Minimum payments under various Awards, Enterprise Agreements and contracts has been a complex issue in Australia for a long time. This is because negotiations about wages have varied greatly between workplaces, the type of work performed, and the years of experience or level of the employee.
Mistakes have consistently been made in the calculation of wages. This has resulted in underpayment of wages often over many years. It is unlawful to underpay an employee and penalties do apply.
To identify an underpayment is time-consuming and depends on many factors including:
- Proper classification of the work being done by the employee
- The age of the employee
- The level at which the employee is performing the work
- The days on which the work is performed, and the hours on any given day
- Whether or not allowances (e.g. clothing or meals) apply. These are usually unique to a workplace/industry.
- Whether an employee has the benefit of an old award because they did not sign up to, or become bound by, a more recent industrial agreement such as an Enterprise Agreement.
When large numbers of employees are involved against big employers (e.g. Coles or Woolworths), the Fair Work Ombudsman has been known to take a keen interest in enforcing the agreement. Where a small employer is concerned, the same rules apply but with less fanfare.
After an underpayment is identified, it can take 6 months for the Fair Work Ombudsman to make a ruling. Often it is a ruling which the employee disagrees with. Whether or not they agree, it is usually left up to the employee to engage their own lawyer to then bring a legal proceeding against the employer for the amount of underpayment.
Underpaid employees should consider whether or not to fast track the process by going straight to a lawyer even though this can be a more expensive process, at least in the beginning. McDonald Murholme offers assistance in the calculation and the legal action to recover underpayments.