DEWR's underpayment fix costing four times more than staff owed

The Department of Employment and Workplace Relations paid external consultants more than $200,000 to clean up the mess of underpaying staff – three times more than the underpayment.

Underpayments to 99 DEWR employees occurred between 7 July 2022 and 11 August 2023.

The total underpayments with indexing amounted to $62,926.52, but legal and consultancy expenses related to the shortfalls landed the department a bill of $221,884.71 to date.

Department Secretary Natalie James told a recent Senate Estimates hearing that at the time of similar hearings last October, DEWR was about to make payments to people in relation to the overtime underpayments.

“The amount that was paid was $62,926.52. That amount was paid, as we foreshadowed at estimates,” she said.

“That was for the period 7 July 2022 up to 11 August 2023. There is work continuing in relation to between 11 August 2023 and 11 December 2023, which is when the Public Service Minister, Minister [Katy] Gallagher, made a new determination covering our department.

“That new determination reverted to the arrangements we had in place or the arrangements in the enterprise agreement that was in place covering most of the staff prior to the machinery of government change.”

The Secretary went on to say rules around hours of work and bandwidth reverted to what is common in the APS and that “essentially” the root cause was the shift in those rules due to the application of parts of the Public Service Award.

“So we have a period between 11 August 2023 and 11 December 2023 where we need to make some more payments with respect to that overtime for that cohort of people,” she said.

Liberal Senator Michaelia Cash, who delighted in noting that DEWR is the department overseeing workplace conditions, appeared surprised that the costs for fixing the problem were ongoing.

“So the total cost is $221,884.71 for an underpayment to date, and paid out was $62,925.60,” she said.

“It could actually go higher – is that what you’re saying?”

Ms James replied in the affirmative and said the department would anticipate that “for those people who were working rosters and working between 6 pm and 7 pm, which some of them were, there will be some overtime owing to them”.

Senator Cash also used the words of the Employment and Workplace Relations Minister Tony Burke (Ms James’s boss) to highlight not only the irony of the situation but also the potential for reputation damage to the department.

“In February 2023, Minister Burke himself defined wage theft in three different categories in his address to the Press Club,” the Senator said.

“He said that the first group are the people who inadvertently make a completely honest mistake.

“The second group are the people where it might not have been deliberate, but they were reckless to the extent of really not making an effort to do the proper checks, and they had the capacity to do so.

“The third are people who absolutely have their eyes wide open that they are ripping off staff. What category of wage underpayer does Minister Burke’s department fit into?”

Ms James took the bait and could not rule out that DEWR fell into the third and worst category.

She instead kept repeating that the matter was still with the Fair Work Ombudsman, to the Senator’s dismay.

“I actually am genuinely surprised by your answer because you’ve left it open to a finding by the Fair Work Ombudsman that it’s the third group of people, where it’s absolutely eyes wide open and are ripping off staff,” Senator Cash said.

Ms James said she would be “very surprised” if that was the case.

“But it is up to the Fair Work Ombudsman,” she added.