The Australian Red Cross Society has admitted it will take until June 2020 to pay the $20m owed in back pay to workers more than 18 months after news of the underpayment broke.
Guardian Australia revealed in May 2018 that Red Cross had failed to pay its workers correctly after discovering the organisation had made incorrect assumptions about the award and enterprise agreement coverage, as well as classification of roles, meaning staff had been underpaid over a number of years.
About 800 staff were originally said to have been underpaid around $1,800 a year over several years.
The charity advised staff the money would be paid back over the coming months, but more than 18 months later, about 30% of current humanitarian staff are still waiting to be paid.
The charity’s annual report, published on the Australian Charities and Not-for-profit Commission’s website, reveals Red Cross at the end of the last financial year still had nearly $20m provisioned for the humanitarian division’s estimate of employee underpayments.
The Fair Work Ombudsman confirmed it had launched an investigation, which it is understood began in May 2018.
“As this investigation is ongoing, it is not appropriate to comment further,” the ombudsman said. “Any workers with concerns should contact us directly for assistance on 13 13 94 or at www.fairwork.gov.au.”
The charity said in the annual report the majority of employees were paid a portion of their back pay as of December 2018.
The charity’s acting chief executive, Noel Clement, told Guardian Australia significant progress had been made but it was still unclear exactly how much back pay was owed to all current and former employees.
“Seventy per cent of our current workforce have been reviewed so far. Since March 2019, we have corrected the ongoing hourly pay rates and annual leave loading for all employees who needed a correction,” he said.
“We have been working to finalise all remaining back pay of hourly pay and annual leave loading to this cohort in the next few weeks, with the possible exception of a group who have complex employment histories, who will be paid soon after.”
About 30% of the organisation’s current employees are on historical or complex enterprise agreements, and Clement said it was taking some time for the company to work through it.
“We will know if there are underpayments owed for the majority of this group by the end of this year, and as soon as we know that we will move quickly to rectify all issues.”
Clement said Red Cross would aim to have all back pay paid by June, and was keeping the ombudsman updated on its progress. He said $20m was an upper estimate and the organisation had the reserves to more than meet the costs of back pay.
“Red Cross relies on its talented people to deliver its vital humanitarian programs for thousands of vulnerable people across the country and many more in our region and beyond,” he said. “We recognise the enormous contribution our staff bring to Red Cross and they are highly valued by us. It’s a priority to pay all staff accurately and we are committed to rectifying any money owed as quickly as possible.”
In the 2018-2019 financial year, the organisation reported total revenue of $867m and a net deficit of $19.5m. The chief financial officer, Cameron Power, said maintaining and increasing revenue was under continued pressure and not-for-profit organisations were seeing a decline in traditional fundraising channels.
“We have put in place new fundraising channels and products but these take time to test and iterate so that they can deliver significant revenue,” he said.
