Nov 16, 2021

Aged care provider set to reimburse underpaid staff $6 million

Aged care workers underpaid

On Monday, Southern Cross Care revealed it owes staff at least $6 million due to the use of outdated payroll and rostering systems.

The error was brought to CEO Robyn Boyd’s attention in March 2020, a week after he began working with the not-for-profit provider. He immediately engaged KPMG to investigate, and by April 2020 it was clear there had been an underpayment.

The company promptly reported the matter to the Fair Work ombudsman.

“The board and management of SCCT deeply apologises to past and current staff who may have been underpaid their overtime due to outdated payroll and rostering systems,” a statement on the company’s website read.

“SCCT takes this issue very seriously and are dedicated to ensuring all our past and current employees are paid their correct overtime amounts.”

The provider has introduced a new payroll and rostering system in the wake of the revelation, hoping to prevent similar underpayments from occurring in the future.

KPMG is reviewing SCCT’s payroll and rostering data, but won’t know until early next year the extent of the underpayments. 

SCCT chair Stephen Shirely told The Mercury, “Given the hundreds of thousands of documents to be reviewed and the difficulties of analysing the numerous, extremely complex, enterprise agreements we have, across each of our sites and for the past six years, the review has taken the better part of two years.”

When KPMG completes its report, SCCT has stated it will begin the “remediation” process. The company will contact the individuals affected and ensure they are paid all amounts owed, plus interest.

However, the statute of limitations means KPMG is only legally obligated to extend its inquiries back six years. This timeframe leaves open the possibility that staff who worked at SCCT more than six years ago may never be reimbursed, even if they were underpaid.

The Health and Community Services Union says this could leave hundreds of staff short-changed.

“Unfortunately, because of the way they’ve been treating their staff, there’s been high turnover, so we’d speculate this would affect hundreds of workers, some who still work for them,” HACSU assistant secretary Robbie Moore told The Mercury.

Moore has suggested the inquiry be extended to look at potential underpayments more than six years old.

“They should pay people what they owe them, which would go back at least 14 years when they struck an enterprise agreement,” Moore told The Mercury.

He also said HACSU is “disappointed” SCCT didn’t “come clean” earlier, when they first discovered the shortfall. He noted the company has provided little detail about the underpayments, other than the fact they’re in relation to overtime. HACSU had begun its own investigations.

SCCT was also in the news recently for plans to cut the working hours of kitchen staff. The company denied the assertion, saying it was simply implementing changes after receiving feedback from resident focus groups.

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  1. Questions need to be asked by the regulators of the Board oversight of the organisation, the role of the previous CEO and anyone holding senior financial roles during this time. The timing would suggest that a worker notified the new CEO as soon as they commenced which would suggest that the previous CEO (and the incumbent CFO) would have both known about the matter and yet had decided not to take action. Credit to the new CEO for acting decisively but someone needs to hold other senior staff accountable – who it would seem – knew about this underpayment and had done nothing.

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