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Underpaying employer forced to clean up its act

By Portner Press on December 5th, 2018
  1. Industrial Instruments
  2. Fair Work Act

 

A commercial cleaning company found to have underpaid almost 99% of its staff must send apology letters to every affected worker, as well as place a public notice in the Australian Financial Review to acknowledge and apologise for its employment law breaches.

Perth-based Delron Cleaning Pty Ltd, which operates in Western Australia and Sydney, commissioned a private external audit after it identified errors in its payroll system.

The audit revealed that between March 2015 and March 2017, workers had been both underpaid and overpaid at various times, resulting in a total net underpayment of $447,717 to 1,174 out of 1,188 staff.

One cleaner was underpaid $12,100.

Delron Cleaning notified the Fair Work Ombudsman (FWO) of the payment errors and cooperated with the regulator to correct the breaches, back-paying all of the underpaid employees.

The underpayments resulted from failures to pay correct overtime and shift-work penalties, as well as part-time and broken-shift allowances, as required under the Cleaning Services Award 2010. The FWO also identified record-keeping breaches in relation to the company’s casual and part-time employees.

Delron Cleaning has since signed up to an Enforceable Undertaking with the FWO, prior to which the company made significant workplace improvements which included educating managers and staff on new payroll processes, conducting quarterly audits and integrity checks of its new payroll system and setting up an employee hotline.

Under the Enforceable Undertaking, the cleaning company will be subject to ongoing scrutiny by the FWO.

The company must further train its payroll and human resources staff on workplace obligations and complete three external audits over the next 18 months to check workplace-law compliance and rectify any breaches found.

FWO’s Sandra Parker said this matter highlighted the importance of employers regularly checking their payroll systems to ensure they are compliant.

“While Delron have taken proactive steps to improve their workplace practices, this undertaking contains strong measures aimed at ensuring sustained compliance across the business,” she said.

“We know that cleaners can be some of the most vulnerable workers in Australia and the sector remains an ongoing focus for the agency.”

As part of the Enforceable Undertaking, Delron Cleaning must also make a ‘substantial’ donation to the Cleaning Accountability Framework, an initiative which assists with the promotion of workplace compliance in this business sector.

How tidy is your organisation’s payroll system?

If you don’t know, you must take action now, before it’s too late.

Find the information you need in chapter W1 Wages in the Employment Law Practical Handbook.

Written by top employment law experts, the Handbook contains more 80 chapters covering all areas of workplace law.

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