Red Cross underpaid hundreds of workers by $6m

The Red Cross admitted it had been underpaying its workers on Thursday.

The Red Cross admitted it had been underpaying its workers on Thursday. Photo: Getty

More than 800 workers at the Australian Red Cross and an unaccounted for number of past employees were underpaid over several years by the charity, with the total amount of unpaid wages hitting about $6 million.

The New Daily can reveal staff at one Australia’s biggest charities were informed about the bungle on Thursday.

In an email to staff, Red Cross chief executive Judy Slatyer said the charity discovered the issue “when we started a review to make pay and conditions simpler and modern”.

“In doing this work, we found we haven’t paid some staff correctly over several years,” Ms Slatyer said.

“It’s simply not good enough and we are determined to fix it.”

The admission comes amid a national restructure at the organisation, which The New Daily understands has resulted in significant job losses.

The underpayment occurred at the Red Cross humanitarian division, and did not affect the organisation’s Blood Service, which is a separate entity.

In her organisation-wide letter on Thursday morning, Ms Slatyer said the issue affected 800 current staff, who were underpaid an average of $1800 per year, but that former employees were also affected.

“What we don’t know yet is the exact impact on each individual that has been under-paid,” she said.

“This is what we need to work out between now and mid-August to get you on the right award and correct your pay going forward.”

The New Daily understands the total figure owed to those who were underpaid is around $6 million.

The organisation has 2000 staff across the country, according to its 2017 annual report.

Ms Slatyer said in the email that all staff would be re-paid by mid-August, and that accountants Ernst and Young had been engaged to help solve the issue.

She said the charity had also contacted the Fair Work Commission to ensure the problem did not happen again.

The Red Cross reported a $400,000 surplus in 2017, resulting from a $10 million surplus from the charity’s blood service and a $9.6 million deficit from its humanitarian work.

In a media statement on Thursday morning, Ms Slatyer said the error would have no “impact on our humanitarian work and services”.

The organisation had made “incorrect assumptions about how to allocate specific roles to awards, which means we have not paid some staff the correct amount”, she said.

“It has had an impact over several years,” Ms Slatyer said.

“This issue affects current and former staff and came to light when we commenced a remuneration review.”

The organisation was “still calculating what this means for past employees,” Ms Slatyer said.

“We sincerely apologise for mistakes made and the uncertainty that this causes staff, who are at the heart of our humanitarian work. We should not make mistakes like this and we are fixing this urgently.”

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