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Compliance and enforcement

Two formal cautions were issued. A formal caution is issued when the FWO has found non-compliance. The written warning puts a business on notice that future non-compliance could result in the FWO seeking financial penalties. If the FWO becomes aware of any further instances of non-compliance, the fact that the business was issued with a formal caution will be taken into account in deciding whether to commence civil proceedings against the business, and it may be used as evidence in any penalty determinations.

Case study – Formal caution

Inspectors audited a hotel that had been operating in the region since 2006. The business had eight employees, mainly employed on a casual basis. All of the employees were covered by the Hospitality Industry Award 2010 (the Award). On assessing the records provided by the employer, an inspector identified that all of the casual employees were receiving a flat rate of pay for all hours worked. This flat rate was not sufficient to ensure that their minimum entitlements were being received.

Following contact with the employer, the inspector established that the majority of employees were provided meals and accommodation at no charge. The employer wasn’t aware that the Award had provisions that stated these benefits could be deducted from employees’ wages. Though the inspector acknowledged these additional benefits, they still directed the employer to review all records and correct any underpayments found. To assist with this process, the inspector provided all relevant clauses of the Award and current rates of pay, including all penalty rates.

The employer provided calculations that clearly identified two casual employees had been underpaid a combined total of $2018.11 over an 11-month period. These underpayments were due to work performed by the employees on Sundays and public holidays. Neither employee required accommodation. After reviewing the calculations and receiving confirmation of payment, the FWO issued the employer with a formal caution due to the employer having operated the business for more than 10 years with limited understanding of the Award.

Three infringement notices were issued. An infringement notice is a fine given to a business for non-compliance with record-keeping or pay slip requirements of the Act and the Regulations. A total of $2160 in infringement notices was issued during the campaign.

Case study – Infringement notice

The FWO assessed the records of a remote cattle station in the region that engaged casual employees during their busy periods, such as mustering times. At the time of the audit the employer had two casual Farm & Livestock Hand Level 1 employees, covered by the Pastoral Award 2010 (the Award). 

On reviewing the records an inspector found that the employees were being paid by the day and not the hour. On requesting records for the hours worked, the inspector was advised that they did not exist as they were paid by the day. Though there were no records of the hours worked there still appeared to be an underpayment. The inspector found that the employees received food, accommodation and transport when needed and were also paid for time off due to the flexible nature of the job.

With the additional information, the inspector could not identify if the employees had received their correct entitlements. To assist the business to comply with their obligations moving forward, the inspector provided the relevant clauses of the Award that needed to be addressed with regard to pay rates and record keeping requirements.

Failure to make and keep records is a serious offence under the Act and as there was no way to determine whether or not the employees received their minimum entitlements, the FWO issued the business with an infringement notice of $1800 for failing to keep records as required under the Regulations.

The FWO will revisit this business as part of follow-up activity in the future.

One enforceable undertaking was executed. An enforceable undertaking is a publicly available legally binding agreement between an employer and the FWO in which the employer accepts responsibility for serious breaches of the Act. The employer agrees to pay all outstanding monies owed to their employees, and to terms that ensure future compliance, such as training sessions for senior managers, and periodic compliance reporting. Enforceable undertakings typically operate for a period of between two to five years.

Case study – Enforceable undertaking

The FWO entered into an enforceable undertaking with Tennant Creek Women’s Refuge Inc. in 2017 after Inspectors found, through the course of the audit, that the business had failed to meet wages obligations in accordance with the Equal Remuneration Order under the Social, Community, Home Care and Disability Services Award 2010 (the Award).

Through discussions with the CEO, Inspectors found that the underpayments had arisen due to a failure to keep up to date with the changes to the modern award. The business back paid $50 664.69 to 11 employees to rectify the underpayment of minimum weekend rates and shift loadings.

As part of the enforceable undertaking, the business agreed to a number of actions, including:

  • registering with a FWO My account and subscribing to FWO alerts and newsletters relevant to the organisation
  • ensuring that the CEO completes the educational activities on the FWO website
  • sending a letter of apology to affected employees
  • engaging an external body such as an accounting professional, to undertake periodic audits each year until 2019, providing evidence of audits to FWO
  • providing the FWO with details of systems and processes already in place or to be implemented in order to comply with the Act, Regulations and modern award
  • a workplace notice of the undertaking to be displaced in all workplaces controlled by the business and a public notice in the local newspaper.
  • a provision in writing informing all agencies or other bodies that provide funding, that they have entered into an undertaking with the FWO.

One litigation was filed. The FWO commences legal proceedings in instances where there is both sufficient evidence and public interest. Litigation is the most significant enforcement tool used by FWO and is reserved for matters involving allegations of serious non-compliance and where a penalty is considered warranted.

Case study – Litigation

The FWO commenced proceedings against David Mayne Pty Ltd, the legal entity operating the Barkly Homestead, an accommodation and roadhouse service on the Barkly Highway between Tennant Creek, NT, and Camooweal, Qld. The matter relates to the alleged underpayment of $23 753.93 over six months of 17 employees under the Hospitality Industry (General) Award 2010 (the Award).

The FWO alleges the employees were all engaged full-time on a flat rate of $19.21 per hour to undertake cleaning, gardening and waiting duties. Although the flat rate was $0.74 above the minimum ordinary hourly rate for the classification, it was insufficient to cover the penalties, overtime and shift allowances that the employees were entitled to under the Award. This resulted in an alleged underpayment of $23 753.93 to the 17 employees over the six-month period. Legal action was commenced due to the significant alleged underpayments across a relatively short period, and the lack of earlier co-operation from the employer. Once legal action had begun, the company director sought to rectify underpayments of nine of the 17 employees, back paying a total of $14 232.15.

The FWO sought payment of the outstanding underpayments ($9521.78), to be distributed to the remaining employees, and that penalties apply in respect of the breaches. Furthermore, the FWO requested an order requiring manager Andrew Mayne register with My account and complete all employer education courses. At the time of publication the matter remains before the court.