Australian Red Cross admits underpaying thousands of staff

The Australian Red Cross has admitted underpaying thousands of its current and former staff by millions of dollars over a period of several years.

According to documents obtained by The Guardian, the organisation has set aside AUS$20 million (US$15.1 million) to back pay the workers after an audit revealed the payroll errors.

Chief executive Judy Slatyer said 800 current staff are owed an average of around AUS$1,800 (US$1,378) per annum over several years. "We are still calculating what this means for past employees," she said.

The Red Cross has hired auditors Ernst & Young to help sort out the mess. The charity has already spent AUS$607,000 (US$458,892) on a remuneration compliance project, with another AUS$200,000 (US$151,200) earmarked for an internal audit that is due to be carried out by the end of the year.

Miles Heffernan, director of litigation at Industrial Relations Claims, said he was not surprised the organisation was desperate to fix its underpayment problem.

"The penalties for systemic underpayment of wages can be huge – currently, serious contraventions of workplace laws now attract a maximum $630,000 (US$476,281) penalty for a corporation, and that’s per contravention,” he said. “In this case, there are thousands, if not hundreds of thousands, of contraventions.”

The leaked documents also indicated that one former department head allegedly ran up an AUS$125,000 (US$94,500) phone bill while on a private overseas holiday. In February and March this year, two senior executives were accused of spending AUS$318,775 (US$244,061) on travel.

Meanwhile, staff were said to have incurred more than AUS$100,000 (US$75,600) in traffic fines, including 77 for speeding, 17 for running red lights, 28 for parking offences and 18 for unpaid tolls. Between June 2017 and April 2018, vehicles belonging to the charity were apparently involved in 102 crashes, costing AUS$102,000 (US$77,112) in insurance expenses and repairs.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.

The Australian Red Cross has admitted underpaying thousands of its current and former staff by millions of dollars over a period of several years.

According to documents obtained by The Guardian, the organisation has set aside AUS$20 million (US$15.1 million) to back pay the workers after an audit revealed the payroll errors.

Chief executive Judy Slatyer said 800 current staff are owed an average of around AUS$1,800 (US$1,378) per annum over several years. "We are still calculating what this means for past employees," she said.

The Red Cross has hired auditors Ernst & Young to help sort out the mess. The charity has already spent AUS$607,000 (US$458,892) on a remuneration compliance project, with another AUS$200,000 (US$151,200) earmarked for an internal audit that is due to be carried out by the end of the year.

Miles Heffernan, director of litigation at Industrial Relations Claims, said he was not surprised the organisation was desperate to fix its underpayment problem.

"The penalties for systemic underpayment of wages can be huge – currently, serious contraventions of workplace laws now attract a maximum $630,000 (US$476,281) penalty for a corporation, and that’s per contravention,” he said. “In this case, there are thousands, if not hundreds of thousands, of contraventions.”

The leaked documents also indicated that one former department head allegedly ran up an AUS$125,000 (US$94,500) phone bill while on a private overseas holiday. In February and March this year, two senior executives were accused of spending AUS$318,775 (US$244,061) on travel.

Meanwhile, staff were said to have incurred more than AUS$100,000 (US$75,600) in traffic fines, including 77 for speeding, 17 for running red lights, 28 for parking offences and 18 for unpaid tolls. Between June 2017 and April 2018, vehicles belonging to the charity were apparently involved in 102 crashes, costing AUS$102,000 (US$77,112) in insurance expenses and repairs.

Emma Woollacott is a freelance business journalist. Her work has appeared in a wide range of publications, including the Guardian, the Times, Forbes and the BBC.