14 July 2020
The Fair Work Ombudsman (FWO) has recently announced that large corporate underpayments are its new priority sector and issue for 2020/21 calling for large organisations to prioritise reviewing their workplace relations systems to ensure that workers are being paid their entitlements.
This is in circumstances wherein the FWO in 2019/2020 received more than 60 self-reported workplace breaches from businesses that represented half a billion dollars in employee underpayments.
However, the dramatically changed economic conditions brought about by the COVID-19 pandemic has impacted the FWO's compliance and enforcement work. This impact may result in more favorable outcomes for those large organisations that self-report workplace breaches than previously, with the FWO stating that:
"A business' financial position and viability will be considered when deciding whether to commence litigation for serious non-compliance, or determining the size of any contrition payment included in any Enforceable Undertaking."
Large corporations that are suffering financially due to the COVID-19 pandemic may therefore benefit from self-reporting any workplace breaches to the FWO during this year to allow the FWO to take this into account when considering their enforcement response.
This is reflected in the FWO's new compliance and enforcement policy that states it will take a practical and proportionate approach to those companies that self-report non-compliance.
For example, organisations that have underpayments going back up to 12 months may not be required to actively report those breaches to the FWO so long as certain criteria are met.
Alternatively, organisations that have broader non-compliance that goes back longer than 12 months have the opportunity to self-report to the FWO to seek to achieve a non-litigious and non-punitive outcome, for example, for more serious breaches going back many years the FWO may accept an Enforceable Undertaking instead of instigating legal proceedings representing significant savings for the organisation.
Recommendations
It seems that the FWO will continue to target underpayments across a number of sectors as a matter of priority for a number of years to come. In these circumstances, organisations, especially large organisations, ought to immediately commence reviewing their workplace systems to ensure there has been no underpayment of employee entitlements.
For further information, please contact:
David Amentas, Partner, Clyde & Co
david.amentas@clydeco.com
