22 Apr 2021
On 23 December 2020, Disability Services Australia entered into an enforceable undertaking with the Fair Work Ombudsman (‘the Ombudsman’), and is currently back-paying employees more than $1.6 million.
Disability Services Australia is a non-for-profit organization, providing services to disabled clients across NSW. They also operate a packaging factory at Mascot in Sydney.
In 2019, Disability Services Australia self-reported to the Ombudsman after being prompted by an employee query. It appeared that the employer was giving employees at the packaging factory gift vouchers in lieu of overtime payments on Sundays, which is in extreme contravention of workplace laws.
Consequently, an independent investigation was commissioned of Disability Services Australia, uncovering a variation of non-compliance matters concerning supervisors and production staff. Matters included:
- incorrect usage of time-off in lieu of overtime and penalty rates;
- underpayment of minimum wage rates, incorrect application of on-call and sleepover provisions; and
- underpayment of annual leave loading and allowances.
Result of Enforceable Undertaking
As of December 2020, the investigation has found that more than 800 employees at Disability Services Australia were being underpaid more than $1.6 million between 2013 and 2020, ranging from $2.00 to over $100,000.
It was discovered that the most significant issues affecting the underpayments were:
- annualised salaries being too low to meet all entitlements such as overtime and penalty rates;
- some employees being incorrectly classified as being award free; and
- inadequate governance and processes for ensuring compliance.
Approximately $50,000 of underpayments were also discovered at two other businesses run by Disability Services Australia, namely Macquarie Employment Training Services, and Disability Services Australia Mentoring Services both included in the enforceable undertaking.
The Enforceable Undertaking required Disability Services Australia, Macquarie Employment Training Services, and Disability Services Australia Mentoring Services to compensate each relevant employee for any outstanding amounts, in addition to interest and superannuation by March 2021.
Fair Work Ombudsman Sandra Parker said, “Under the enforceable undertaking, DSA has committed to stringent ongoing measures to ensure it complies with the law and protects its workforce. This includes engaging, at its own cost, an expert auditing firm to check its workplace compliance for the next two years, and report back to the FWO.”
What does this case mean for you as an employer?
This case acts as a precaution and reminder for all employers, that non-compliance with modern awards can lead to extreme contravention of workplace laws and additional unnecessary cost.
For example, the cost of time and money in rectifying underpayments, and unnecessary expense such as extensive auditing costs and payment of interest to employees that would not otherwise have been incurred.
Contact our Workplace Relations Team on (07) 3872 2222 or at firstname.lastname@example.org, if you have any further questions or queries about award and workplace law compliance.
Published: 22 Apr 2021