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The operator of Queensland tropical resort Hamilton Island has back-paid more than 2,000 past and present staff $28.1 million following an investigation by the Fair Work Ombudsman into underpayments over an eight-year period.
Hamilton Island Enterprises Limited (HIE), which operates a range of accommodation businesses on Hamilton Island, also has signed an enforceable undertaking (EU) to quantify and rectify staff underpayments since December 2014.
The Fair Work Ombudsman, which launched its investigation in 2020, says individual back-payments have ranged from less than $5 up to $119,446 in one instance, with the average back-payment about $8,000.
HIE operates ancillary businesses on the island including the marina, airport, retail stores, restaurants, and leisure and recreation facilities, and is also responsible for the public utility services and the provision of some emergency services. Wholly owned subsidiary Hamilton Island Shared Services Pty Ltd (HISS) provides support services to HIE for finance, bookings, sales and marketing.
The Fair Work Ombudsman’s investigation into the wages and entitlements of salaried staff found that most of the underpayments were the result of companies within the group paying many full-time employees annual salaries that were insufficient to cover their minimum award entitlements. This was due to many staff often performing overtime, shift-work and work that attracted penalty rates.
Most underpaid workers were covered by the Hospitality Industry (General) Awards 2010 and 2020, while others were covered by more than 20 different awards.
The most common entitlements underpaid were overtime rates, weekend and public holiday penalty rates, broken-shift allowances and annual leave loading.
The Fair Work Ombudsman says the large majority of the underpaid staff worked across the businesses HIE operates on Hamilton Island, with a smaller number employed by HISS located at the company’s corporate headquarters in Sydney.
Both HIE and HISS have back-paid a total of $28.1 million, including more than $6 million in interest and about $500,000 in superannuation, to 2,152 current and former staff who were underpaid between December 2014 and December 2022.
A further $250,984, plus an additional $10,954 in superannuation, is to be paid to unclaimed monies for 32 employees not yet found.
Under the EU signed by the companies they must make a combined $750,000 contrition payment, comprising $500,000 to be paid to the Commonwealth Consolidated Revenue Fund and $250,000 to the not-for-profit Cleaning Accountability Framework, an organisation established to improve labour standards in property services.
Fair Work Ombudsman Anna Booth says the EU is an appropriate outcome as the companies had cooperated with the ombudsman’s investigation and demonstrated a strong commitment to rectifying its non-compliance issues and ensuring future compliance.
“Under the enforceable undertaking, the companies have committed to rectifying all underpayments they identify in full, plus interest and superannuation, and implementing stringent measures to ensure all staff are paid correctly in future,” says Booth.
The Fair Work Ombudsman says that underpayments resulting from insufficient annual salaries for employees covered by awards have become a “persistent issue” among businesses of all sizes across many industries.
“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers,” she says.
“Employers must ensure wages being paid are sufficient to cover all minimum lawful entitlements for the hours their employees are actually working.”
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