23 October 2023

Current and former staff of aged care services provider Calvary Administration Pty Ltd have been back-paid more than $2.1 million, including interest and superannuation, and the company has signed an Enforceable Undertaking (EU) with the Fair Work Ombudsman.

In 2021, Japara Administration Pty Ltd was purchased by a not-for-profit Catholic health care organisation and renamed Calvary Administration Pty Ltd. At the time of the contraventions Japara Administration was a subsidiary of Japara Healthcare Limited which was an ASX-listed company that had been one of Australia’s largest providers of aged care.

It was Japara Administration that self-reported underpayments to the regulator in July 2020.

The underpaid employees were engaged at the time by Japara Administration either full-time, part-time or casually in aged care facilities in regional and metropolitan Victoria, New South Wales, South Australia and Tasmania.

Underpayments were caused by a payroll error – a Sunday penalty rate that should have been applied under a new agreement was not applied to any relevant worker between April 2018 and May 2020.

A review also found underpayments of annual leave loading under the Victorian enterprise agreement, and of lump sum parental leave entitlements under five agreements.

As a result, between January 2017 and June 2020, Japara Administration underpaid 2,800 current and former employees $1,831,131, excluding superannuation and interest.

The large majority of underpayments were in Victoria, including all the Sunday penalty rate and annual leave loading underpayments. Only 17 underpaid workers were outside Victoria.

The company has back-paid all underpayments to all employees, with $2,103,617, including interest and superannuation, paid. Back-payments ranged from $1 to $3,613. The average back-payment was $751.

Fair Work Ombudsman Anna Booth said an EU was appropriate as the company had cooperated with the FWO’s investigation and demonstrated a strong commitment to rectifying underpayments.

“Under the Enforceable Undertaking, Calvary Administration has committed to implementing stringent measures to ensure its workers are paid correctly. These measures include commissioning, at its own cost, independent audits to check its compliance with workplace laws over the next two years,” Ms Booth said.

“This matter shows how important it is for employers to place a high priority on their obligations, to ensure that their systems provide for full compliance with all entitlements. Shortcomings in the company’s payroll system and broader compliance led to breaches of their own enterprise agreements that left hard-working employees shortchanged,” Ms Booth said.

“Improving compliance in the care sector is a priority for the Fair Work Ombudsman in 2023-24. In this and other sectors we expect employers to invest the time and resources to regularly review if they are meeting all lawful entitlements and to remedy any issues."

Under the EU, Calvary Administration must make a $120,000 contrition payment to the Commonwealth’s Consolidated Revenue Fund.

The EU also requires Calvary Administration to ensure relevant staff undertake workplace relations training. It must also publish notices about its contraventions on its website and run a service desk for a year so employees can raise queries about their pay or entitlements.

The majority of underpaid employees were part-time aged care workers engaged as personal care workers, leisure and lifestyle assistants, coordinators and diversional therapists, cleaners, laundry and kitchen workers, cooks and maintenance workers.

Employers and employees can visit www.fairwork.gov.au or call the Fair Work Infoline on 13 13 94 for free advice and assistance.