Queensland employer admits underpaying staff by millions

A Queensland employer is set to compensate its underpaid staff more than $2.5 million as it entered an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO). The employer, a cattle and meat processing company, first self-reported non-compliance to the FWO after it found that it underpaid its workers at an abattoir and meat processing facility in Brisbane between 2010 and 2021.

These workers include meat workers, cleaners, yard-persons, stockpersons, and store-persons, as well as administrative staff including clerks, procurement and logistics workers, and manufacturing employees, according to a media release from the FWO.

Under the EU, the employer is required to back-pay all the underpaid staff by January 13, 2023 - with the individual back-payments ranging from less than $1 to over $134,000.

So far, the company has back-paid nearly $3.28 million to 342 current and former employees, according to the FWO.

In addition, the EU also mandates the employer to apologise to its employees, engage with an independent expert to review and report to the FWO its underpayment ratification process, as well as publish notices to the media, its website, and workplaces on its breaches.

"Under the Enforceable Undertaking, [the employer] has committed to implementing stringent measures to ensure workers are being paid correctly," said Acting Fair Work Ombudsman Michael Campbell in a statement.

"These measures include conducting, at the company's own cost, audits of its compliance with workplace laws over the next two years as well as reporting to the FWO on the extensive upgrade of its human resources and record keeping systems."

Read more: Fair Work Ombudsman crackdown on employee underpayment

Underpayments

The privately-owned company found out about the underpayments when it carried out a review in response to inquiries from employees.

According to the FWO, the underpayments occurred because the companies under the employer "engaged employees on employment contracts containing unlawful and ineffective offsetting clauses."

"The companies incorrectly believed these clauses enabled them to offset entitlements such as overtime by paying a higher overall rate of pay, while also failing to monitor pay rates to ensure these were increased in line with annual national minimum wages increases," the FWO's press release read.

Due to this, the companies underpaid employee entitlements and allowances, such as overtime, shift and meal allowances, public holiday penalty rates, and annual leave loading. The companies also breached record-keeping and pay slip laws, according to the FWO. 

Campbell said the case underscores the importance of compliance to workplace relations laws and ensuring that employment contracts are lawful.

"This matter demonstrates how important it is for employers to prioritise their compliance with workplace relations laws, including at the outset of the employment relationship, ensuring the terms of employment contracts are lawful and effective and that all relevant award and agreement entitlements are passed on. It also shows the importance of monitoring pay rates to ensure these remain in step with increasing legal minimums," said the acting fair work ombudsman.

"Any employer who needs help meeting their lawful obligations to their employees should contact the Fair Work Ombudsman for free advice and assistance."