Single complaint triggers $1m in back-pay

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Are your wage compliance measures up to scratch? This organisation has learnt that all it takes is for one worker to uncover an underpayment for the floodgates to open.

A single complaint from a service technician in South Australia which initially led to almost 400 workers being back-paid some $350,000 has since resulted in more than $1m being dished out.

The workers were employed at Pink Hygiene Solutions, owned by Sydney-based Rentokil Initial Pty Ltd, at locations throughout Australia. With 70,000 workers worldwide at more 50 countries, it’s hard to imagine how wages could be systematically underpaid to such an extent, and that the issue was only discovered after a complaint.

In March, 2010, the Fair Work Ombudsman received a complaint in Adelaide from a former employee about under-payment and non-payment of overtime.

While the complaint was subsequently settled between the parties, the Fair Work Ombudsman (FWO) issued a contravention letter to the company requiring it to ensure its compliance with workplace laws.

In response, a self-audit by Rentokil revealed inadvertent errors in applying overtime provisions had resulted in 396 current and former employees being underpaid a total of $354,494 between 1 July 2007 and 31 December 2009.

Rentokil cooperated with the agency to back-pay the workers, and the matter was dealt with by way of an enforceable undertaking as an alternative to litigation. As part of its commitments under the enforceable undertaking, Rentokil has since identified – and rectified – underpayments totalling more than $1m for over 560 current and former employees.

So what went wrong? According to the FWO, it was primarily due to the application of incorrect pre-modern awards in NSW and the subsequent underpayments in relation to transitional rates.

As part of the enforceable undertaking, Rentokil made a $40,000 donation to the Working Women’s Centre in South Australia to assist it promote the need for employer compliance with national workplace laws.

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