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New findings highlight poor compliance performance

Ensuring the workplace meets all compliance responsibilities is one of the most pressing concerns a business owner has. To protect the rights, health and safety of your employees, not to mention the reputation and finances of the company, having systems in place to manage compliance is essential.

Serving as a reminder of this fact, in early August 2016 the Australian Fair Work Ombudsman revealed the sectors in which compliance performance appears to be causing the most trouble. With over 40 per cent of the Ombudsman’s Enforceable Undertakings issued in a single industry group, the implication is that some fundamental problems are occurring that may require large-scale reforms.

"Food service businesses may need to reassess compliance management.
“Food service businesses may need to reassess compliance management.

Food services and accommodation under the microscope

Fair Work Ombudsman Natalie James announced that 43 Enforceable Undertakings were executed in 2015/16, a minor increase on the 42 of the previous year. The increase of just a single instance is encouraging, however the fact that 17 were issued to businesses in the food services and accommodation sector – a significant jump from the 11 in 2014/15 – is troubling.

Introduced in 2009, the measures are used to achieve strong outcomes against organisations that breach workplace laws, without requiring civil court proceedings.

“We use Enforceable Undertakings where we have formed a view that a breach of the law has occurred, but where the employer has acknowledged this, accepted responsibility and agreed to co-operate and fix the problem,” said Ms James.

43 Enforceable Undertakings were executed by the Fair Work Ombudsman in 2015/16.

The impact of these measures on non-compliant businesses can be severe – $3.85 million in underpaid wages and entitlements was returned to over 2,000 employees after their workplaces had action taken against them by the Fair Work Ombudsman.

Protecting the most vulnerable workers

While food services and accommodation businesses were the biggest culprits in the Ombudsman’s findings, organisations in the administration and support (14 per cent) and retail and manufacturing industries (7 per cent each) also had an alarming number of Enforceable Undertakings executed upon them.

Research from the Centre for Independent Studies into young workers shows that three of the four industries mentioned above – food services and accommodation, retail and manufacturing – make up almost half of all youth employment. The suggested link that sectors attracting individuals lacking in experience and professional development may be exploiting the most valuable workers demands further investigation. However, Ms James asserts that the majority of non-compliant businesses are failing in their obligations through lack of information, not through malicious intent.

“I encourage all businesses to proactively seek information on workplace relations from us, from employer organisations and professionals advising in this space,” Ms James said.

Industries attracting young workers should pay close attention to compliance.
Industries attracting young workers should pay close attention to compliance.

Keeping on top of compliance management

Whether in a large multinational corporation or a local business with just a handful of workers, ensuring all of your employee information meets with compliance standards can be a significant burden. Innovative solutions to track all of the data gathered at the recruitment and employee onboarding stage can not only ensure your business continues to meet regulations, but also assist with licensing, work health and safety and other aspects staff management.

“We all have a part to play in compliance,” commented Ms James.

“There are many opportunities for us as employers, employees, government agencies and workplace advisers to draw on our mutual interests to see employers do the right thing, avoid a nasty back-payment bill, ensure a level playing field for all business and to build a culture of compliance.”

Before finding your business on the wrong end of Enforceable Undertakings proceedings, implement effective systems to ensure compliance. Food services and accommodation, administration, retail and manufacturing industries have been identified for their issues, but all businesses need to ensure themselves and their employees are protected.

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