HR oversight results in hefty back-payment bill for business which short-changed employees $54,000

9 August 2016

A Fair Work Ombudsman investigation has found a business near Coffs Harbour on the NSW Mid-North Coast failed to pay correct annual leave entitlements and calculate accurate leave balances for its shift workers for six years.

The employer miscalculated the leave balances of 75 workers and underpaid 61 employees a total of almost $54,700 in annual leave entitlements. Some employees were affected by both the underpayments and miscalculations.

Four successive workplace agreements provided the employees with an extra week of annual leave every year and annual leave loading that included shift penalties.

A query from a single employee who believed the agreement was being incorrectly applied sparked the Fair Work Ombudsman investigation.

The highest amount a worker was underpaid was $4330 and the largest correction to an annual leave balance was 70.59 hours.

Fair Work Ombudsman Natalie James says the business promptly back-paid outstanding leave entitlements and corrected leave balances of the affected former and current employees following extensive dealings with the Agency and checks by an external auditor.

Ms James says the employer should have had systems in place to monitor and correctly calculate its employees’ annual leave entitlements.

However, she says it is pleasing the employer co-operated with Fair Work inspectors.

"This is an example of an employer who, when approached by the Fair Work Ombudsman, recognised that its management practices led to significant employee underpayments and worked with the Agency to rectify the problem," she says.

"Understanding complex agreements and workplace laws is fundamental good business practice."

She said most underpayments were inadvertent and the result of employers failing to check their obligations under workplace laws.

“When we find errors, our preference is to educate employers about their obligations and assist them to put processes in place to ensure the mistakes are not repeated,” she said.

She encouraged employers who had any uncertainty about whether their workplace practices were appropriate to visit or call the Fair Work Infoline on 13 13 94 for advice. A free interpreter service is available on 13 14 50.

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Media inquiries:

Eithne Johnston, Media Adviser
Mobile: 0439 835 855

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