Embattled aged care provider Southern Cross Care Tasmania has agreed to back pay almost $6.9 million to underpaid staff.
The provider came to an agreement with the Fair Work Ombudsman to rectify underpayments to employees in locations across the state including Launceston, Low Head, Somerset and Hobart, which occurred between 2015 and 2022.
Under the agreement, 1708 current and former employees will be backpaid a total of $6.87 million, including over $5.8 million in wages and entitlements, more than $313,000 in superannuation and the remainder in interest.
A Southern Cross Care Tasmania spokesperson said the payments ranged from less than $1 to more than $220,000. Six workers were underpaid more than $100,000, while the average back-payment is just over $4000.
It has taken two years to reach an agreement after the aged care provider self-reported its breaches to the Fair Work Ombudsman.
The aged care provider said it had already backpaid the large majority of employees, including all it could find.
Under the agreement, staff must be backpaid by the end of September.
What went wrong?
Southern Cross Care Tasmania had found "fundamental errors" in its payroll and human resources system after conducting a review.
They said the errors included failing to have agreements in place with part time staff to work additional hours at ordinary rates of pay.
This resulted in employees not being paid their entitled overtime for additional hours.
The not-for-profit also said it failed to recognise that shiftworkers without written agreements were entitled to be paid from the start of their first shift to the end of their final shift each day.
Overtime entitlements accounted for the majority of underpayments, the aged care provider's spokesperson said, employees were also underpaid other rates.
Appropriate outcome: Ombudsman
Fair Work Ombudsman Anna Booth said an enforceable undertaking was appropriate because Southern Cross Care Tasmania had cooperated with the investigation and demonstrated a strong commitment to rectifying underpayments.
An enforceable undertaking occurs when an employer volunteers to fix the issue and agrees to prevent actions for the future with the Fair Work Ombudsman.
The ombudsman can take the employer to court to enforce the terms of the agreement if not complied with.
"Under the enforceable undertaking, Southern Cross Care (Tasmania) has committed to implementing stringent measures to ensure all of its workers are paid correctly," Ms Booth said.
"These measures include commissioning, at its own cost, three annual independent audits to check its compliance with workplace laws.
"This matter demonstrates how important it is for employers to place a high priority on their workplace obligations."
She said it was expected all employers invested the time and resources to ensure they were meeting all lawful entitlements.
The agreement will also require Southern Cross Care Tasmania to provide the Fair Work Ombudsman with evidence it is working to ensure future payroll and human resourcing compliance.
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