Aitken Legal Workplace Forum
The Fair Work Ombudsman’s view on major compliance issues for
employers and dealing with the Fair Work Ombudsman
Nicholas Wilson 1
Friday 2nd November 2012
PREAMBLE
1. I begin by respectfully acknowledging the traditional owners of the land on which we
meet today, the Kombumerri people, and pay my respects to Elders both past and
present.
2.
It is also appropriate to acknowledge the Fair Work Ombudsman institutes
proceedings in the Federal Magistrates’ Court and Federal Magistrate Whelan, who you
will hear from shortly, is one of the judicial officers who hears those cases. Nothing said
today will involve a matter that is before Federal Magistrate Whelan and nothing in this
presentation is intended to influence Her Honour in any way. Similarly, I acknowledge
the attendance of Senator Abetz and record that nothing I say is intended to comment
on the policies of either the Government or of the Liberal-National Party Coalition.
3.
I congratulate Aitken Legal for showing leadership in convening this forum and
ensuring their clients and others can connect with the latest developments in the Fair
Work system. Employers in regional Australia deserve to have the same opportunities
as those in our largest cities to learn of these developments.
1
Fair Work Ombudsman
P a g e |2
4. I record that the views expressed are my own and do not necessarily reflect Government
policy, and I take responsibility for any errors in the text.
INTRODUCTION
5.
My brief is to report to you on two things relevant to employers – my
perceptions about major compliance issues and working with the Fair Work
Ombudsman.
6.
So much of our work arises when trust and respect has broken down. You don’t
want to be there – underpayment; de-motivation; dismissal; harassment.
7.
Employers generally comply quite well with their obligations, or perhaps,
as well as can be expected.
If there are failings with payment obligations; anti-
discrimination or fair dismissal obligations, perhaps those failings are sourced not just in
the obvious non-observances, but also in the underlying systems and cultures of the
business and its managers.
8.
What do you think is being said by the workplace where someone is
sacked for being too young?2 What do you think is being said by the workplace where
an employee is routinely required to attend extensive unpaid training?3 What is being
said when someone feels so strongly about the relationships in their workplace they
want to complain about it publicly through social media?4
2
Buxton (Sandringham) Pty Ltd Enforceable Undertaking (19 March 2012) – see
http://www.fairwork.gov.au/enforceableundertakings/Enforceable-Undertaking-Buxton-(Sandringham).pdf
3
Gas Hair Studio Enforceable Undertaking (2 October 2012) – see
http://www.fairwork.gov.au/enforceableundertakings/Gas-Hair-Studio-EU.pdf; and Hennessy Lane
Enforceable Undertaking (2 October 2012) – see
http://www.fairwork.gov.au/enforceableundertakings/Hennesy-Lane-EU.pdf
4
Linfox Australia Pty Ltd v Glen Stutsel, [2012] FWAFB 7097, 3 October 2012, per Boulton J, Harrison SDP,
Deegan C
Aitken Legal Workplace Forum
2 November 2012
P a g e |3
9.
Is there an inevitability to trouble with the Fair Work system? Not in my view
– at least not for workplaces that have constructive management practices and strong
positive employment cultures. All things considered, the number of occasions on which
businesses find themselves the subject of industrial action or a claim of unfair dismissal
or a claim for underpaid wages is low.
10.
On those occasions a problem does arise, the severity of the problem can be
reduced through sound advice and good judgement.
WHY ARE YOU EMPLOYING?
11.
A question for any employer should be – why are you employing? Not because
there is something wrong with employing people, but because the answer to the
question will reveal some things about your values and expectations and how you go
about managing – and perhaps about the risk you may have of getting into employment
trouble. You should ask yourself - what is your employment proposition?
12.
Are you just in it for the short term profit and to heck with the longer term
consequences?
13.
Or is you view that you want the business to survive and be sustainable and grow
as much as it can?
14.
If your employment proposition fits the second category, then you will
most likely want the best staff you can get, with the best skills and the best motivation.
If you are in the category of wanting your business to survive and flourish, you will
probably see the people around you as an asset; you will care for them; be friends with
them; and will want them to be motivated, safe and well paid. You will realise that the
pathway to your goals – profit and sustainability – is going to be easier with the
cooperation of your workforce.
15.
So what advice do I have for an employer in the first category, where people
are just a commodity and their quality and motivation will not affect their ongoing
reputation or business? Even though my best advice should probably be that you don’t
want to be in such a category, my pragmatic advice would quickly become to ascertain
your minimum obligations; observe them and document how you have observed them.
Aitken Legal Workplace Forum
2 November 2012
P a g e |4
16.
Of course, I am aware that not everyone agrees with the safety net’s
standards, or with employee benefits like unfair dismissal. However, ignoring these
standards or trying to circumvent them is dangerous and should not be tried.
BEFORE EMPLOYMENT STARTS
17.
Whichever category of employer you might be, you should consider some
practical issues before employment starts. Sometimes, not everything is as it seems.
18.
In particular, sometimes people who are said not to be employees are actually
employees, and sometimes people who are said to be casual employees are actually
part-time employees; and other times people who are said to be one classification are
actually another. Don’t ever be blind to the possibility that you may not be able to do
what you want to do.
19.
So, when is an arrangement employment and not something else? In Australia,
generally someone becomes an employee because their circumstances match the
common law definition of an employee. Even though a person might be called an intern
or a contractor, they may well be an employee, and that means they become entitled to
pay in accordance with the Fair Work Act; they may be entitled to claim superannuation
contributions from you; and they may well have rights to claim unfair dismissal. In some
cases, they may have access to workers compensation if they are injured at work.
INDEPENDENT CONTRACTOR
20. There are a number of things that can help tell the difference between an employee and
a contractor. Essentially, an independent contractor is someone in business for
themselves, which your business is using for part of their time to do things in your
business. “Independent contractors run their own business, hiring out their services to
other organisations. Unlike most employees, independent contractors negotiate their
Aitken Legal Workplace Forum
2 November 2012
P a g e |5
own fees and working arrangements, and can work for a variety of clients at one time.” 5
There isn’t one thing that makes the difference on its own - you need to consider
everything together. The Fair Work Ombudsman website has several resources which
can help a business determine whether or not a person is an independent contractor or
an employee.6
a) Employees usually;

do ongoing work that is controlled by their employer;

work hours they’re told to work by their employer;

are not responsible for financial risk;

are entitled to superannuation from their employer;

are entitled to minimum wages;

have income tax taken out of their pay;

are paid regularly (weekly / fortnightly / monthly);

are generally entitled to paid leave if they are permanent employees.
b) Independent contractors usually;

decide how to do their work and what skills they need to do it;

decide whether to employ someone else to do the work;

carry the risk of making a profit or loss;

pay their own superannuation and tax, including GST;

have their own insurance;

are contracted to work for a set time or do a set task;

decide what hours to work;

invoice for their work or get paid at the end of the contract or project;
5
From www.business.gov.au “business topics; independent contractors”
6
For more information see either http://www.fairwork.gov.au/employment/independent-
contractors/pages/default.aspx or the resources at www.business.gov.au
Aitken Legal Workplace Forum
2 November 2012
P a g e |6

don’t get paid leave.
INTERNS
21. In relation to whether or not someone is an intern, the Fair Work Act recognises formal
work experience arrangements that are a mandatory part of an education or training
course. These arrangements are referred to as vocational placements, and are defined
as being:
a) undertaken as a requirement of an Australian based educational or training course;
and
b) authorised under a law or an administrative arrangement of the Commonwealth, a
State or Territory; and
c) undertaken with an employer for which a person is not entitled to be paid any
remuneration.
22.
If all of these criteria are met, the person will not be covered by the FW Act and
is therefore not entitled to the minimum wage and other entitlements provided in the
National Employment Standards and modern awards. If those criteria are not met, the
person may well be an employee and therefore entitled to payment.
23.
Because of these possibilities, you should sort out before they start working for
your business whether or not the person is an employee.
24.
If you’ve made the decision that the person working for you is an employee, you
need to decide on their conditions of employment and document them. Are they to be
an ongoing employee or casual? Are they to be subject to a probation period before
they are confirmed in employment? Maybe before employment starts you need to
check their credentials. Do they actually have the qualifications they say they have? Are
you working in a field where a background check is required before employment can be
offered?
25.
You will also need to make some judgements about what you should pay the
person and what will be their conditions of employment.
Aitken Legal Workplace Forum
2 November 2012
P a g e |7
DURING EMPLOYMENT
26.
Once employment has started, an employee is entitled to a variety of benefits
and conditions:
a) First and foremost, they’re entitled to a safe workplace, which includes not only being
safe from the worst hazards, but being safe from psychological hazards, such as
bullying, intimidation and harassment.
b) Secondly, every employee in Australia is entitled to be paid at least their minimum
entitlements for all hours worked. They are also entitled to fair treatment at work,
and the extent to which you may go about doing this is especially important if the
relationship sours and you end up dismissing them – sometimes this is known as “a
fair go all round”.
c) A workplace free of unlawful discrimination is also the entitlement of every
employee.
27.
Of course, I realise that employing people can be difficult and especially for small
and medium sized family owned businesses. Resources are thin; market conditions are
tough; and there are constant competing demands for management’s limited time.
Even so, you need to recognise that every employer and manager has to spend time on
delivering employees their entitlements.
28.
On the one hand, if you mistakenly get enough people’s pay wrong for long
enough, your margins won’t reflect the disrupted cash-flow that might be taken up with
repaying the underpaid wages.7 On the other hand, I haven’t met too many employees
7
The risk for small business is shown by Kelly v Fitzpatrick [2007] FCA 1080. In this case underpayments of
$96,664 accrued over six years to a single transport worker in a very small business, and had to be repaid. –
see http://www.austlii.edu.au/au/cases/cth/federal_ct/2007/1080.html. The risk for large business is shown
in Rentokil (Pink Hygiene Solutions), in which a single complaint to the FWO has led to backpayment of more
than $1m for over 560 current and former employees – see http://www.fairwork.gov.au/media-centre/media-
Aitken Legal Workplace Forum
2 November 2012
P a g e |8
who don’t already know their entitlements, at least in general terms – treat them
sufficiently poorly for long enough (even through error) and they will vote with their
feet, which can be costly and disruptive for any employer.
29.
So what advice can I give employers and managers? Gratuitously, the third best
piece of advice I can give any manager would be to ask you to “do unto others as you
would have them do to you”. Perhaps my second best advice is to never, ever, practice
“psychic management”.
30.
Beyond these moments, my best advice would be to have you reflect on the
subject with which I started – what kind of employer do you want to be? A positive
workplace culture is going to be the very best employment protection you can find. It
may well help your goals of profit and sustainability.
WHAT IF THERE IS A PROBLEM?
31.
Admittedly, as a regulator, I have seen the worst of employment. I have seen
cases where people have been dreadfully exploited or harassed and even allegations
about conditions that verge on slavery8. I have also seen cases of extreme bullying and
where safety standards have been ignored and people killed as a result. No-one
deserves these things.
32.
I have worked for around 15 years in regulatory roles and have been personally
involved in several thousand cases, which mainly by definition are the more serious ones
requiring the attention of a senior manager. I have also probably seen several thousand
other cases in the first part of my working life as a representative of employers. The
nature of the legislation I now deal with means that all but a handful of these cases are
investigations into the actions of managers or employers.
releases/2012/10/pages/20121031-rentokil-eu.aspx and Rentokil Enforceable Undertaking (27 July 2012)
http://www.fairwork.gov.au/media-centre/media-releases/2012/10/pages/20121031-rentokil-eu.aspx
8
Fryer v Yoga Tandoori House Pty Limited [2008] FMCA 288
Aitken Legal Workplace Forum
2 November 2012
P a g e |9
33.
Despite seeing this tide of misery and attempted or actual law avoidance, I am
and remain, incredibly optimistic about Australian managers and employers. Mostly we
do a very good job and mostly the attitude of employees rises above the cynical to the
point of accepting the boss as doing OK. Millions of us go to work every day and return
home as safe as we were in the morning and the majority of us stay in our work for
years at a time.
34.
Even so, we should not be blind to the fact that employment problems can and
do occur. As managers, you and I need to be prepared for what occurs when the
relationship sours.
Performance Management
35.
Firstly, you need to recognise that managing performance is a skill. It is as much
a skill as any trade or profession and it requires practice to be done well. It will be as
poorly performed by the unskilled as the home handyperson trying to build something
when they have no carpentry skills or the home book-keeper trying to prepare a
complex tax return.
36.
If you need to performance manage someone working for you, then seek expert
advice. You are about to do something that could cost your business thousands of
dollars. If you do it very badly, it might even cost you many tens of thousands of dollars.
The cost of advice will usually be small compared with your potential risk.
37.
When looking at dismissals, industrial tribunals will look at whether employers
have done several things. These are set out in s387 of the Fair Work Act, which provides
as follows;
“387 Criteria for considering harshness etc.
In considering whether it is satisfied that a dismissal was harsh, unjust or unreasonable,
FWA must take into account:
(a) whether there was a valid reason for the dismissal related to the person’s
capacity or conduct (including its effect on the safety and welfare of other
employees); and
Aitken Legal Workplace Forum
2 November 2012
P a g e | 10
(b) whether the person was notified of that reason; and
(c) whether the person was given an opportunity to respond to any reason related
to the capacity or conduct of the person; and
(d) any unreasonable refusal by the employer to allow the person to have a support
person present to assist at any discussions relating to dismissal; and
(e) if the dismissal related to unsatisfactory performance by the person—whether
the person had been warned about that unsatisfactory performance before the
dismissal; and
(f) the degree to which the size of the employer’s enterprise would be likely to
impact on the procedures followed in effecting the dismissal; and
(g) the degree to which the absence of dedicated human resource management
specialists or expertise in the enterprise would be likely to impact on the
procedures followed in effecting the dismissal; and
(h) any other matters that FWA considers relevant.”
38.
The principle of there being a “fair go all round” is a guiding light, not only in the
legislation, but also in how a tribunal will examine a case. The principle stems from a
decision in 1971, in which it was said;
“The objective in these cases is always industrial justice and to this end weight must
be given in varying degrees according to the requirements of each case to the
importance but not the inviolability of the right of the employer to manage his
business, the nature and quality of the work in question, the circumstances
surrounding the dismissal and the likely practical outcome if an order or
reinstatement is made.” 9
9
In re Loty and Holloway v Australian Workers' Union [1971] AR (NSW) 95, Industrial Commission of NSW,
Sheldon J, p99
Aitken Legal Workplace Forum
2 November 2012
P a g e | 11
39.
Over the years, this principle has developed to include consideration of not only
whether a decision to dismiss was unfair, but also whether the procedure followed by an
employer to form that view was itself unfair, which principle is now set out in the Act.
40.
There are some basic principles you should follow if you need to performance
manage someone. While endeavouring to summarise these principles in a complex and
constantly evolving environment is a challenge, experience suggests there are at least
these categories for consideration – knowledge about the problem; assistance with
overcoming the problem; fair warning and time for improvement. Lastly, there is the
need for any manager to obtain professional and competent advice before they act.
KNOWLEDGE ABOUT THE PROBLEM
a) Both sides must have precise knowledge of what is required of the job and what is
not (in the view of the employer) being done properly. The work performance
problem must be real – by the time the employer moves to dismiss, they must have a
valid reason (s387(a))
b) Before you start discussing the matter with your employee, try this out – make a list
with two columns. In the first column, write down how you know the employee is
not performing to your standards; and in the second column how you know the
employee knows what they had to do. Experience suggests that often what is written
in the first column is broader than that in the second column. There is danger in
acting on what you assume to be shared knowledge.
c) If there is a gap between the second and first columns, you have to work to close it.
ASSISTANCE WITH OVERCOMING THE PROBLEM
d) An employer has a duty to explain their problem to the employee (s387(b)) and to
allow the employee to respond about how their performance is perceived and
whether there is any reason why they might be acting in the way the employer sees
(s387(c)). The employee is entitled to have a support person in attendance (s387(d)).
Aitken Legal Workplace Forum
2 November 2012
P a g e | 12
e) Once that is done, every employee is entitled to assistance to improve themselves.
Perhaps they need access to some better tools or extra training. Or perhaps they
need some better or closer supervision or just some time to practice a new skill.
FAIR WARNING AND TIME FOR IMPROVEMENT
f) Beyond knowledge about the problem and provision of assistance and if things are
not improving, everyone is entitled to fair warning, which needs to be precise and
pointed (s387(e)). Many supervisors and managers struggle with the human problem
of sitting across from someone and having a difficult conversation – “this job
requirement is not being done to my standard and if you don’t improve by this date, I
will dismiss you from employment”. You should ensure you document this in a letter
to the employee.
Even once these basics have been done and spoken, an
underperforming employee will be entitled to reasonable time to remedy the
problem.
g) The Small Business Fair Dismissal Code10 elaborates on what these things mean
through a six- point check-list;
a) Did you clearly warn the employee (either verbally or in writing)  Yes
that the employee was not doing the job properly and would  No
have to improve his or her conduct or performance, or
otherwise be dismissed?
10
Small Business Fair Dismissal Code, The Fair Dismissal Code applies to small business employers with fewer
than 15 employees (calculated on a simple headcount of all employees including casual employees who are
employed on a regular and systematic basis). Small business employees cannot make a claim for unfair
dismissal in the first 12 months following their engagement. If an employee is dismissed after this period and
the employer has followed the Code then the dismissal will be deemed to be fair. See
http://www.fairwork.gov.au/Templatesformschecklists/Small-Business-Fair-Dismissal-Code-2011.pdf
Aitken Legal Workplace Forum
2 November 2012
P a g e | 13
b) Did you provide the employee with a reasonable amount of time  Yes
to improve his or her performance or conduct? If yes, how much  No
time was given?
c) Did you offer to provide the employee with any training or  Yes
opportunity to develop his or her skills?
 No
d) Did the employee subsequently improve his or her performance  Yes
or conduct?
 No
e) Before you dismissed the employee, did you tell the employee  Yes
the reason for the dismissal and give him or her an opportunity  No
to respond?
f) Did you keep any records of warning(s) made to the employee  Yes
or of discussions on how his or her conduct or performance  No
could be improved?
Please attach any supporting documentation.
ADVICE
h) Perhaps the most vital advice I can give you about performance management is that if
you decide to dismiss an employee, make sure you get specific advice before you do.
41.
In the event you do dismiss someone, they might claim you have dismissed them
unfairly. They might even do that if they are not an employee or even if they don’t have
a case. While commencement of an application is open to anyone, they won’t get much
further unless they are entitled to make the claim and there is some substance to it.
Last year;
Aitken Legal Workplace Forum
2 November 2012
P a g e | 14
“Fair Work Australia finalised 14,063 applications … which includes applications
lodged prior to the 2011–12 financial year. Of those applications, 11,410 were
resolved at or prior to conciliation.” 11
551 required determination through a final decision or order of the tribunal.12
42.
The evidence is that the overwhelming majority of dismissal matters are settled without
proceeding to a formal hearing. The Fair Work Australia processes are usually started
with a telephone conciliation conference, which is designed to flush out the principal
issues and to see whether the matter can be quickly settled. The conference is designed
to reality check both sides – “this is what you face if you proceed. Are you sure you want
to proceed?”
Most matters are settled at, or shortly after, the first conciliation
conference. My experience tells me that most parties will arrive at the conference
without a lot of insight into the problems on their side of the case. Ask yourself – would
you go into a business negotiation not knowing what your strengths and weaknesses
might be, or how far you are prepared to flex?
Complaint about underpayment, workplace grievances or discrimination
43.
Everyone has the right of complaint in the workforce, and there are strong
protections provided for people who do complain.
44.
Understanding the “right to complain” is critical for any manager. Employees
and former employees can complain they have been underpaid; that their manager is a
bully or that he has sexually harassed them or that they have contravened any of several
other obligations.
Courts, tribunals and inspectors – quite rightly – expect every
manager to carefully consider and respond to such allegations and to never retaliate by
delisting them from a roster; reducing their hours of work or dismissing them.
11
Fair Work Australia Annual Report 2011–2012, p27
12
ibid, p28
Aitken Legal Workplace Forum
2 November 2012
P a g e | 15
45.
I would like to address three issues referring to workplace complaints – making
sure something is done about the problems that really matter; what you should do if you
are contacted about a complaint by a Fair Work Inspector; and why we take some
matters to Court and what happens as a consequence.
Seeing the problems that really matter
46.
In the course of a year, we see a lot of complaints – 28,412 last year, and most of
those were about underpayments of wages. Underpaid wages totalling $33.6m were
recovered for 11,923 people13. Since 2009, we have had jurisdiction to investigate and
litigate unlawful discrimination in the workplace where the discrimination results in
adverse action against an employee.
47.
One of the discrimination cases we have recently taken to court involves the
operators of several Gold Coast Thai Restaurants14.
Amongst other claims, our
allegations in the matter, which are yet to be tested by the Court, include that a waiter
with more than 15 years service had his employment status changed from full-time to
part-time when he asked for long service leave, and was then dismissed when he turned
65 years of age, even though he wanted to keep working.
48.
Chris Hartigan a partner in Herbert Geer solicitors questioned why we should be
proceeding with this case. He said;
“... the prosecution indicates the FWO has dedicated resources specifically to
prosecute discrimination cases, which in part arises from Fair Work Act amendments
13
Fair Work Ombudsman Annual Report 2011-2012, p v, see
http://www.fairwork.gov.au/Publications/Annual%20report/Fair-Work-Ombudsman-Annual-Report-201112.pdf
14
Fair Work Ombudsman v Theravanish Investments Pty Ltd and Anors, see “Court action over restaurant’s
response to employee’s request for long service leave”, http://www.fairwork.gov.au/media-centre/mediareleases/2012/10/pages/20121009-theravanish-prosecution.aspx
Aitken Legal Workplace Forum
2 November 2012
P a g e | 16
which have included unlawful terminations and adverse actions relating to protected
attributes like age.
‘The interesting policy point that arises from the FWO
prosecuting is that in every state and territory and at the Commonwealth level there
are already discrimination laws in existence and discrimination commissions, so to an
extent this is a duplication of the law,’ Hartigan says.
...
Hartigan says there have been some attempts to try to make sense of the interaction
between the state and federal discrimination laws and now this new emphasis on the
FWO prosecuting cases. ‘It does beg the question of why all these state and federal
agencies don't have some coordination between them,’ says Hartigan. ‘The Federal
Government has another agency that deals with discrimination. So why are they
funding two agencies to do the same thing? It does seem a bit wasteful of our
taxpayer dollars.’” 15
49. This is an unfortunate commentary that was not checked with me before it was made.
My response is that, as I think the commentator well knows, the Fair Work Ombudsman
is the only one of those bodies which has standing to fully investigate and initiate
proceedings in the public interest, whereas the others generally can only encourage
mediation.
50.
In the last financial year, we received 1,040 complaints alleging unlawful
workplace discrimination, however 28% of those were outside of our jurisdiction. The
Fair Work Ombudsman’s 2011-12 Annual Report records;
“Of the 1 040 complaints received and assessed by the Fair Work Ombudsman, 182
cases were referred for further investigation. Of the 182 cases referred for
investigation, 142 were closed due to lack of evidence, were outside the Fair Work
15
“Fair Work Ombudsman's first age discrimination prosecution criticised as ‘wasteful of taxpayer money’",
Tuesday, 09 October 2012 10:30, http://www.smartcompany.com.au/legal/052257-fair-work-ombudsman-sfirst-age-discrimination-prosecution-criticised-as-wasteful-of-taxpayer-money/2.html
Aitken Legal Workplace Forum
2 November 2012
P a g e | 17
Ombudsman’s jurisdiction or were withdrawn. A further eight were resolved via
educational visits, voluntary compliance and mediation, while the remaining 32 are
still under investigation.
The most common complaints within this group related to physical or mental
disability, pregnancy and race. Physical or mental disability was the most common
complaint referred for investigation with 45 matters reviewed.” 16
51.
Last year only 2 of the discrimination matters we started off with had sufficient
evidence and connection with the public interest for us to proceed to Court and there
were just 2 in the year before as well. Of course, all allegations of discrimination are
concerning and deserve investigation and I strongly disagree with the superficial analysis
referred to above.
52.
Despite what might be thought, not every case is suitable to run to Court, and
most applicants do not want that. We hear a lot of commentary about discrimination,
but not all of that commentary translates into reported cases and without reported
cases we can’t investigate and change behaviour.
53.
Even so, discrimination plainly is still around us. I have referred to the case we
are running on the Gold Coast, and last Friday, Tracey Spicer penned a nationally
syndicated column entitled “A career in broadcasting has been great, apart from the
misogynist men I met along the way”17 in which she said “As it turns out, wrinkles were
the least of my worries. I'd gotten myself knocked up. I wanted to go back to work when
bubby was three months old but, once again, it took a man to show me the error of my
ways.”
54. Project yourself into her shoes, or those of her partner – is this sort of behaviour
tolerable in modern Australia?
16
ibid, p46
17
http://www.theage.com.au/opinion/society-and-culture/and-heres-the-news-my-bums-got-nothing-to-do-
with-the-story-20121025-28837.html
Aitken Legal Workplace Forum
2 November 2012
P a g e | 18
55. Connect that with the report released this week by my colleague, Elizabeth Broderick,
the Sex Discrimination Commissioner, which deals with the prevalence of sexual
harassment in the workplace.
The Commissioner’s research, through a national
telephone survey of over 2,000 Australians indicated that;
“Just over one in five people (21%) over the age of 15 years experienced sexual
harassment in the workplace in the past five years. Sexual harassment is a particular
problem for women. A quarter of women (25%) experienced sexual harassment in the
workplace during this period, 90% of whom said they were harassed by a man. But
sexual harassment is not confined to women as targets: one in six men (16%)
experienced sexual harassment in the workplace in the past five years.” 18
“the 2012 National Survey shows that the most common types of sexual harassment
behaviours are sexually suggestive comments or jokes, intrusive questions about
one’s private life or physical appearance, and inappropriate staring or leering. It also
shows that sexual harassment is more likely to be a one-off incident or to occur over
a short period of time, rather than to take place over a sustained period.”
56. The worst discriminatory behaviour deserves investigation and litigation, and our
jurisdiction to investigate and litigate is where that behaviour intersects with adverse
action against an employee. Not everyone is sufficiently resourced to take their own
action and the Fair Work Ombudsman is well placed to consider, investigate and litigate
such allegations when they arise. This is not “a bit wasteful of our taxpayer dollars”, but
is instead a community opportunity because the Fair Work Ombudsman is well
resourced.
57. My proposition is that as we age; as our demographics change and Australia’s
workplaces becomes increasingly diverse, there can be no place for telling people they
have to go because they are pregnant or because they are perceived as past retirement
18
“Working without fear: Results of the 2012 sexual harassment national telephone survey”, Australian Human
Rights Commission, 2012, p1
Aitken Legal Workplace Forum
2 November 2012
P a g e | 19
age or because their language or religion doesn’t fit with yours and there can be no
place for tolerance of sexual or other harassment. As I have already mentioned, I think
that, in the future, more people will see a wrong and try to right it. Will your workplace
be ready?
If you are contacted about a complaint by a Fair Work Inspector
58. If you do receive a call or correspondence from a Fair Work Inspector, my best advice is
to check what it is they have contacted you about; get some advice; and cooperate
freely and openly.
59. Our processes work in several ways. We might contact an employer because we have
had a complaint, or we might contact them as part of a targeted compliance campaign.
If we are contacting you because of a complaint, our knowledge of the circumstance
might be imperfect or it might be wrong. In all cases, we are acting impartially. So when
we put to you that an employee says they have not been paid their termination pay, we
don’t know that is the case, we are merely saying that is what has been said to us.
60. As any investigation progresses, advice is essential. Leigh Johns, our first Chief Counsel,
famously said in 2009 in a speech entitled “Avoid the workplace watchdog - join an
employer association” that we
“had never launched action against a member of an employer association. ‘And that
is because they provide good advice’. He said if he was an employer association, ‘I
would be out there selling the fact they are an insurance policy against an
intervention by the [Fair Work] Ombudsman’.”19
61. While things have changed a bit in the past 3 years, the core part of his comments (to
get advice) remains what I advise. Competent representatives can be dispassionate and
can advocate or push back where needed. While my staff might be dismayed at me
saying this, Fair Work Inspectors are not infallible, and do not always have universal
19
“Avoid the workplace watchdog - join an employer association” Workplace Express, 01 April 2009 8:17pm
Aitken Legal Workplace Forum
2 November 2012
P a g e | 20
knowledge about how the Fair Work Act operates. There are many parts of the Act in
which different interpretations can be legitimately formed by different experts with
different perspectives. There are regularly occasions on which representatives will
challenge our views and cause us to consider opinions they want to put forward.
62. In many of the cases we see, there has been some element of non-compliance. That
could come about because of a lack of information or misinterpretation, either of which
are innocent enough mistakes. On the other hand, non-compliance might arise because
the duty-holder has taken the view that a dollar is better sitting in their pocket than in
the employee’s.
63. In the first category – mistake – we expect you to remedy the problem without fuss or
delay and to not repeat it. In the second category – deliberate non-compliance – we will
investigate and test what compliance outcome is best applied and in the course of a
year, we will run about 1,000 detailed investigations. Each of these will involve us using
our coercive powers to demand documents and to require evidence.
Usually an
investigation will contain several formal stages of evidence gathering and decision
making20;
a) the first step of the formal investigation process is usually to issue the duty-holder
and other relevant people with a Notice to Produce, which is a formal document
demanding the provision of named documents21; it may be accompanied by a formal
entry to premises by Fair Work Inspectors (which may be with our without advance
notice)22;
20
The full process is set out in Guidance Note 8 - Investigative Process of the Office of the Fair Work
Ombudsman, see http://www.fairwork.gov.au/fwoguidancenotes/GN-8-FWO-Investigative-Process.pdf
21
See s712
22
See s708
Aitken Legal Workplace Forum
2 November 2012
P a g e | 21
b) that stage is likely to be followed by the taking of statements from relevant people, as
potential witnesses;
c) consideration by the FWO managers of what the evidence shows and what should be
done about it; this may conclude with no findings against the duty-holder; through
the issuing of a Contravention Letter (which sets out the belief of a contravention,
together with an instruction about what should occur as a result; or, in the more
significant cases, with the recommendation that the case be considered for litigation.
64. Mostly, my advice is to cooperate (while realising that few of the 1,000 duty-holders are
likely to see the process as helpful or value adding to themselves). However, my advice
on our demands for documents is to take care and to always exercise your rights.
Normally we issue very wide demands, which is done for good reason (we don’t know
what you have and need to ask for ever relevant document that you do have). In some
cases this can mean the Notice to Produce is too wide, and in such cases you are, of
course, entitled to debate with our inspectors the width of the document call.
Narrowing the scope of the documents that have to be produced plainly means less
work for the person who has to gather them, and often can be done without
compromising the quality of the investigation.
WHY SOME MATTERS ARE TAKEN TO COURT AND WHAT HAPPENS AS A CONSEQUENCE
65. Decisions to proceed to litigate against any duty-holder are taken very carefully and – it
may surprise you to learn – there are not that many of them in the course of the year.
Last year, we commenced proceedings in 51 matters. 31 of these involved (we believe)
small businesses. Decisions to proceed to Court are made where the evidence is strong
and it is in the public interest to proceed.
66. We don’t just pick the cases we take to Court randomly; or those who happen to have
annoyed me for some reason; or even those with the letter “w” in their name.
Aitken Legal Workplace Forum
2 November 2012
P a g e | 22
67. For every case taken to Court, there are many more which are considered for legal
action and disregarded because the evidentiary base is not sufficiently strong or because
it is not in the public interest to pursue.
68. I recently said the following about our litigation policy23;
“The Fair Work Ombudsman’s litigation policy24 has developed since March 2006,
and is reflective of two core philosophies. First, that the social good which is the
workplace relations safety net will be most beneficial to the Australian community if
it really operates as a universal safety net. Of course, part of that belief is that
coercive activities will be a necessary component of achieving the wider goal.
Second, is the strongly held and mostly self evident, view that it is neither desirable
nor necessary to penalise every offender in order to achieve the wider goal. This
second element is consistent with the Commonwealth Director of Public Prosecutions
Prosecution Policy, which deals with the constraint of resources in this way;
‘It has long been recognised that not all criminal offences must automatically
result in a criminal prosecution. The resources available for prosecution action
are finite and should not be wasted pursuing inappropriate cases, a corollary
of which is that the available resources are employed to pursue with
appropriate vigour those cases worthy of prosecution.’ 25
In practice, the Litigation Policy is played out as the result of decisions by managers
on individual cases ... each decision is backed by independent external legal advice
23
Industrial Relations Commission NSW Annual Members Conference, “The Fair Work Ombudsman litigation
policy in practice”, Nicholas Wilson and Lynda McAlary-Smith, Thursday 18th October 2012
24
See Guidance Note 1 - Litigation Policy of the Office of the Fair Work Ombudsman,
http://www.fairwork.gov.au/fwoguidancenotes/GN-1-FWO-Litigation-Policy.pdf
25
Prosecution Policy of the Commonwealth, Office of the Director of Public Prosecutions, Canberra, 2008
Aitken Legal Workplace Forum
2 November 2012
P a g e | 23
that confirm there are reasonable prospects of success and that the action is in the
public interest to pursue.
When the Fair Work Ombudsman institutes legal proceedings it does so
unapologetically and on the basis that the approximately 50 matters a year are of
significant factual or jurisdictional gravity to warrant the attention and
accompanying authority of the Courts, which consider very well the factual and legal
questions before them and approach the complexity of determining quantum of
penalties with diligence and balance.”
69. In practice this means that every case taken to Court is backed by evidence.
I
understand very well that the tactic of many defendants will include a battle to show we
are wrong – not just a little bit wrong, but totally. Plainly that is the right of any
defendant, and that contest will be carefully managed by the presiding Judge or Federal
Magistrate.
70. When we commence proceedings, we will inform the community through a media
release in a way that is not dissimilar to many other Federal and State regulators, as
shown in Table 1. The reason we do this is for transparency, as well as it being an
invaluable tool in educating the public about the consequences of non-compliance. In
the past six years, as our investigation processes and practices have developed, we have
become acutely conscious not only of the very high media interest that can be shown in
particular investigations as they are conducted, but also the need to conduct the
investigations until such point as decision is made. Just as it might be unrealistic to be
expected to respond to a question about what has been found out about an
investigation that has only been going for a day or two, it is similarly unrealistic to never
say anything until the Courts have finished their hearings and determinations. The
absence of any media statement by us would only push the journalists to the daily lawlists, since the Courts in which our matters appear are all open to the public and the
media.
71. I balance the tension between these needs by endeavouring to restrict commenting on
the progress of open investigations until final decision-making within the Fair Work
Aitken Legal Workplace Forum
2 November 2012
P a g e | 24
Ombudsman, at which time we issue a “matter-of-record” media statement. In our legal
system, the high point of my decision making is a decision to commence litigation, after
which decisions and their timing is up to the Courts.
Table 1- Media Policy of Selected Commonwealth Agencies
Agency litigations media policy
Agency
Number of civil
penalty litigations last
financial year
FWA
Less than 5
FWBC
(ABCC)
ASIC
19
33
Does the Agency issue a
media release drawing
attention to each civil
penalty litigation?
Standard timing for media releases
relating to court matters
Yes
Upon filing in court
After decision is handed down
Yes
Upon filing in court
After decision is handed down
Yes
Upon filing in court.
After most decisions are handed down
ACCC
26
ComCare
45 approx
In most cases
Upon filing in court
After decision is handed down
Yes
Upon filing in court.
After most decisions are handed down
72. An employer’s best protection to avoid being named in a media release is to not be a
party to a litigation.
73. Bear in mind that, except in those cases where the vulnerability of the workers demands
Court action, or there is some issue of great legal moment that requires proceedings,
every duty-holder we take to Court has been given multiple opportunities to
acknowledge there has been a breach and to remedy the breach at an early stage.
Except in those limited instances of worker vulnerability or legal test, an employer who
has acknowledged their offending and remedied back-payments will probably not be the
subject of litigation by the Fair Work Ombudsman.
Aitken Legal Workplace Forum
2 November 2012
P a g e | 25
74. Let me be more plain – we do not commence litigation to put an employer out of
business. We commence litigation because, on our allegation, lawful duties have not
been followed and often deliberately so and usually (in the case of underpayments)
because the duty-holder has not rectified the underpayments.
Sometimes
underpayments are rectified AFTER Court action has been commenced by us, or after we
have indicated to them that Court proceedings are soon to commence. Rectification by
an employer of underpayment at that stage is simply too late and will not be taken into
account by us in whether we continue in Court. Instead, the late rectification of an
underpayment will be indicated to the Court as a mitigating factor in the event the Court
determines a penalty against the duty-holder.
CONCLUSION
75. In closing, I don’t think you need feel worried about the Fair Work Act, or the risk of a
claim against you by an aggrieved employee; or of being contacted by a Fair Work
Inspector if you follow some basic advice – which includes getting advice.
76. If you have firm employment practices that recognise employees as useful contributors
to your business, and you practice management techniques and policies which ensure
individual staff are valued, I do not think you have much to worry about. However, you
need to recognise that, as much as any other skill, managing people effectively is a skill
that has to be learned and practiced. The more you can do this, the more your business
should flourish, and the less you are likely to see of employment problems.
Aitken Legal Workplace Forum
2 November 2012