A major payroll error has cost one of South Australia’s largest private employers a staggering $2.3 million in back-paid entitlements - serving as a sharp warning for businesses across the country.

What Went Wrong?

Leading service station chain On The Run, which operates in South Australia, Victoria, and Western Australia, came under investigation by the Fair Work Ombudsman (FWO) after multiple complaints were lodged by employees. The outcome? Over 1,500 workers were underpaid due to one critical misstep: incorrect employee categorisation.

Between July 2018 and February 2023, employees who should have been classified as shift workers were instead treated as standard employees. That one classification error meant they received four weeks of annual leave per year - when they were entitled to five.

The Cost of Getting it Wrong

The FWO’s investigation involved inspecting 15 sites, reviewing rosters, and speaking to managers and workers. The result was a massive rectification process:

• 934 former employees will receive $975,820 in owed entitlements, including:
  • $792,685 in annual leave
  • $138,720 in leave loading
  • $44,415 in interest
• 590 current employees have had more than 43,900 hours of annual leave credited - worth $1.3 million

Most of those impacted worked as console operators and roadhouse attendants, with sites in South Australia and regional Victoria including Horsham, Mildura, Ararat, and Traralgon.

A Wake-Up Call for Employers

Fair Work Ombudsman Anna Booth didn’t mince words.

“This case is a clear example of what happens when employers fail to correctly classify their employees,” she said. “It led to long-term breaches and significant underpayments.”

Booth stressed the importance of robust systems that ensure compliance year after year - particularly for large employers, where errors can quickly snowball.

Key Takeaways for Business Owners and HR Teams

1. Know the Awards Inside-Out
   Misinterpreting something as basic as “shift worker” status can have enormous ripple effects on entitlements.
2. Set Up Rigorous Payroll Reviews
   It’s not enough to “set and forget.” Regular audits can uncover issues before they balloon into multimillion-dollar problems.
3. Listen to Staff Complaints
   In this case, the initial red flag came from workers themselves. If employees are raising payroll issues, take it seriously - and investigate early.
4. Ensure HR & Payroll Systems Talk to Each Other
   Disconnects between rostering, timekeeping, and payroll often lead to these compliance failures. Integration and oversight are crucial.

Need Help Avoiding a Similar Slip?

If this story makes you wonder how solid your own payroll systems really are, you're not alone. Many employers think they’re compliant - until it’s too late.

At HR Dynamics, we help businesses get ahead of Fair Work issues with award interpretation, payroll audits, and compliance training.

Let’s make sure your systems are watertight - before the Ombudsman comes knocking.