MAJORITY OF AUSTRALIAN EMPLOYERS ADMIT TO ‘ACCIDENTAL WAGE THEFT’

More than half of Australian companies have made a payroll error in the past 24 months, according to new research from workforce management platform Rippling.

Among the 59% of employers that admitted to accidental wage theft - 48% of errors involved overpayments and underpayments, while 44% involved delayed payments. Misclassifying an employee (28%) and not paying superannuation (24%) were the next most common issues.

The data, based on a survey of 500 payroll managers, suggests the move to remote working had added a layer of complexity to the process. And more than half of respondents (52%) are concerned about recent IR changes that criminalise wage theft and introduce substantial non-compliance penalties. 

As a result, 54% of employers are now reassessing how they manage payroll.

A major Australian employer, Insurance Australia Group IAG, has entered into an enforceable undertaking after a Fair Work Ombudsman investigation found "basic" payroll shortcomings resulted in 19,000 workers being underpaid more than $21 million.

Two entities of IAG - which operates brands including NRMA Insurance and CGU - back paid current and former workers who were underpaid between 2013 and 2023; signed the EU; committed to training managers in workplace relations; and made a $650k contrition payment. They also back paid $16.2m in long service leave entitlements.

The FWO investigation found the underpayments were caused by "basic shortcomings" in time and attendance systems of Insurance Australia Group Services Pty Ltd and Insurance Manufacturers of Australia Pty Ltd, which employ more than 90% of IAG's workforce.

The entities also failed to perform reconciliations and top-up payments necessary to ensure employees were receiving entitlements that were "no less beneficial" than those under the applicable modern awards.

WHAT EMPLOYER’S CAN’T AFFORD TO IGNORE IN 2024

Last year ushered in many changes to the workplace - from the Federal Government's Secure Jobs, Better Pay Act; to the 1st tranche of the Fair Work Legislation reforms (Closing Loopholes Bill). With more on the way in 2024, including the 2nd tranche of the Closing Loopholes Bill introduced this year, Employers face a busy year ahead.

So, what does 2024 have in store for Employers?

In our newsletters, we will be highlighting areas and issues businesses should focus and prepare for. Today we highlight 4 areas;

1. Domestic and Family Violence Leave

Since August of last year, all businesses, regardless of size, must offer 10 days of paid Domestic and Family Violence Leave to employees.  It is crucial that employers are across (understand and implement) these (this) change(s), as a failure to do so will likely increase the risk of a general protections or unfair dismissal claim being lodged against them.

Employers should review procedures to ensure employees are aware that they can access their entitled Leave; review how Leave requests are managed; and implement strategies to maintain confidentiality.

2.  Superannuation under the National Employment Standards

From 1 January 2024, the National Employment Standards (NES) has been amended to include superannuation as an entitlement. This means that employees covered by the NES have the right to pursue unpaid or underpaid Superannuation under the Fair Work Act, so long as the ATO has not already commenced proceedings.

As long as employers are fulfilling their obligations under superannuation guarantee laws, the NES provision will not be contravened. 

3.  Positive Duty to prevent workplace Sexual Harassment

The Sex Discrimination Act 1984 (Cth) was amended to impose a new positive duty on employers to take reasonable and proportionate measures to eliminate, as far as possible, workplace Sexual Harassment and related unlawful conduct. And as of late last year, the Australian Human Rights Commission (AHRC) has powers to enforce compliance of the positive duty.

In 2024, it is expected an increase in enforcement by both the AHRC and health and safety regulators, with a focus on psychosocial hazards in the workplace. Employers must be prepared to meet their new obligations or face scrutiny from external regulators in a way they have not had to do so before.

Businesses should commence taking steps now to ensure compliance, such as reviewing AHRC guidance and conducting a thorough review of their complaints process, policies, and staff training.

4.  Workplace Health and Safety updates

Tougher penalties for offences under the federal Work Health and Safety Act 2011 came into effect late last year, following the passing of the 1st tranche of the Closing Loopholes Bill.

The Closing Loopholes legislation also introduced the offence of industrial manslaughter for causing a workplace death through negligent conduct or recklessness. Applying to officers and persons conducting a business or undertaking (PCBUs), the offence takes effect on 1 July 2024 and carries maximum penalties of $18 million for bodies corporate and 25 years' incarceration for individuals.

This is a reminder for businesses to conduct an audit of the risks of their workplace and ask 'have you limited each risk as far as reasonably practicable to reduce the risk of workplace injury?'. In 2024, employers should take time to create a safety management plan to cover any risks identified and ensure that all staff are provided with training and support.

Employers will want to ensure all actions are documented. Keep in mind, that ensuring a safe workplace is important, but in the event of legal proceedings, employers will be required to demonstrate the safety measures in place.

EMPLOYER ENTITLED TO INSIST ON CLEAN SHAVE

TasWater can direct workers to shave off their stubble, sideburns, moustaches, and beards to ensure their respiratory masks fit properly, the Fair Work Commission (FWC) has held, rejecting the CEPU's claims that it is unreasonable. 

The employer argued that its personal protective equipment (PPE) procedure had always required workers to be clean shaven when using respiratory protective equipment (RPE), although it had not previously strictly enforced it. 

But following a review, the utility late last year, directed all workers comply with a revised PPE procedure and warned it would enforce the measure. 

The procedure says workers who use respiratory PPE requiring a facial seal "must be cleanshaven between the face and the seal", and those with "stubble (even a few days' growth), a moustache, sideburns, or a beard which passes between the skin and the sealing surface cannot perform activities which require respiratory PPE". 

TasWater applied under s739 of the Fair Work Act, for the FWC to deal with a dispute over the requirement, after the CEPU challenged multiple aspects of the policy and contended that status quo provisions in the organisation's agreements prevented it from enforcing it until the issue was resolved. 

The tribunal heard some of the workers cut through cement, bricks, asphalt, and other substances to access pipes, releasing airborne hazardous material such as asbestos and crystalline silica, which can cause severe illness or death if inhaled. 

Treatment plant workers might also enter areas where hydrated lime is used to treat wastewater, while others access pump station areas potentially exposing them to airborne pathogens, hydrogen sulphide and concentrated carbon dioxide.

$800K FINE FOR NOT WEARING A HI-VIS VEST

Safety controls are important. A $800,000 fine has been handed to a business following the death of a worker where it was found that the business had provided vests and had instructed employees to wear them, but failed to enforce its own Policies.

In this particular case the worker, a truck driver, was struck and killed during a trailer changeover, which was conducted in a poorly lit area. The worker was not wearing his provided High Vis Vest when he was struck by his work colleague, who could not see him in the dim light.

In handing down the penalty the Judge noted, that while the business Policies required line haul drivers to be provided with and wear approved high-visibility vests, some workers were not provided with these vests and others complied with the rule “to varying degrees”, finding that the business identified the risk to workers, identified the controls and then failed to ensure that the workers were actually following them. 

Learnings for all businesses

This tragic case is a reminder to all businesses that it is simply not good enough to do the risk assessment and issue the policy or PPE.  Workers must be trained in the risks and hazards associated with their roles and must understand the controls that are there to mitigate those risks. Furthermore, the business must implement systems and reviews to ensure that staff are actually utilising the controls. 

The big message to employers is you simply cannot allow controls that have been implemented to be ignored. Failure to ensure your own controls are used, can lead to serious outcomes for workers or the public and serious fines for the business.