ABC ‘sorry’ for $12m in underpayments affecting 1,907 employees
The ABC said it ‘has apologised to staff for this unintentional error’ that saw 1907 employees underpaid $12m over six years.
The ABC will make a record $600,000 “contrition payment” to the Commonwealth after admitting underpaying 1907 employees by $12m over more than six years.
The Fair Work Ombudsman said on Friday the ABC had backpaid more than $11.9 million to 1,800-plus current and former casual staff and entered into an enforceable undertaking with the regulator.
The FWO launched an investigation after the ABC reported to the regulator that it had found instances where casual employees had not received entitlements under its enterprise agreements.
Fair Work Inspectors identified that some casual staff were receiving flat rates of pay insufficient to cover entitlements including overtime, penalty rates and some allowances, and in some cases employees were paid less than the minimum hourly rate.
The FWO said 1,907 ABC employees were underpaid $12,029,038, mainly between October 2012 and February 2019. As at May 27 2020, the ABC has backpaid $11,983,950 to 1828 employees.
Affected workers have been paid 5.25 per cent interest on back-payments, superannuation, and 5.25 per cent interest on superannuation.
Fair Work Ombudsman Sandra Parker defended its decision not to litigate, saying an EU, rather than court action, was considered appropriate because the ABC took immediate steps to rectify the error and improve its systems to ensure future compliance.
“This payment is consistent with FWO’s approach to other similar self-reported breaches of the Fair Work Act and takes account of what a court might have imposed by way of civil penalties,” she said.
The $600,000 contrition payment is the biggest paid by an employer to the FWO. The Previous biggest was $400,000 by Qantas earlier this year.
“The contrition payment, like a penalty ordered by a court, will be paid into the Commonwealth’s Consolidated Revenue Fund for the benefit of the broader Australian community,” Ms Parker said.
“While the extent and duration of the underpayments are disappointing, the FWO acknowledges the ABC’s remediation efforts, such as its comprehensive back payment initiatives and its commitment to avoid a repeat of this failure.
“In cases such as this where the breaches are not the result of deliberately unlawful conduct, the FWO’s focus is on ensuring employees get their entitlements paid to them as quickly as possible. Through the investigation and Enforceable Undertaking, lessons are learned and systems put in place to avoid such serious underpayments in the future.
“The Fair Work Ombudsman saw no justification in treating a public statutory company differently from any private sector company – all employers must comply with Australia’s workplace laws.”
In a statement on Friday, the ABC said it “has apologised to staff for this unintentional error”.
“A contrition payment will be made as a result of the negotiations with the Fair Work Ombudsman,” it said.
“This payment has been budgeted in the current financial year and will have no impact on the requirement to find ongoing savings.”
Attorney-General and Industrial Relations Minister Christian Porter said the enforceable undertaking was a “welcome step in resolving the underpayment of wages by the ABC”.
“The underpayments of more than 1,900 employees totalling more than $12 million by an organisation as large as the ABC is a reminder to all employers – whether they be public or private sector employers – of the need to pay your staff correctly,” he said
“Whilst not suggesting the ABC’s underpayment issue was deliberate, it certainly should reinforce to all employers, particularly for large employers such as the ABC, that making sure you have the right systems and processes in place to pay your staff properly should be the first order of business.”
Ms Parker said contrition payments provided a deterrent to noncompliance, which was commensurate with a penalty that a court might impose, but without the cost and delay of drawn-out litigations.
Affected ABC staff worked across the country in roles including camera operators, make-up artists, graphic designers, production managers, directors, producers, reporters and presenters.
Underpayments ranged from $7 to $180,000, with full remediation to occur by July 31, 2020.
The broadcaster will also calculate and back-pay entitlements owed to a small number of breakfast shift producers due to time sheet errors, and some misclassified technology staff.
In addition to the annual audits, the ABC must engage and pay for an external expert to complete a broader review of its workplace compliance and will implement the expert’s recommendations. It will also place notices on its intranet, corporate website, LinkedIn and Twitter channels.
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