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Year in review

Sandra Parker PSM, Fair Work Ombudsman Sandra Parker PSM, Fair Work Ombudsman

​In the 2019–20 financial year, the Office of the Fair Work Ombudsman (FWO) continued to deliver on its purpose of promoting harmonious, productive, cooperative and compliant workplace relations in Australia.

Our intelligence-led approach to education and compliance activities, reinforced by our focus on priority sectors and a revised enforcement posture, resulted in record recoveries of over $123 million in unpaid wages for over 25,000 workers.

The year has also brought unforeseen challenges to the Australian workforce, most notably from the bushfires and the coronavirus (COVID-19) pandemic. The pandemic in particular has caused severe disruption to workplaces, industries, small business and employees, resulting in an unprecedented demand for our services. As the head of the agency, I am proud of how we have increased our service offerings to support our customers during this time.

Our 2019-20 priorities

In June 2019, I announced the FWO’s 2019–20 Compliance and Enforcement Priorities:

  • fast food, restaurants and cafes
  • horticulture and the Harvest Trail
  • supply chain risks
  • franchisors
  • sham contracting.

In addition to the above, we continued to prioritise matters that:

  • involve vulnerable workers
  • are of significant public interest or scale
  • demonstrate blatant disregard for the law
  • present an opportunity to test the law.

We chose these priorities based on operational intelligence, experience and data. The priorities guided our service offerings and compliance activities for 2019–20. Setting priorities helps us determine where the FWO’s discretionary efforts are best directed so we can utilise our resources to deliver maximum benefit to the Australian community.

In the 2019–20 financial year, we have:

  • conducted 1432 targeted compliance activities nationally, with our investigations strategically targeting high-risk sectors, such as food precincts1 and major horticulture regions around the country2
  • achieved significant litigation outcomes, including the largest penalty decision to date3 and our first litigation outcome involving new provisions to protect vulnerable workers4
  • established a dedicated sham contracting unit
  • worked with business, community organisations and government agencies to better understand the drivers of non-compliance
  • launched numerous tailored educational resources and campaigns to educate the Australian workforce about their rights and entitlements
  • reshaped our organisation to meet the significant challenges created by the coronavirus pandemic.

Our response to the COVID-19 pandemic

The COVID-19 pandemic has had a major impact on Australian workplaces. Since it began, we have redeployed our resources to make supporting workplaces through the pandemic our top priority. We are working closely with other federal departments and agencies to support efforts to boost the economy and we are also assuming new enforcement responsibilities to uphold the integrity of the JobKeeper scheme.

COVID-19 has created a surge in demand for our services, with a substantial increase to the number of calls, online enquiries and website visits we received in the last quarter of the financial year.

To quickly meet this demand, we increased resourcing for our frontline services, created a dedicated coronavirus website and set up a dedicated coronavirus hotline. We also set up an internal taskforce to coordinate the agency’s ongoing response to the pandemic, and established a Workplace Legal Advice Program to provide free advice to eligible employers.

We will continue to work across government and with relevant stakeholders to uphold the integrity of the JobKeeper scheme and further understand the impacts of COVID-19 on workplaces. We will also continue to educate employers and employees about their rights and obligations by refining and adding to our suite of resources.

A revised enforcement posture

We strengthened our compliance and enforcement posture in mid-2019, following an internal capability review and recommendations from the Migrant Workers’ Taskforce report.5 Our revised Compliance and Enforcement Policy resulted in a firmer approach, and an increased use of most of our compliance and enforcement tools in the past financial year.

In particular, our new approach to compliance notices (CNs) has achieved significant results. In 2019–20, we issued 952 CNs, recovering more than $7.8 million in unpaid wages. This is more than triple the number of CNs (274) and nearly eight times the monies recovered compared to the 2018—19 period. These notices have a compliance rate of approximately 96%.

In the past financial year, we commenced numerous legal proceedings against companies and accessories that failed to comply with a CN. These litigations, and the corresponding media releases, send a clear message to businesses that these notices should be taken seriously.

Self-reported underpayments by employers

Since July 2019, we have seen a significant increase in the number of large corporate entities self-reporting non-compliance with their workplace obligations. These matters usually involve large and complex underpayments affecting thousands of workers across several years.

The prevalence and the scale of this type of non-compliance is extremely disappointing and concerning. That so many companies are now self-reporting to us indicates that our compliance and enforcement activities, along with negative community sentiment about underpaying workers, is having a deterrence effect on large employers.

In response to the increase in these self-reported matters, we have established a Corporate Sector Taskforce that is dedicated to investigating large employer underpayments. I also wrote to the Chairs and CEOs of Australia’s largest corporations, to seek their assurance that they are taking their obligations seriously and have appropriate governance mechanisms in place to ensure their entities are, and will remain, compliant with workplace laws.

Our revised Compliance and Enforcement Policy sets out how we approach matters where businesses self-report non-compliance to us. Where businesses undertake comprehensive remediation of underpayments, address any impacts of the contraventions and cooperate fully with our investigation, we may consider non-litigious outcomes. For example, in 2019–20, we entered into 9 Enforceable Undertakings (EUs) with businesses who self-reported non-compliance to us.

Educating and assisting our customers

In addition to compliance and enforcement, one of our core functions is providing education, assistance and guidance to employers, employees and organisations.

In the past financial year, our frontline staff answered more than 490,000 customer enquiries over our phone and digital channels (including social media), and returned over $19 million to underpaid workers through our assisted dispute resolution services. The community also lodged over 19,000 anonymous reports of suspected non-compliance and made over 5.7 million pay tool calculations.

Our website recorded 20.7 million visits –the highest number of visits for a financial year so far. We continued to educate the community about their workplace rights and obligations and develop new and tailored resources for our online channels, including:

  • a new and improved Fair Work Information Statement, and translating it into 35 languages
  • a new Horticulture Showcase including education videos on key topics
  • educating hospitality apprentices and employers by sending out approximately 6000 tailored text messages
  • a new online course on workplace laws for business advisers was added to our Online learning centre
  • in-language educational videos for Pacific Island workers.

Outlook

COVID-19 will continue to have an unprecedented impact on Australian workplaces. Supporting workplaces through the pandemic and recovery phases is our overarching priority for 2020--21. We will focus on supporting vulnerable workers, small businesses and industries hardest hit by the pandemic. We will also continue to uphold the integrity of the JobKeeper scheme through appropriate and proportionate compliance activities.

High-risk sectors such as fast food, restaurants and cafés, horticulture and franchise networks will remain a priority. We acknowledge many of these sectors have been seriously impacted by the pandemic, and this will be taken into account in our education, engagement and compliance activities.

We will continue to focus on compliance of large employers to ensure major entities are meeting their obligations and have appropriate governance and systems in place to identify, remediate and prevent large underpayments.

We will also remain responsive to changing economic conditions, legislation or Fair Work instruments, and the evolving needs of the community.

COVID-19 has significantly changed the industrial relations landscape. In 2020--21, the Fair Work Ombudsman will play a crucial role in supporting Australia’s businesses and workforce to recover from these challenging times.

Fair Work Ombudsman Priorities and Approach 2020—21  Fair Work Ombudsman Priorities and Approach 2020—21

Footnotes

  1. FWO media release: FWO audits Brisbane’s West End, 25 July 2019, www.fairwork.gov.au/about-us/news-and-media-releases/2019-media-releases/july-2019/20190725-media-release-fwo-audits-brisbanes-west-end-final
  2. FWO media release: Bundaberg businesses audited, 11 July 2019, www.fairwork.gov.au/about-us/news-and-media-releases/2019-media-releases/july-2019/20190711-bundaberg-audits-media-release
  3. FWO media release: Sushi operators hit with record penalties, 18 May 2020, www.fairwork.gov.au/about-us/news-and-media-releases/2020-media-releases/may-2020/20200518-hero-sushi-penalty-media-release
  4. FWO media release, Sushi operators penalised $125,000, 21 August 2019, www.fairwork.gov.au/about-us/news-and-media-releases/2019-media-releases/august-2019/20190821-sushi-79-penalty-media-release
  5. Australian Government, Report on the Migrant Workers’ Taskforce, https://www.ag.gov.au/sites/default/files/2020-03/mwt_final_report.pdf