Recycling company signs up to workplace agreement after underpaying staff almost $140,000

22 June 2011

A national processing and recycling group has back-paid dozens of staff a total of almost $140,000 after an investigation by the Fair Work Ombudsman.

The CMA group of companies – which includes CMA Corporation Limited, CMA Recycling Pty Ltd and CMA Assets Pty Ltd – has back-paid 73 employees it underpaid a total of $138,019 between July, 2009 and April, 2010.

Most of the underpaid employees, including labourers, oxy cutters, drivers, yard hands and furnace workers, were based in NSW at worksites in Sydney (Revesby, Mascot and St Marys), the Newcastle area (Cardiff and Tomago) and Port Kembla.

There were also some underpaid employees located in Queensland, South Australia, Tasmania, Victoria, Western Australia and the Northern Territory.

The underpayments were the result of the CMA companies asking employees to take pay reductions in an attempt to avert job losses anticipated as a result of the global financial crisis.

The 73 employees that subsequently agreed to reductions had their pay cut below the minimum rates in the workplace agreements that applied to their positions.

Fair Work Ombudsman Executive Director Michael Campbell says the pay reductions were therefore in breach of workplace law.

"It is unlawful to reduce an employee's pay rate below the minimum rate in the relevant industrial instrument – even if the employer has a handshake or written arrangement with the employee," Mr Campbell said.

As an alternative to litigation, the CMA companies back-paid the employees and have entered into an Enforceable Undertaking with the Fair Work Ombudsman.

The agreement requires CMA companies to:

  • Issue written apologies to the underpaid workers,
  • Issue memos to all current employees and post a public website notice apologising for the breaches and promising to comply with workplace relations laws in future,
  • Report to the Fair Work Ombudsman on new systems they develop to ensure their businesses comply with workplace laws in future,
  • Ensure that all state managers, human resources and payroll staff participate in workplace relations compliance training, and
  • Report employment details of staff to the Fair Work Ombudsman for the next two years, including employee classifications and pay rates.

Mr Campbell says Enforceable Undertakings are a mechanism the Fair Work Ombudsman can use to achieve constructive outcomes against wrong-doers without civil penalty proceedings.

The underpayments by the CMA companies came to light after the Fair Work Ombudsman investigated allegations made by the Australian Workers' Union.

The Fair Work Ombudsman has a number of tools on its website to assist employees and employers to check minimum rates of pay, including PayCheck and a Pay Rate Calculator.

Online resources also include payslip and record-keeping templates, a self-audit checklist and fact sheets.

An 'Industries' section on the Fair Work Ombudsman's website provides information specifically tailored for employers and workers in the retail, cleaning, clerical, hair and beauty, security, hospitality, fast food and horticulture industries.

Small to medium-sized businesses without human resources staff can also ensure they are better equipped when hiring, managing and dismissing employees by using free template employment documentation with step-by-step instructions or accessing a series of Best Practice Guides.

Employers or employees seeking assistance should contact the Fair Work Infoline on 13 13 94 or visit www.fairwork.gov.au A free interpreter service is available on 13 14 50.

Keep up to date with the Fair Work Ombudsman and updates on Australia's workplace relations laws through @fairwork_gov_au external-icon.png .

Enforceable Undertaking - FWO and CMA Corporation Limited & Ors (PDF 468.9KB)

Media inquiries:

Ryan Pedler, Senior Adviser, Media & Stakeholder Relations
(03) 9954 2561, 0411 430 902
ryan.pedler@fwo.gov.au

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