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Year in review

Image of Natalie James, the Fair Work Ombudsman

The Fair Work Ombudsman’s (FWO) activities in 2016–17 supported workplaces to become productive, compliant and inclusive. Our service delivery is based upon the principle of ‘customer first’. A key element of this service delivery is directing our compliance activities to systemic exploitation of vulnerable workers. To ensure we are effective in this endeavour we have adopted a multi-faceted and joined-up approach with government and communities. Our contribution included:

  • pushing the boundaries of the law to deal with the most severe cases of exploitation
  • advocating for changes to the law to enhance deterrence of unlawful conduct
  • working with government, stakeholders and the community to share intelligence, carry out joint compliance activities and address the broader settings that impact on the treatment of vulnerable workers, particularly migrant workers in the labour market
  • emphasising the role that established and well-known brands should play in preventing worker exploitation in their service networks and labour supply chains. 

Award-winning services

The FWO continued to augment our customer services with new and improved digital solutions to help people get the information and support they need, whether they are checking a pay rate, seeking guidance on how to resolve a workplace dispute or raising serious compliance concerns.

The Fair Work Infoline and Small Business Helpline remained a core component of our service delivery model. During the year advisers answered more than 385 700 calls. In 2016–17 our Infoline won awards for the Best Government Contact Centre over 30 staff and Best in Class Contact Centre (under 100 seats).

To provide our customers with greater access to our services we continued to develop our online presence, which was visited by more customers than ever. There were over 16 million visits to our website and more than five million pay rates were generated by our pay calculator. We launched our FWO Library which, for the first time, gives the public access to the technical guidance notes our advisers and inspectors use.

We enhanced our online enquiry service to make it quicker and easier for the community to seek our assistance. As a result digital enquiries rose 15% when compared to 2015–16. We also introduced an online lodgement system that enables individuals to electronically provide the information and documentation we need to assess the best way to help. The new system expedites processing and has been favoured by our customers. Since its introduction, only 1% of requests for assistance have been filed using paper-based forms.

We launched new digital resources, adding to our extensive suite of online tools that support both employers and employees. Three new online learning courses were released to help businesses manage employees, implement flexible arrangements and ensure a diverse workplace free from discrimination. We also released our first smartphone application that automatically records an employee’s working hours and can help ensure employees are paid for every hour they work. Record My Hours was launched in March and was downloaded over 13 400 times by the end of financial year. Its use continues to rise.

Our digital innovation has been recognised with our Online Learning Centre winning Excellence in Public Sector Management at the 2016 Prime Minister’s Awards and Record My Hours winning a gold medal at the 2017 Tech Design Awards.

Intelligence-led compliance activities

With the introduction of our Anonymous Report form in 2015–16, we have been receiving tip-offs from sections of the community that may not have felt comfortable coming to the Government for help.

We are also continuing to strengthen our intelligence-gathering capability through participation in forums such as the cross-agency Phoenix Taskforce and our information sharing arrangements with Commonwealth and state government agencies.

Combining anonymous report data with intelligence from partner agencies and our existing operational data has improved the targeting of our compliance activities. We are able to focus on a particular precinct, location, sector or type of conduct where indications across a range of sources tell us there may be a systemic problem.

When executing these compliance activities our practice allows us to verify the intelligence, better understand the cultural drivers at play and develop strategies to bring about impactful, sustained behavioural change.

The increasing sophistication of our intelligence-led approach has contributed to a 12% increase in the total number of enforcement tools we used and a comparative increase in our total recoveries for the year (from $27.3 million in 2015–16 to $30.6 million in 2016–17).

Resolving disputes

We dealt with the majority of workplace disputes through alternative dispute resolution tools, enabling us to resolve the overwhelming majority of matters in seven days or less. Our experience is that many people coming to the FWO for help are unclear about their rights and obligations. We ensure they have access to the right information and find we can support many of our customers to resolve their concerns with tailored advice and coaching.

Where we identified indicators of serious or systemic non-compliance, we initiated compliance activities, and in appropriate cases, deployed the full range of enforcement tools available to us including litigation.

In 2016–17, the Courts ordered over $4.8 million in financial penalties against non-compliant businesses, directors and accessories. This is a 66% increase on the total penalties ordered in 2015–16 ($2.9 million). In addition to the total amount of penalties significantly increasing, we achieved our highest ever penalty in a single case this year.1 Penalties of $532 910 were handed down in a matter that involved threats of violence, dismissal, withdrawal of support for the employee’s visa and demands that the employee pay back part of his wages in cash.

This increase in penalties reflects the fact that the Court’s tolerance for this type of conduct is diminishing and the increasing complexity of matters we are filing.

We have continued to test the boundaries of the law. In a precedent-setting decision, the Court found an accountant liable as an accessory to the underpayments of their client. This decision places key advisers such as accountants and human resources professionals on notice that they will be held to account for knowingly facilitating contraventions for their clients.

Vulnerable workers

This year saw us further invest in establishing clear and evidence-based strategies for addressing migrant worker exploitation. The goal is to ensure that our work not only resolves individual cases but has a lasting impact in deterring exploitative conduct and addressing the features of the systems that enable this conduct to arise.

A key component of this work has been to provide accessible tools and resources that enable migrant workers to understand and act on their rights. During the year, we enhanced our in-language website content with a suite of translated videos, storyboards and updated topics. We made the Record My Hours app available in 17 languages other than English. And, in what I understand to be a first for Australian Government agencies, we began work on a translated version of our Anonymous Report form which was released not long after the end of the year on 17 July 2017.

The FWO worked with government agencies, stakeholders and communities to impede the drivers of exploitation and remove barriers to migrant workers coming forward. This was done through participation in forums such as the Migrant Workers’ Taskforce and the Council of International Students National Conference. We established a protocol with the Department of Immigration and Border Protection (DIBP) to give assurance to visa workers that their work visas will not be cancelled if they are assisting us with an investigation. Our community partners and stakeholders raised awareness about the protocol within migrant communities.

The final component of our strategy has been to use the enforcement tools at our disposal to deal with the pernicious and persistent minority of operators who exploit the vulnerabilities of migrant and young workers. Nearly half (49%) of the court cases initiated this year involved a visa holder and 44% involved an employee under the age of 25.

Labour supply chains

It was a year that continued to see us initiating and reporting on compliance activities involving well-known brands where we held concerns about the treatment of young and/or migrant workers within their businesses; Red Rooster, United Petroleum, Caltex, Dominos and Pizza Hut. These activities build upon our actions in the past involving businesses supplying labour to major supermarkets, charities and other established and profitable businesses. While these household-recognised brands may not directly employ the workers who have been underpaid, they have the capacity, and I would say the responsibility, to influence critical settings that determine whether unlawful conduct is permitted in their business. This sentiment underpins the Government’s policy that franchisors should bear a reasonable degree of responsibility for the pay and conditions of employees in their network, now enacted as law in the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.

To ensure business is appropriately supported in this endeavour, we released new guidance material to help those businesses who want to do the right thing and take responsibility for their labour supply chains and networks. This material sets out practical methods that can be adopted by businesses large and small, and was developed in consultation with supply chain experts and industry representatives. It builds on earlier work the FWO has undertaken to assist farmers sourcing labour to pick fruit and vegetables on the Harvest Trail.

Industry-driven initiatives foster sustainable, long-term change. The FWO has worked with a number of stakeholders across industries to support these initiatives including entering into a Memorandum of Understanding with Recruitment and Consulting Services Australia, participating in roundtable discussions with horticulture industry representatives and supporting the Cleaning Accountability Framework (CAF). Currently in the pilot stage, CAF is an accreditation scheme that seeks to improve labour and contracting standards in the commercial cleaning industry.

A number of investigations were commenced involving the threshold issue of whether the system covers workers operating as part of well-known business models in the emerging gig economy. The difficulty in answering whether a person is or is not an employee in the ‘new economy’, and therefore covered by minimum wages and entitlements, is a key issue we are addressing. These businesses challenge a number of ‘traditional’ operators and our role is to ensure employers of labour are playing on a level field.

Establishment of the Registered Organisations Commission

On the organisational front, the FWO welcomed staff who transferred from the Fair Work Commission (FWC) to work in the newly established Registered Organisations Commission (ROC). The ROC commenced operation on 1 May 2017.

While the two bodies exercise independent statutory functions and powers, corporate services such as human resources, accommodation and information technology are shared. Read Commissioner Bielecki’s review.

The year ahead

In September the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 was passed by Parliament. The Act contains a number of measures that adjust the settings in the Fair Work Act. I welcome these measures. They will significantly enhance our capacity to take action in cases of serious worker exploitation. They remedy many of the deficiencies in the settings that I had previously identified as inhibiting our capacity to deliver meaningful consequences to those who deliberately targeted vulnerable workers.

The new provisions give the FWO greater leverage to combat exploitative practices and ensure that lawful entitlements are returned to workers. New higher penalties for serious contraventions and record-keeping breaches will provide stronger deterrents against these behaviours. And the FWO has been given enhanced powers to investigate cases of non-compliance so that rogue employers cannot simply avoid tough penalties by refusing to engage.

It is also encouraging to see the Government considering the settings in other parts of the statute books that affect the capacity of regulators to bring such employers to account.

The Migrant Workers’ Taskforce, the Black Economy Taskforce and the Fair Entitlements Guarantee Scheme Review are considering the effectiveness of the broader settings that influence the capacity of government to take effective action against exploitation of vulnerable workers. Issues being considered include the use of labour hire in exploitative practices, phoenixing, cash payments and other aspects of corporations and migration laws.

We will continue to work with other regulators to help people understand their rights and obligations and to take strong action in those cases of unlawful mistreatment of workers.

We will maintain our measured and graduated approach to enforcing the Fair Work laws, including in our use of new evidence-gathering powers. We will work with the community, including businesses at the top of industry sectors, franchisors and their advocates and advisers, to help them understand the new laws and the ways they can contribute to building a culture of compliance with them.

Reaching and supporting cohorts of vulnerable workers will continue to be an important focus in the year ahead. Traditional channels and methods of communication are not always successful in reaching at-risk workers, so we will be experimenting with new techniques to ensure groups such as international students understand and can act upon their rights at work. Working with community partners will assist us in reaching and building trust with migrant workers. Technology will also be critical in this area. I anticipate the translated versions of our Anonymous Report form and Record My Hours app will inform our compliance activities and feature in our enforcement outcomes.

I am pleased to introduce this annual report and thank everyone at the FWO for their hard work and dedication in delivering the excellent outcomes outlined.

Signature of Fair Work Ombudsman Natalie James

Natalie James

Fair Work Ombudsman

  1. A higher penalty was ordered in Fair Work Ombudsman v Mhoney Pty Ltd on 31 July 2017. Total penalties of $660 020 were ordered in this matter.