It's common ground someone or some people in management at the Peter MacCallum Cancer Institute had for about 4 years stuffed up by paying the research staff less than their Agreement entitled them to.

The error, oversight or whatever term is used to describe the failure to make the correct payments was clearly on the part of the management employed by the Peter MacCallum Cancer Institute.

The effect of that error, besides and additional to the Peter MacCallum Cancer Institute's liability to make good its underpayment to its staff, was that the Institute had breached the Agreement covering its staff.

Mistakes happen - but this one was a very expensive one.

So put to one side the issue of backpay.   That was dealt with when the staff accepted the new pay deal, negotiated in good faith.   Additional to the new pay deal, the Peter MacCallum Cancer Institute had a clear case to answer on an allegation or charge of breaching the Agreement.   It was an apparently clear breach and it had continued for about 4 years.

The operative legislation relevant to the breach was the Workplace Relations Act 1996.

The Act was brought into force in 1996 and was updated regularly.   The historical record of the updated versions of the Act is filed at www.comlaw.gov.au

Here is a link to the version of the Act that was in force as law in 2003

Part VIII of the Act deals with Compliance issues.

Division 1 deals with penalties and other remedies for contravention of awards and orders

Section 178 says this:

178 Imposition and recovery of penalties
 (1) Where an organisation or person bound by an award, an order of
the Commission (whether under this Act, the Registration and
Accountability of Organisations Schedule or otherwise) or a
certified agreement breaches a term of the award, order or
agreement, a penalty may be imposed by the Court or by a court of
competent jurisdiction.

Competent lawyers for the Peter Mac and the union would have been aware of the penalty provisions in the Act should the matter be taken to court.

How much does the Act say could be imposed in penalties?   Here it is in respect of a breach of a Certified Agreement:

(iia) if the breach is of a term of a certified agreement and
continues for more than one day—the total of:
 (A) $10,000 for a body corporate or $2,000 in other
cases; and
 (B) $5,000 for a body corporate, or $1,000 in other
cases, for each day for which the breach
continues; and

That is a penalty for breaching the Agreement of $10,000 plus $5,000 for each day the breach continued.

It would have been arguably open to the Court to find the breach had been in place for some years.

Now to the matter of who the penalty would have been paid to.   Here is what the Act says:

(5) A penalty for a breach of a term of an award or order may be sued
for and recovered by:

(d) an organisation that is affected, or any of whose members are
affected, by the breach; or
 (e) an officer or employee of an organisation that is affected, or
any of whose members are affected, by the breach where the
officer or employee is authorised, under the rules of the
organisation, to sue on behalf of the organisation.

To summarise the potential liability the Peter MacCallum Cancer Institute faced as a result of its breach of its Agreement with its staff, the Act provided for substantial penalties to be paid to the organisation that sued for the breach.   If the union and the Institute had not negotiated the outcome and had instead gone to court, that is what the Peter Mac potentially faced.

In that context a settlement with the Union in the amount of $250,000 as part of an Agreement including a new pay structure for staff seems to me to be a good commercial outcome for all parties.

Congratulations and well done to the Chairman of the Board Heather Wellington, the union led by Kathy Jackson and the researchers at the Peter Mac for negotiating that outcome!