Department underpays 99 staff members, costing hundreds of thousands of dollars

The Department of Employment and Workplace Relations (DEWR) underpaid almost 100 staff over the course of a year and has only just repaid them in the past few days.

Senate estimates hearings exposed the issue on Wednesday (25 October), asking questions of department secretary Natalie James and noting the irony that her agency is in charge of overseeing workplace conditions.

Underpayments to 99 employees took place between 7 July 2022 and 11 August 2023.

The underpayments ranged from $9 to $4051.07, with the average underpayment coming in at $635.25.

The total of the underpayments with indexing amounted to $62,926.52, but legal and consultancy expenses related to the shortfalls landed the department an almost $200,000 bill.

Ms James said she had only become aware of the underpayments in June this year and informed Employment and Workplace Relations Minister Tony Burke on 25 July.

An internal query over the matter was brought to her attention and the department subsequently self-reported the underpayments to the Fair Work Ombudsman in August this year.

“The Minister did not request a briefing,” Ms James said when asked.

“We talked through the issues and we endeavoured to keep him informed.”

Asked if Mr Burke had apologised to staff, Ms James replied that he hadn’t.

“I’m not sure why he would… it’s my responsibility,” she said.

Ms James revealed the department has paid $119,625 for legal fees to date and a further $75,866 to external consultants for data analysis.

But staff have only just been paid in the current pay cycle what they have long been owed.

Six of them are no longer even in the employ of the department.

The official excuse for the underpayments has been put down to machinery of government changes that affected the department following last year’s federal election.

“Arrangements for pay and conditions became a little more complex as a result of the machinery of government change,” Ms James said.

Shadow employment minister Michaelia Cash, who was dogged in questioning Ms James and department officials over the underpayments, later suggested that if the government couldn’t pay its staff right it had little authority to crack down on businesses.

“This has been quite an extraordinary episode,” Senator Cash said.

“If the department responsible for employment and workplace relations struggles to pay its staff correctly what hope do small businesses have?’

“Ms James admitted that complexity was the issue, which is exactly the challenge facing tens of thousands of small and medium businesses in this country.

“This government is only making the workplace relations system more complex and confusing with their radical industrial relations laws.

“Unfortunately, most businesses do not have the resources to pay lawyers and consultants tens of thousands of dollars to sort through such issues.”

Agriculture Minister Murray Watt attended the estimates hearing on Mr Burke’s behalf and said when underpayments are detected they should be remedied as soon as possible.

“Wage underpayment should not occur in any circumstance,” Senator Watt said.

“And where those wage underpayments are intentional, of course, we have legislation before the parliament to deal with that.”