Major Medical Centre Operator’s Failure to Comply with Award Requirements

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. Further, in late 2018, Idameneo's parent company, Healius Limited, underpaid over 5,000 of its current and former staff, as reported to the Fair Work Ombudsman (FWO).

Reasons For Underpayment

The reason behind the underpayments was Idameneo’s failure to comply with the minimum rates requirements under the:

  • Nurses Award 2010; and
  • Health Professionals and Support Services Award 2010.

Further identified grounds for underpayment were:

  • failure to classify employees appropriately under the relevant Awards;
  • assigning improper pay points to employees within the classification level;
  • annualised salary arrangements used failed to meet minimum Award entitlements;
  • failure to pay additional hours worked by employees, both hourly paid as well as salaried; and
  • errors in payroll system.

The mistakes in the system 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 Underpayment

Employees of Idameneo affected by the underpayment included nurses, administrative staff, doctors, dentists, and scientists.  Idameneo had 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 underpaid $880,000 collectively.

Underpayment Consequences

The consequences suffered by Idameneo as a result of the underpayments were as follows:

  • Idameneo had to provide an Enforceable Undertaking (EU) with 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.
    • 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 a 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 findings and report would go back to the Fair Work Ombudsman.

The matter serves as a reminder to employers that workplace compliance must be prioritised. It is critical to understand and comply with the legislation and the Awards that apply to the wages of your employees. Regular remuneration reviews must be undertaken to avoid significant underpayments that might have accrued over time.

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