ABC underpayments bill expected to top $23m

The ABC’s payments to up to 2500 casual staff that were underpaid is expected to top $23m.

ABC chair Ita Buttrose. Picture: AAP

The ABC is set to fork out about $23m on paying up to 2500 casual staff that were underpaid over a six-year period.

The payments by the underfire public broadcaster will start next month and vary greatly, with one employee set to receive more than $60,000, an ABC insider told The Australian.

Another ABC staffer has been informed that they will be paid $27,000, while one former employee will receive $16,000 after working at the broadcaster for 10 months.

The ABC blamed the bungle on the use of flat pay rates to calculate staff wages, without properly taking into account penalty rates and overtime.

“The underpayments resulted from the practice in some areas of the ABC of paying casual employees flat rates of pay designed to be high enough to compensate for penalty rates and overtime provided for by the Enterprise Agreement. In some cases the flat rates were insufficient to do this and resulted in people being paid less than they were entitled to,” the ABC said in a statement posted on its website on Monday.

An ABC spokesman declined to comment on the payments. “We’re not commenting on any individual outcomes but there was a wide variance in underpayment amounts.”

READ MORE: Wage underpayments by large companies swamp Fair Work | Report reveals ‘systemic and cultural failure’ by the ABC over staff underpayments

The announcement comes as the ABC faces criticism over its decision to axe its radio coverage of the Olympics next year, citing budgetary pressures.

The broadcaster has also come under fire for its story about the horse racing industry last month, and handling of a controversial Q&A episode, which has called into question the broadcaster’s editorial policies and statutory duties.

The cost of repaying casual staff will add to ABC’s financial woe. It has a budget hole of $84m after the federal government froze its indexation of funding, meaning legislated increases in the $1bn it receives each year from taxpayers would not occur.

As a result, the ABC needed to find savings of about $40m annually from the 2022 financial year.

An ABC spokesman said: “We won’t know the accumulated total until the Fair Work process is finalised, but we expect the figure will be less than the amount estimated in the annual report.”

Money set aside

The ABC’s annual report recently revealed it had set aside $22.98m for historical salary, wages and superannuation entitlements for casual staff.

The Community and Public Section Union, which brought the underpayment mistake to the ABC’s attention, said on Monday it will cost the broadcaster approximately $23m and believes that staff will have to pay tax on it.

“We’re glad that people are finally starting to get the money they’re owed,” Sinddy Ealy, CPSU ABC section secretary said.

“This outcome is a credit to the hard work of union members, who worked together to bring it to management’s attention and pursue it until it was resolved. Without these union members coming forward, the union wouldn’t have been able to conduct the investigation and produce the report which exposed this issue.”

Australia’s biggest media union welcomed the payment news, and called for the broadcaster to overhaul its employment process.

“This issue highlights that the ABC relies heavily on staff who spend years employed as casuals or across a series of short-term contracts. Many of these staff are legally entitled to ongoing employment,” said Neill Jones, director of MEAA Media.

“The ABC needs to introduce a clear process to ensure that these employees are provided with the opportunity to convert from casual and contract employment to ongoing employment.”

The underpayment problem was publicly disclosed in January, which led to an extensive review, with the help of accounting and advisory giant PricewaterhouseCoopers.