Underpayment ‘flexibility’ for struggling SMEs as Fair Work targets corporate non compliance

July 13, 2020

Fair Work Ombudsman Sandra Parker.

The Fair Work Ombudsman (FWO) will be flexible with businesses to ensure it doesn’t crack down too harshly on industries struggling to recover from the COVID-19 pandemic, while re-doubling its efforts to stamp out corporate wage theft.

Ombudsman Sandra Parker says the workplace watchdog’s compliance and enforcement priorities have been informed by the coronavirus crisis and bosses can expect a proportionate approach that takes into account their financial circumstances.

“Some of our priority sectors have been seriously impacted by the pandemic and are under considerable financial strain,” Parker said in a statement on Monday.

“We are mindful that our regulatory efforts do not negatively affect already struggling industries, while also being sensitive to the nuances of each sector and the challenges each will face when recovering from disruption.”

The FWO published its strategic priorities for 2020-21 on Monday, re-adjusting its focus to allegations of ”serious non-compliance with workplace laws”, including complaints about JobKeeper.

“A business’s 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,” Parker said.

The FWO has a legislated role in regulating several JobKeeper-related workplace laws and has been working closely with the Australian Taxation Office (ATO) in recent months to canvas worker complaints about dodgy bosses.

This includes situations where workers have been issued improper stand down orders, or have had their duties or hours unilaterally changed in ways not permitted by recent Fair Work Act amendments.

Corporate wage theft also remains on the FWO’s radar following a spate of high-profile underpayment cases involving some of Australia’s largest businesses, including Woolworths Group and several businesses owned by the Wesfarmers conglomerate.

Woolworths, which admitted to underpaying more than 5000 workers last December, has revised the scale of its wage-theft scandal twice in recent months and now estimates staff were underpaid $390 million.

After signalling last year that large businesses were asking for light treatment after self disclosing underpayments, Parker said more than 60 such corporations have come forward to confess more than $500 million in wage theft.

The ombudsman has written to the bosses of Australia’s largest businesses to impart the need for urgent action on corporate underpayments, amid a renewed regulatory focus on big business.

“Large organisations need to place a much higher priority on rigorously reviewing workplace relations systems to ensure that paying workers what they are entitled to becomes the norm,” Parker said.