Employers face backpay nightmare

Thousands of employers could soon face investigation to ensure they are properly back-paying staff employed under workplace agreements that have failed the Government’s fairness test.

It was revealed on the weekend that close to 4000 employers have failed to comply with a Workplace Authority request to provide additional information on between 25,000 and 30,000 AWAs or collective agreements lodged since the fairness test took effect on 7 May this year.

Late last week Workplace Authority officials decided that employers have been given enough time to comply with the requests for further information. A process of finally vetting the agreements against the fairness test will now begin, with the vast majority of agreements expected to fail the test.

Once agreements have been judged to fail the fairness test, employers have just 14 days to fix them before they are required to start paying employees back-pay under their old employment arrangements.

“The Workplace Authority now has no alternative but to proceed to assess the agreement on the basis of the limited information available. In most cases this will see those agreements where further information has been sought but not provided assessed as not passing the test and requiring changes within 14 days,” Workplace Authority head Barbara Bennett says.

For the thousands of employers that have not provided the Workplace Authority with the information they require, the end of that 14 day period will mean arranging to pay thousands in arrears to employers – or face investigation, and possible penalties, by the Workplace Ombudsman.

Bennett has confirmed that the Workplace Authority will refer any employers who fail to meet their back-pay obligations to the workplace watchdog, which has a team ready to investigate possible breaches.

Employers that have lodged workplace agreements without providing adequate information to apply the fairness test would have received at least two communications from the Workplace Authority since mid to late July 2007.

A spokeswoman for the Workplace Authority says employers will receive notification if an agreement they have lodged hasn’t passed the fairness test, and then a final phone call two days before the end of the 14 day period if they have failed to provide the additional information required.