A national childcare operator with dozens of locations in Perth has been accused of underpaying more than 1,400 workers, with the alleged total exceeding $2 million.
The Fair Work Ombudsman has started legal action against G8 Education Limited, chasing compensation and penalties.
ASX-listed, Queensland-headquartered G8 operates 33 childcare centres in Western Australia, under several names including Great Beginnings, Buggles, and Jellybeans.
One of Australia’s biggest for-profit operators of childcare and early learning centres, G8 Education has more than 350 centres nationwide.
Shares in G8 Education fell 6.45 per cent, trading at 14 cents each, as of 3.54pm AEST on Wednesday.
In its statement, the Fair Work Ombudsman (FWO) alleged there were underpayments of $1.03 million for workers under the Children’s Services Award 2010.
Affected employees included those working as children’s services employees or support workers and extended to juniors aged under 20, the FWO claimed.
“It is also alleged G8 Education failed to ensure that hundreds of childcare workers it entered into Individual Flexibility Arrangements (IFAs) with were better off overall than if the IFAs had not been made,” the FWO said.
“The Fair Work Ombudsman alleges workers were not left better off overall by the IFAs, which increased the number of ordinary hours that could be worked in a day without the payment of overtime from the usual 8 hours to 10 hours.
“The FWO alleges there was no monetary benefit to the workers under the IFAs, and any non-monetary benefit some of the IFAs purportedly gave these workers was not sufficient to leave them better off overall.
“It is alleged that some of the IFAs resulted in workers not being paid entitlements that they would have otherwise received and the FWO is seeking compensation for these workers representing $1.045 million of the total sum being sought.”
In a statement, G8 said it had been working proactively with the FWO since December 2020, when it identified non-compliance issues during a review.
"G8 Education immediately self-reported to the Fair Work Ombudsman and initiated a full remediation program," G8's statement read.
"The program is designed to ensure all affected team members are compensated in full for any underpayments, including interest and superannuation.
"To date, G8 Education has paid approximately $41 million in compensation to impacted employees and will remediate any further identified underpayments."
G8 said it has strengthened its internal controls for accurate workers' payments since the issues were identified in 2020.
"Appropriate provisions for remediation payments and penalties have been included in G8 Education’s financial accounts since the issue was identified," the company said in its statement.
"G8 Education apologises unreservedly to affected team members."
Fair Work Ombudsman Anna Booth said the alleged conduct was disappointing, and large corporate employers need to place higher priority on paying the lawful entitlements.
“It is completely unacceptable for large, well-resourced corporate employers to allegedly underpay hard-working childcare workers’ basic minimum entitlements,” she said.
“It is crucial for employers that any Individual Flexibility Arrangements leave employees better off overall.”
