Balancing compliance and enforcement with viability and recovery

By Simon Dewberry, Chloe Wilton
Employment & Safety

In brief 2 min read

Yesterday the Fair Work Ombudsman released its priorities for the year ahead, along with an updated Compliance and Enforcement Policy.

They confirm that while the Ombudsman will continue to focus on large corporate underpayments, franchise arrangements and sham contracting, it will also be informed by 'the dramatically changed economic conditions brought about by the COVID-19 pandemic'.

Key takeaways

Early disclosure and cooperation remain key factors in the Ombudsman's consideration of the appropriate enforcement outcome and the amount of any contrition payment. However, a business' financial position and viability will also be taken into account. In particular, Ombudsman Sandra Parker told the AFR that if a business is receiving JobKeeper, that was 'probably enough evidence [of financial strain] for us'.

The updated Policy also draws a distinction between 'isolated payroll errors resulting in underpayments over a short period of time (up to 12 months)' and broader and/or systemic underpayment issues. While isolated and short-term underpayment issues need not be disclosed (provided the employer rectifies the underpayments and fixes the error), the Ombudsman expects employers to notify it of broader and/or systemic underpayment issues as soon as possible.

How does this affect you?

This latest guidance from the Ombudsman reiterates the importance of proactively reviewing and improving workplace relations systems to ensure they are fit for purpose.

Developing an action plan as soon as possible after any potential underpayments are identified is also critical. The appropriate actions will depend on the nature and extent of the issue. However, early consideration should be given to how any underpayments will be quantified and how and when to engage with relevant stakeholders, including the Ombudsman.