French multinational defence industry contractor Thales Australia has back paid staff $7.44 million in wages, superannuation and interest after entering into a court-enforceable undertaking (EU) with the Fair Work Ombudsman (FWO).
A total 407 current and former employees were underpaid between 2011 and 2018, FWO found. Affected employees have been back-paid individual amounts ranging from $2,593 up to $158,978.
The underpayments were discovered after Thales disclosed it had paid annual salaries below what employees were entitled to under the applicable enterprise agreements.
Fair Work inspectors found that the underpayments primarily occurred because Thales did not take sufficient steps to check that the salary contracts it entered into with employees were above the minimum salaries listed in the enterprise agreements and awards that covered them.
Some employees were underpaid as a result of Thales inadvertently classifying and paying them at a lower level than they were entitled to.
Fair Work Ombudsman Sandra Parker said that the regulator considered an EU appropriate after Thales back-paid workers and dedicated significant resources to overhauling its workplace practices.
“This outcome sends a strong message to employers that if you don’t prioritise workplace compliance, you risk underpaying staff on a large scale and facing a massive back-payment bill,” Parker said.
“Under the Court-Enforceable Undertaking, Thales must apologise to its highly-skilled and committed employees for significantly underpaying their lawful entitlements. The company must also implement a new payroll system to improve its wages and record-keeping practices, which will ultimately benefit thousands of its current and future employees,” Parker said.
Affected employees included middle managers, professionals, administrative employees, salaried manufacturing and technical employees.
Under the EU, Thales is required to commission audits of employees’ pay and conditions by an external auditor later this year and again next year and report the results to the FWO.
Thales has admitted to breaching workplace laws. In addition to back-paying staff, Thales will also make a gesture of contrition through a $200,000 payment to the Commonwealth Government’s Consolidated Revenue Fund, FWO said.
Thales develops, supplies and maintains products and services including command, control, communications and computer systems, munitions, weapons, protected vehicles and mission packages. It employs about 3,900 people at more than 35 sites around Australia.