Last Wednesday, the Fair Work Ombudsman (FWO) published its priorities for FY23. The FWO is the primary statutory regulator responsible for investigating workplace complaints and enforcing compliance with national system workplace laws. The FWO releases a statement of priorities each financial year. This year’s statement provides a valuable insight into the investigative and enforcement actions that the FWO is likely to pursue.
FWO’s Priority Sectors
The following sectors have been identified by the FWO as key focus areas:
- large corporates;
- fast food, cafes and restaurants;
- universities; and
- contract cleaning.
Given the instances of non-compliance across Australian large corporates in recent years, it is no surprise that large corporates remain a focus for the FWO. The agricultural and university sectors are new additions the FWO list of priorities this year. The remaining sectors were identified as sectors of concern last year.
Businesses that operate in these sectors should expect the FWO to take particular interest in actual or suspected non-compliance with workplace laws.
In a statement to the press, the FWO Sandra Parker said:
"The FWO continues to find high levels of non-compliance in the fast food, restaurants and cafe sector, with many requests for assistance coming from vulnerable workers. That is why we will continue to undertake proactive investigations in metropolitan food precincts across the year.”
"The agriculture sector is a priority given its reliance on visa holders, who can be at greater risk of exploitation, and its often complex labour supply chains. he Fair Work Ombudsman will also be playing a key role in both education and enforcement of the recent Horticulture Award changes.”
“[W]e expect to take further high-level enforcement action against a range of large corporates this year.”
The FWO has also singled out sham contracting as a matter of priority. There has been renewed regulator interest in sham contracting following recent High Court decisions, Jamsek and Personnel Contracting. Our previous alert about the two High Court decisions can be found here.
Sham contracting under the Fair Work Act 2009 (Cth) occurs when a business engages a worker as a contractor but knows (or is reckless to the fact that) the worker is an employee at law. Sham contracting is an offence and penalties apply.
The release of the FWO’s priorities coincides with an intensification of the scrutiny being applied on compliance with workplace laws from multiple angles, including Federal and State Governments.
On 1 July 2021, the Victorian Wage Theft Act 2020 came into effect. The Victorian law makes it an offence to dishonestly withhold an employee’s wages. The act also contains related offences, such as falsifying employee entitlement records and failing to keep employee entitlement records. Each offence is punishable by a fine of up to $1,090,440 for companies and up to 10 years imprisonment for individuals.
The Albanese government has also signalled its intention to introduce similar penalties for wage theft.
It follows from the above that compliance with workplace laws has never been more critical. This includes companies that are, or could soon be, the subject of an acquisition. In the context of acquisitions, there has been a similar surge in scrutiny from potential purchasers, lenders and warranty and indemnity insurers.
Taking proactive steps to review and ensure compliance is critical. Please contact the G+T employment team to discuss such compliance measures.