Staff Payment Updates

Determining who has been impacted, and what individual scenarios are, is a complex process and will take some time.

We are pleased to update you that 50% of the current local staff records have been recalculated, and repayments have been received by affected staff. All remaining affected current staff will be notified and receive their payments within the next 4-6 weeks.

Once the current staff data is processed, we will begin analysing the records of previous staff. This could take up to 12 months to complete, as there are over 1,000 past staff pay records that need to be thoroughly checked for any payment errors. Affected individuals will be contacted, and repayments will be processed accordingly.

Superannuation payments are under review. Any underpayments identified will be notified in writing, and payments will be made by the ATO. This process could also take up to 12 months.

We appreciate that you may be feeling let down by this information, and we ask that you allow us the time to get this right and make good. We won’t have any information to provide until the work is completed, and we are moving through this as quickly as we can.

This issue impacts many people, and each in different ways – but you can be assured that all underpayments will be rectified.

If you have questions in the meantime, we ask that you send enquiries to the questions@chorus.org.au mailbox, which has been set up specifically for queries on this matter. This way we can understand the questions everyone has and keep all staff up to date.

As with most errors, a combination of factors led to this outcome – but a key factor was the complexity of the SCHADS Award, which is different to other modern awards in some important ways and not simple to interpret and apply in our novel operating environment.

The specific issues related to:

1. SCHADS Award classification misalignment
   The SCHADS Award has two classifications that align with the work done by our people – the Home Care Employee (HCE) classification, and the Social and Community Services Employee (SCSE) classification. The Chorus 2.0 model assumed that all support workers would work across all service types, and that the majority of work would be aligned with the HCE classification. For a small number of support workers and this has not been the case, and the majority of their work has been more closely aligned with the SCSE classification. This misalignment between the award and the work that people are doing has led to some people being underpaid.
2. SCSE pay point increase
   Team members employed on the SCSE classification are also entitled to a pay point increase when they have worked 1,976 hours. The process for tracking and managing these increases up to now has been a manual process, and not built in to any of our systems. As a result of staffing changes, this was not consistently tracked and actioned.
3. Superannuation on leave loading and workers compensation
   Under Australian taxation laws, organisations are obliged to pay superannuation on ordinary earnings, which for almost all industries means that superannuation is NOT paid on leave loading, or on workers’ compensation payments. However, the SCHADS Award specifically obliges organisations to pay superannuation on these earnings. This additional superannuation payment code was missed in the set-up of the Chorus payroll system, meaning Chorus staff who received leave loading and/or workers’ compensation payments did not receive Superannuation on top of these payments.
4. Better off over all test
   A small number of enabling team members had been employed on an hourly rate based on the SCHADS award terms and conditions. At some point following the inception of Chorus, these team members moved to an annual salary arrangement. When this happens, we are obliged to make sure that these team members remain “better off overall” than if they had remained on the hourly rate with the award terms and conditions.  This better off overall test has not been reliably and consistently applied, meaning some team members may not have maintained their “better off” status.

We are assessing the payroll for all current and former employees from July 2018, when Chorus first became an employer, through to today.

There are three things we need to do next:

1. We need to stop the errors continuing.

• • We will update the Superannuation quarterly payment to the tax office in December to make sure that everyone’s superannuation is accurate going forward.
  • We will work with local leads to identify those team members who may need to be re-classified or have the way they are working correctly aligned to ensure that the work and their pay rate is matched.

2. We need to assess who might have been underpaid and repay these amounts.
   • This process will take some time as we will need to complete an individual assessment of each team members salary over the relevant period. We expect to have all current team member assessments complete within the next six months and then we will start to assess previous employees.
   • Any underpaid superannuation amounts are paid directly to the tax office who process the management of payments directly into team members funds. We understand that this process could take anywhere up to a year to finalise.
3. We need to make sure that these mistakes do not happen again.

• • We are upgrading our payroll system to ensure that we can automate the rules around pay rates, and maintain a history in the system of when and why specific changes were made.
  • Moving forward, we will be conducting an annual payroll system audit to ensure we stay up to date with any future changes to the Award.

If you have been affected by any of these errors, we will contact you directly with further information and next steps as we move through and complete the assessment process with our external providers.

• Chorus employees (excluding those on an annualised salary) who have taken paid leave been affected by the superannuation error, and this will be remedied directly with the ATO and your nominated superannuation fund. Any superannuation payable is paid at the current rate, which means you do not lose any of the accrued value of those amounts.  As the calculations of Superannuation are finalised, Chorus will contact each individual to notify them of the total amount and the date this amount was repaid to the ATO.  The ATO will then disperse the funds to your superannuation account, and we understand this may take up to 12 months.
• Team members who have been affected by a misclassification or “better off overall” error will be informed in writing with details of how the error impacted them, and how and when these amounts will be repaid. We estimate that this process will take approximately six months for current team members, and may take up to a year to resolve for former employees.

To ensure full transparency in the assessment process, Chorus has commissioned two external and independent partners to assist us in carrying out this work.

Payroll Edge is a specialist payroll consulting business, and is conducting the individual assessments and calculating any underpayments that are owed. Payroll Edge has been conducting the audit of our current system, and has identified some of the errors that we are letting you know about today. HLB Mann Judd is our external financial auditor, and will review all the calculations that will go to the ATO for updated superannuation payments.

Importantly, at the end of the process any employee who is dissatisfied with the assessment will have an opportunity to have the decision reviewed.

We’re deeply sorry that this has happened, and we know that people may be feeling let down or less confident about processes that they trust to be correct and beyond reproach.

It’s upsetting that this situation has occurred, and there is no one person or process that is responsible. The current payroll and people teams have been diligent in bringing these issues to our attention, and we want to thank them for doing this work – and we are working hard to put measures in place to ensure nothing like this can happen again.

Chorus manages its financial position closely – and while there is further detailed analysis needed to assess the individual impact, we have conducted a high-level, conservative estimate of the total cost and are assured we have sufficient funds available to cover these obligations without putting Chorus at financial risk.

There is no risk to jobs, or to our ability to provide services to our customers and communities. While we would prefer this had not happened, our focus is now on making things right for our people and ensuring that we don’t have any of these issues in future.

Yes. All underpayments will be rectified.

We have included some links below that you might find useful. When the time comes that you know the details of your circumstances, you will be in a better position to follow up if you think you need to.

We have set up a dedicated mailbox questions@chorus.org.au for questions related to this.

We do not know specific information at this early stage, but we are very happy to receive questions you may have thought of, and which other people may also have.

If you would like to speak to someone on the telephone, please email questions@chorus.org.au to request a call. Please ensure you provide your contact details.

You can also reach out to the Chorus Wellbeing and Employee Assistance Provider, Sonder, who we have also let know that people may be feeling unsettled by this situation.

These links may also be useful resources:

Services Australia – Other Employment Income Declaration

Fair Work – I think I have been underpaid