The Fair Work Ombudsman announced on Thursday it had reached an agreement with Qantas, under which the airline will directly apologise to affected employees and place public notices on its intranet, website external link icon and Facebook page for one month, as well as in national newspapers.
“Qantas has come forward and admitted to breaching the Fair Work Act for several years and significantly underpaying hundreds of its employees several million dollars,” said Fair Work Ombudsman Sandra Parker.
The airline will also set up an independent employee hotline and complaints system within 30 days.
Aside from publicly admitting to the wrongdoing, the company has committed to calculating and rectifying any further underpayments by 24 April 2020.
Moreover, it will then make a contrition payment to the Commonwealth’s Consolidated Revenue Fund equal to 5.5 per cent of its underpayments.
The FWO investigated Qantas after the airline self-reported that it had incorrectly paid some of its marketing and administrative staff in accordance with the terms of individual contracts of employment, rather than the relevant enterprise agreements that covered and applied to them.
As a result, employees did not receive the minimum terms of the relevant enterprise agreements, including minimum wages, overtime, annual leave entitlements and superannuation, which led to underpayments and record-keeping breaches.
To date, Qantas has back paid $7.1 million to 638 employees who were underpaid between June 2011 and June 2019. Head office staff in corporate and administration roles were affected.
According to the FWO, the airline has paid interest on all back payments using an interest rate 6 per cent above the RBA cash rate, and an additional payment of $1,000 to affected workers, at a total of $2 million.
“The EU creates a robust process where an independent expert will verify that employee back payments are correctly calculated and paid by Qantas. Three further pay audits will also be conducted by an independent auditor, which will benefit Qantas’ current and future employees,” Ms Parker explained.
The expert review is expected to be completed by 14 October 2020. The FWO said that any further underpayments identified by the expert will be back-paid with interest, an additional payment of $2,000 to affected employees and attract a higher contrition payment of 7 per cent.
“Viewed together, the back payment bill, interest paid on underpayments, additional payments made to impacted staff and contrition payment impose a significant cost on Qantas. These additional measures, along with the cost of an independent expert and future audits, help to level the playing field for businesses who have complied with workplace laws,” Ms Parker said.