Thinking | 3 March 2022

Underpayments in the education industry

By Alison Baker and Aerin Hines

Employers operating in the education industry should be aware of the risk of employee underpayments, given the broad range of employees they often engage under various industrial instruments.

Case study: St Peter’s Lutheran College

In November 2020, St Peter’s Lutheran College in Queensland self-reported to the Fair Work Ombudsman, disclosing underpayments of its co-curricular sports staff working as coaches and coordinators. The college has now entered into an Enforceable Undertaking with the Fair Work Ombudsman. The college must back-pay staff more than $2 million, including interest and superannuation, to 753 current and former employees who were underpaid between July 2012 and December 2020.

The Enforceable Undertaking

An Enforceable Undertaking is a written agreement between the Fair Work Ombudsman and an employer who has contravened workplace laws, which rectifies an issue and ensures it does not occur again. In this recent case, the college was obligated to pay all amounts owing within 30 days of the Enforceable Undertaking’s execution. Further, the college was required to publish a media release on its website about the Enforceable Undertaking and make a $20,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund. It must also engage an independent auditor to conduct two audits of its compliance with the Fair Work Act 2009 (Cth), Fair Work Regulations 2009 (Cth) and the applicable modern awards and enterprise agreements.

Failure to comply with workplace laws

The college engaged staff as volunteers, while paying them lump sums in recognition of their time and expertise. After receiving external legal advice that these were employment relationships, the college admitted that it had breached the Educational Services (Schools) General Staff Award (2010 and 2020) and the applicable enterprise agreements.

The contraventions related to entitlements including minimum rates of pay, casual loading, weekend penalty rates, overtime, vehicle allowances, a failure to apply pay-point progression, and breaches of record-keeping obligations.

However, the Fair Work Ombudsman has stated that the college demonstrated a strong commitment to rectifying all underpayments after identifying errors in how it engaged workers.

How Hall & Wilcox can help

Hall & Wilcox’s employment team has expertise in advising employers on underpayments and compliance with industrial instruments. We can assist your organisation with resolving underpayment issues through:

  • advising on modern award and enterprise agreement coverage and interpretation;
  • developing an investigation methodology;
  • advising on engagement with (and drafting communications to) any affected employees;
  • advising on any disclosures to the Fair Work Ombudsman; and
  • providing representation before the Fair Work Ombudsman.

Find more information about how we can assist your organisation with underpayments.

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