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Focus on Underpayments by the Fair Work Ombudsman
The National Library of Australia (“NLA”) has recently given an enforceable undertaking to the Fair Work Ombudsman (“FWO”), providing another example of the FWO’s recent focus on underpayments.
The enforceable undertaking given by the NLA is in relation to the underpayment of casual employees to the tune of $250,000 over the course of 20 years.
The underpayments that the NLA was involved in related to the non-payment of weekend and public holiday shift penalties for casual employees covered by several enterprise agreements and the Australian Public Service Award 1998, which went back more than 20 years.
In total, 106 current and former employees had been underpaid a total of $245,359 in wages and superannuation between 2000 and 2020, with the individual amounts varying between $12 to $19,997.
The NLA had discovered the underpayments during an internal payroll audit, and self-reported to the FWO earlier this year. The NLA signed an enforceable undertaking, committing to, amongst other things:
- paying back the amount of underpayment to each affected employee;
- paying any 15.4% superannuation on those underpayments;
- paying interest calculated at a flat rate of 4.75% of the total underpayment amounts; and
- engaging and independent accounting professional or an employment law specialist to conduct an audit of the NLA’s compliance with the Fair Work Act and its enterprise agreement.
Revised strategy for the FWO
The FWO announced that it would be focusing on large corporate underpayments as part of its priorities for 2020-21. This new direction means that we are likely to see an increase in the use of FWO enforcement and compliance powers, as was the case in 2019/20.
The NLA enforceable undertaking is the latest in a series of underpayment claims which have highlighted the FWO’s focus on underpayments as part of its main operations. The FWO’s recent focus on underpayments has resulted in enforceable undertakings from major companies such as IBM, Western Power and Sunwater, and this is likely to result in further enforcement action across the Australian economy.
- The Fair Work Ombudsman has committed to focus on underpayments for the 2020/21 financial year.
- It is likely that we will see the continued used of enforceable undertakings and other tools of compliance by the Fair Work Ombudsman in the near future.
- Employers need to ensure that they are meeting all of the minimum entitlements under relevant legislation and any applicable industrial instruments.
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11 January 2018