Seven subsidiaries of Wesfarmers Industrial and Safety Pty Ltd (WIS) will back-pay more than $4.8 million to more than 3,400 underpaid employees nationally and have signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman.
J. Blackwood & Son Pty Ltd, Protector Alsafe Pty Ltd, Bullivants Pty Limited, The Workwear Group Pty Ltd, Coregas Pty Ltd, Blacksmith Jacks Pty Ltd and Lawvale Pty Ltd are the seven WIS entities which form a group of three main businesses engaging workers nationwide.
Between them, the main businesses supply industrial and safety products and services, work clothing and uniforms, industrial gases and installations, and environmental and consulting services.
WIS reported underpayment issues by the WIS entities and two now former subsidiaries of WIS, Greencap Pty Ltd and Trimevac Pty Ltd, to the Fair Work Ombudsman in October 2019 after finding anomalies while implementing a new payroll system across the corporate group.
A broader review found that because of payroll system errors adopted by WIS in the course of its acquisition of various employing entities in 2013 and 2014 which it failed to correct, more than 3,400 current and former full-time, part-time and casual employees had been underpaid by the WIS entities and former WIS entities between January 2010 and June 2020.
Entitlements underpaid included base and overtime penalty rates; annual leave and casual loadings; laundry, first aid and vehicle allowance or kilometre reimbursements; and termination payments. These entitlements were owed under 59 industrial instruments applying to various WIS entities and former WIS entities.
The seven WIS entities and two former WIS entities underpaid the employees $4,836,036, plus $246,779 in superannuation, in that period of more than a decade. The EU requires the WIS entities to back-pay all known underpayments and superannuation, plus total interest of $1,476,827, by February 2023.
Individual underpayments were up to $38,362 and the average underpayment was $1,392.
Fair Work Ombudsman Sandra Parker said an EU was appropriate as the WIS entities had demonstrated a firm commitment to rectifying all underpayments and changing their practices.
“Under the Enforceable Undertaking, the WIS entities have committed to implementing stringent measures to improve compliance and protect the rights of its workforce. These measures include commissioning, at the companies’ own cost, independent annual audits to check their compliance with workplace laws during the next two years,” Ms Parker said.
“This matter demonstrates how important it is for employers to identify and fix non-compliance in their processes, including the continued use of out-of-date and unsupported software systems and the incorrect interpretation and creation of pay rules.”
“Businesses who fail to invest the time and resources to ensure they are meeting all lawful entitlements risk facing large-scale back-payment bills.”
Underpaid employees worked in locations including Melbourne, Sydney, Newcastle, Wollongong, Mackay, Canberra, Perth and Darwin. They worked in a range of roles including retail and customer service; manufacturing; clothing and textiles; engineering; management; laboratory technology; transport and logistics.
Under the EU, the WIS entities must make a $100,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund. Factors involved in determining the contrition payment include the companies’ payment of remediation entitlements outside the statutory limitation periods as well as their co-operation to rectify the breaches and ensure future compliance.
The companies must also display notices that apologise for the contraventions across their Facebook pages, public websites and intranets. Additionally, the companies must ensure all relevant staff have the right training regarding workplace entitlements; run a hotline for employees; and give free taxation and financial advisory services to affected workers.
Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94.
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