This article is from the Australian Property Journal archive
MAJOR childcare centre operator G8 Education revealed it underpaid staff by up to $80 million over six years, and has self-reported to the Fair Work Ombudsman as it sets about a remediation program.
About 27,000 current and former workers have been affected. An external review by law firm Allens and PwC identified “potential inadvertent non-compliance with some requirements” of the Children’s Services Award and the Educational Services (Teachers) Award dating back to July of 2014.
“In many cases, the issues arose due to insufficient documentation of agreed hours,” G8 Education said yesterday.
A full remediation program is expected to be completed by the end of July next year, and affected staff employed during the period will be paid what they are owed in full, G8 Education said, as well as interest and superannuation in accordance with the group’s obligations.
Total remediation costs are estimated to be between $50 million to $80 million pre-tax. This includes estimated direct wage costs of approximately $38 million to $60 million, wage oncosts such as superannuation and payroll tax, interest and remediation program costs.
Remediation costs, net of tax, of about $35 million to $56 million will be funded from existing cash reserves.
G8 Education apologised for the pay errors and to all affected staff.
It reported occupancy rates have been inching back upwards. Like-for-like occupancy is at 75.5%, a gap of 4.5% to 12 months earlier, narrowing by approximately 5.5% since the April low.
“The group expects CY21 to be a recovery year given the absence of additional government subsidies and the ongoing impacts of COVID-19, particularly on occupancy – either directly through movement restrictions or indirectly through economic impacts such as higher unemployment,” it said.
About 10 new greenfield centres are expected to open during the 2021 calendar year with a capital outlay of approximately $4 million.
