Fair Work Ombudsman pay errors anger ARA

A retail lobby group is calling for an industry-specific education program regarding workers’ pay, following revelations the Fair Work Ombudsman provided incorrect information to employers.

On Tuesday, the Ombudsman released a report showing 26% of retail employers are underpaying workers’ wages and entitlements.

In response to the findings, retailers were urged to make use of self-help tools provided by the Ombudsman, including online pay calculator PayCheck Plus and employment guides.

But it’s since been revealed the Ombudsman has made multiple changes to fix errors in its online pay calculator.

The incorrect advice may have led retailers to unintentionally contravene their employer obligations, adding more confusion to an already-complex system.

The revelation has angered the Australian Retailers Association, which says it’s easy to see why retailers are confused. The ARA is calling for a retail-specific education program.

“Retail industry associations have an important role in filling the gap between general information and retail-specific information, as well as offering education programs specifically for retailers,” executive director Russell Zimmerman says.

“The ARA is calling on government support for ongoing education provided by retail industry associations, as retailers make efforts to ensure they proactively comply with their obligations.”

Zimmerman says small retailers don’t have access to in-house HR expertise, so they’re dealing with incremental changes to the modern award system in addition to all of their other duties.

“Retailers who aren’t members of an association need to be aware of possible shortfalls when seeking advice from non industry-specific experts,” Zimmerman says.

“[Retailers] should probably weigh up the benefits of joining an industry association against the possible cost of back paying their staff and keeping up with often confusing changes.”

Similarly, small business lobbyist Peter Strong says small business owners do not have the resources or the expertise to achieve everything that is asked of them.

“Small business is a person who cannot be an expert on everything.  The current system has obviously failed in the small workplace,” he says.  

Meanwhile, the operator of a Hungry Jack’s outlet has been penalised $46,200 after the Fair Work Ombudsman found it had been underpaying its workforce for more than four years.

The Federal Magistrates Court in Melbourne imposed the penalty against Chamdale Pty Ltd, which operates a Hungry Jack’s outlet in the Victorian town of Bendigo.

Federal Magistrate Norah Hartnett found the company had underpaid 180 workers – mostly juniors, including some school-based apprentices – a total of $104,946 between 2005 and 2009.

The largest individual underpayment was $8,218, while 29 employees were underpaid more than $1,000.

According to Fair Work Ombudsman Nicholas Wilson, the penalty should serve as a reminder to employers, no matter how big or small, that underpayment of employees is a serious matter.

“We expect those companies, which employ significant numbers of young people, to diligently exercise their workplace obligations and ensure staff receive their full and proper entitlements,” he said in a statement.

Wilson said the Fair Work Ombudsman is planning to launch a dedicated webpage to assist the franchise sector, with information and resources aimed at franchisors and franchisees.