In 2018–19, we conducted 1256 investigations into more complex or significant matters (involving vulnerable workers, serious non-compliance and/or uncooperative employers).

We commenced investigations into individual cases of potential non-compliance with workplace laws, and compliance activities targeting industries, geographic regions and businesses with high or emerging levels of non-compliance.

Intelligence-led activities

We rely on intelligence to determine the industries, regions and businesses to target in our compliance activities.

We gather intelligence from:

• internal operational data
• requests for assistance from individuals
• stakeholders
• public reports of non-compliance (e.g. media stories)
• anonymous reports from the community.

Proactive audits and compliance activities

Using this intelligence, we proactively audited 2859 workplaces in 2018–19 and recovered $2,527,642 in unpaid wages.

Our compliance activities allow us to:

• verify our intelligence by targeting industries, sectors and businesses that our intelligence indicates may be non-compliant
• better understand the drivers of non-compliance
• provide targeted education, information and advice to non-compliant businesses
• develop strategies for sustained behavioural change.

Key compliance activities for the 2018–19 year included audits of approximately 200 businesses in the Victorian city of Geelong. We targeted the suburbs in and surrounding two university campuses, based on intelligence that employers in the area were at risk of breaching workplace laws. The area was chosen because of the high concentration of young workers, a cohort who are particularly vulnerable to workplace exploitation.

We also continued our series of compliance activities involving popular food precinct areas. For more information on these activities, see Fast food, restaurants and cafes .

The overall compliance rate for our audits for the year was 45%, with the most common contraventions relating to:

• hourly rate underpayments (33%)
• failure to provide pay slips in their prescribed form (23%)
• penalty rates for weekend work (10%).

Anonymous reporting

Members of the community can use our Anonymous Report tool to notify us of businesses or individuals who they suspect of breaching workplace laws.

The tool is available in 16 languages (in addition to English). This enables more migrant workers (one of our most vulnerable cohorts) to report workplace issues anonymously to us in their language.

As of 30 June 2019, we received 16,485 anonymous reports, an increase of 9% from 2017–18. Of these reports, 1212 were in languages other than English.

Of all reports received in 2018–19, hospitality was by far the most reported industry, amounting to 36% of all reports. The next highest industries were retail (13%) and building and construction (5%).

The most used language to make reports in languages other than English were:

• Simplified Chinese (32%)
• Traditional Chinese (18%)
• Korean (17%)
• Japanese (11%).

The industry that we received the most in-language anonymous reports on was also hospitality, totalling 38%, followed by:

• agriculture (11%)
• food manufacturing and processing (11%)
• retail (7%).

The data we collect from anonymous reports, combined with other operational data and research, has helped to improve our targeting for compliance activities. For example, the inner-west Sydney region has one of the highest rates of anonymous reports in New South Wales, with most of the reports coming from young workers or visa holders. Relying on this intelligence (among others), we conducted over 60 unannounced audits of outlets in a popular dining precinct strip in Newtown, Sydney, in the last financial year.

Fast food, restaurants and cafes

The fast food, restaurants and cafes sector continues to be a key priority. While only accounting for 7% of the labour force, the hospitality industry has consistently had the highest number of disputes we’ve assisted with for the last five financial years.

The hospitality industry accounts for 36% of all anonymous reports we received in the last financial year (more than three times higher than the second highest ranked industry) and accounted for one-quarter of all our litigations. Within this industry, the highest rates of non-compliance are found in the fast food, restaurants and cafes sector.

Our intelligence shows that barriers to addressing non-compliance in the fast food, restaurants and cafes sector include:

• high business turnover due to competition and low barriers to entry
• a high concentration of young, vulnerable workers, many of whom are on migrant visas
• the transient nature of the workforce.

We launched our Fast Food, Restaurants and Cafes (FRAC) Strategy in 2018–19. The strategy seeks to engage, educate and influence this sector, and improve compliance levels through an ongoing program of proactive intelligence-led activities, including:

• working with key business owners and influencers in the industry to drive behaviour change
• delivering targeted information, education and communications activities
• communicating our messages across sector networks
• holding business owners to account, including using our new legislative powers with respect to lead businesses and others involved in non-compliance.

As part of the strategy, we have:

• conducted unannounced audits at various locations and businesses, based on intelligence. This includes:
  • 92 stores under the Retail Food Group (one of Australia’s largest multi-brand retail food franchisors) across the country
  • 19 Gami Chicken stores across Melbourne, Sydney and Perth
  • popular dining locations in the Melbourne and Sydney CBD areas

• worked with key stakeholders to better understand the drivers of non-compliance in this sector, and build a culture of compliance
• created industry-specific templates and online resources for both employers and employees in the industry. For more information about these resources, see Online services
• delivered communications campaigns to raise awareness of our online resources for the hospitality industry, including targeted online advertising through social media (Facebook and Instagram), websites and Spotify; search promotion via Google Ads; and advertising in industry-specific newsletters. These ads were collectively viewed over 7 million times.

In 2018–19, we also used enforceable undertakings against five businesses in the fast food, restaurants and cafes sector, and initiated 13 litigations. We secured a total of $1,637,661 in court-ordered penalties against non-compliant companies, business owners and their accessories in this industry. For more information about these cases, see Enforcement outcomes.

Horticulture

We published the findings of our Harvest Trail Inquiry in November 2018.

Our report into the Harvest Trail detailed widespread non-compliance among employers in the horticulture and viticulture sectors, a significant reliance on migrant workers and a negative impact where illegal labour-hire arrangements were used.

The Inquiry involved inspectors conducting close to 1300 education and audit activities, engaging with growers, workers, industry bodies and community groups and surveying 1025 consumers. We recovered $1,022,698 for over 2500 employees, and at the time of report publication, we had secured more than $520,000 in court-ordered penalties in six matters. However, poor record-keeping, cash payments and a transient workforce meant we weren’t able to determine the full extent of underpayments. Other issues identified include the misuse of piece rates and low consumer awareness of workplace conditions, and an unwillingness from the consumer to pay more for ‘domestic fair trade’ produce.

Since the Inquiry, we have developed a horticulture strategy to address the outcomes of the report and enhance compliance through engagement, education and enforcement. The new strategy includes creating tailored online resources for the industry and raising awareness of rights and obligations via online and print advertising.

The first communications campaign targeted employees during the busy fruit and vegetable picking period in March 2019. Facebook and digital display advertising was seen over 3.3 million times and generated over 7,000 clicks to tailored web content. It included translated social media posts in eight key languages including Chinese (traditional and simplified), French, German, Italian, Korean, Portuguese and Thai. This campaign also included a survey targeting employees to gather more demographic information, as well as their reasons for undertaking work on the harvest trail and the way they received information about working in Australia. The survey recorded a high completion rate of 92% from a total of 291 responses.

The second communications campaign launched in June 2019 targeted growers in the industry, with a focus on record-keeping and hiring employees, as stakeholders indicated these topics were of particular importance to this audience. The campaign included regional radio advertising as well as advertising across digital display and social media. Radio ads were played 446 times and digital advertising was seen over 3.3 million times.

A key element of the horticulture strategy is working with an Industry Reference Group comprised of major employer and employee organisations, retailers and growers to build a culture of compliance in the sector.

Further details on the Inquiry’s outcomes and recommendations are available on the FWO website.

Vulnerable and migrant workers

Intelligence continues to tell us that migrant workers are one of the most vulnerable cohorts. They’re over-represented in our disputes and compliance and enforcement outcomes. While migrant workers make up only 6% of the Australian workforce¹, they account for:

• 22% of all formal disputes completed
• 24% of anonymous reports received
• 83% of the litigations we commenced in 2018–19.

Our research indicates that migrant workers are often vulnerable to exploitation because they:

• are new to the Australian labour market
• have limited knowledge about their workplace rights and entitlements
• may be experiencing language and cultural barriers.

Some migrant workers may also not want to speak with public officials and may be concerned about their visa status if they do.

We actively encourage migrant workers to seek our help by identifying and removing barriers that may make them reluctant to reach out.

The Fair Work Act’s Protecting Vulnerable Worker’s Amendment recognises that the exploitation of vulnerable workers is a serious issue in Australia. Higher penalties (in certain circumstances) and new tools are helping us respond more effectively to this exploitation. We have utilised these new tools, initiating a number of litigations using the new powers under the Protecting Vulnerable Workers Act in the 2018–19 financial year.

We have continued to work to understand and remedy the exploitation of these vulnerable workers. Activities included:

• using enforcement tools to deal with the most serious cases of non-compliance against this cohort. In 2018–19, we secured nearly $1.8 million in court-ordered penalties for cases involving migrant workers, and recovered almost $3.2 million. See Litigation for examples
• contributing as a member of the Migrant Workers’ Taskforce
• continuing to work with the Department of Home Affairs on our visa assurance protocol. Under the protocol, a worker's visa won't be cancelled if they request our assistance with workplace issues and meet other criteria, including following their visa conditions in the future. We also continued to share intelligence and data with Home Affairs to target and disrupt those looking to commit visa fraud and exploit migrant workers
• participating in Taskforce Cadena, an Australian Border Force led taskforce that aims to detect and disrupt criminal syndicates that profit from exploitation of migrant workers in Australia
• supporting the Pacific Labour Scheme and Seasonal Workers Programme
• participating in forums and networks, and working collaboratively with government bodies and key stakeholders to combat human trafficking and slavery-like practices. This includes referring suspected human trafficking and slavery cases to the Australian Federal Police
• monitoring how the Modern Slavery Act 2018 may impact on our work.

We've also shared information about our work through:

• the Interdepartmental Committee (IDC) on Human Trafficking and Slavery
• the National Human Trafficking Roundtable.

While human trafficking offences don’t fall within our remit, we understand that we may interact with victims or perpetrators of human trafficking and slavery.

Supporting supply chain compliance

We find breaches of workplace laws regularly occur where a business engages in multiple levels of subcontracting, without establishing processes to monitor or manage their labour supply chains. Where systemic issues of non-compliance occur, they usually involve vulnerable workers performing low-skilled work.

While the Fair Work Act requires the direct employer to ensure workers are receiving their proper entitlements, the company at the top of the supply chain has an obligation to ensure that unlawful conduct is not occurring within their business network. Where operators deliberately ignore exploitation in their supply chains, we use every lever available to ensure they are held accountable.

During the year, we secured penalties of $168,071 in a matter involving a cleaning supply chain in Melbourne. Penalties of $17,926 were ordered against two former directors of the since-deregistered cleaning company for breaches of sham contracting, frequency of payment and pay slip provisions. The head contractor (who supplied labour from the cleaning company to the customer at the top of the chain) admitted to having been involved in underpayment contraventions and was ordered to pay penalties of $132,218. As a result of the FWO investigation, the head contractor also undertook measures to increase transparency and compliance in its supply chain.

Businesses can take practical steps to minimise their legal and reputational risks by downloading our supply chain resources. In 2018–19, these guides were collectively viewed over 4000 times.

We also continued to support companies to take ethical responsibility through industry-driven initiatives aimed at fostering sustainable, long-term culture changes. Activities included:

• participating in and supporting the Cleaning Accountability Framework — a multi-stakeholder industry-led initiative that seeks to improve labour and cleaning standards in Australia through a certification scheme
• entering into a second Proactive Compliance Partnership with Woolworths Group Limited in relation to their cleaning services supply chain. Under the terms of this second partnership, Woolworths has agreed to report regularly to the FWO on issues such as employee records, underpayments and complaints, implementing responsible measures to ensure their cleaning contractors are meeting their workplace obligations and paying their workers correctly. This is in addition to a separate Proactive Compliance Deed we have with Woolworths in relation to their trolley collection supply chain.

Assessing emerging labour markets under the Fair Work Act

We finalised two matters involving the threshold issue of whether the national workplace relations system covers workers operating as part of business models in the gig economy.

Our investigation relating to Uber Australia Pty Ltd found that the relationship between the company and its drivers is not an employment relationship.

In June 2018, we commenced proceedings against food delivery company Foodora Australia Pty Ltd (Foodora) alleging that the company engaged food delivery workers as independent contractors when they were in fact employees. As a result, we alleged that Foodora had underpaid its workers under the Fast Food Industry Award 2010.

In August 2018, Foodora ceased operations and went into external administration. Our proceedings were later discontinued following the sale of Foodora’s assets and the execution of a deed of company arrangement under which more than 1000 delivery workers received 31% of the entitlements owing to them, including the three workers subject to the FWO’s legal action.

The FWO’s findings in investigations relating to Uber Australia and Foodora relate solely to those specific matters. Companies in the gig economy use a range of business models and we will continue to assess allegations of non-compliance on a case-by-case basis, and encourage anyone with concerns about their employment arrangements to contact the FWO.