dealing with the fwo · 8. the assigned topic “employer dealings with the fwo” is quite...

TELEVISION EDUCATION NETWORK

4TH ANNUAL EMPLOYMENT LAW CONFERENCE

22 July 2011

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THE FWO

INTRODUCTION

1. Thank you for the opportunity to address the conference. Events such as this ensure

the Fair Work Ombudsman is able to connect with and assist some significant

practitioners who influence the behaviour of many of the duty-holders within our

jurisdiction.

2. I would like to respectfully acknowledge the traditional owners of the land on which

we meet today, part of the home of the Yugambeh people, and pay my respects to

Elders both past and present. In doing so, we should reflect that indigenous people

in Australia often have worse outcomes than most Australians in many things, and

frequently in employment opportunities.

3. The views I express today are my own, do not necessarily reflect Government policy,

and I take responsibility for any errors in the text.

4. I think it was October 1989 that I first came to the Gold Coast for a conference. It

was the occasion of the annual Industrial Relations Society of Queensland annual

conference. I can’t quite remember the theme, or any of the speakers, and I’m

certain that the program didn’t have a discussion about what workplace inspectors

were up to. For some reason though, I can remember what I read in the papers that

weekend. “Inspectors raid Gold Coast hospitality premises to recover underpaid

wages”, and “1 in 3 Gold Coast hospitality premises underpay workers say LHMU”. I’m

not sure why I remember this newspaper article, or why I don’t remember the beach

conditions. No doubt there is some subliminal reason for this.

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5. 22 years later, and several careers later, I feel like asking whether anything has

changed? Some might say “probably not”. But of course, it has. I’m a public servant

and a workplace inspector for a start, and I didn’t have an especially high regard for

either profession in 1989.

6. Unfortunately, non-compliance with workplace relations legislation is around us and

has been evident for a very long time. However, as a society, we have agreed there is

a need for a community pay floor – the fair work safety net – and we should

recognise that attempts to avoid the floor are not moments of “good on you” pride

for the creative and reckless, but moments at which exploitation takes place of real

people, at very real and profound levels.

7. Most of the work we do is aimed at rectifying the underpayments of small and

medium business. Most of that work involves rectification of errors that could have

been avoided through better distribution of information. Unfortunately a large

amount of our work examines breaches by people who really should know better.

The types of non-compliance I refer to go well beyond underpayments at the bottom

end of the market and include issues of systemic and creative avoidance. Your role,

is to do us out of work, by advising your clients to keep away from adventure, or to

regularly audit their operations in order to avoid major systemic error.

Slide 2 – Introduction

8. The assigned topic “employer dealings with the FWO” is quite descriptive and it may

not assist your own learnings too much if I follow the descriptive path too closely.

Notwithstanding, it will be beneficial if I give you an overview of the points at which

employers are likely to deal with the FWO. Our vision is to aspire to Fair Australian

Workplaces and our mission is to work with Australians to educate, promote

fairness and ensure justice in the workplaces, and there are several stages at which I

expect we will work with employers. These stages don’t have to be sequential, and

can overlap.

9. First of all, we work to prevent disputes and to empower Australians about working

fairly. This involves services designed to educate and to give advice and assistance.

Secondly – and you may not think this – we work fanatically to resolve disputes, and

TEN EMPLOYMENT LAW CONFERENCE 22 July 2011

P a g e | 3

so much of our time and effort is spent on that task. Thirdly, we build a case for

compliance and fairness.

10. We aim to approach employers – and indeed all people – in each of these functions

with respect; in a timely manner; and in a way that leaves a lasting and certain

impression. Most times we achieve that aim. What we don’t do is act for any party –

we are entirely neutral.

11. While there is no doubt some overlap between our clients and yours, I think it’s fair

to say the people we deal with are not people or businesses you see as clients. It is

also the case that the kind of Fair Work Act work we do probably does not strongly

correlate with yours. Your conference’s other speakers reinforce this – protected

industrial action; bargaining; sexual harassment damages claims; senior executive

exit disputes and the like. Instead of these things, we deal with things like minimum

wages; vulnerable workers; and the lack of provision of the National Employment

Standards.

12. As a result, my commentary about our work themes should be seen through a

slightly different frame, which is the prevention and resolution of disputes on

subject matters that are sometimes different to your experiences.

Slide 3 – Prevention of Disputes

PREVENTION OF DISPUTES AND EMPOWERMENT TO WORK FAIRLY

13. The Fair Work Ombudsman’s prevention of disputes and empowerment of

Australians to work fairly is played out through our educative and advisory services,

which millions of people access every year.

14. Over the past two years the Fair Work Ombudsman has shown a strong commitment

in developing these services. Aside from State employed Inspectors engaged in

visiting more than 35,000 businesses with information, we have released 12 Best

Practice Guides downloaded more than 165,000 times. These deal with a range of

workplace matters such as parental leave, family, small business, and managing

underperformance which have been.

15. We have also developed template employment documentation and letters for use by

small business on issues such as commencing employment, managing employment


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and ending employment. More than 800,000 have been downloaded so far, with the

most popular being;

a. Payslips and record keeping – more than 310,000 downloads to date

b. Commencement of employment – more than 110,0001

c. Termination of employment – more than 125,000

d. “my employment” checklist for employees – more than 30,0002

16. I am enormously proud of these services, heartened by their take-up and the work

we have done to develop our role and deliver on some of the aspirations in the Act.

For example I think the work we have done around parental leave arrangements

resonates very well with the community – both employer and employee – and has

led to a better appreciation of people’s respective rights.

17. The nature of much of our educative work is interpretative, which in itself

sometimes invites disputes. Our approach to these situations is to involve ourselves

in dialogue.

Slide 4 – Dispute Resolution

DISPUTE RESOLUTION

18. The compliance role we have is heavily about dispute resolution, and we have

learned that it can become more so. A large number of people approach us each

year about problems in their work, or pay-packet. Mostly they want the problem

fixed. The analogy is the Saturday night phone call to the police about the noisy

party next door. While you want the problem to go away and not be a problem

again, you recognise that with the call comes a risk – you have to get along with your

neighbours and the risk is the phone call might inflame things. The Fair Work

Ombudsman clients generally recognise this dilemma when they approach us, which

reinforces our dispute resolution role.

1 A copy of the FWO Letter of Engagement (full-time/part-time) template is attached

2 A copy of the FWO My employment checklist is attached


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ASSISTED VOLUNTARY RESOLUTION

19. The first thing we do is to encourage the employer and employee to sort out their

differences themselves. More than 40% do so within formal mechanisms supervised

by an FWO staff member who endeavours to ensure the conversation can take place

safely and with sufficient information to allow it to occur. We know that most

employers will check their records; realise a problem has occurred; and fix it

immediately. Although this is not an especially new idea, what is new is our

coordination of the process and endeavours to ensure it is conducted safely.

20. Our philosophy is an extension of our view of the exercise of duties.

21. We estimate there are between 250 million and 500 million pay-packets produced

each year and those pay-packets cover 40 to 50 billion duties. Just as we can’t and

won’t be in all of those pay-packets, and just as the exercise of those Fair Work Act

duties is based on voluntary compliance, the same occurs with how we approach

resolution of complaints in the first 30 days – if the parties can sort out their

differences, well and good. Of course, if we hear or see something that looks like

coercion, or more deep-seated non-compliance, we will continue to have interest.

Best advice – first stages of a wages complaint

22. The best advice I can give an employer about this stage is two-fold;

b. If you think the claim is spurious or is not quite as it seems, don’t agree to it.

a.

Please don’t lawyer-up at this point;

Slide 5 – Dispute Resolution

REFERRAL TO A FAIR WORK INSPECTOR

23. About 25,000 wages complaints are made each year, and about 10,000 survive the

first 30 day resolution process. Those 10,000 are then the subject of more intensive

assistance by Fair Work Inspectors.

24. After formal assignment to an inspector, the first step might be a formal Notice to

Produce (originally drafted by the next speaker).


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25. Aside from being an extensive and comprehensive demand for documents, it serves

to establish some unambiguous facts – what work was done; over what time period;

and what was paid for the work? The more certainty an employer can give, the

quicker the problem can be resolved. The less helpful the employer is; the fewer

documents exist or are given; and the more games they or their representatives play

in providing the information, the harder and longer is the inspector’s job.

26. At some point, the inspector forms a judgement about the basic facts, and they

discuss this with the employer and the employee. This discussion is not a ruling; it’s

not binding, and it certainly is not infallible, but it is an indication of how we see

things, based on the information we have.

27. The inspector’s objective with this is to achieve agreement between the two parties,

with or without representatives. There is a substantial difference to how this

interaction works now, compared with what I would have seen when I came to that

IRS conference in 1989. Instead of the inspector being an unsophisticated conduit in

a game of “let’s make a deal”, the interaction is now about obtaining factual

agreement – about the fact of employment; about the duties performed; about the

hours of work; about the payments made, or not made. The agreed facts can then

inform a discussion about how best to resolve the matter.

28. This is our dispute resolution contribution – a belief that most employers and

employees are endeavouring to do the right thing, and will do so with information

and facilitated discussions.


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Slide 6 – Best advice – referral to a Fair Work Inspector

Best advice – referral to Fair Work Inspector phase

29. The advice I would give employers about interactions with the Fair Work

d. If you don’t agree with us, say so, and say why

Ombu

dsman in these stages would be the following;

a.

Get some advice! (preferably from a workplace relations professional);

b. Work cooperatively and constructively – w e are yet to make firm decisions

about the disposition of the claim;

c. Ask yourselves whether any aspect of the claim is correct? If it is, remedy the

problem quickly, and don’t wait for “proof” or decision-making on the

remaining aspects;

30. We take our role in dispute resolution so seriously we now run a formal mediation

service that operates on classical ADR processes, and we are trialling some different

approaches to the use of the FW Act’s small claims procedures in order to improve

our overall effectiveness and relevance to the community.

Slide 7 – Building a case for compliance

BUILDING A CASE FOR COMPLIANCE

31. For success, any dispute resolution process requires either a willingness of

engagement, or a compulsion for attendance. We create that tension, and do so very

successfully, through building a case for compliance, which others might call that the

doctrine of specific and general deterrence3. We unashamedly build a case for the

community of the consequences of non-compliance. Employers will see this case

3 How specific and general deterrence is applied by the Courts in the Fair Work Ombudsman matters has

been set out in a string of cases. For example, see Mason v Harrington Corporation Pty Ltd [2007] FMCA 7,

Mowbray FM, and Kelly v Fitzpatrick [2007] FCA 1080 (27 July 2007), Tracey J.


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played out in a few different ways, principally through audits, detailed investigations

requiring evidence; and enforceable undertakings and litigations.

32. Our compliance case is made out across the spectrum of the FW Act. In addition to

underpayments of wages, it extends to sham contracting; the actions of directors

and managers; unlawful discrimination against employees; and unlawful industrial

action and freedom of association breaches. The case is built in several different

ways. Usually this is built through direct engagement with employers and employee.

Less often it is built through the media, but of course, our media activity is the part

of the work that is publicly noticed. Even though our media activities are what you

see, it should be borne in mind that our firm policy is for publication of details of

investigations usually in only three instances;

a. where we have made a firm decision to litigate against someone (in which

case publicity will usually accompany the filing of proceedings);

b. where we have entered into an Enforceable Undertaking, or other Deed that

allows for publication; and

c. where we are asked in some public way, such as through a media or

Parliamentary request to confirm we are investigating, and the nature of the

investigation.

33. I thought it would be beneficial to highlight a couple of different aspects of the case

we build.

TARGETED COMPLIANCE

34. The Fair Work Ombudsman conducts several different type of auditing activities

around the country in the course of a year. We conduct national audits and those

which are regionally focussed; and we audit according to industry and by region.

We endeavour to have roughly 1 audit for each 5 or 6 underpayment complaints we

receive, and we minimise the use of crude and frequently unreliable methodologies

of random and unannounced visits, which often don’t have a strategic purpose

beyond being unannounced. Unlike the past, every significant audit is the subject of

a close-out report, which is available publicly. Our audit reports record many things,

including a raw statistic about the level of compliance we see.


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35. Our objective with auditing continues to be to challenge duty-holders to work

toward self compliance and to voluntarily correct problems that occur.

36. Typically audits show that about above half, and up to two-thirds, of the businesses

we see are compliant. For example, the recently completed National Cleaning

Services Campaign report showed 63% of the audited businesses were compliant.4

About a half of the one-third that were non-compliant had problems with

underpayments of wages, and others had problems with payslips and record-

keeping and the payment of penalty rates and loadings;

Contravention types

Underpayment of 48%

wages

Payslip/record keeping 39%

Penalty rates 12%

Loadings 1%

4 National Cleaning Services Campaign 2010-11, report published July 2011. A full copy of the Audit

Report can be accessed from this link: http://www.fairwork.gov.au/about-us/audits-and

campaigns/recent-campaign-results/pages/national.aspx


http://www.fairwork.gov.au/about-us/audits-and

P a g e | 10

Slide 8 – Best Advice – targeted audits

Best advice – targeted compliance and auditing

37. My be

st advice for employers during the auditing phase?

a. Work with your employer or industry association – m ore than likely they’ve

been consulted about the parameters of the audit campaign;

b.

Work cooperatively and constructively with the Fair Work Inspectors;

c. Use the audit as a learning experience that can strengthen (rather than tear

down) your payroll procedures;

d. If you don’t agree with what we say, tell us, and tell us why

Slide 9 – Investigations

THE INVESTIGATION PHASE

38. Not every complaint seen by our staff leads to a full investigation. Usually those that

do arise either because there is a suspicion by our staff that the duty-holder has

either deliberately tried to avoid their obligations, or has not recognised them when

they have been pointed out.

39. In outline form, matters requiring full investigation go through several distinct

phases5;

a. Establishment of jurisdiction and consideration of relevant threshold issues;

b. Identification of the applicable industrial instrument(s); and

c. Gathering and analysing evidence.

40. The evidence gathering phase will usually require several formal steps, including the

issue of a Notice to Produce6, and/or a formal Record of Interview. The purpose of

5 These are set out publicly in FWO Investigative Process (Guidance Note 8) which deals with the FWO

Investigative Process – see http://www.fairwork.gov.au/guidancenotes/GN-8-FWO

Investigative%20Process.pdf

6 A copy of our template Notice to Produce is attached.


http://www.fairwork.gov.au/guidancenotes/GN-8-FWO

P a g e | 11

these is partly to gather as much relevant documentary material as possible, and

(where necessary) to test that orally with material witnesses. It is also partly to sort

out the factual base – often basic facts are the subject of dispute. For example, was

there an employment arrangement; what were the duties; what hours were worked?

41. Mostly this process allows us to narrow down the areas of contention, and to

identify what (if any) breaches have occurred in our opinion. When we see

breaches, we frequently issue a contravention letter, which outlines the breach and

the actions we expect to be taken. This action sits within this policy;

“5.3.d.2. If a Fair Work Inspector identifies a contravention of Commonwealth

workplace laws, they will notify the relevant parties.

5.3.d.3. The FW Regulations provide a Fair Work Inspector with the power to issue

a notice in writing informing a person of a contravention and to require the person

to take action to rectify the contravention. Furthermore, the notice may require the

person to inform the inspector of any action taken to rectify the contravention. A

Fair Work Inspector issues this notice in the form of a ‘Contravention Letter’, which

will identify what the contravention is, the reason for the determination and the

actions required to rectify the contravention.

5.3.d.4. The contravention letter will provide a reasonable period of time for the

person to rectify the contravention. If the person fails to rectify the contravention

the FWO may initiate further enforcement action. If a contravention is rectified, the

FWO will consider whether the matter will be finalised, or whether further

enforcement action is required.”

42. Mostly these exchanges are effective in that the basis for the letter is acknowledged

and the required action is taken.

43. Where there has been a significant breach we consider whether there is anything

that requires litigation to be considered, and our Litigation Policy7 counsels in

relation to money matters that;

7 Fair Work Ombudsman Litigation Policy – Guidance Note 1 (2009), – see

http://www.fairwork.gov.au/guidancenotes/GN-1-FWO-Litigation-Policy.pdf


http://www.fairwork.gov.au/guidancenotes/GN-1-FWO-Litigation-Policy.pdf

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“4.4. In certain circumstances proceedings may be commenced, not withstanding

any voluntary compliance, if the FWO considers such proceedings to be the most

appropriate means of dealing with the contravention or deterring others from

contravening Commonwealth workplace laws (for example, where there are

significant amounts underpaid, a number of employees or vulnerable employees

involved).”

“9.4. Any decision to commence proceedings requires a two-stage test be

satisfied:

(a) First, there must be sufficient evidence to prosecute the case; and

(b) Secondly, it must be evident from the facts of the case, and all the

surrounding circumstances, that commencing proceedings is in the public interest.”

44. In relation to public interest, although the policy says we do not pursue trivial

matters, these matters are NOT trivial;

“(iii) contraventions giving rise to significant underpayments (upward of $5,000

in total (not per employee)) particularly where there is evidence the employer

knowingly contravened their obligations or did not properly discharge their duty to

ascertain their obligations”

45. I have recently expressed the view that corporations need to be careful about

engaging in sub-contracting practices which dramatically undercut minimum wages,

or which attempt to disguise employment as independent contracting.

46. Despite saying this, of course, sub-contracting arrangements can be above-board,

and similarly, independent contractors may be engaged, and those independent

contracting arrangements may well be above board, depending on the facts.

However the risks are apparent, and I encourage you as a professional workplace

relations or legal practitioner to be careful about the risks of a corporately

sanctioned “blind eye” which could imperil your client’s reputation or may be

unlawful. If a party sets out to avoid its workplace relations responsibilities, and

that avoidance takes the form of using the commercial processes to find a business

partner who will undercut established minimum wage rates, then that may well be

unlawful.


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47. The pretence that commercial negotiations can procure below award wages or that

the cover of an ABN can avoid an employment arrangement are merely that –

pretences. And they are pretences that can have significant consequences. What I

would say about activities like this is the same thing that the Chairman of the ACCC

has said about his regulatory area;

"If it sounds too good to be true, then it usually is. Don't be suckered into these types of

deals, and read the contracts you've been given. After you've read your contracts, you may

even want to go over them with a legal representative, just to make sure that what you're

getting isn't totally wrong."8

48. The FW Act has two sections that will be particularly important to the advice you

might give as you consider some of the sharper practices that are around.

49. First, are the provisions of the FW Act which create liability for someone involved in

a contravention9. We use this provision principally for behaviour at the bottom end

of the market – such as directors of companies who can’t be pursued productively in

other ways due to an unfortunate date with liquidation. Then there are the

provisions dealing with sham contracting, which caution against disguising an

employment arrangement as one of independent contracting.10

50. The effect of these two provisions combined in a recent case in which a human

resources manager was held personally liable (as well as the company that

employed him, and the director of the company).11 In that case, the owner and sole

director was fined $13,200, and the company’s former human resources manager

was fined $3,750 after having been found to have been involved in the contravention

8 Graeme Samuel, “Telco scam victims tell: we've lost millions”, 2 November 2010,

http://www.smartcompany.com.au/legal/20101102-telco-scam-victims-tell-we-ve-lost-millions.html

9 See FW Act, s550

10 See FW Act, s357

11 See Fair Work Ombudsman v Centennial Financial Services Pty Ltd & Ors [2010] FMCA 863 (15

November 2010), and Fair Work Ombudsman v Centennial Financial Services Pty Ltd & Ors [2011] FMCA

459 (21 June 2011) [penalty decision]; see also http://www.fairwork.gov.au/media-centre/media

releases/2011/06/Pages/20110623-Centennial-penalty.aspx


http://www.fairwork.gov.au/media-centre/mediahttp://www.smartcompany.com.au/legal/20101102-telco-scam-victims-tell-we-ve-lost-millions.htmlhttp:company).11http:contracting.10

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of the former WR Act’s sham contracting provisions (which were replicated in the

FW Act).

51. This is the first time we have used the accessorial liability provisions against a non-

owner manager, and serves as a warning against managerial decisions which know

proposed conduct is contrary to the FW Act.

Slide 10 – B est Advice - Investigations

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e, my best advice includes the following

a. Where there has been a money breach, we expect it to be rectified. We don’t

haggle.

b. Work cooperatively and constructively with the Fair Work Inspectors – w e

are yet to make firm decisions about the disposition of the claim;

c.

Neutral and objective advice is the best advice!

12

d. If you don’t agree with what we say, tell us, and tell us why.

Slide 11 – Litigation & Enforceable Undertakings

ENFORCEABLE UNDERTAKINGS AND LITIGATION

53. In the last 12 months, the Fair Work Ombudsman commenced 56 court actions and

finalised 11 Enforceable Undertakings. These have included the following13;

12 Guidance Note 8 which deals with the FWO Investigative Process says at 5.1 “If a person is a party to an

investigation throughout any phase, their cooperation with the FWO and assistance throughout the

investigation process may be looked upon favourably.” – see

http://www.fairwork.gov.au/guidancenotes/GN-8-FWO-Investigative%20Process.pdf

13 In all cases, the details have been referenced from the Fair Work Ombudsman website media pages –

see http://www.fairwork.gov.au/media-centre/media-releases/pages/default.aspx


http://www.fairwork.gov.au/media-centre/media-releases/pages/default.aspxhttp://www.fairwork.gov.au/guidancenotes/GN-8-FWO-Investigative%20Process.pdf

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Litigations Commenced Enforceable Undertakings Signed

Gippsland store faces court over alleged Recycling company signs up to workplace

$30,000 underpayment agreement after underpaying staff almost

12 Jul 2011 $140,000

The Fair Work Ombudsman has launched a 22 Jun 2011

prosecution against the operators of a Gippsland A national processing and recycling group has

retail store for allegedly underpaying an employee back-paid dozens of staff a total of almost $140,000

more than $30,000 after an investigation by the Fair Work

Ombudsman.

Fair Work Ombudsman alleges four oil rig More than $175,000 back-pay for 53 service

workers underpaid more than $120,000 station employees

27 Jun 2011 17 Jun 2011

The Fair Work Ombudsman has launched a Fifty-three current and former employees of a

prosecution against three companies and one service station in Melbourne are to be reimbursed

company director over more than $120,000 in more than $175,000 after an investigation by the

alleged underpayments of four Filipino nationals Fair Work Ombudsman found they were being

who worked on oil rigs off Western Australia. underpaid.

Perth companies face court over alleged sham Melbourne fruit & vegetable workers to share

contracting half-million dollar back-pay

3 Jun 2011 14 Mar 2011

The Fair Work Ombudsman has launched a A Melbourne fruit and vegetable retailer has agreed

prosecution against two companies alleging they to back-pay 265 current and former staff after an

engaged in sham contracting activity affecting investigation by the Fair Work Ombudsman found

workers at a South Perth accommodation facility. the workers were inadvertently underpaid more

than $464,000 over two years.

Two national companies face court over alleged Employers urged to assess workplace

sham contracting agreements on pregnancy discrimination

3 May 2011 11 Mar 2011

The Fair Work Ombudsman has launched a The Fair Work Ombudsman today urged employers

prosecution against two companies for alleged to check their workplace agreements to ensure

sham contracting activity affecting thousands of they are not inadvertently breaching federal

call centre workers and door-to-door salespeople. workplace laws on pregnancy discrimination.


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Maritime union to face court over alleged Transport companies sign up for training and

unlawful industrial action reporting plan after breaching drivers’ rights

28 Apr 2011 3 Mar 2011

The Fair Work Ombudsman has launched two Port Adelaide-based transport companies Ascot

separate prosecutions against the Maritime Union Haulage and Northern Territory Freight Services

of Australia (MUA) over alleged unlawful industrial have entered into an Enforceable Undertaking with

action at Fremantle and Broome, in Western the Fair Work Ombudsman.

Australia.

Phone retailer faces court for alleged Lismore café signs up to training and reporting

discrimination against Geelong employee plan after underpaying staff $138,000

1 Mar 2011 10 Feb 2011

The Fair Work Ombudsman has launched a The operator of a cafe at Lismore in NSW has

prosecution against a mobile phone retailer for promised to report its wage rates to the Fair Work

allegedly discriminating against a Geelong Ombudsman for the next three years after the

employee when she attempted to return from workplace regulator found the company was

parental leave. underpaying its staff.

Albury-Wodonga hair salon operators face Toys”R”Us back-pays $1 million to 1000 staff

court over alleged discrimination 30 Jan 2011

25 Jan 2011 National retail giant Toys“R”Us has promised to set

The Fair Work Ombudsman has launched a up a whistleblower hotline for its staff to complain

prosecution against the operators of three about wages and conditions after an investigation

hairdressing salons in Albury-Wodonga, alleging by the Fair Work Ombudsman found the company

they discriminated against a physically disabled was underpaying its employees.

employee.

Melbourne restaurant allegedly underpaid $41,600 back-pay for 155 staff at Durty Nelly’s

Indian cook $24,000 Irish Pub in Perth

19 Jan 2011 14 Nov 2010

The Fair Work Ombudsman has launched a The operator of Durty Nelly’s Irish Pub in Shafto

prosecution against the operator of a suburban Lane, Perth, has reimbursed 155 of its employees a

Melbourne restaurant for allegedly underpaying a total of $41,689 following an investigation by the

cook recruited from India more than $24,000. Fair Work Ombudsman.


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54. Taken together, these are high-end compliance responses where we are satisfied

that a significant breach of the FW Act has occurred and that it is in the public

interest to pursue an outcome which has a deterrent effect.

55. In practice, these matters represent a lot of independent decision making to work

the matters up to a point where the evidence shows a significant breach; the

managers consider action is required; and independent legal advice indicates there

are good prospects of success if the matter is being considered for Court action. We

look at these matters from several perspectives. The pursuit of justice for an

aggrieved party is one such perspective; the need for the community to be assured

that laws will be enforced is another; and the idea of deterrence of other, unrelated

duty-holders is a third.

56. Every matter that is considered for an enforceable undertaking or litigation moves

through an extensive case conferring process that guides the overall progress of the

investigation. During that process, we endeavour to make it as plain as possible to

the parties involved that we are moving to a high-end compliance activity. To put it

another way, there will always be several points where we seek explanations for

contrary behaviour or voluntary compliance. In a handful of cases we pursue high-

end compliance activities, even though voluntary compliance has been achieved –

however those cases are isolated and always have circumstances that we consider

require higher-end action.

57. A part of the case conferencing process is consideration about which outcome is

best, and it may well be during that time an approach is made to the duty-holder to

consider an Enforceable Undertaking. We may consider such an approach either

because the full circumstances do not warrant the risks and costs of a trial, or

because we perceive a better outcome for the community can be achieved.

58. Enforceable undertakings are provided for by the FW Act in s715, which provides

for us to accept a written undertaking when we believe there has been a

contravention of a civil penalty provision. The content of the undertakings can be

enforced through the Courts if need be. They allow us to formalise an arrangement

where a duty-holder has voluntarily complied with the law after an investigation by

a Fair Work Inspector. It allows us to consider alternative ways to compensate

people who have suffered loss or damage as a result of the contravention as well as


P a g e | 18

opportunities to ensure continuing compliance that may not be available via an

order from a court. While we COULD litigate against the duty-holders involved for

their breaches, we exercise a discretion to say that it is not in the public interest for

us to do so.

59. The aim of the content of an Enforceable Undertaking is;

“... to focus the wrongdoer on the tasks to be carried out to remedy the alleged

contravention, and/or prevent a similar contravention in the future”14

60. Some of the outcomes able to be achieved from our Enforceable Undertakings have

included back-payments; written apologies to employees; public statements of

contrition in press advertisements or Facebook “wall”; human resources staff

attending quality accredited workplace relations compliance training; and providing

written reports annually to the Fair Work Ombudsman about a range of compliance

matters.

61. All of our Enforceable Undertakings are public15 (except one) and detail the

breaches that occurred, and the reasons they came about, and can be publicised by

us as we consider fit. My policy is not to consider proposals for private admissions

and undertakings.

62. While litigation is a concerted activity by us, it is used sparingly, generally where we

think it will be most effective. The Court actions taken by the Fair Work

Ombudsman may be commenced in either the Federal Court or the Federal

Magistrates Court, or another Court of competent jurisdiction. While we are

prepared to discuss Statements of Agreed Facts with the respondent, and frequently

do so, in order to narrow the issues, we rarely withdraw a matter, such as when a

change of heart leads to underpayments being rectified.

63. The FWO legal practice has lawyers based in all mainland States, and has been

accredited by the Attorney-General for the next 12 months to use in-house lawyers

14 FWO Enforceable Undertakings Policy, Guidance Note 4, clause 5.1, see

http://www.fairwork.gov.au/guidancenotes/GN-4-FWO-Enforceable-Undertakings-Policy.pdf

15 Enforceable Undertakings are published on the FWO website at this address:

http://www.fairwork.gov.au/about-us/legal/pages/enforceable-undertakings.aspx


http://www.fairwork.gov.au/about-us/legal/pages/enforceable-undertakings.aspxhttp://www.fairwork.gov.au/guidancenotes/GN-4-FWO-Enforceable-Undertakings-Policy.pdf

P a g e | 19

to conduct all its civil penalty litigations.16 Generally, this means we will use our

staff to act as solicitors and counsel, using external firms and Counsel where the

complexity of the matter requires.

Slide 12 – B est Advice – L itigation

B

64

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a. Ask for an enforceable undertaking if one hasn’t been offered and

proceedings have not been commenced;

b.

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c. If you think we have not taken into account evidence or explaining behaviou

make sure we know about it

s

r,

Slide 13 – Conclusion

CONCLUSION

65. Beyond the points I have already mentioned, I reinforce that our work is directly

aimed at improving fairness, and I believe our work has ensured a very large

number of duty-holders know their responsibilities better than ever and that our

approach gives them some practical help to implement their responsibilities.

66. We value that the primary relationship in employment is between the employer and

employee, and that most duty-holders will rectify problems as soon as those

problems are drawn to their attention. Accordingly, we appreciate that often the

best contribution we can make is to assist employers and employees to know their

rights and responsibilities.

16 “Recognition for in-house legal team allows Agency to prosecute its own cases”, FWO Media release, 8

July 2011, see http://www.fairwork.gov.au/media-centre/media-releases/2011/07/pages/20110708

inhouse-laywers.aspx


http://www.fairwork.gov.au/media-centre/media-releases/2011/07/pages/20110708http:litigations.16


P a g e | 20

67. I especially encourage employers and their advisers to think carefully about how

they engage with our work. We are approachable and we are happy to discuss

alternative opinions.

68. I hope that my advice about dealing with the Fair Work Ombudsman will be of

assistance.

Slide 14 – Questions and contact details

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Location: 414 Latrobe Street, Melbourne

Telephone: 03 9954 2611

Email : [email protected]

Infoline: 13 13 94

Web: www.fairwork.gov.au

TELEVISION EDUCATION NETWORK4TH ANNUAL EMPLOYMENT LAW CONFERENCE 22 July 2011TELEVISION EDUCATION NETWORK. 4TH ANNUALINTRODUCTION DISPUTE RESOLUTION ASSISTED VOLUNTARY RESOLUTION . BUILDING A CASE FOR COMPLIANCE TARGETED COMPLIANCE THE INVESTIGATION PHASE ENFORCEABLE UNDERTAKINGS AND LITIGATICONCLUSION

dealing with the fwo · 8. the assigned topic “employer dealings with the fwo” is quite...

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