Robyn Anderson posted on February 01, 2011 09:37
Retailer Toys ‘R’ US (Australia) is in the press for breaches of the Workplace Relations Act, the predecessor to the Fair Work Act. A Fair Work Ombudsman (FWO) investigation has resulted in the company creating a hotline for workers to complain about employment breaches and donating $300,000 to charity after admitting to underpaying its employees by almost $1,000,000.
This was the deal struck that saw FWO agreeing to discontinue legal proceedings that had been commenced against the company. A large cost both financially and to the retailer’s reputation as a youth employer.
The Fair Work Ombudsman in late 2008 informed the retailer that it was investigating whether it had lodged a large number of AWAs and ITEAs (the transitional equivaleent of an AWA) that breached the Workplace Relations Act.
A joint "voluntary compliance process" revealed the employer had underpaid about 1,000 employees a total of $998,000. The underpayments and breaches related to a large number of AWAs and ITEAs the employer lodged with the Workplace Authority (now known as the Fair Work Ombudsman) in 2007 and 2008.
The Retailer failed to bring the agreements up to scratch after being informed they failed the no disadvantage test (now replaced by the 'better off overall' test), but continued to pay employees the rates they provided rather than applicable award rates.
In addition to the underpayments – all of which the company rectified in March 2009 – the compnay also admitted to breaching a number of the Act's requirements for lodging AWAs and ITEAs, including failing to date and sign them or have instruments covering junior employees signed by a parent or guardian which is a legal requirement for agreements for junior employees.
Under an enforceable undertaking given to the FWO, Toys ‘R’ Us agreed to apologise to its employees in a letter. Further, it will donate $300,000 to organisations dedicated to the "service, training and education needs of young or vulnerable workers and the protection of their rights in the workplace".
The retailer has also committed to establish and publicise a whistleblower hotline its employees can use to complain about underpayments or breaches of conditions and to investigate the complaints.
In addition to the above the Toys 'R' Us undertakings include:
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engaging an external service provider to conduct two audits of its employment arrangements;
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sending its managers responsible for HR or authorising employee pay to approved workplace relations compliance training; and
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co-operating with any future FWO investigations
This is yet another example of large employers getting it wrong and comes off the back of the 2010 case involving Cotton On who had to backpay large amounts to a employees and also issue a letter of apology to its employees and these are companies that have the benefit of a large HR Department.
If you are unsure of your employer obligations under the Fair Work Act and the new industrial awards, email enquiries@hrnavigation.com.au or phone HR Navigation on 1300 669 747.