Western Australian electricity network provider Western Power has back-paid employees more than $8 million, and is reporting to the Fair Work Ombudsman to ensure it correctly calculates and finalises further significant back-payments, under an entered into with the FWO.
Western Power, a statutory corporation owned by the WA State Government, self-reported to the regulator last year that it had underpaid employees located in Perth and the South-West of WA.
The affected employees were managers, team leaders and staff in professional, para-professional, technical and administration roles, who all entered into Individual Flexibility Arrangements (IFAs).
The underpayments were the result of the company failing to correctly ensure employees on individual agreements were better off compared with the Enterprise Agreements that covered the employees, and excluding entitlements in the Enterprise Agreements which were not permitted to be varied in the individual agreements.
This resulted in Western Power underpaying hundreds of staff pay-point-progression payments, allowances, penalties, overtime, redundancy pay and superannuation entitlements at various times between March 2010 and January 2020.
Before the execution of the EU, the company had identified and back-paid 1,238 workers a total of $8.29 million, which includes interest and superannuation. Individual back-payments range from $2 to over $40,000.
Further back-payments relating to the underpaid entitlements – expected to be significant in size – are yet to be finalised. The EU requires Western Power to calculate and pay outstanding amounts to every underpaid employee by 1 October this year.
Fair Work Ombudsman Sandra Parker said that an Enforceable Undertaking offered to the FWO by Western Power was accepted, given the commitments it included and the level of cooperation the company had shown.
“Western Power demonstrated a strong commitment to rectifying all underpayments, and the Enforceable Undertaking commits the organisation to stringent measures to protect its workforce. This includes an independent assessment of its rectification program by a qualified expert and two future independent audits of its compliance over the next two years,” Ms Parker said.
“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. Any employers who need help meeting their lawful workplace obligations should contact the Fair Work Ombudsman for free advice.”
Under the EU, Western Power will make an initial $400,000 contrition payment into the Commonwealth’s Consolidated Revenue Fund, followed by a second contrition payment into the fund next year with this amount to be calculated once underpayments are finalised.
As part of the EU, the organisation must operate a hotline for 12 months that employees can use to make enquiries in relation to their entitlements, underpayments or related employment concerns. Western Power is also required to display public, workplace and online notices detailing its breaches and apologise to workers.
