25 July 2022
The Fair Work Ombudsman has revealed its main concern for the year ahead, with the primary focus being on supporting businesses and employees as they recover from the impacts of COVID 19.
As always there will also be a continued effort to examine key industries on compliance issues. These sectors include the fast food, restaurant and café and agriculture sectors. Given the turmoil throughout COVID 19 and recent case history, the University sector is also under the radar for underpayments. This has shown to be true after poor governance and management has been the major contributor to the claims before the Commission. Ineffective records and lack of a HR function has proven to underpin what has occurred within this sector.
The investigation of sham contracting and non-compliance reports across the cleaning industry will also be carried out. This is not to say that this won’t occur in other industries as well. Specific task forces have been sanctioned in these areas.
It is evident that Small businesses are still recovering from the impact of COVID 19. With changing conditions in the employment landscape, business owners need to be across these changes. For some Awards this includes the removal of pandemic leave. For others it’s the mandatory vaccination status. As such, the FWO will continue to provide advice to ensure that small businesses remain compliant.
One of the other key pieces of legislation that sits alongside the Fair Work Act is the Vulnerable Workers Act. Many employees that work within the hospitality sector are often consider vulnerable because of the conditions they work under. The FWO will continue to review and investigate multiple food precincts throughout the year as there have been over 25 complaints in this area this year alone. This industry has poor compliance practice, not from lack of trying but for the complexity amongst some the Awards that govern their industries.
Known as an industry that has a high number of Visa holders working within it, the Agriculture sector is also under the spotlight as Visa holders return after COVID 19 boarder closures permitted their entry. These workers are also considered to be vulnerable and have the potential to be exploited. There have also been a number of changes in the Horticulture Award which also make it challenging for those operating in this area.
One of the things surrounding non-compliance is that there is an avenue for self-reporting if a mistake has been made or a certain condition has not been followed. Woolworths, Coles, Latrobe University and Commonwealth Bank have all elected to go down this avenue. So as such, this has encouraged the FWO to review likeminded businesses and determine if it’s applicable there. Part of this review predominantly relates to record keeping and underpayments. These more so in regard to overtime and penalties worked.
Sham contracting occurs when an Employer either knowingly or unknowingly engages an individual as an independent contractor, rather than an Employee. This may be done intentionally or unintentionally so the company can avoid taxes or Employee entitlements such as minimum wages, leave entitlements, worker’s compensation and superannuation obligations. This occurs a lot in the building and construction industries whereby “subbies” are frequently used. Wrongly classifying someone has significant penalties attached to it. So not only are businesses then required to pay the correct entitlements, they are also issued a fine for non-compliance.
In conclusion, both small and large businesses can get it wrong. HR is complex. Changes occur frequently and if you’re not across it then you can miss it. While it’s not an acceptable form of defence, it’s worth engaging with professionals to monitor changes on your behalf. If you do not know, then you need to seek assistance, even if it’s for peace of mind. That is where we can help. Let us work with you to ensure compliance and best practice is set up now, not only for the present but for the future. If you haven’t reviewed your HR documentation in the last 12 months, now is the time to do it. For help email [email protected]
