Dept's $220,000 bill to clean up $63,000 in underpayments

DEWR secretary Natalie James dodged questions at a Senate estimates hearing last week on whether the outsourced services were a good use of taxpayer funds, instead saying she had "determined that this was the appropriate course of action at the time".

The underpayment issue was made public last year, after the department realised it had not paid correct overtime entitlements to a cohort of staff in June 2023. It has since paid out $62,925.60 to 99 people, but is still assessing whether it owes more.

The underpayments affected staff members who were scheduled to work hours in the morning and evening, such as those working at contact centres and service desk employees.

In response to questions from Liberal senator Matt O'Sullivan ahead of estimates, the department revealed it had spent $221,884.71 on external advice and services to rectify the issue, as at 31 December 2023.

The expenses include $90,080.54 on data analysis and calculation of entitlements, paid to Cobalt Consulting, $116,426.17 on external legal advice, split between Kingston Reid, Ashurst and the Australian Government Solicitor, and $15,378 on communication services to Elm Communications.

Ms James faced tough questions from Liberal senator Michaelia Cash over the bill in the Education and Employment committee.

"Do you now think it is a good use of taxpayers' funds?" Senator Cash asked.

Ms James said she "would have preferred not to spend any taxpayer funds on this initiative".

"But it is important, my view is it is important, that you have the right support and expertise in resolving these issues."

But Senator Cash pressed the department on the example this underpayment, and the associated costs, set for Australian businesses.

"What I'm hearing is the Commonwealth department that is actually tasked with actually overseeing Australia's workplace laws, is by their own admission, saying they are not fully equipped, they don't have the resources to manage an underpayment from what is now ... a considerable period of time ago," she said.

She asked how businesses could be expected to keep up with the "complexity of workplace law" and match the resources used by the department if they did get it wrong.

"I will say that it is a lesson in why all businesses should get it right from the outset," Ms James told the committee.

"It's also a lesson in ... the importance of having good records, so the reason we didn't require for example, complex data analysis in doing these calculations is because we had a number of records, which [we've] outlined, that we brought together and then validated and verified."

Senator Cash expressed surprise that "$90,000 bucks on an external firm doing data analysis" was not considered complex.

Ms James also told senators she had judged objective advice to be of value, given this was an "emotional situation".

"I will say that, when you're dealing with your own people's entitlements and something's gone wrong, it is an emotional situation.

"And sometimes you don't have objectivity, it's fair to say you might not have objectivity."

The DEWR boss said this had informed decision making throughout the process.

"It's my job to put in place processes, systems and have discussions to ensure we make the right decisions. Independent advisors, are quite important in helping you do that," she said.

"So there's an element of accountability there, someone from outside your situation is helping hold you to account and is reflecting.

"So that is what I would say informed all our decisions about the independent advice, and particularly the legal advice."