Red Cross in the Ombudsman ‘Hall of Shame’
The Fair Work Ombudsman have imposed two Enforceable Undertakings on the Australian Red Cross Society, specifically within the Humanitarian Services Division and the Lifeblood Division. It is projected the Red Cross will be required to back pay over $25 million to employees.
In 2018, the Humanitarian Division reported itself into the Ombudsman, after identifying that it had underpaid employees through completing an internal review.
The result of these underpayments was largely due to the application of incorrect awards or enterprise agreements. These underpayments were caused by wrongly classifying employees as award free, which meant that employees were not being paid the correct entitlements or minimum rates of pay.
Within the Humanitarian Services Division, over 10,000 employees were affected by underpayments. Between 2012 and 2021, it is projected that the employees could have been underpaid $22 million.
While investigating the Humanitarian Services Division, the Ombudsman also discovered underpayments in the Lifeblood Division. These underpayments were due to the Red Cross wrongly assuming that some employees were beyond the coverage of the applicable enterprise agreements.
It was identified that between 2010 and 2021, approximately 1,160 employees within the Lifeblood Division had been underpaid:
- various leave entitlements;
- shift work loadings;
- public holiday loadings;
- overtime;
- redundancy entitlements;
- superannuation; and
- minimum rates of pay.
The combined underpayments totalled $3.5 million.
Collectively, the Red Cross has underpaid over 11,000 current and former employees more than $25 million.
The Ombudsman has stated that the Red Cross has been very diligent in rectifying these underpayments.
Additionally, the Ombudsman has acknowledged that “Under the two Enforceable Undertakings, the Red Cross has committed to stringent measures to comply with the law and protect its workforce. This includes engaging, at its own cost, an expert auditing firm to check its workplace law compliance for the next two to three years, …”.
The Red Cross has currently back paid more than $10 million to the affected employees. The Enforceable Undertaking imposed on the Humanitarian Services Division involves the Red Cross to have paid all affected employees, plus interest and superannuation, by 21 February 2021.
Both Enforceable Undertakings also require the Red Cross to source an independent organisation to control a Hotline to assist employees and provide workplace relations training for staff.
Correctly interpreting awards is vital to ensure you are meeting all your obligations to employees. If you would like guidance or advice regarding award interpretation, please contact our Workplace Relations Team on (07) 3872 2222 or workplacerelations@amaq.com.au.