Underpayments and wage breaches seem to constantly be in the headlines, with the types of businesses and the dollar figures becoming larger and larger. This is not just a perception, it is a reality.
In 2022/2023 the Fair Work Ombudsman has recovered more that $509 million in unpaid wages for more than 250,000 Australian workers. This combines with last year’s $532 million to result in more than $1 billion in backpay recovered in the last two years and is a call to all businesses to act now to ensure compliance.
The vast majority (two thirds) of the underpayments came from universities and large corporates.
In an address in Canberra, the acting Fair Work Ombudsman Kristen Hannah outlined that while the majority of the underpayments were from the universities and large corporates the fact that these have been primarily self-identified and self-reported highlights that the message to review systems and ensure compliance is being heard in these sectors.
Ms Hannah noted however that there are still high-risk sectors where self-reporting and enforceable undertakings have not delivered the “sustainable change” that is sought.
“In sectors that our evidence tells us are at high risk of non-compliance, like fast food, restaurants and cafes, otherwise known as FRAC, and agriculture, week seek to use the enforcement tools available to us to enact sustainable change”, Hannah said.
Hannah detailed clearly that these lengths include pursuing franchisors for the underpayments made by their franchisees where appropriate, as is the case with both the 85 Degrees Coffee and the Bakers Delight case (acapmag.com.au/2023/07/franchisor-facing-court-for-not-preventing-underpayment-of-staff-by-its-franchisees) both in front of the courts now.
“Businesses are aware of their responsibilities, even when they’re one step removed from being the direct employer”, Hannah explained.
“Holding franchisors to account is important to generate systemic change through franchisor networks that will lead to ongoing future compliance. Another way we do this is by targeting and designing investigations for problematic industries”.
“A good example is our rolling program of unannounced audits in the FRAC sector over the past several years, specifically targeting area with ‘cheap eats’ havens. These are areas where meal costs are low and have not risen in line with other precincts or minimum wages. The surprise, coupled with good intelligence about where the problems are, make these very effective activities”, noted Ms Hannah.
A recent audit blitz through Melbourne in both the inner south and inner west food precincts saw the Fair Work Ombudsman investigate 82 businesses. 86% of these investigations turned up breaches of workplace laws that amounted to more than $680,000 in underpayments that were recovered for 1000 workers.
Highlighting the importance of anonymous tipping and industry intelligence in harnessing the activities of the regulator, Hannah noted that the online anonymous reporting ‘tip line’ saw and increase in reports to 14,000.
“This information helps form an evidence and intelligence base that informs our proactive compliance work and ultimately leads to some of the litigation outcomes”.
In closing her address, Hannah noted that while the FWO will be unflinching in stamping out underpayments and pursuing offenders, that the goal is a functional and compliant system; “As a regulator we also recognise that prevention is better than cure, so we put a huge amount of effort into our education and advice function to help ensure the community is informed and has access to the information they need and can rely on to get it right”, she concluded.
Here to help
ACAPMA members are reminded that the ACAPMA Assisted Compliance Audits are available as a resource to not only have an external professional ‘check in’ on employment compliance, but also get the help needed to ensure the documents, records and systems are not only ensuring compliance but can demonstrate it. For more information, see acapma.com.au/our-services/compliance-and-auditing or email employment@acapma.com.au.
HR Highlights are things to consider, implement and watch out for in your business. They are provided as general advice and you should seek further advice on your situation by emailing employment@acapma.com.au – it’s free for members. ACAPMA membership is affordable at only $860 per year for a single site and valuable with sites gaining access to all the ACAPMA Guides as well as HR and IR advice support and representation and a raft of other benefits and discounts.
Elisha Radwanowski BCom (HRM & IR)
Executive Manager Employment and Compliance
ACAPMA
Source: https://acapmag.com.au/2023/08/1-billion-in-backpay/.
