Public servants underpaid amid Labor’s industrial relations shake-up

The federal bureaucracy has admitted to underpaying 57 staff more than $348,000 just weeks after the passage of new reforms which dramatically hardened wage theft penalties.

Workplace Relations Minister Tony Burke. Picture: NCA NewsWire / Martin Ollman

The federal bureaucracy has admitted to underpaying 57 staff more than $348,000 just weeks after the passage of new industrial relations reforms which dramatically hardened wage theft laws including a fivefold increase in maximum penalties and criminalisation of underpayments.

In response to a question on notice, the Office of National Intelligence revealed one instance of “systemic underpayment” affecting 10 employees in the 2021-22 financial year.

The statutory body, responsible for advising Anthony Albanese and the National Security Committee, said the underpayment was currently being investigated and had been reported to the Fair Work Ombudsman.

In a separate instance, the Department of Parliamentary Services revealed it was forced to back pay 42 food and beverage staff in 2021-22 based on “a revised interpretation” of the enterprise agreement at a total cost of $340,147.

The government department said there had been “some ambiguity” in the enterprise agreement and had self-reported to the Fair Work Ombudsman for the “avoidance of doubt”.

A further five staff were also back paid shift penalty provisions totalling nearly $8000 after mispayments were found during annual reconciliation.

The revelations come after the government pushed through its second tranche of industrial relations reforms which criminalised wage theft following a surprise deal between the Albanese government and the Senate crossbench.

The deal was hailed by unions but condemned by furious employers who have threatened to ramp up their multimillion-dollar campaign opposing Labor’s agenda.

Opposition workplace relations spokeswoman Michaelia Cash suggested the underpayments revealed hypocrisy and warned Labor’s complex new laws were crippling small businesses.

“If government departments can’t pay their employees correctly what hope do small and medium sized businesses have?” Senator Cash told The Australian.

“The issue has always been complexity and this has been an ongoing challenge for businesses across Australia. Most businesses want to do the right thing but the system makes it hard for them.”

The Australian Chamber of Commerce and Industry’s workplace relations director Jessica Tinsley said the government’s own underpayment of workers exposed the dangers of Labor’s “nightmarishly complex” reforms.

“If massive commonwealth departments with large HR teams cannot make sense of this complexity, how on earth can a small business be expected to?” she said.

But Workplace Relations Minister Tony Burke said all workers should be paid correctly and that it should be “an obligation on every employer without exception”.

“I will never accept Mr Dutton’s team claiming it’s all too difficult. Workers have a right to be paid properly,” Mr Burke said.

“If there’s an honest mistake it should be corrected immediately. If there’s deliberate underpayment it is now a crime. It will continue to haunt the Liberal and National parties that Mr Dutton’s team voted against wage theft being a crime.”

The Department of Employment and Workplace Relations in October revealed it underpaid 99 staff more than $62,000 between July 2022 and August 2023, and spent nearly $200,000 on legal advice and data analysis in order to rectify the underpayments.

Secretary of the department, Natalie James, told a Senate estimates hearing that she was first informed of the underpayments more than four months ago on June 15 but departmental officials in October revealed that the 99 impacted staff had still not received any of their owed backpay after more than a year of underpayments.

During the hearing, Ms James claimed to have personally apologised in a video statement provided to all affected staff in the department.

However, a transcript of the video provided to Senator Cash on a question on notice has revealed Ms James did not apologise as previously claimed.

Providing the transcript, the department said she gave an “expression of regret and acknowledged the issue was something the department had got wrong and should have got right”.