The National Disability Insurance Scheme (NDIS) is a system that has been set up to provide support for people living with disabilities. This system has resulted in an increase in the number of NDIS service providers, all of which have to be compliant with the Social Community and Home Care & Disability Services (SCHADS) Award. However, a number of Employment Law issues have been raised – a major issue has been underpayment of wages.
Complexity of SCHADS Award
When it comes to the NDIS, service providers are responsible for ensuring that their employees are paid correctly and in accordance (usually) with the SCHADS Award. These Employer obligations apply even to not for profits, charities, co-operatives as well as private companies. Unfortunately, there have been instances where service providers have underpaid their employees, which can be a cause for concern.
Some examples (some of who were self-reported to the Fair Work Ombudsman) include:
- Li-Ve – $700,000
- Breakthru Ltd – $2.7 Million
- Disability Services Australia – $1.6 Million
- Scope (Aust) Ltd – $326,000
- Wellways Australia – $1.5 Million
There are a number of reasons why underpayment of wages could be a concern for NDIS service providers.
Fines and Penalties
The Social, Community, Home Care and Disability Services Award (SCHADS) is the award that covers most workers in the disability sector.
If you are an NDIS service provider, it is important to be aware of the potential fines and penalties that may be imposed if you underpay your employees.
A breach of the SCHADS Award will lead to a backpay and compensation component. However there are also pecuniary penalties attached to such a breach – for breach of modern award provisions.
Unpaid overtime payments and misclassification of award coverage seem to be the major issues when it comes to breaches of the Modern Award which lead to large penalties.
Penalties as of January 2023 are as follows:
- penalty of $16,500 per contract for an individual and $82,500 per contract for an Employer
- for more serious contracts up to $165,000 per contract for an individual and $825,000 per contract for an employer
- payment of outstanding entitlements plus interest
- an order requiring an Employer to undertake training or an audit
- an order for payment of compensation to the employee compensation for losses suffered.
Misclassification of SCHADS Award
The most common reason for underpayment of wages is simply an error in the classification of employees.
In Vahid Sedighi Gourabi v Westgate Medical Centre  FWCFB 3874 a Full Bench of the Commission summarizes the principles to apply when interpreting awards namely:
- legal question – proper construction of the coverage clause and any other provisions of the modern award;
- factual question – whether the employer and employee fall within the scope of the coverage clause
The normal factual question requires a need to look at the following:
- qualifications; and
A relevant decision of Joseph Haiser v Feros Care T/A Feros Care Limited  FWC 56 (11 January 2023) saw an employee as a Customer Service Liaison (CSL) for the Local Area Coordination (LAC) department which is contracted to complete work on behalf of the National Disability Insurance Agency (NDIA) his duties included:
- Answering inbound calls to provide customer support to National Disability Insurance Scheme (NDIS) Participants, their families and the greater community, this support includes providing information about the NDIS, information on how to meet access for the NDIS, information on how to use their NDIS plan, information on supports the NDIS provide, links to community and mainstream supports in their region
- Booking and managing appointments for Local Area Coordinators (LAC’s)
- Assisting with a range of administration duties to support the Feros Care LAC program
The employee argued that the SCHADS Award applied to his employment as opposed to the Clerks Award. The Fair Work Commission after undertaking an assessment found in favor of the employee and in their view the SCHADS Award applied.
As such relief for compensation and back pay is now open to the employee to seek.
Interpretation of Awards
Another area of controversy is the interpretation of the SCHADS Award.
A number of NDIS service providers have made errors in regards to the SCHADS Award interpretation of:
- Minimum weekly wages and penalty rates
- Hours of work
- Rostered days off
- Rest and meal breaks
- Allowances: for clothing and equipment, laundry, meals, first aid, travel and transport, heat and on-call time
- Annual leave
- public holidays
- minimum payment periods
- broken shifts
- client cancellations
- remote work
- 24-hour care
- roster changes
What can NDIS Service Provider Employers do?
NDIS Service Provider Employers can:
1. Check that their employees are being paid the right amount by looking at their employment contracts, comparing it to the SCHADS Award and calculating any discrepancies – keep in mind the misclassification and misinterpretation of the SCHADS Award has led to the most underpayment claims
2. Keep track of employee hours worked using an accurate system, including break times and public holidays;
3. Raise any concerns with their employees about their pay, and work together to resolve any issues, keeping in mind disputes can eventually make their way to the Fair Work Commission; and
4. Seek professional legal advice to obtain definitive legal advice on coverage and interpretation for the SCHADS Award if unspecified.
Give NB Employment Law a call, we offer an obligation-free consultation and are happy to help. Reach out via [email protected] or +61 (07) 3876 5111 to book an appointment.
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Jonathan Mamaril leads a team of handpicked experts in the area of employment law who focus on educating clients to avoid headaches, provide advice on issues before they fester and when action needs to be taken and there is a problem of mitigating risk and liability. With a core value of helping first and providing practical advice, Jonathan is a sought after advisor to a number of Employers and as a speaker for forums and seminars where his expertise is invaluable as a leader in this area as a lawyer for employers.
+61 (07) 3876 5111