Workers clocked up to 90-hour fortnights on base pay under IFAs meant to help them
An ACT aged care provider has signed an enforceable undertaking with the Fair Work Ombudsman after underpaying 335 employees more than $1.39 million.
Goodwin Aged Care Services, a registered charity and the ACT's largest locally based not-for-profit aged care provider, entered into the enforceable undertaking - a legally binding agreement with the regulator, used in place of court proceedings - after self-reporting underpayments totalling $1,395,359.73.
The Fair Work Ombudsman announced the undertaking on September 22, 2026, capping a process that began when Goodwin wrote to the regulator in July 2024 to report the problem itself.
The trouble started with individual flexibility arrangements, commonly known as IFAs. These are written agreements between an employer and an individual employee that vary certain terms of an enterprise agreement. Under Goodwin's enterprise agreement, an IFA was only valid if the employee ended up better off overall - a requirement known as the "better off overall test," or the BOOT.
Goodwin's IFAs were freely entered into on both sides. That part was never in dispute. But the arrangements leaned on non-monetary benefits to clear the BOOT, and in practice, IFA employees ended up rostered and paid at the base rate for up to 90 ordinary hours in a fortnight - well past the enterprise agreement's 76-hour cap. They could work up to 12 hours in a single day, against a 10-hour maximum, and were given as little as eight hours between rostered shifts when the minimum was ten.
The result: 313 workers were underpaid on overtime they should have received, and Goodwin admitted it had breached its enterprise agreement and, through that, the Fair Work Act.
Goodwin engaged Russell Kennedy Lawyers and forensic accounting firm FTI Consulting to conduct the review. The underpayments spanned from July 2, 2018 to March 16, 2025.
Then a second problem surfaced. On March 27, 2025, Goodwin disclosed a separate issue: some residential aged care employees had not been paid a 10% early afternoon shift penalty. That penalty was required under a prior undertaking lodged with the Fair Work Commission in August 2016, which obligated Goodwin to apply the early afternoon shift clause from the Aged Care Services Award 2010.
The cause was a payroll system error - an incorrect role configured in the system. The problem was magnified during COVID-19, when staff worked atypical shifts that triggered the penalty in circumstances they would not ordinarily have encountered. That issue hit IFA employees and a further 22 workers who had no IFA in place.
In total, Goodwin paid $1,393,379.54 directly to 322 affected employees, including interest calculated at the Federal Court pre-judgment rate and outstanding superannuation. A further $1,980.19 was paid to the Fair Work Ombudsman as unclaimed monies for 13 former employees who could not be located.
The Fair Work Ombudsman acknowledged Goodwin's cooperation and voluntary disclosure. But cooperation does not mean the matter ends with a cheque. The enforceable undertaking imposes a significant compliance regime: Goodwin must engage an independent auditor, approved by the regulator, to audit its pay practices. If that audit finds breaches, and the Fair Work Ombudsman believes significant or systemic non-compliance is still occurring, a second audit follows. Should the regulator believe underpayments extend to employees not captured in the sample, Goodwin must fund a broader audit covering all affected staff.
The undertaking also requires Goodwin to report to its board at least every three months on compliance, table all audit reports before the board, and maintain a standing agenda item on pay queries within its workplace consultative committee.
Goodwin provides retirement living, residential aged care, home care, and allied health services across the ACT and New South Wales. It employed 748 staff at the time it reported the issue.
For HR teams using IFAs, the practical lesson is pointed: non-monetary benefits do not automatically satisfy the better off overall test, and a flexibility arrangement that erodes hours caps, daily limits, and minimum rest periods needs more than mutual goodwill to be lawful. Getting it wrong can mean years of mandated auditing, board-level reporting, and public disclosure - well beyond the back-pay bill.
The enforceable undertaking is a regulatory outcome, not a penalty or a court finding. Goodwin admitted to the contraventions and has completed all back-payments to identifiable affected employees.
