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Compliance with the workplace relations framework

02 November 2020
Businesses in Australia need to remain vigilant in relation to compliance with the workplace relations framework.

The Fair Work Ombudsman (FWO) and Australian Taxation Office (ATO) are posting significant results in relation to underpayments and JobKeeper clawbacks in a year seriously marred by the COVID-19 pandemic. 

Some of you may recall the FWO Sandra Parker's comments in June:

"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."

It is easy enough for businesses to draw an inference from this statement that those industries affected by the COVID-19 pandemic may face less scrutiny than they would have previously for contraventions of the workplace relations framework. However, in the same statement, Ms. Parker also noted that this:

"doesn't mean we will say that's fine, forget it, you're off the hook – what it says is you need to work with us and we will take account of that."

The FWO has now published its 2019-2020 annual report (available here). The report announces that in the previous financial year, the FWO has recovered a record $123 million in underpayments. While this is not at odds with Ms. Parker's statement, it is important for businesses to appreciate the risks that are faced when considering the financial impact of the COVID-19 pandemic and workplace entitlements.

Given Ms. Parker's statements and the recent FWO publication, businesses should be vigilant in relation to compliance with the workplace relations framework. In circumstances where underpayments are made, it will be important to work with the FWO in these respects in order to avoid additional scrutiny (or to avoid regulatory non-compliance in the first instance where possible). 

It is also worth taking into consideration that wage theft legislation is coming into effect in Victoria on 1 July 2021, further details about this can be found in DWF (Australia)'s previous publication available here. 

Further, the ATO is reporting significant "clawing back" of $120 million in JobKeeper payments from employers having behaved recklessly or having deliberately made errors in relation to these payments.

Emerging from the pandemic, it seems likely that regulators will continue to closely scrutinize business' payment arrangements and practices. As always, it will be important to ensure that employers take regulatory matters seriously.

We would like to acknowledge the contribution of Grant Klemm to this article.

If you have any queries about this article, please get in touch with the contacts below.

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