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Exercise

Exercise

Read the case study below and use the resources provided to complete work through the investigation as a group.

Case Study – Investigation of ABC Constructions Pty Ltd for the Ipswich Stadium Project

The Compliance Branch refer you a supplier, ABC Constructions Pty Ltd (ABC), for investigation. You receive the following referral summary from the Compliance Branch.

Note that the case study in Module 9 contains the same facts and carries on from the Module 8 content.

ABC Constructions Pty Ltd (ABC) is the principal contractor on a new $95 million sports stadium at Ipswich.  The Queensland Government is determined the stadium will become a world class facility and will be utilised during the 2032 Olympics and beyond.  The Government expects that all suppliers used on this project will act ethically in full compliance with the Ethical Supplier Mandate and the Ethical Supplier Threshold.

This includes prioritising local subcontractors and indigenous employment on the project.

During this exercise, the procuring agency for this project is the Department of Energy and Public Works.

ABC have provided a signed Ethical Supplier Threshold declaration during tender and have no history of any non-compliance with the Threshold.

ABC have asked that all subcontractors support the Government’s commitments having included these commitments in the subcontracts awarded during the subcontractor tendering process.

As part of their contractual commitments for the project, ABC was required to complete 1600 on the job training hours made up of 960 ‘New entrant’ and 640 ‘Other workforce’ on the job training hours.

These hours were entered into the Training Policy Administration System (TPAS) at the commencement of the project.

As part of their tender, ABC committed to ensuring that a minimum of 85% of their project workforce would be comprised of workers who lived within a 125km radius of the project site with a further 15% residing within Queensland.

ABC also included in their tender a commitment to employ throughout the course of the project, 25 indigenous workers provided by a local Indigenous Employment Agency ‘Ipswich Aboriginal and Torres Strait Island Employment.’

Construction commenced on the steel work six months ago.

You have been contacted by the Queensland Government Procurement Compliance Branch and advised that an audit has been conducted of the Managing Contractor for the project. You receive the referral documentation that details how during the audit it was identified 2 employees had not been paid their appropriate entitlements resulting in significant underpayments.

It was further identified during this audit Workplace Health and Safety Queensland were investigating as a result of a worker employed by ABC suffering a broken leg after falling over an embankment. ABC had notified WH & S Queensland of this incident as per their requirements under the Work Health and Safety Act 2011.

Approximately 6 months later, you are advised that the project has now reached practical completion and the Queensland Government Procurement Compliance Branch has conducted an audit of ABC’s contractual commitments to the Building and Construction Training Policy, Local Benefits, and ‘Other’ contractual commitments.

You are advised ABC were found to have only achieved 885 ‘New Entrant’ hours whilst they were found to have achieved 675 ‘Other workforce’ hours.

In auditing the ‘Local Benefits’ component it was identified that only 60% of their project workforce lived within the specified 125km radius of the project site with a further 40% living within Queensland and, while they had engaged ‘Ipswich Aboriginal and Torres Strait Island Employment’ only 18 indigenous workers had been employed on site during the constructions phase.

Resources

Investigation

Let’s work through the investigation together throughout Module 9.

Start by considering whether ABC may have breached their commitments in the following categories:

  • Industrial Relations?
  • WH&S?
  • Training Policy?
  • Local Benefits?
  • Other contractual commitments?

Industrial Relations Investigation

You have received the referral documentation that details how during the audit it was identified 2 employees had not been paid their appropriate entitlements resulting in significant underpayments.

The first employee that has been identified by audit as being underpaid is Clarke Kent.

Employee 1: Clarke Kent 

Using Clarke Kent’s timesheets and pay slips as an example, in this video the Compliance Branch provides useful guidance on how to best maximise your use of the Compliance Calculator.

We have used a real life Industrial Instrument used for the Queens Wharf project in this example exercise in order to demonstrate what you will encounter in your investigation.

In this video, the Compliance Branch further explain how to use the Compliance Calculator and provides useful guidance on:

  • how to check the pay period for Clarke Kent
  • using time sheets to populate the Compliance Calculator
  • where to seek data from for the Compliance Calculator
  • time sheet review and analysis

Clarke Kent Week 1

No concerns have been identified for this week.

Clarke Kent Week 2

Note the rate change which came into effect 01/07/22

Clarke Kent Concern 1

You will see cell L57 is lit up in red. The rate of pay appears to have not been updated to the new rate which changed on 1 July 2022. This should have been reflected on the employee’s pay slip for the pay period starting 4 July 2022. This resulted in an underpayment for the employee.

Clarke Kent Concern 2

Cell L63 is lit up in red. During the week of 10/07/22, the employee was a leading hand for 12 workers and therefore should have received the higher leading hand rate of $3.23 per hour.

The employer paid the incorrect amount of $2.43 to the employee.

No other concerns have been identified for this week.

Now let’s have a go ourselves!

Employee 1: Bruce Wayne 

Open the Bruce Wayne Exercise- Compliance Calculator provided and populate information into the blue shaded fields with the rates and entitlements from the Enterprise Agreement, the employee’s details and the relevant timesheets and pay slips.

Once all the information is entered, identify any concerns by highlighting in yellow in the investigator comments section.  Take some time to work on this.

Bruce Wayne Week 1

Cells L22 and L23 are in red, indicating a concern. You will see that the pay advice amount for both ordinary hours and casual loading are lower than the applicable amounts in the EA, indicating an underpayment.

You will see cell J25 is lit up in red. This cell is red due to the timesheet having no information populated for the sick day and the pay slip identifying 7.2 hours. A casual employee is not entitled to receive payment for a sick day. Although the spreadsheet has identified an irregularity, this is not an underpayment.

No other concerns have been identified for this week.

Bruce Wayne Week 2

Note the rate change which came into effect 01/07/22

Cells L57 and L58 are in red, indicating a concern. You will see that the pay advice amount for both ordinary hours and casual loading are lower than the applicable amounts in the EA, indicating an underpayment.

You will see cell J59 and L59 are lit up in red. These are indicating concerns that need to be investigated. Ordinary hours in the Enterprise Agreement indicate that an employee working additional hours outside 36 hours a week is entitled to receive overtime penalty rates.

In this instance, the employee worked 38 hours (36 ordinary hours and two overtime hours).

In the pay slip the additional two hours was not recognised as overtime and was paid at the ordinary rate of pay. This has resulted in an underpayment.

Cell E73 is lit up in red.

From July 2022 the rates for superannuation salary sacrifice increased from $70.00 to $74.00 a week. The employer paid the employee $70.00 for this week incorrectly.

No other concerns have been identified for this week.

A copy of the Compliance Calculator excel document with concerns identified is provided for your reference.

Further Resources – Example Show Cause Notice to ABC

The Compliance Branch have prepared an example only Show Cause Notice under the Ethical Supplier Mandate to ABC for failing to comply with their contracted commitments to the Queensland Government Building and Construction Training Policy (Training Policy) for the Project. Download a copy of the Show Cause Notice (Example Only).

Not intended as legal advice. Read full disclaimer.