Fair Work Ombudsman warns businesses compliance notices are no empty threat

The Fair Work Ombudsman is cracking down on companies which fail to adhere to compliance notices, with three restaurants currently being targeted for their failure to comply.

The action is part of a push by the FWO to encourage employers to take action when issued a compliance notice, rather than allow the case to progress to court.

The FWO investigates more than $20 million in underpayments each year and compliance notices are issued when employers haven’t responded to the warnings of investigators.

While all business owners should be aware of their legal requirements to pay staff according to industry award rates, many may not realise it is also unlawful not to comply with a FWO compliance notice.

Under a FWO compliance notice, action must be taken to rectify the specified workplace law breaches within 28 days.

M+K Lawyers partner Andrew Douglas told SmartCompany the FWO always seeks to rectify the problem with the employers before any kind of action is taken.

“Failure to rectify the breaches will cause two things – the subject of the breaches will become discontents and the FWO will continue more aggressively in its investigations into your business,” he says.

“Once you identify a breach, you should immediately rectify the problem.”

Fair Work Ombudsman Natalie James said in a statement employers must comply with the notices unless they have a reasonable excuse and make a court application to challenge it.

“If we choose to take the matter to court, companies face a penalty of up to $25,000 and individuals face a penalty of up to $5,100 for failing to comply with a compliance notice, on top of a court order to rectify the underpayment in full,” she says.

The FWO is currently taking legal action against three companies for failing to comply with notices, the first legal action of its kinds.

Restaurants in Bendigo, Lorne and Terrigal have all been hit with court action for failing to back-pay kitchen staff and waiters when ordered to by the FWO.

“We decided to launch legal action in these cases because enforcing compliance notices is fundamental for maintaining the integrity of Australia’s workplace laws,” James says.

“Fair Work Inspectors are increasingly issuing compliance notices in cases where employers with contravention issues refuse to co-operate and we will not tolerate these compliance notices being ignored.”

Douglas says if a notice is adhered to, the vast majority of the time cases do not proceed to court, effectively saving some businesses thousands of dollars.

“If the case should then proceed to court, say for example if the compliance notice has only been followed at the last minute, the court will then take into consideration the fact you complied with the order,” he says.

“You should comply immediately unless you have a very strong case as to why they’re wrong.”

In September a Perth cleaning company was slammed with a record-breaking $340,000 fine for underpaying six workers when the judge ruled the conduct had been deliberate.