Company joins throng of firms self-reporting after shortfalls revealed
Truck and car sales giant AP Eagers is the latest company to be embarrassed by pay-systems shortfalls, forcing it to self-report a $4.5 million shortfall to the Fair Work Ombudsman (FWO).
The development comes as large companies and government entities face reputational damage, through accusations of “wage theft”, and threats of criminalisation for such breaches in future.
Supermarket chain Woolworths is one that continues to find the wrong sort of headlines, an FWO probe and legal action over the issue.
AP Eagers says it identified entitlements inconsistencies “during a company-initiated review while implementing a new time and attendance system to centralise its payroll systems.
“These systems have been previously managed by disparate, individual dealerships, some of which were acquired by AP Eagers in recent years. “
Once identified, audit firm PwC was engaged to undertake an external assessment of the firm’s payroll to determine the extent to which past and present employees had been impacted.
AP Eagers board reviewed the assessment and then self-reported, pledging to fully cooperate during any resulting FWO investigation.
Read the Australian Payroll Association’s warning on payroll law changes, here
About 6,200 employees are impacted over a seven-year period.
“The total payment shortfall equates to $4.5 million or just under 0.25% of a total of $2.1 billion payments made to employees over that same period,” the company says.
Management was contrite about the issue.
“We unreservedly apologise to our employees,” AP Eagers CEO Martin Ward says.
“AP Eagers is committed to paying the amounts owed to past and present employees, in full and with interest, as soon as practically possible.
“We understand the importance of ensuring our employees are paid their entitlements in full and on time – we take full responsibility for the mistake and we are very sorry.”
Specifically, the issues relate to award classification, the application of overtime, superannuation contributions and deductions.
“AP Eagers is implementing a centralised time and attendance system as well as improvements to its payroll processes to ensure all employees are paid their full entitlements going forward,” the company says.
“Implementation of this system is being closely monitored by the executive leadership team and the AP Eagers board.
“AP Eagers has also committed to undertake a review of AHG’s payments to employees following its acquisition of the company in September 2019.”
Mainstream media reports on the progress of the AHG Refrigerated Logistics sale has speculation centring on US reefer giant Emergent and more recently private equity firm Anchorage.