Wesfarmers Industrial and Safety underpaid 3400 workers $4.8m

The parent company of Bunnings and Kmart has revealed that seven subsidiaries of its business owe more than 3400 workers millions.

An Australian company will back-pay more than $4.8 million to over 3400 employees nationally and also fork out $100,000 into a government fund.

Individual underpayments were worth up to $38,362 and the average underpayment was $1392, according to the Fair Work Ombudsman (FWO).

The back payments will be made by seven subsidiaries of Wesfarmers Industrial and Safety (WIS), which operate three main businesses: Blackwoods, the Workwear Group and Coregas.

Between them, the main businesses supply industrial and safety products and services, work clothing and uniforms, industrial gases and installations, and environmental and consulting services.

The company reported the underpayments to the FWO on October 2019 after finding anomalies while implementing a new payroll system across the corporate group.

A further review revealed that the underpayment issue stretched out between January 2010 and June 2020.

Blackwoods hardware store. Picture: Supplied

Underpaid employees were based in Melbourne, Sydney, Newcastle, Wollongong, Mackay, Canberra, Perth and Darwin with estimates that 2000 current employees and 4000 former staff members were impacted, according to WIS.

They worked in a range of roles including retail and customer service; manufacturing; clothing and textiles; engineering; management; laboratory technology; and transport and logistics.

Entitlements underpaid ranged from base and overtime penalty rates, annual leave and casual loadings, laundry, first aid and vehicle allowance or kilometre reimbursements; and termination payments.

Employees were underpaid by $4.8 million, including $246,779 in superannuation, and the company has signed an enforceable undertaking to back-pay that amount as well as $1.4 million in interest this month.

Fair Work ombudsman Sandra Parker. Picture: Aaron Francis/The Australian

Fair Work Ombudsman Sandra Parker said the company had committed to implementing stringent measures to improve compliance and protect the rights of its workforce.

“These measures include commissioning, at the companies’ own cost, independent annual audits to check their compliance with workplace laws during the next two years,” she said.

“This matter demonstrates how important it is for employers to identify and fix noncompliance in their processes, including the continued use of out-of-date and unsupported software systems and the incorrect interpretation and creation of pay rules.

It must also give free taxation and financial advice services to impacted workers. Picture: Getty Images

“Businesses who fail to invest the time and resources to ensure they are meeting all lawful entitlements risk facing large-scale back-payment bills.”

The company has also agreed to make a $100,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.

It will also display notices that apologise for the contraventions across their Facebook pages, public websites and intranets.

Additionally, it must run a hotline for employees and give free taxation and financial advisory services to affected workers.