The release of the Fair Work Ombudsman 2019/2020 Annual Report is a stark reminder of the need to ensure compliance issues are dealt with swiftly and not left on the backburner. While the need to implement drastic changes to adapt to the “new normal” has led to a shift of focus and priorities for some organisations, a revised Fair Work Ombudsman (the “FWO”) strategy has resulted in a significant increase in the use of FWO enforcement and compliance powers.

FWO Enforcement

In mid-2019, the Fair Work Ombudsman announced that it would strengthen its compliance and enforcement strategy. The revised Compliance and Enforcement Policy has resulted in a firmer approach and an increase in the use of FWO enforcement and compliance tools.

By way of example, this new approach led to the issue of 952 Compliance Notices and a recovery of more than $7.8 million in unpaid wages. This represents a significant increase from the 2018/2019 financial year in which the FWO issued 274 compliance notices, recovering more than $1 million in unpaid wages.

A compliance notice is one of numerous enforcement tools available to the FWO which formally requires a person to take specific action to fix an alleged entitlement-based breach of the Fair Work Act 2009 (Cth) (the “FW Act”) or an industrial instrument.

The FWO has further reported that it recovered an amount of $123,461,548 for 25,583 workers and filed 54 sets of proceedings in the 2019/2020 financial year in relation to FWO enforcement and compliance issues. This similarly represents a dramatic increase from the 2018/2019 financial year in which the FWO recovered an amount of $40,204,976 for 17,718 workers and commenced 23 sets of proceedings.

The 2019/2020 financial year also saw the establishment of a new sham contracting unit within the FWO. The FWO has reported that this unit has recovered a sum of $363,976 in the 2019/2020 financial year in relation to sham contracting and miscellaneous matters.

Takeaways

• Despite the challenges brought on by COVID-19, it is essential that employers continue to manage legal compliance issues and ensure they are meeting all minimum entitlements under the FW Act and any applicable industrial instruments.
• Employers should be mindful when hiring contractors that they do not inadvertently misrepresent an employment arrangement as an independent contracting arrangement.
• Employers should be aware of any changes to minimum rates of pay and allowances. New minimum rates and allowances will apply in awards for the construction, manufacturing and a range of other industries from the first full pay period on or after 1 November 2020.