Fair Work frustration at underpayments by big employers

The workplace regulator says the lack of investment by employers in payroll expertise is ‘really coming back to bite’ them.

Fair Work Ombudsman Sandra Parker.

Fair Work Ombudsman Sandra Parker says the continued large underpayment of workers by major employers is “incredibly frustrating and disappointing”, and their lack of investment in payroll expertise is “really coming back to bite” them.

In the wake of BHP announcing it would backpay $430 million to 28000 workers for 13 years of underpayments, Ms Parker said it was even more frustrating that the companies committing the underpayments were covered by enterprise agreements that they negotiated themselves.

She said while the industrial relations system was complicated, that “doesn’t mean that you don’t put effort into it, or you throw your hands up”.

“I accept it’s complicated but so are a lot of other things that businesses do,” she told The Australian.

“The tax system is really complicated. All of their overseas arrangements are complicated. Everything they do is complicated and I don’t really hear them saying to the Tax Office we don’t want to comply because it’s complicated.”

Ms Parker, who will finish up as FWO next month after five years as the workplace regulator, said the community would have expected corporates to have fixed their underpayment issues by now “but they just keep coming”.

Citing the big underpayments by BHP and Woolworths, she said: “They are very, very large underpayments and it’s just incredibly frustrating and disappointing because it does mean that we will continue to have to focus on this issue going forward as a regulator when, quite frankly, it would be good if we could put much more of our effort into looking after vulnerable workers and migrant workers and those who really can’t help themselves as well.”

Ms Parker said there had been a “lot of commentary on social media about payroll issues and payroll expertise and payroll people feeling burnt out and not enough investment being put into payroll, and that’s starting to look like a really significant issue for companies to have to deal with”.

“That seems to be a real pattern emerging that there just hasn’t been investment in payroll expertise over the years, and it’s really coming back to bite,” she said

“It’s just costing these companies massive amounts of money and, in addition to what they owe, because they have to audit and fix it, and work with us, and put a huge amount of effort into fixing it, the loss of confidence that provides for workers.

“If you invest in things, they get fixed. Some of these are going back more than 10 years.”

She said companies would be familiar with agreements given they negotiated them but once they were approved by the Fair Work Commission, they “sort of set and forget”.

“You give them to the payroll area and say make this happen and then no-one’s really going back and doing checks,” she said.

“Boards aren’t saying to their executive teams, where’s the assurance on this? Assure us as the board that you are actually doing regular checks and there is not any ongoing issues.

“Often it’s not discovered until they do a takeover or the acquisition of another business and then they do an audit and realise there’s a problem.

“The other frustration is that we respond to self-reports from corporates or through whistleblower or anonymous reports of underpayments.

“We’re not doing proactive audits of companies because we’re not resourced to do so. So there’s probably a lot more out there than we know. I suspect there is.”