Largest aged care operator in Tasmania to pay staff overtime and underpayment dues

Most underpaid employees were part-time aged care workers, nurses and community care workers who performed shift work.

Tasmania’s largest aged care operator, Southern Cross Care (Tasmania) Inc, is back-paying staff almost $6.9 million and has signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman.

The not-for-profit organisation, which operates aged care facilities and offers home and community care services, self-reported its breaches to the Fair Work Ombudsman in August 2021 after identifying them during an internal review.

Southern Cross Care (Tasmania) conducted the review after identifying fundamental errors in its payroll and human resources systems.

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The errors included failing to have agreements in place with part-time staff to work additional hours at ordinary rates of pay. This meant that employees were entitled to – but not paid for – overtime for these additional hours.

Southern Cross Care (Tasmania) also failed to recognise that shift-workers without written agreements were entitled to be paid from the start of their first shift to the end of their final shift each day, rather than just the hours worked during the separate shifts.

The underpaid employees performed work in locations across Tasmania including Hobart, Launceston, Somerset and Low Head. Underpayments occurred between 2015 and 2022.

Most underpaid employees were part-time aged care workers, nurses and community care workers who performed shift work, although full-time and casual employees were also affected. Some cleaners, laundry and maintenance staff were also underpaid.

Southern Cross Care (Tasmania) is back-paying 1,708 current and former employees a total of $6.87 million, including $5,806,756 in wages and entitlements, plus $313,591 in superannuation and $754,181 in interest.

Individual back-payments range from less than $1 to more than $220,000. Six workers were underpaid more than $100,000. The average back-payment is just over $4,000.

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Southern Cross Care (Tasmania) has already back-paid the large majority of employees, including all it could find, and under the EU must back-pay all staff by the end of September.

Fair Work Ombudsman Anna Booth said an EU was appropriate as the employer had cooperated with the FWO’s investigation and demonstrated a strong commitment to rectifying underpayments.

“Under the Enforceable Undertaking, Southern Cross Care (Tasmania) has committed to implementing stringent measures to ensure all of its workers are paid correctly. These measures include commissioning, at its own cost, three annual independent audits to check its compliance with workplace laws,” Ms Booth said.

“This matter demonstrates how important it is for employers to place a high priority on their workplace obligations. Fundamental errors – including failing to ensure that written agreements with part-time employees were in place – were left unchecked, which led to long-term breaches and a substantial back-payment bill.

“We expect all employers to invest the time and resources to ensure they are meeting all lawful entitlements.”

The EU also requires Southern Cross Care (Tasmania) to provide FWO with evidence of systems and processes it has put in place to ensure future compliance; commission workplace relations training for human resources, payroll and rostering staff; write to all underpaid employees to notify them of the commencement of the EU; and display workplace notices detailing its contraventions.

Whilst overtime entitlements accounted for the majority of total underpayments, employees were also underpaid wages for ordinary hours, penalty rates for weekend and public holiday work, as well as paid meal breaks and shift penalties and allowances, including sleepover allowance.

The underpayments were under the Social, Community, Home Care and Disability Services Industry Award 2010 and applicable Enterprise Agreements.

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