Illustrating the importance of effective award interpretation, the investigation found that Toys 'R' Us staff in stores across a number of states had been underpaid their minimum hourly rates and shift penalty rates between 2007 and 2009.
Fair Work Ombudsman Executive Director, Michael Campbell, said the scale of the underpayments was one of the largest his team had encountered.
"An extraordinary number of young and vulnerable employees were underpaid a large amount of money. We accept the contraventions were inadvertent and not deliberate," he said. It was reported that one employee was just 14 years old.
The investigation resulted in an enforceable deal with the company, ending the need for any further prosecution. Toys 'R' Us has been ordered to pay back all employees what they are owed and as part of the deal.
Toys 'R' Us has also agreed to donate $300,000 towards the cost of educating and training young workers and protecting their rights at work.
The settlement with the Fair Work Ombudsman also saw the toy giant agree to:
• SET UP a whistleblower hotline for its staff
• APOLOGISE in writing to all current and past employees;
• APPOINT external professional service providers to audit its pay and conditions, record-keeping and staff complaint procedures within three months and again within 18 months;
• SEND its payroll and/or human resources staff to accredited training courses for the next three years;
• ENSURE compliance with federal workplace relations laws and co-operate with the Fair Work Ombudsman in any future investigations; and
• POST a copy of the agreement and a signed copy of its letter of apology on its website.
In a letter to staff, Toys 'R' Us expressed its "sincere regret" and said the underpayments were a result of "inadequate processes".
A Toys 'R' Us spokeswoman advised that all employees affected by the pay discrepancies had received "complete restitution", and pledged it would not happen again.
So how can you safeguard your organisation from potential underpayment cases?
Ensuring that you are compliant with penalty rates and modern awards can represent a major headache for many organisations, with recent workplace cases such as Toys 'R' Us and South Australia's Irvine Transport, highlighting the importance of effective Award Interpretation and Time Management processes.
Mitrefinch's Employee Time Management System (TMS) takes the stress out of employee allowances and entitlement calculations via an in-built, fully customisable Award Interpreter.
Easily calculate base and overtime pay, weekend and public holiday penalties, as well as leave loading and shift penalties, ensuring consistent application of your business rules. A direct interface to your external payroll application further reduces payroll administration and the potential for costly payroll errors.
If you would like discover how your organisation can benefit from more efficient Award Interpretation and effective Employee Time Management contact Mitrefinch today on 1300 884 931 or email sales@mitrefinch.com.au
You can't afford not to.
(Source: Herald Sun and Payroll News)
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