Introduction

A major national medical centre operator, Idameneo (No 123) Pty Ltd, has back-paid employees $15.3 million and entered into an Enforceable Undertaking (EU) with the Fair Work Ombudsman (FWO).

Idameneo (No 123) Pty Ltd has provided medical centre management services through its 69 medical centres and 13 GP practices under the brand names of parent company Healius Limited, which include ‘Primary Dental’ and ‘Primary Health Care’.

Company self-reported

Healius reported to the FWO in late 2018 that Idameneo (No 123) had underpaid more than 5,000 current and former employees over $12.3 million after failing to meet rates owed under either the Health Professionals and Support Services Award 2010 or the Nurses Award 2010.

Incorrectly classifying workers

Workplace law breaches included assigning an incorrect classification or pay point to some employees, applying an annualised salary rate for salaried employees which did not meet award entitlements, not paying all additional hours worked by waged and salaried employees, and other payroll system errors.

This led to widespread underpayments of award entitlements including minimum weekly wages, casual loading, various allowances, overtime and penalty rates for weekend and public holiday work.

As at April this year, Idameneo (No 123) had identified and back-paid 4,018 employees just over $14 million, which includes interest, for underpayments that occurred between July 2011 and November 2018. The company has also paid additional superannuation contributions.

Underpaid employees include nurses, administrative staff, doctors, dentists and scientists. Individual back-payments range from $1.51 to $131,336.

Looking for 1,300 other workers who are owed money

A further 1,341 employees who are owed $880,000, including interest, have not yet been found. Under the EU, these underpayments must be rectified within 90 days of the EU’s signing, or be paid into the Commonwealth’s Consolidated Revenue Fund 30 days after workers have not been able to be located. The monies will be distributed to the employees as they are found by the FWO.

Fair Work Ombudsman Sandra Parker said an Enforceable Undertaking was appropriate as the employer had self-reported and cooperated with the FWO’s investigation.

“Under the Enforceable Undertaking, Idameneo (No 123) has committed to stringent measures to comply with the law and protect its current and future workforce. This includes at Idameneo’s cost, an independent assessment of its rectification program by a qualified expert and three future independent reviews of its compliance,” Ms Parker said.

“This matter serves as a warning to all employers that if you don’t prioritise workplace compliance, you risk underpaying your staff on a large scale. Any employers who need help meeting their workplace obligations should contact the Fair Work Ombudsman for free advice.”

$400,000 fine imposed

The Enforceable Undertaking commits Idameneo (No 123) to make a contrition payment of $400,000 to the Commonwealth’s Consolidated Revenue Fund.

The EU requires Idameneo to pay for an independent expert to conduct a review of the underpayments with the findings reported directly to the FWO. Any further underpayments that are identified must be back-paid promptly.

Idameneo will continue its dedicated telephone hotline and email service to help its employees with any pay and entitlements concerns for the next 12 months.