The latest casualty in the war on wage underpayment is an unlikely candidate. In an exquisite irony a law firm that holds itself up as the champion of workers’ rights, and is vocal in its criticism of underpayments at other companies, has underpaid hundreds of former and current part time workers, including university students, almost $1 million.
Maurice Blackburn, which markets itself under the slogan “we fight for fair” has written to affected staff alerting them to the stuff up.
The Australian Tax Office is being given more power to track down companies ripping off employees with their superannuation.
“We have identified a group of part time employees where overtime rates have not been correctly applied when additional hours were worked. This includes some past employees such as you,” the letter says.
It turns out to be quite a group: 400 people in all. The problem was first uncovered by the Australian Services Union (ASU) which brought it to Maurice Blackburn’s attention in February, with a deal on restitution struck towards the end of June.
Maurice Blackburn chief executive Jacob Varghese said the “error” was due to an ambiguous overtime provision in the enterprise agreement. “The union felt we were interpreting it wrong,” he said.
After a series of negotiations the law firm and union reached an agreement that the compensation calculations would date back to February 2012, which is the statute of limitations, even though overtime rates weren’t being applied further back than then. For a company that prides itself on being fair, this is only a bit fair.
But Varghese believes the company erred on the side of generosity when it struck the deal. He said the workers benefited from being a unionised workforce.
Corporate Australia is littered with pay errors, some systemic, some accidental, some deliberate.
Earlier this week cosmetics group Lush admitted it had accidentally underpaid more than 5000 workers over the past eight years. It agreed to pay back $2 million in back pay after describing it as “serious payroll system errors”.
Unlike most companies, Lush went on the front foot and owned the problem. It informed the Fair Work Ombudsman, wrote to staff and issued a media statement outlining the extent of the problem and apologizing profusely.
“We are sincerely sorry for letting our staff down so badly,” the company said. “We hope that they can forgive us for this monumental mistake.”
It blamed itself. “It was irresponsible to imagine that such a manual and outdated system could work for a business of our size.”
The brutal reality is the award system has become increasingly complex. The retail award alone has 100 different pay rates.
But at the end of the day the law is the law and that means all companies are required to have good systems in place and properly understand their enterprise agreements to ensure workers are paid their proper entitlements.
Anything less doesn’t meet community standards.
For a law firm like Maurice Blackburn that has gone hammer and tongs after companies such as 7-Eleven, Pizza Hut and others over underpayment issues, it should be above reproach.
Maurice Blackburn’s Varghese agree it is embarrassing, particularly given it prides itself on having some of the best industrial relations lawyers in the country. “From now on they will be involved,” he said.
More than 220 former Maurice Blackburn employees and 180 current employees have been identified and contacted in the past few weeks.
The letter sent out in late June refers to the underpayment as a mistake. “Our firm is deeply committed to doing right by our employees, but mistakes can still happen,” the letter says.
Our firm is deeply committed to doing right by our employees, but mistakes can still happen.
The letter includes the figure estimated to be owed but fails to reveal how that figure has been calculated or the period covered. Not surprisingly, it has raised concerns of a lack of transparency by some recipients.
But Varghese is adamant more details will follow.
Under the Maurice Blackburn Employees Agreement, part time employees are entitled to overtime rates of 1.5 times the normal rate for the first three hours and two times the normal rate for overtime greater than three hours for each day in the week. This didn’t happen.
“In some cases you were paid at a normal rate when you should have been paid at an overtime rate. To correct the error we will be paying you the additional amount you were owed for working overtime,” the letter says.
Too many companies talk the talk but don’t walk the walk.
ASU assistant national secretary Linda White said the enterprise agreement wasn’t “beautifully drafted” and she could see where it could be interpreted differently. She said the deal struck was “fair”.
One former employee who received a letter said they were surprised because the understanding at the time was that they would never be paid overtime. “If anything, I’m surprised they’re paying us these rectification payments at all,” the former para legal said.
But the former staffer said it was disappointing.
“The appeal of working at Maurice Blackburn was the social justice aspect which is so heavily promoted. I could have worked elsewhere in a more corporate job for a higher salary. But after seeing the inner machinations of the place, I probably should have just taken a higher salary at a corporate firm, because at the end of the day, no matter how much they flaunt their social justice branding, it’s a business, and it’s run for profit,” they said.
They are confronting words but companies across Australia need to think about not just what they say but what they do. Too many companies talk the talk but don’t walk the walk.