Time out for Melbourne childcare centre after underpaying staff almost $140,000

A Melbourne childcare centre has been found to have underpaid 114 of its staff almost $140,000 after an investigation by the Fair Work Ombudsman.

Wonderkindy, which operated centres in Port Melbourne and Tullamarine, was found to have underpaid its childcare workers a total of $137,000 since January 2012.

The operator of the business, Allan Coman, has agreed to an enforceable undertaking with the watchdog, public committing to comply with workplace laws in the future.

However, Wonderkindy is no longer operating and is currently in the process of being sold.

The enforceable undertaken will come into effect if Coman continues or recommences trading after the transfer of business.

Coman’s two companies failed to pay staff in accordance with the frequency of payment provisions, as well as failing to pay accrued annual leave on termination.

The majority of the underpayments have been rectified except for $17,000 still owed to 14 employees, which must be repaid by Coman under terms of the enforceable undertaking.

He is also required to provide staff with a written apology expressing the company’s “sincere regret”.

The federal government’s childcare provider portal, mychild.gov.au, shows Wonderkindy was a poor performing provider when it was operating, with the Port Melbourne centre achieving a ranking of ‘significant improvement required’.

The Fair Work Ombudsman also announced this week that it had put a Perth chain of childcare centres on notice for underpaying more than 160 staff.

The chain, which the watchdog is yet to name, runs centres throughout the Perth metropolitan area and was found to have short-changed its employees almost $170,000.

M+K Lawyers partner Andrew Douglas told SmartCompany childcare awards are some of the most complex legislation in the country.

“Any organisation with low budgets is inclined to not have the proper recourses to determine the correct rates,” says Douglas. “It’s very easy to get wrong.”

Lyndal Ryan, national vice president of United Voice, the union for childcare workers, told SmartCompany there were several features of the childcare sector that caused issues with compliancy, including small isolated workplaces, a very high turnover of staff and young staff who were unaware of their entitlements.

Ryan disagreed with Douglas, saying she didn’t believe the awards were particularly complicated and many underpayments in the industry centred on issues outside of the award structure, such as superannuation.

“These people are not earning a lot,” said Ryan. “It’s a real shame to think that these very low paid workers are missing out on further entitlements.”

SmartCompany attempted to contact Coman but did not receive a response prior to publication.