The Smith Family has completed payments of more than $5.9 million, including interest and superannuation, for 784 underpaid workers as part of entering into an Enforceable Undertaking with the Fair Work Ombudsman.
The national charity organisation, which helps young people and their families overcome poverty-based education inequality, has also committed to a range of measures to ensure compliance with workplace laws in future.
The Smith Family underpaid workers at its head office in Sydney and across all states and territories over an eight-year period.
A broad range of workers were underpaid, including education program staff, managers, engagement advisors, and professionals such as marketing, accounting and HR staff.
In its investigation, the FWO found The Smith Family failed to have adequate systems in place to ensure it understood which industrial instruments, such as Award or Agreement, applied to its employees.
This led to the charity failing to pay many employees the minimum rates and entitlements owing to them under its Enterprise Agreement and the Social, Community, Home Care & Disability Services Industry Award 2010.
On other occasions, The Smith Family identified the correct Award or Agreement but paid employees unlawfully low rates as a result of classifying them at a lower level than was appropriate given the employee's experience, qualifications or duties being performed.
A failure to conduct regular reviews resulted in the underpayments persisting for several years.
Overall, workers were underpaid minimum wages and a range of other entitlements, including overtime, allowances, leave entitlements and public holiday-related pay.
The charity also breached workplace laws by failing to keep proper employment records for workers.
It identified underpayments during an internal review and self-reported its non-compliance to the Fair Work Ombudsman in 2023.
The Smith Family has rectified all identified underpayments, paying $5.912 million for a total of 784 current and former employees it underpaid between 2016 and 2024. This included underpaid wages and entitlements, interest and superannuation contributions.
Back-payments to impacted individual employees range from $1 to more than $121,000, including superannuation and interest, with an average back-payment of about $7,900.
Fair Work Ombudsman Anna Booth said an Enforceable Undertaking was appropriate as The Smith Family had cooperated with the FWO's investigation, rectified its underpayments and committed to improving its compliance.
"We welcome The Smith Family's commitments to ensure future compliance, including to commission an independent audit, and to establish an internal forum that will increase employees' voice on pay and conditions," Ms Booth said.
"This matter serves as a warning of the significant long-running problems that can result from an employer failing to have adequate systems and checks-and-balances in place to ensure workers are receiving all lawful entitlements. Years of reviews and back-payments, with interest, will follow.
"All employers need to make sure that for each employee they understand which Award or Agreement may apply, and what the employee's correct classification is under that instrument. The employee must then be paid all minimum rates and entitlements that apply to that classification."
Under the Enforceable Undertaking, The Smith Family has committed to a range of measures to ensure future compliance, including:
- commissioning an independent audit to assess its compliance with workplace laws;
- establishing an internal forum that allows for consultation with employees on pay and conditions matters;
- providing six-monthly reports to the Fair Work Ombudsman on regular internal monitoring of workplace relations compliance by its internal committees; and
- implementing an automated time-and-attendance system.
