The government department that is supposed to ensure Australians have "safe, secure and well-paid work" underpaid its own employees, and spent three times more on legal advice than on workers' compensation.
A Senate estimates committee heard 99 workers at the Department of Employment and Workplace Relations had been underpaid by more than $60,000 from July 2022 until August this year.
Staff are due to receive their compensation in the next few days, even though the department first discovered the underpayments more than four months ago.
Management received an internal query about the issue on June 5, which was received by department secretary Natalie James on June 15, who informed Workplace Relations Minister Tony Burke on July 25, before staff were told on August 11.
Under questioning from Liberal senator Michaelia Cash, Ms James blamed the underpayments on the 2022 election.
"Because of the machinery of government change and some other systems, getting a hold of our own records for the full period wasn't as straightforward as we would have preferred," she told the committee.
"I am, of course, extremely sorry that this happened.
"I appreciate the irony as a former Fair Work Ombudsman and as someone who was a partner at Deloitte and spent a lot of time telling businesses to address these sorts of issues."
The average employee was short changed $635.25, but in one case a worker had been underpaid by more than $4000.
Upon discovering the underpayment, the department spent about $200,000 on legal advice and data analysis.
Once staff were finally informed, management held information sessions with staff and opened inboxes to receive their queries.
"It would have been better if we had identified this issue earlier," Ms James said.
"This example is one where you've got historic latent underpayments and someone's belled the cat on them - and if you don't act, that is one of the worst things you can do."
