Security industry faces further scrutiny

14 June 2011

The Fair Work Ombudsman is conducting follow-up audits of hundreds of security companies after recovering more than $1 million for underpaid security workers last year.

Fair Work inspectors will audit up to 600 security industry employers over the next three months to check they are paying staff correctly and are not engaging in sham contracting.

The Fair Work Ombudsman last year completed audits of 296 employers in a national campaign targeting the security industry and found 154 (52 per cent) were in breach of workplace laws.

Eighty-three employers were found to have underpaid a total of 1124 of their employees $1.18 million.

Fair Work Ombudsman Executive Director Michael Campbell says those employers with contraventions will be re-visited - and more than 100 additional employers who have previously come to the Agency’s attention will also be assessed.

Recently-registered security industry employers will also be included to ensure they understand workplace laws and are aware of the assistance available from the Fair Work Ombudsman.

“The level of non-compliance discovered in the security industry during last year’s campaign was a major concern, so we believe this extensive follow-up campaign is warranted,” Mr Campbell said.

“We asked for leadership from the security industry to dramatically improve its compliance with workplace relations laws, so we are hoping to see some evidence of that being the case.

“We are mindful that this is an industry which employs large numbers of young people and migrant workers who may be vulnerable if they are not fully aware of their workplace rights.”

Regions being targeted for the audits include the following areas:

  • NSW/ACT: Sydney, Canberra, Central Coast, Newcastle, Wagga, Bathurst, Coffs Harbour, Dubbo, Tamworth, Goulburn, Armidale, Maitland, Gosford, Forster-Tuncurry, Albury, Orange, Blue Mountains, Wollongong, Lismore, Queanbeyan and Nowra.
  • VIC: Melbourne, Geelong, Bendigo, Ballarat, Mildura, Swan Hill, Colac, Whittlesea, Traralgon, Horsham, Warrnambool, Wodonga, Kilmore, Lakes Entrance, Wonthaggi, Sale, Mornington Peninsula and Shepparton.
  • QLD: Brisbane, Gold Coast, Cairns, Rockhampton, Townsville, Hervey Bay, Sunshine Coast, Whitsunday, Toowoomba, Mackay, Chinchilla, Gladstone, Dalby, Bundaberg and Gatton.
  • WA: Perth, Kalgoorlie-Boulder, Mandurah, Bunbury, Dunsborough, Albany, Geraldton and Onslow.
  • SA: Adelaide, Port Lincoln, Naracoorte, Berri, Victor Harbor, Murray Bridge, Port Pirie, Mt Barker and Port Augusta.
  • TAS: Hobart, Launceston, Devonport, Burnie, Ulverstone and George Town.
  • NT: Darwin, Alice Springs and Tennant Creek.

Among businesses audited will be providers of alarm monitoring services, security at events and airports, crowd control, medical centre static guards, mobile patrols and other general security.

Key stakeholders have been advised of the campaign, including the Australian Security Industry Association and Security Providers’ Association of Australia.

Mr Campbell says inspectors will ensure employees are being paid the minimum hourly rates, allowances and penalty rates they are entitled to.

“Last year we found many employers paying flat rates for all hours worked and consequently failing to pay workers their full penalty rates for overtime, night and weekend work,” he said.

“Employers need to be aware that a handshake agreement to pay workers a flat rate - even if it is above the minimum hourly rate in the Award - does not negate the need to pay workers penalty rates.”

Inspectors will also target sham contracting, which occurs when an employer disguises or misrepresents an employment relationship as an independent contracting arrangement.

Mr Campbell says all employers should be aware that just because a worker has an ABN and has been labeled a contractor does not necessarily mean they can legally be classified as a contractor.

“Where we suspect sham contracting is occurring, we look behind the documents and apply workplace laws to determine the true state of affairs,” he said.

“It is vital we ensure workers are classified correctly because if they are incorrectly classified as independent contractors they can miss out on employee entitlements such as minimum rates of pay and leave entitlements.”

A section of the Fair Work Ombudsman’s website is devoted to providing information specifically for the security industry: www.fairwork.gov.au/security

Employers and workers seeking advice or assistance regarding independent contracting and sham contracting can visit www.fairwork.gov.au/contractors

Employers and employees seeking assistance can also contact the Fair Work Infoline on 13 13 94.

A free interpreter service is available by calling 13 14 50.

Media inquiries:

Ryan Pedler, Senior Adviser, Media & Stakeholder Relations
(03) 9954 2561, 0411 430 902
ryan.pedler@fwo.gov.au

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