31st January, 2020
A string of noteworthy Fair Work disputes have landed some of the country’s best-known brands in the headlines for all the wrong reasons recently. Here’s what you’ll want to avoid as an employer.
As an employer, staying on top of payroll can be a headache. With regular changes to award rates and the introduction of Single Touch Payroll, getting things right year-in, year-out may seem like a burden.
On the other hand, getting worker entitlements right is fundamental to being a great boss. Moreover, paying employees fairly is viewed as giving people a ‘fair go’ – a key aspect of what many feel to be one of the better aspects of Australian culture.
And if that’s not enough to make you consider how worthwhile payroll compliance is for employers, take a look at what happens when businesses get it wrong.
READ: As a small business owner, when should you start paying yourself?
The following five brands made headlines in the last 12 months for Fair Work disputes. As such, they make great examples of the types of activity small business owners want to avoid.
Fast-food chain Subway was hit with hefty fines for underpaying workers at 22 stores across the country late last year.
The Fair Work Ombudsman recovered $81,638.82 in unpaid wages for 176 current and previous employees after requests for assistance from employees and an anonymous tip-off about potential breaches of Australia’s workplace laws.
The lengthy investigation found that employers failed to pay minimum wages, failed to pay entitlements like casual loadings and overtime rates, failed to issue proper payslips and didn’t keep adequate employment records.
Half of these workers were young or from a migrant background, which Fair Work points out makes them particularly vulnerable to exploitation.
The Australian arm of a Japanese burger chain was ordered to back-pay $1.12 million to 285 former and current Queensland employees and will be subject to ongoing scrutiny of its practices by the industry watchdog.
MOS Burger Australia was made to enter into a court-enforceable undertaking after a Fair Work Ombudsman investigation found contraventions of the Fast Food Industry Award 2010.
Fair Work inspectors determined that the company had paid unlawfully low flat rates to workers, and misclassified some employees as part-time when they were in fact casuals. Breaches ranged from failing to pay ordinary hourly rates, casual loadings and penalty rates for night, weekend and public holiday hours.
Fair Work admitted it was shocked that yet another large, publicly listed company had breached workplace laws on a massive scale in the case of Woolworths, which was also reported late in 2019.
While the supermarket giant stepped forward on their own terms to admit to the violations, revelations that the retail behemoth owes nearly 6,000 staff up to $3 million in underpaid wages dating back nearly a decade rocked the industry watchdog, which came out swinging.
Fair Work launched its own investigation into the massive underpayment, warning that ‘admission is not absolution’.
One of Australia’s best known celebrity chefs was slapped with a $200,000 fine after admitting to underpaying his staff at his Melbourne restaurants to the tune of nearly $8 million.
The action was a result of the findings of Fair Work’s four-year investigation into Calombaris’ Made Establishment – the umbrella company for restaurants Hellenic Republic, The Press Club, Gazi and Jimmy Grants restaurants.
The ex-MasterChef host underpaid more than 500 current and former employees to the tune of $7.83 million. He’s also entered into an enforceable undertaking that effectively makes him become an ambassador for the Fair Work Ombudsman with a series of speaking engagements to educate the restaurant sector on the importance of workplace compliance.
Fair Work Ombudsman Sandra Parker has expressed public frustration at the upsurge in large-scale businesses admitting that they haven’t classified staff correctly, haven’t paid overtime or penalty rates or haven’t completed annual pay reconciliations as required.
“Lately, we’re seeing a disturbing number of large corporates publicly admitting that they’ve underpaid their staff,” said Parker.
“Some of these matters go back many years, and several comprise millions of dollars owed to workers. This is simply not good enough.”
It’s particularly concerning that many of these corporates have enterprise agreements in place that they negotiated but then failed to property uphold the minimum standards.
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These sorts of careless missteps by businesses can be costly, often running into the millions of dollars across the entire workforce, she said.
“If companies don’t prioritise workplace compliance from the outset, it can take significant resources and time to fix, particularly where companies don’t have accurate records of times worked and waged paid.
“It’s not surprising that workers lose trust in their company when this happens.”
If you’re a small business owner, you may not have to deal with the level of complexity faced by large companies like those highlighted above. Nevertheless, workplace compliance is a naturally tricky part of doing business, and at the very least employers should be working hard to stay on top of changes to awards in 2020 and beyond.