The Walter and Eliza Hall Institute of Medical Research has entered an Enforceable Undertaking with the Fair Work Ombudsman after underpaying employees more than $350, 000. The not for profit medical institute self-reported last year it had underpaid a total of 423 current and former employees $350,322 between 2014 and 2019.
Investigation found the underpayments were a result of the organisation failing to use modern awards. The Medical Institute was paying employees according to outdated pre-modern awards which did not include the more generous provisions and entitlements incorporated in modern awards. This mistake resulted in employees being underpaid minimum shift engagements, meal allowances, first aid allowance and overtime, weekends, and public holiday penalty rates.
Four hundred and twenty-three employees were affected by this error including research and animal assistants and technicians, maintenance employees, and students doing casual research, data entry, events, and office work. The Walter and Eliza Hall Institute has located and back paid most of the employees including superannuation and interest. The Enforceable Undertaking commits the Walter and Eliza Hall Institute of Medical Research to strict measures to improve workplace compliance. This involves, rectifying underpayments promptly and funding external audits over for the next two years. The Institute must also operate a hotline for six months for employees to make enquires related to their work entitlements, underpayment, or other concerns.
“This matter should serve as a warning to all organisations that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale and face not only a massive administrative and logistical exercise but the cost of a significant back-payment bill, ” warns Fair Work Ombudsman Sandra Parker.
In this case, the organisation is not required to make a contrition payment to the Fair Work Ombudsman because of their cooperation with the investigation and impact of the pandemic on its revenue.
This case reinforces the application of modern awards in all industries to ensure the correct payment of employees. This underpayment could have been easily avoided if the organisation had correctly transitioned to the modern award system.
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Written by Danielle McNamee