Healthcare giant Australian Unity underpaid staff $7.3m

Thousands of workers were short changed and owed up to $23,000 with the company saying it deeply regrets the errors.

An 180-year-old Australian company underpaid staff a whopping $7.3 million and has been forced to make a $250,000 “contrition payment” as a result of the issue that stretched out over seven years.

Australian Unity, a wellbeing company offering health, wealth and care services, conducted a review of its payroll and discovered more than 8900 employees had missed out on money owed to them between 2014 and 2021.

The payroll errors occurred in its assisted living business, which operates retirement communities and provides aged care and disability services, and included the underpayment of penalty rates, minimum shift times, overtime, travel time, higher duties, accrued leave and superannuation.

On average, workers were short changed $739 each but individually people were owed between $1 and more than $23,000, the Australian Financial Review revealed.

There is still $516,428 outstanding for hundreds of former employees, which must be paid in the next four months. Picture: Getty Images

It impacted roles including nurses, cooks, catering employees, residential care workers, administrative staff, gardeners and laundry and maintenance workers.

The Fair Work Ombudsman’s (FWO) Sandra Parker said the company must complete two independent audits a year at its own cost.

“This matter demonstrates why employers should prioritise workplace compliance and ensure their systems and processes meet all requirements of relevant awards or agreements,” she told the Australian Financial Review.

“Where breaches are not picked up quickly, they can lead to a substantial back-payment bill.”

Australian Unity self reported the underpayments to the FWO in November 2020.

So far more than 8500 staff have been backpaid $6.8 million, including 5.5 per cent interest, while there is still $516,428 outstanding for hundreds of former employees, which must be paid in the next four months.

The company has entered into an enforceable undertaking with the FWO, which includes conducting independent audits and formally apologising to impacted employees.

Australian Unity managing director Rohan Mead. Picture: David Caird

Australian Unity’s Group managing director, Rohan Mead said that the company deeply regretted the errors and apologised to adversely affected employees.

“We always seek to pay our people correctly and would never intentionally underpay anyone,” he said.

“To minimise the risk of these issues reoccuring, we’ve made a number of enhancements to improve our systems and processes.

“We appreciate and value the work our people do to support our customers and the significant impact this has on our broader community. We would never want to jeopardise the positive, ongoing contribution that our employees make to the community.”