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.
Additionally, 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 reasons for the underpayments were failures to comply with minimum rates requirements under the:
- Nurses Award 2010; and
- Health Professionals and Support Services Award 2010.
in addition to:
- failures to classify employees appropriately under the relevant Awards;
- assigning improper pay points to employees within the classification level;
- annualised salary arrangements failing to meet minimum Award entitlements;
- failures to pay additional hours worked by employees, both hourly as well as salaried; and
- other errors in its payroll system.
The mistakes and errors 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 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:
- Idameneo had to provide an Enforceable Undertaking (EU) with the Fair Work Ombudsman under which it 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 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 findings and report would go back to the FWO.
This case study serves as a reminder to employers that workplace compliance must be prioritised. It is critical to understand and comply with the applicable legislation and Awards with respect to the wages and other entitlements of your employees. Regular remuneration reviews must be undertaken to avoid significant underpayments that might have accrued over time.
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