‘Set-and-forget’ approach leads to $28.1m back payments for Hamilton Island operators

Companies responsible for the operation of Hamilton Island in Queensland have now back paid over $28.1 million to employees who experienced underpayments courtesy of a “set-and-forget”.

Hamilton Island Enterprises Limited (HIE) has signed an enforceable undertaking (EU) with the Fair Work Ombudsman (FWO) after widespread underpayments saw them have to back pay employees over $28.1 million.

The investigation by the FWO into the enterprise – which operates a range of accommodation businesses and ancillary businesses – began in 2020, with the regulator looking into the wages and entitlements of salaried staff after requested assistance.

As the investigation was conducted, it was found that a majority of the underpayments sprouted from the companies paying many employees annual salaries that failed to fit the needed parameters to cover minimum award entitlements.

This led to the most common of entitlements going underpaid, including overtime rates, weekend and public holiday penalty rates, broken shift allowances and annual leave loading.

According to the FWO, most underpaid workers were covered by the Hospitality Industry (General) Awards 2010 and 2020, with others covered by more than 20 different awards. These underpaid workers were spread across the range of businesses HIE operates on Hamilton Island in Queensland.

These companies have thus far back paid a total of $28.1 million, which included more than $6 million in interest and about $500,000 in super. Exactly 2,152 current and former staff received these payments between December 2014 and December 2022.

Touching on the EU, Fair Work Ombudsman Anna Booth said it was an appropriate outcome as the companies had cooperated with the FWO’s investigation.

“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,” said Booth.

As part of the EU, the companies must make a combined payment of $750,000, with $500,000 to be paid to the Commonwealth Consolidated Revenue Fund and $250,000 to the Cleaning Accountability Framework.

The EU also requires the companies to:

• Commission one independent audit of its payments of salaried employees, tabling results to HIE’s board and reporting the results to the FWO.
• Commission workplace relations training for relevant staff.
• Recruit a compliance officer within HIE to monitor its compliance with workplace laws.
• Run a dedicated employee hotline and email address for employees and/or their representatives to make any workplace relations queries.
• Embed mechanisms that promote consultation with employees and their representatives with results reported to the board, including running an employee engagement survey and holding employee feedback sessions every three months for the life of the undertaking.

“Businesses paying annual salaries cannot take a ‘set-and-forget’ approach to paying their workers. Employers must ensure wages being paid are sufficient to cover all minimum lawful entitlements for the hours their employees are actually working,” said Booth.