Charitable Aged Care provider required to back pay $3.3m to staff

On 12 August 2020, the Office of the Fair Work Ombudsman (FWO) released information about the Uniting Church in Australia Property Trust (NSW) (Uniting NSW), a registered charity that runs more than 70 residential aged care facilities as well as other community services under the Uniting brand in NSW and the ACT.

The FWO reported that Uniting NSW is back-paying employees more a total of $3.36 million to 9561 employees and has entered into an Enforceable Undertaking (EU) with the FWO.

Uniting NSW identified underpayments when it conducted a payroll review after receiving complaints from a number of its employees about payment errors relating to laundry, uniform and vehicle allowances as well as failing to provide shift workers an extra week of annual leave they were entitled to each year.

Many of the affected employees worked as front-line carers and as community and disability services workers in NSW and ACT, covered by several different Enterprise Agreements.

The back payments include interest, for underpayments that occurred between 2013 and 2019 and individual underpayments range from less than $1 to more than $11,000.

While Uniting NSW has already back paid the majority of workers, the EU requires the organisation to pay any outstanding amounts to former employees by 15 August 2020. The EU also imposes a range of other obligations to ensure future compliance, including funding an independent organisation to operate a Hotline for the next four months so that employees can make enquiries in relation to their entitlements, underpayments or related employment concerns. Uniting NSW is also required to display public, workplace and online notices detailing its workplace law breaches and apologise to workers.

The FWO Sandra Parker said that an EU was appropriate, rather than pursuing the matter in the Federal Court, because the organisation had cooperated with the investigation. Ms Parker said:

“This matter serves as a warning to all organisations that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale and face not only a massive administrative exercise calculating underpayments but the cost of a significant back-payment bill. Any employers who need help meeting their lawful workplace obligations should contact us.”

Previously:

  • a Western Australian NFP disability services provider was required to back-pay employees a total of $13.6 million after discovering that they had incorrectly calculated employee entitlements using a customised wage assessment tool;

  • penalties totalling $41,580 have been imposed on the operators of a respite and care facility in Sydney, for deliberately underpaying two disability support workers a total of $84,450; and

  • a Western Australian home-care services organisation having to back-pay foster carers more than $6 million under a Court-Enforceable Undertaking with the Fair Work Ombudsman in December 2019, after self-disclosing that it underpaid 124 current and former employees.

Employers are reminded that the FWO will pursue matters to the full extent of the law where they have identified that employees have been underpaid and employers have failed to comply with their obligations, whether that failure is intentional or a lack of understanding of their employment obligations. The standards are no different for NFPs and social enterprises as they are for commercial ventures.

It is crucial that directors and managers in the NFPs and social enterprises are aware of and comply with their obligations under their relevant modern award. A failure to do so could result in individuals being found to be personally liable and penalties being personally awarded against them by the Court.

If you are unsure of your organisation’s obligations to employees under the FWA, the relevant modern award or a workplace agreement, we can assist you to understand your obligations and assess the risks to your organisation.

You can contact us on 07 3160 0010 or at reception@nfplawyers.com.au.


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