The WorkChoices legislation introduced by the Howard Government
changed many aspects of Australian workplace law, and some of those
changes have been retained by Labor. One of the significant changes
has been the establishment of a large and well-resourced federal
government agency charged with the tasks of ensuring compliance
with workplace laws and the protection of employees'
entitlements – the Fair Work Ombudsman (or
"FWO"), previously known as the
Workplace Ombudsman. Prior to 2007, state and federal government
workplace regulators tended to be under-resourced and their impact
on Australia's workplace culture and the rights of workers was
limited. With the FWO now on the scene, that state of affairs has
The Fair Work Ombudsman is an independent regulator and
investigator appointed by the federal government to investigate and
enforce the provisions of the Fair Work Act. The FWO's
statutory position is, however, independent of government and the
FWO can investigate complaints against all national system
employers including the Commonwealth. The FWO has statutory power
to investigate alleged breaches of the Fair Work Act, including the
National Employment Standards (such as leave and notice
entitlements), Award or Agreement based pay rates and the General
Protections (discrimination and workplace rights). Notably, the FWO
also has the capacity to investigate employers' prior
contraventions of the now-repealed Workplace Relations Act. The
FWO, through its appointed inspectors, has statutory power to
attend workplaces, interview employees and request and collect
employment records, in order to conduct its investigations. If an
employer is found to be in default of its obligations under the
Fair Work Act, the FWO can issue the employer with a contravention
letter and/or a compliance notice. If the employer does not comply
with the notice, the FWO may issue a fine or commence Court
proceedings against the employer. Orders available in Court
proceedings include the repayment of employees' entitlements,
compensation, injunctions, reinstatement and/ or penalties.
Penalties range up to $6,600 for individuals and $33,000 for
corporations and can be ordered in respect of each particular
contravention proved against the employer.
It is important for employers to be aware that the FWO has the
power to audit workplaces even where no complaint has been
received. It may also take action against contraventions discovered
in the course of its investigation of a complaint even though such
contraventions do not relate to the original complaint.
Accordingly, it is essential that employers are aware of their
obligations under the Fair Work Act and remain in compliance with
these obligations at all times.
To illustrate, the FWO has publicised its investigation into a
number of 7-Eleven convenience stores in Victoria. Of 56 stores
audited, the FWO concluded that 30% of these stores had contravened
workplaces laws, with at least 42 contraventions committed by 17
stores. The contraventions FWO says it uncovered included
employers' failure to keep accurate and up-to-date time and
wages records, non-supply of pay advices, and engaging in ongoing
underpayment practices. FWO reports these investigations resulted
in a significant number of compliance notices being issued with
almost $33,000 in underpaid wages recovered for employees. Employer
cooperation helped avoid prosecution action by FWO.
The Fair Work Ombudsman now has sufficient powers and resources
to make it an effective watchdog and enforcer of employees'
rights. Recent cases have illustrated that the FWO is undertaking
audits and investigations across a number of industries and
occupations, for a host of reasons and suspected contraventions. As
the FWO is able to investigate all aspects of an employer's
enterprise (without the need for any originating complaint),
employers should take pro-active steps to ensure that they comply
with their numerous obligations under the Fair Work Act,
particularly the new National Employment Standards, and should
ensure that their employee records are accurate and up-to-date.
Carroll & O'Dea has had significant experience over the
last few years representing employers in FWO investigations, which
can arise from employee complaints, but most often from targeted
industry audits. In our experience, the best defence for an
employer to such investigations is by regularly checking workplace
compliance through internal controls and regular informal
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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