How did you discover the payment issue?
We initially found some anomalies while implementing our new resource management system. We then took a closer look and realised that we had an issue and needed some expert assistance to investigate properly and make sure we were doing the right thing by our Crew. We have completed the investigation and discovered the source of the issue.
When did you discover the problem?
We found the initial anomalies in August 2020 and have been working through the matter since then.
Who does this impact?
We have now confirmed and contacted all past and current Crew members affected by this issue. This process has been a collaborative effort between a specially assembled Reach project team involving members of the Reach Board, Leadership Team and Finance Team and external experts in relation to workplace laws and data analysis at PwC.
How will I know if I am affected?
We have contacted everyone individually who has been impacted via email. If you have not received this direct communication from Reach, then you have not been impacted by this historical error.
What about Crew who have left Reach?
Some Crew who have left Reach are among those impacted. They have also been contacted directly.
What programs were affected?
The two potential pay issues originally identified related to Crew involved in the delivery of our camps over several years which meant that some team members were not paid correctly.
An extremely thorough review into the staffing and payroll for these camps was undertaken to determine who was impacted by this pay issue.
The first issue related to payments for Crew who worked at our camp programs. Employees had historically been paid a lump sum for their participation in a camp program. This amount was intended to compensate the Crew member for all benefits under the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) for this period. However, Reach had identified that the amount paid may not meet the minimum requirements under the SCHADS Award taking into consideration payment for different scenarios such as working Saturday and Sunday and the sleepover allowance. Our review confirmed that there was a shortfall against the Award entitlements in respect of overnight camps for some Crew members.
Many complex factors came into play during this review including roles, responsibilities and working hours – all of which informed the calculation of individual payment amounts. These criteria were externally recommended by PwC.
The second issue identified related to pay point progression. Following our review, we have determined that no further adjustments were required in respect of this issue.
How much were people underpaid?
Backpay amounts vary from person to person depending on their hours worked, camps and positions. Each individual impacted will receive communication detailing their personal total back payment. The payment also includes interest. Superannuation contributions will be made to individual’s nominated super funds.
Why did it take so long for the issue to be resolved?
These pay issues were uncovered as a result of an internal review, which was undertaken to strengthen our systems and processes. As soon as we became aware that there may be an issue, we moved as quickly as we could. We voluntarily self-reported to the Fair Work Ombudsman (FWO) and transparently informed our current and former Crew of its existence while working to establish exactly who was impacted. We also reported this error in our 2021 Annual Report.
We engaged the assistance of external experts – PwC – to investigate the issue. They guided a review of our payroll systems and our approach to Crew employment as well as assisting us to quantify the error.
The process to understand and rectify this issue has taken many months, and we thank everyone for their patience – it is a very complex area and we wanted to make sure we got it right.
We are confident that Reach’s systems, processes and team structures have been adjusted to reduce the risk of such circumstances arising again in the future.
Why haven’t I received notification of a back payment?
When this issue came about, we transparently contacted all Alumni and Crew to inform everyone of the pay issue. At this time, we didn’t know how many people, and who, had been impacted by the error.
We have since completed a thorough payroll review with expert help from PwC and have identified those individuals who were impacted. Only those impacted have received individual notification of an upcoming back payment to rectify the issue.
If you haven’t received notification of a back payment, this means you weren’t among those affected by the error.
What are the tax implications for people getting a back payment?
Back payments, like normal income, are potentially taxable. We have been advised by the Australian Taxation Office that a flat rate of withholding of 34.5% will apply to these back payments. While Reach is unable to provide tax advice, we will be holding a tax information session to help guide those impacted through potential tax implications. We will be in touch with details about this session soon. Please register your interest by sending an email to hr@reach.org.au
Any other questions?
Please don’t hesitate to reach out to us at hr@reach.org.au if you have any further questions or queries about this issue.