A Fair Work Ombudsman re-audit of rule-breaking employers finds 38% haven’t cleaned up their acts

More than a third of employers being monitored for breaking workplace laws have failed to clean up their acts, failing a round of re-audits conducted by the Fair Work Ombudsman recently.

A new report into the Ombudsman’s compliance monitoring activities released on Thursday has revealed 184 of 479 employers have failed re-audits, despite being put on notice.

The Ombudsman said it recovered $244,246 from 98 of the non-compliant employers, but only commenced legal proceedings against two businesses.

Outside of the two Court cases and Chemist Warehouse, the 84 non-compliant businesses that underpaid workers were found to be about $530 short, on average.

A further 54 fines were handed out, totalling $20,340 in penalties, alongside 16 compliance notices, requiring $61,565 in back payments. In total, 88 formal cautions were issued.

More than $3.56 million was recovered in a compliance partnership with Chemist Warehouse after an audit of its network revealed Fair Work Act breaches.

However, while 70% of larger businesses were found to be compliant, only 62% of smaller businesses (less than 15 workers) were following the rules.

The Ombudsman’s report said it acknowledged the difficulty small businesses are encountering in understanding and following workplace laws — the system has been criticised as overly complex — but resources tailored to SMEs were available.

“The FWO expects that given this support and previous interactions, employers irrespective of business size, can achieve sustained compliance with their workplace obligations,” the report said.

Notable cases include two nail salon owners in Adelaide, which were subject to litigation that recovered over $200,000, and a fast-food franchisor which repaid $5,112 in an enforceable undertaking.

Fair work ombudsman Sandra Parker said the compliance uplift (62% were compliant) was evidence of the FWO’s effectiveness.

“We regularly follow up with businesses to ensure they have made the necessary changes to comply with workplace laws. This activity confirms that most employers respond well to initial contact, and we are having a significant impact on long-term behavioural change,” Parker said in a statement on Thursday.

The ACTU was more scathing in its assessment of the report.

“There are around 200 FWO inspectors charged with enforcing our workplace laws for more than 12 million workers,” secretary Sally McManus said.

“Meanwhile thousands of workers’ representatives are sitting on the sidelines unable to stop wage theft because our broken laws prevent them from effectively doing so.”

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