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Disability Services Provider Caught Underpaying Workers $13.6 Million

Disability Services provider caught underpaying workers $13.6 million

A disability services provider caught underpaying workers $13.6 million has promised to back-pay them in full.

The affected workers are all people with disabilities and are covered by a pay structure set out in the Supported Employment Services Award.

The award allows the employees to receive a rate of pay based on their capacity to perform the work.

Disability services provider self-disclosed underpayments

Disability services provider, Activ Foundation Inc. (Activ) is a registered Australian Disability Enterprise.

It admitted underpaying 1,695 current and former employees in a wide-range of roles.

For example, manufacturing, property maintenance, landscaping and product packaging.

The underpayments happened as a result of changes made to the application of the tool used to determine its employees’ rate of pay.

Enforceable Undertaking

Instead of commencing litigation, the Fair Work Ombudsman offered Activ the chance to enter into an Enforceable Undertaking.

Consequently, Activ promised to back-pay the workers within 90 days.

Additionally, Activ has promised to make a contrition payment of $20,000 to two WA-based disability organisations.

Further it commits to implementing stringent measures to protect their employees.

For example,

  • setting up a dedicated hotline for employees
  • funding three external audits over the next three years
  • setting up a clear process for workers or their representatives to dispute their rate of pay
  • and registering with the Fair Work online portal and pay for workplace relations training for payroll and human resources staff.

Activ must also liaise with relevant government bodies to ensure that the back payments do not affect social security payments.

Finally, the organisation is required to display public, workplace and online notices detailing its breaches and apologising to workers.

Ombudsman says Enforceable Undertaking ‘appropriate’

Fair Work Ombudsman Sandra Parker defends the Enforceable Undertaking because the organisation has promised to back-pay the workers.

“The Court-Enforceable Undertaking commits Activ to stringent measures to protect their employees, including funding three external audits over the next three years and setting up a clear process for workers or their representatives to dispute their rate of pay.

“This matter serves as a warning to all organisations that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale and face a massive back-payment bill. Any employers with questions about their lawful workplace obligations should contact us.”


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