Industrial Magistrates Court decision

The City of Stirling has committed to backpaying past and present employees who were underpaid due to a misinterpretation of an industrial agreement.
 
In 2021, a City employee lodged a claim with the Industrial Magistrates Court alleging they had been underpaid in breach of the City’s Outside Workforce Agreement 2017 (OWA).
 
The claim related to wage increases in the financial years 2018/19 and 2019/20, when the Consumer Price Index was 1.8 per cent and 1.9 per cent respectively.
 
The City increased wages by 2.2 per cent in each financial year, believing that was over and above the requirements set out in the OWA, which covered a group of 254 employees.
 
However, in June 2024, the Industrial Magistrates Court ruled that under the relevant clause of the OWA, the City should have increased wages by 3.5 per cent in 2018/19 and 3.0 per cent in 2019/20.
 
Those figures were the annual increases to Australia’s minimum wage as determined by the Fair Work Commission.
 
Magistrate Tim Kucera found the City liable for breaching the OWA, however he acknowledged the relevant clause “could have been drafted more clearly”.
 
The court’s orders were delivered on Monday 24 February, with the City ordered to pay the employee the underpayment amount of $3,492.28, plus interest of $611.77.
 
The City was also ordered to pay a penalty of $10,000 – just under 8 per cent of the maximum.
 
Magistrate Kucera declared that the City had twice contravened the Fair Work Act 2009, but he rejected the allegation that the breaches represented “serious contraventions” as defined in the Act.
 
Instead, he said the contraventions were “at the lower end of the range” and the City had not acted maliciously or tried to exploit anyone.
 
He also noted that the City had not been found liable for any previous contraventions of the Act.
 
City of Stirling CEO Stevan Rodic said the City respected the court’s decision and had apologised to employees.

Mr Rodic said the claim was isolated and there was no basis for similar interpretation issues for City employees covered by the Inside Workforce Agreement or the OWA outside of the specific two-year timeframe.

“This has been a difficult learning experience for our staff, who thought they had done the right thing by their colleagues,” he said.
 
“The City is now seeking to back-pay all of those workers who should have received higher wage increases, including those who no longer work at the City.

“The City’s employees are its strongest asset and the City remains committed to treating and paying its employees fairly.”