Southern Cross Care to Repay $11.7 Million in Underpaid Wages
Southern Cross Care (NSW & ACT), an aged care provider, has entered a court-enforceable agreement to repay over $11.7 million in underpaid wages, superannuation, and interest to thousands of its current and former employees. The underpayments, which spanned seven years, were self-reported to the Fair Work Ombudsman (FWO) in 2023 following an internal audit.
Background of Underpayments
Southern Cross Care (NSW & ACT), a not-for-profit organization operating 54 communities and residential homes across New South Wales and the Australian Capital Territory, initiated an internal audit in 2023. This audit was prompted by an employee's query regarding overtime payments, which subsequently uncovered widespread underpayments. The organization then self-reported the findings to the Fair Work Ombudsman.
The underpayments occurred between July 2017 and October 2024. A broad range of frontline staff were affected, including:
- Home care employees
- Registered and enrolled nurses
- Assistants in nursing
- Facility managers
- Cooks
- Handypersons
The total amount owed exceeds $11.7 million. Individual back-payments averaged $1,716, with one worker identified as being owed $44,593 in unpaid wages, superannuation, and interest.
Identified Causes
Southern Cross Care attributed the underpayments to systemic issues within its payroll processes. These issues included a reliance on manual payroll procedures and a faulty time-and-attendance system. These systems reportedly failed to accurately calculate various entitlements, such as:
- Overtime
- Weekend penalties
- Shift loadings
All of these were due in accordance with applicable enterprise agreement requirements.
Remedial Actions and Enforceable Undertaking
Under the terms of the court-enforceable agreement, known as an Enforceable Undertaking, Southern Cross Care has already repaid $10.1 million to over 3,600 identified employees.
Key requirements of the Enforceable Undertaking include:
- Locating all remaining affected staff within 60 days. Any outstanding wages not claimed within this period will be forfeited to the Commonwealth Consolidated Revenue Fund.
- Overhauling its payroll technology and systems to prevent future inaccuracies.
- Funding independent compliance audits to ensure ongoing adherence to wage obligations.
- Establishing an external whistleblower hotline to facilitate reporting of potential compliance issues.
Fair Work Ombudsman Anna Booth stated that the case serves as a warning to Australian employers regarding the importance of managing worker entitlements with appropriate checks and balances. The FWO acknowledged Southern Cross Care's cooperation and transparency as factors influencing the decision to pursue an Enforceable Undertaking instead of more severe litigation.
Company Response
A spokesperson for Southern Cross Care (NSW & ACT) stated that the organization acted immediately upon identifying the incorrect payments. They confirmed that all affected current staff have been compensated and that efforts are ongoing to rectify payments for former employees. The spokesperson added that the provider is strengthening its systems and processes to prevent recurrence of such issues.
Current and former employees who believe they may be affected are encouraged to contact Southern Cross Care (NSW & ACT) directly or the Fair Work Infoline for further assistance.