The Fair Work Ombudsman has made no secret about the fact that it is concerned about lack of compliance in the retail sector with respect to workplace relations issues. In the period 2008–09, the Fair Work Ombudsman found that the retail industry generated the highest number of complaints received from any industry sector.
This led to a campaign by the Fair Work Ombudsman in 2010/2011 to improve compliance in the sector.
Since then:
- In August 2013 the Fair Work Ombudsman recovered more than $39,000 for workers underpaid at video stores in Western Australia.
- In April 2013, the operators of a regional NSW fruit and vegetable store were fined a total of $166,848 after engaging in sham contracting and underpaying a shop assistant more than $60,000.
- In 21 November 2013 the Fair Work Ombudsman wrote to almost 3,000 retailers across Western Australia, South Australia and the Northern Territory as part of a new campaign to improve compliance in the sector, including ensuring compliance with the General Retail Industry Award 2010.
- In March 2014, the operator of an Asian grocery store in Adelaide was required to repay workers $23,000 in relation to underpayments.
- In June this year, the Fair Work Ombudsman indicated it had received complaints about employees of brand clothing and accessory retailers not being reimbursed for clothing they were required to buy and wear on the shop floor. We have previously written an article on this issue. As a result Fair Work inspectors assessed compliance at 35 retail stores, interviewing staff in many instances.
Who is the Fair Work Ombudsman?
The Fair Work Ombudsman enforces compliance with the Fair Work Act 2009, awards and statutory agreements like enterprise agreements. It also educates employers about work practices, rights and obligations.
What’s the difference between the Fair Work Ombudsman and Fair Work Australia?
The Fair Work Ombudsman and the Fair Work Commission (previously called Fair Work Australia) are different government organisations.
As mentioned above, the Fair Work Ombudsman enforces compliance with workplace laws. If you are underpaying employees, the Fair Work Ombudsman may prosecute you. Think of them as being similar to a civil police force.
On the other hand the Fair Work Commission is a tribunal. It conciliates and makes decisions about a range of things such as unfair dismissals, changes to awards, minimum wages and industrial action and union activity.
Just to confuse matters further, if the Fair Work Ombudsman does prosecute you for breaching an award, the prosecution will be taken to a civil court such as the Federal Circuit Court, but not to the Fair Work Commission.
What can I do if the Fair Work Ombudsman comes knocking at the door?
The Fair Work Ombudsman has wide powers. In certain circumstances they have the power to:
- enter workplaces;
- interview employees, although this must occur with consent as there is no general obligation to answer the FWO’s queries;
- require a person to provide their name and address;
- obtain employee records, in order to conduct its investigations;
- require a person to produce a record or document; and
- issue compliance notices.
Sometimes the Fair Work Ombudsman may even seek to exercise its powers where no complaint has been received. For example, when conducting audits.
It is important to respond promptly to the Fair Work Ombudsman and to consider the issues that it has raised. Ignoring the Fair Work Ombudsman is not a good strategy. You quickly need to make an assessment of what has occurred and if you are in the right you need to let the Fair Work Ombudsman know.
Before entering a premises, or as soon as possible after entering, a Fair Work Inspector must show their identity card. You need to be careful not to prevent a Fair Work Inspector from undertaking their job. If a person seeks to hinder or obstruct a Fair Work Inspector in the course of their duties, they may face criminal charges.
One particularly difficult area has been the Fair Work Ombudsman’s requirements around producing documents, which can create a burden on employers to produce all the documents requested in the timeframe allotted. Often employers only have 14 days to produce the relevant documents. Unfortunately a failure to comply with a notice to produce is an offence in itself, unless there is a reasonable excuse.
Sometimes employers supply documents to the Fair Work Ombudsman that are not required under the notice to produce, because they do not understand the terms of the notice to produce. In addition, in responding to a notice to produce, a person is not required to provide information that attracts a valid claim of legal professional privilege. Assessing what attracts legal professional privilege is a technical exercise in itself.
It is best to obtain legal advice from us immediately on receiving such a notice in order to clarify your legal rights.
The importance of legal professional privilege
In working out how to deal with a potential compliance issue, you need to be aware that documents that you create containing internal deliberations about the issues may have to be handed over to the Fair Work Ombudsman if such documents are required as part of a notice to produce. However, communications which are created for the dominant purpose of obtaining legal advice or in anticipation of litigation may be privileged and may not have to be handed to the Fair Work Ombudsman.
Therefore, consideration should be given to involving us as soon as an issue is identified. Not only can we advise you about the best way of handling the issue, but involving lawyers will assist in establishing privilege for communications concerning the compliance issue.
What are the possible consequences of non-compliance?
The Fair Work Ombudsman can:
- Issue fines;
- Issue compliance notices (directions to take certain remedial steps);
- Obtain from the employer, enforceable undertakings; or
- Obtain from a court, penalties and compensation.
These consequences often involve:
- Compensation in respect to employees’ entitlements; and
- Penalties (separate to compensation) of up to $10,200 for individuals and $51,000 for corporations and can be ordered in respect of each particular contravention proved against the employer.
It is not only the employer who may be prosecuted. Directors and managers (such as HR managers) have also been personally prosecuted for being an accessory to the employer’s breaches.
What can I do to minimise the risk of being prosecuted by the Fair Work Ombudsman?
Regularly check you are complying with workplace laws, including awards. We can assist you with this.
If you do have the Fair Work Ombudsman contact you, take it seriously. Obtain legal advice about how to deal with the Fair Work Ombudsman.
In our experience, the imposition of court imposed penalties is a rare outcome where an employer works with us and the Fair Work Ombudsman in respect to the alleged non-compliance.
More information
If you would like to discuss this issue, please contact David Brown, Principal Lawyer on (03) 8600 8828 or dbrown@kcllaw.com.au or a member of our Employment and Workplace Relations team on (03) 8600 8888.
Note: This update is a guide only and is not intended to constitute legal advice.