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Southern Cross Care backpays underpaid staff nearly $6.9 million

Aged care provider Southern Cross Care is back-paying a total of 1,708 employees in Tasmania nearly $6.9 million after it underpaid them between 2015 and 2022, according to the Fair Work Ombudsman (FWO) on Friday.

Most of the underpaid employees were part-time aged care workers, nurses, and community care employees who performed shift work, according to the FWO. There were also full-time and casual employees, as well as some cleaners, laundry, and maintenance staff who were underpaid.

Affected employees include current and former staff who carried out work in locations across Tasmania, including Hobart, Launceston, Somerset, and Low Head.

According to the FWO, the underpayments reached a total of $6.87 million, including $5,806,756 in wages and entitlements, in addition to $313,591 in superannuation and $754,181 in interest.

Six workers were underpaid more than $100,000, the FWO said. Average back-payment is just over $4,000, while individual back-payments range from less $1 to more than $220,000.

Payroll, HR systems error

The underpayment stems from “fundamental errors” in the company’s payroll and human resources system, according to the FWO.

The discovered errors prompted an internal review that led to the aged care operator self-reporting its breaches to the FWO.

According to the company, it failed to have agreements in place with part-time staff to work additional hours at ordinary rates of pay. It also failed to recognise that shift workers without written agreements were entitled to be paid from the start of their first shift to the end of their final shift each day.

The company has already back paid most of the employees affected, according to the FWO.

Fair Work Ombudsman Anna Booth said the case underscores how important it is for employers to prioritise their workplace obligations.

“Fundamental errors – including failing to ensure that written agreements with part-time employees were in place – were left unchecked, which led to long-term breaches and a substantial back-payment bill,” Booth said in a media release

“We expect all employers to invest the time and resources to ensure they are meeting all lawful entitlements.” 

EU signed

Meanwhile, the company also signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman which mandates the company to back-pay all staff by the end of September.

“Under the Enforceable Undertaking, Southern Cross Care (Tasmania) has committed to implementing stringent measures to ensure all of its workers are paid correctly. These measures include commissioning, at its own cost, three annual independent audits to check its compliance with workplace laws,” Booth said.

Other requirements under the EU include:

  • Providing the FWO evidence of systems and processes it has put in place to ensure future compliance
  • Commission workplace relations training for human resources, payroll, and rostering staff
  • Write to all underpaid employees to notify them of the commencement of the EU
  • Display workplace notices detailing its contraventions

The EU is appropriate as the employer cooperated with the investigation and is committed to rectify the underpayments, according to the FWO.

With its admission, the Southern Cross Care joins the list of Australia’s major employers who underpaid its staff, including SuncorpBHPCommonwealth Bank of Australia, and Woolworths.

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