Idameneo Pty Ltd (“Idameneo”) (otherwise known as Primary Health Care), a major medical centre operator has been found to have underpaid its employees in the amount of more than $15 million.
Reasons For Underpayments
These underpayments of employees stemmed largely from Idameneo’s failure to comply with the minimum employee pay rates requirements under the:
- Nurses Award 2010; and
- Health Professionals and Support Services Award 2010.
and where Idameneo:
- failed to classify employees appropriately under the relevant Awards;
- assigned improper pay points to employees within the classification level;
- annualised salary arrangements that failed to meet minimum Award entitlements;
- failed to pay additional hours worked by employees, both hourly paid as well as salaried; and
- made errors in its payroll system.
These resulted in substantial underpayments of Award entitlements which included minimum weekly wages, overtime, allowances, casual loading and penalty rates for work performed by employees on weekends and public holidays.
People Affected by the Underpayments
Employees of Idameneo affected by the underpayments included nurses, administrative staff, doctors, dentists and scientists. Idameneo identified and back paid 4,018 employees with payments exceeding $14 million in total. Back payments made by Idameneo included interest and additional superannuation contributions for underpayments that occurred between July 2011 and November 2018. Idameneo was unable to locate over 1,000 other employees who had been collectively underpaid $880,000.
Underpayment Consequences
The consequences for Idameneo as a result of the underpayments were:
- Idameneo had to provide an Enforceable Undertaking (EU) to the Fair Work Ombudsman under which Idameneo had the following obligations:
- Remaining underpayments had to be made within 90 days from the date of signing of the EU; and
- Where the remaining employees could not be located, Idameneo had to pay the amount into the Commonwealth's Consolidated Revenue Fund. The FWO would then pay the amounts to the remaining employees when they were located.
- Idameneo was required to contribute the sum of $400,000 to the Commonwealth's Consolidated Revenue Fund.
- Idameneo had to pay for an independent expert to review the underpayments. The expert’s findings and report would go back to the Fair Work Ombudsman.
This matter serves as a reminder to employers that compliance with minimum workplace Award entitlements must be prioritised. It is critical to understand and comply with the relevant legislation and the Awards that apply to your employees. Regular compliance reviews and audits are strongly recommended to minimise the risk of significant underpayments or other non-compliance issues that might have accrued over time.
For any assistance for medical or healthcare legal requirements contact us today on +61 3 9822 8588 or email our team supportteam@burkelawyers.com.au.
