SPEECH NOTES
NICHOLAS WILSON
Fair Work Australia Summit 2009 (May 8)
CREATIVE COMPLIANCE – UNIVERSAL, FAIR AND INDUSTRY FOCUSED
SLIDE 1: INTRODUCTION
I want to begin by acknowledging the traditional owners of the land on which we meet.
At the outset, it is appropriate for me to note that I am not part of the workplace policy decisionmaking stream so I am not able to give insights into legislative drafting. The views expressed in this paper are my own and do not necessarily reflect Government policy. I take responsibility for any errors the text may contain.
It is also pertinent for me to acknowledge that I am giving this speech as the Workplace
Ombudsman and not as the Fair Work Ombudsman. The Government is yet to announce who will hold this position when it commences in July.
SLIDE 2: - THE WORKPLACE WATCHDOG
Just two years ago, a number of Australian academics reported that workplace relations regulation increased – not decreased - the incidence of non-compliance.
Writing in the Journal of Industrial Relations, Queensland University of Technology’s Miles
Goodwin and Glenda Maconachie contended that a complaints-based investigative model
“reduced the probability of detection and subsequently encourage[d] employer evasion.”
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Further, the article suggested that legal action as a matter of “’last resort’ has provided little deterrence to employer non-compliance” .
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As the first Workplace Ombudsman responsible for protecting workplace rights across
Australia, it is pleasing to see, at least in some quarters, the evolution of a more positive response from academia towards my Agency’s approach to compliance.
1
Goodwin, M. and Maconachie, G. “Unpaid Entitlement Recovery in the Federal Industrial Relations
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System: Strategy and Outcomes 1952-95” 49(4) Journal of Industrial Relations (2007) p523.
Op cit
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In a paper published last year, Monash University’s Chris Arup and Carolyn Sutherland concluded that the Workplace Ombudsman was “a well-organised and efficient” regulator with a vital role to promote compliance and minimum standards.
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In effect, an industry focussed regulator with universal effect.
I’m happy to cop that - public commentary hasn’t always been so flattering!
I vividly remember that soon after the Office of Workplace Services was established, the
Agency was unkindly likened by one prominent media outlet to a watchdog with fleas.
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Once again, today, it’s a very different story.
The Workplace Ombudsman is now portrayed in the media as “the pay protector” which aggressively defends workplace rights.
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Labels to one side, we have advanced … and forged a strong reputation as a professional organisation committed to compliance and thus creating fairer Australian workplaces.
SLIDE 3: CREATIVE COMPLIANCE AT THE WORKPLACE OMBUDSMAN
So how do we go about creating fairer Australian workplaces? Well, we rely on a suite of creative compliance activities which are underpinned by a model that relies on voluntary compliance.
As a matter of policy, it is just not feasible to operate anything other than a voluntary compliance model.
We estimate we have responsibility for ensuring compliance with up to 40 billion workplace duties every year.
And while we have 320 inspectors around the country, they are responsible for 8 million employees and one million employers located at many more workplaces.
Clearly, our inspectors can’t be in every workplace – but let me assure you, that is by no means a green light for complacency.
3
Arup, C. and Sutherland, C. “The Recovery of Wages: Legal Services and Access to Justice” 35(1)
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Monash University Law Review (2008).
Cartoon by Nicholson from "The Australian" newspaper: www.nicholsoncartoons.com.au
(17 August
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2005).
Pengelley, J, “The Pay Protector” Career One lift out, The Advertiser (26 July 2008), p3.
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Beyond voluntary compliance, we have developed a number of creative complementary compliance activities that have significantly increased our effectiveness as a regulator.
Although not an exhaustive list, these activities include: proactive targeted campaigns, education, use of the media, working closely with stakeholders and, where appropriate, prosecution.
Much more than merely a time and wages regulator, we have evolved into a genuine workplace
“watchdog” – minus the fleas – prepared to push the boundaries of compliance in the interests of all Australians.
SLIDE 4 – CREATIVE COMPLIANCE INTO THE FUTURE
In eight weeks’ time, the long-awaited amalgamation of our portfolio agencies will occur and the
Fair Work Ombudsman will come into effect from July 1.
All of my staff will join with staff from the Workplace Authority Infoline. It is a merger – not a take-over by any one agency – and I know from my travels throughout the country talking to staff that they are keen for our respective organisations to work together to provide an even better and more effective service for the Australian public.
As I indicated at the start, while the Government has not yet indicated who will be the Fair Work
Ombudsman, I am confident that the staff of both my agency, the Workplace Ombudsman, together with the staff of the Workplace Authority, with whom our staff will soon join, are ready to form the new agency and are very energised by the opportunities given by the new Fair Work
Ombudsman.
Although I don’t yet know what role I will personally play, I very much hope I will be part of the new agency, and I am certainly very actively involved in planning for it’s formation.
And after 25 years’ working in this field, I am still excited about the changes that are coming.
The Fair Work Ombudsman will have an unprecedented opportunity to implement a truly creative and comprehensive suite of compliance activities. This will involve the capacity to strategically coordinate services in compliance, advice and education.
And for the first time, the Fair Work Ombudsman will also be able to investigate allegations of discrimination in the workplace – discrimination on the grounds of race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer responsibilities,
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pregnancy, religion, political opinion, national extraction or social origin – and initiate legal proceedings.
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The responsibility for the enforcement of anti-discrimination laws means that we can provide a much fuller service to employers and employees alike which, we believe, will translate to greater simplicity, greater awareness and greater compliance.
Last month, the Minister for Employment and Workplace Relations announced that the
Government will facilitate a $13 million targeted education and information program to ensure workers, employers and small businesses understand Australia’s new workplace relations system.
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SLIDE 5 – EDUCATION AND ASSISTANCE A PRIORITY
Education and assistance for Australia’s workplaces is going to be a big task for the Fair Work
Ombudsman, to the point of it being legislated as a core function
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. As an agency, we are very well equipped to deliver.
Broadly, the functions of the Fair Work Ombudsman as set out in the Fair Work Act 2009
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, and have also been the subject of Parliamentary and other comment and will include:
- Promoting harmonious, productive and co-operative workplace relations;
- Producing best practice guidance material;
- Monitoring compliance and investigating breaches of the Fair Work Act and fair work instruments;
- Publishing information on national employment standards, modern awards, agreementmaking, the right to freedom of association, termination of employment and the like, and
- Establishing a specialist information and assistance unit for small to medium sized businesses.
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SLIDE 6 – PUSHING THE BOUNDARIES: AN EXAMPLE OF A WO INVESTIGATION
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Fair Work Act 2009, s351
7
Hon. Julia Gillard MP, Deputy Prime Minister, Media Release, “Launch of Fair Work Education and
Information program” 13 April 2009, see:
8 http://www.deewr.gov.au/Ministers/Gillard/Media/Releases/Pages/Article_090414_114136.aspx
9
Fair Work Act 2009, s682(1)(a)
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Fair Work Act 2009, s682
Letter from Senator Fielding tabled in Parliament on 19 March 2009.
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To date, as the Workplace Ombudsman, we have tackled our compliance role with great energy and vigour and many of our investigations have taken us into previously unchartered waters.
Take for example our response to a complaint we received in January last year about foreign nationals working on a barge located 150 km off the coast of Australia. Initial reports indicated that these workers were receiving as little as $5 an hour.
The company argued vehemently that, because the workers were not employed by a constitutional corporation and the barge was operating outside the Migration Zone, they did not fall within the remit of the Workplace Relations Act.
After suggestions that the Workplace Ombudsman was operating ultra vires, we could easily have wrapped up the investigation and taken no further action.
We could have shrugged our shoulders and said the matter was beyond our jurisdiction, or that it was just too difficult.
We did none of that.
Instead, we chartered a helicopter to fly inspectors to the barge, where they found workers from a number of Asian countries working 12-hour shifts for up to 60 days’ straight under the obligation of employment contracts made in their country of origin. All held sub-class 456
Business Short-Stay visas, which do not attract a Minimum Salary Level.
After completing the investigation, we established that these workers should have been granted other visas.
The result?
A Government commitment that 456 visas are no longer issued to overseas workers employed within the Australian Migration Zone to ensure that employees are properly paid and Australian wages and conditions are not undermined.
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SLIDE 7 – THE USE OF THE COURTS
The past three years have been exceptionally challenging for us – but we have learned a lot and we are a much better Agency for it.
11 http://www.chrisevans.alp.org.au/news/0908/immimediarelease04-01.php
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Responsible for approximately 80 per cent of the labour force, we’re part of a truly national system with offices in each capital city and 18 regional locations.
We work across all aspects of compliance within the workplace relations system.
No other regulator – Federal or State – has tried this before and made it work sustainably.
We have.
Last financial year, the Workplace Ombudsman recovered $36.6 million for more than 27,000
Australian workers who had been underpaid.
Ninety-five per cent of this amount was recouped without the need for litigation.
Most employers want to do the right thing by their staff, and where our inspectors identify a problem, we make every attempt to work closely with the business to resolve it voluntarily.
However, when faced with a recalcitrant employer, or vulnerable employees, we will dedicate the necessary resources to bring about compliance.
So far this financial year, we have commenced 41 prosecutions, finalised 29 and secured more than $1.1 million in civil penalties.
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While less than one per cent of matters we investigate end up before the courts, the significant penalties they are handing down are a strong signal that the light-handed approach to regulation of workplace laws is a thing of the past.
When I first took this job, had someone told me we would get a penalty of $288,000 against an employer I would have thought they were mad.
I think it is worth noting that this record penalty was awarded against a small, single-operator company which had underpaid two casual employees – an 18-year-old and a newly-arrived migrant – less than $4000.
A quarter of a million dollar fine for short-changing two staff members less than $4000 is surely a sobering reminder of the need for every employer to be constantly vigilant of their workplace obligations.
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Recent litigation outcomes: http://www.wo.gov.au/asp/index.asp?sid=7407&page=legal-actionview&cid=5369&id=735
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Workplace Ombudsman v Saya Cleaning Pty Ltd
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The courts are taking a very dim view of the boss who tries to rip off his staff, particularly those who are vulnerable … such as trolley collectors.
Last year we achieved a $120,000 penalty in the Federal Magistrates Court against a company which – in the judgment of the Court – “bullied, intimidated, threatened, exploited and underpaid” 42 of its trolley collectors at supermarket sites in a regional city.
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This group of workers, many of them young - some from non-English speaking backgrounds – some of them disabled – had been underpaid more than $100,000 and deliberately intimidated and bullied by their employer if they complained.
Significantly, the main retail chains, Coles and Woolworths, have committed to changing their contracting practices in order to address the failings in the trolley collection industry. As well as being enormously proud that the actions of our workplace inspectors have led to this change at the corporate level, I congratulate the companies concerned for their social responsibility in this regard.
Indeed, big business is coming to understand the public relations cost that flows from allegations of unfair workplace practices. A recent investigation we undertook involved a very large Australian employer with offices across the country. Allegations were made that some employees were subjected to duress during the process of making new agreements. Our investigation showed that, after contacting over 15,000 workers, just one manager in the company had behaved in that manner, and he was responsible for the management only of a small team.
Nonetheless, the media interest in this story was significant. And the potential damage that could have occurred to the company’s public image was substantial. The corporate end of town is coming to learn about the media risks of non-compliance, and they are consequently taking workplace breaches very seriously.
SLIDE 8 – PUBLIC COMMENTARY
I believe that the media has been instrumental in the development of the Agency’s standing in the public arena, and this brings me to my family slide show.
As the role of the Workplace Ombudsman has become better understood in the community, the number of matters for investigation has increased.
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Lang v Xidis Pty Ltd & Anor
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In the first three months of 2009 (1 Jan to 31 March), we received 6,100 written complaints – fielded 30,200 calls to our national Help Line – and recorded over 202,000 visits to our website.
But we do not have a massive advertising budget to get our message into every worksite, which is why we put significant effort into external communications, particularly media.
Strong, assertive external communications are critical to our objectives – it’s the only way our workplace inspectors have of ensuring broad-based understanding of what they do … of the value of compliance … and the dangers of deliberate non-compliance.
We have a strong media presence because we are serious about getting the compliance message into the community.
The media is a strong motivator to achieving voluntary compliance. To make it work, we have to get our message into regional and remote communities as well as the capital cities, and the media assists us in doing this.
SLIDE 9 – PUBLIC COMMENTARY
At the start, I showed you a picture of my 12 year old daughter. An interesting moment for me last year in my relationship with her was when she turned from reading in our kitchen the
“Progress Leader” which is the free suburban newspaper in my area. Did you do this she asked? “This” was a story entitled “Ombudsman pursues Camberwell car wash operator over staff pay” .
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It quoted me as saying I was taking to Court a company and its sole director for more than $4500 we allege is owed to five ex-employees. What resonated for my daughter was that the article talked in plain language about money owed to two young people - $750 was owed to an employee who had been an 18-year-old at the time of the alleged offence for a month’s work done more than two years ago; and $781 for someone who had been 20 years old when they worked for two weeks of work in 2006.
Here in plain language was some advice about workplace rights for young people who might either be starting in their first job, or perhaps might be moving into the workforce in a few years time.
While the article had the direct benefit of allowing my daughter to finally understand what I do during the day it also pointedly illustrated how important it is to communicate rights to citizens about their daily lives.
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Progress Leader, 12 November 2008, see: http://progress-leader.whereilive.com.au/news/story/nopay-prosecution-ombudsman-pursues-car-wash-man/
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I also showed you a picture of my daughter’s dog. The connection here is that when I was picking him up from the dog groomer’s last Saturday morning, I got asked what I did for a living.
When I told the attendant, she not only knew what on earth a Workplace Ombudsman might be, but she was able to reframe my answer back to me (in front of her boss) – “oh, you look after people’s pay and conditions and make sure things are fair at work”.
SLIDE 10 – PUBLIC COMMENTARY
By themselves, these articles may appear to be fairly minor, however, they form part of a broader and vital compliance tool that ensures that people know to whom they may turn when they need assistance. And just as importantly, the same articles have the benefit of ensuring that duty-holders know their duties and the consequences of transgressions.
We reckon our media activities educate hundreds of thousands of Australians every month and equate to several million dollars worth of free advertising each year.
We engage with the community in this way to ensure that every workplace and every Australian employee has a better understanding of their workplace rights and obligations and what they can do if they are transgressed.
SLIDE 11 – PROACTIVE OPERATIONS
And we continue to be pro-active in the community. Two weeks ago, our inspectors throughout the country participated in a range of activities – primarily throughout regional and rural
Australia – as part of a campaign we called Workplace Rights Week.
Inspectors conducted educative visits to hundreds of businesses – delivered presentations from school groups to industry organisations – and staffed booths at major shopping centres to provide information and answer questions from both workers and employers alike.
It was a concerted effort to raise public awareness about the role of the Workplace
Ombudsman and how we can assist people – an extension of smaller road trips our inspectors make into communities regularly for face-to-face contact with our key stakeholders.
Also last month, we distributed new fact sheets on workplace rights to more than 1,000 community organisations working with migrants.
We have now added translated information to our website in Filipino, Sinhala, Tamil, Hindi,
Urdu, Japanese, Tongan and Somali – taking the total to 23.
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Migrant workers who have limited or no English skills can also call our free translating and interpreter service. We need to reach out to these people because they are some of Australia’s most vulnerable employees.
To promote this initiative to the broad migrant population, media releases and community service announcements have been recently distributed to all ethnic print and electronic media in language of origin.
The Workplace Ombudsman is also raising awareness about domestic workplace relations laws for foreign workers who are working in Australia. I consider these workers to be vulnerable and we are working hard to ensure they are protected. One of our many activities in this area is being an active member of the National Roundtable on People Trafficking.
In February this year, as part of university Orientation Week activities around Australia, our inspectors went on campus to speak directly with students and provide helpful tips to those with or seeking part-time employment.
This exercise built on two recent campaigns where we have proactively sought to help educate and inform young people about their workplace rights and the laws which protect them.
In September last year, in response to the rising number of overseas students living and studying in Australia – over 450,000 of them – we distributed more than 14,000 brochures to universities and TAFE colleges aimed directly at helping international students taking part-time or casual work to understand they have basic rights and protections the same as any other worker.
And then in November – as Year 10, 11 and 12 students prepared to take up casual jobs over the summer holidays … for many of them their first job … we blitzed schools, shopping centres, cinemas, cafes and other venues where young people traditionally congregate … with tens of thousands of flyers with basic information they should all know.
As our Minister recently remarked: “I don’t meet too many employers or employer organisations who say to me the key to the national economy is making sure 16-year-old kids can be ripped off in their first job” .
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Nevertheless, our experience tells us that young people and first-time workers excited about a new job and their first pay packet are vulnerable to being unwittingly exploited if they don’t understand their rights … I would venture to suggest many of you in this room have teenage sons and daughters with part-time jobs …
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Radio Interview 2SM, 7.20am Tuesday,17 June 2008 http://mediacentre.dewr.gov.au/mediacentre/Gillard/Releases/NationalEmploymentStandards.htm
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… can you honestly say you know they are receiving their proper entitlements and not unfairly being taken advantage of ?
To that end, we don’t just sit and wait for complaints to come to us … one in five of our audits are now targeted … primarily at industries generating the most complaints or sectors we have not previously looked at.
It’s pleasing that more industry associations are recognising the benefits of working with us to educate their members and promote improved compliance.
A twelve-month long national hospitality campaign – which is due to recover almost $720,000 for about 2200 workers who had been underpaid – was actually suggested to us by the
Australian Hotels Association, whose state affiliates co-operated closely with us throughout the process.
In discharging our responsibilities, we recognise it is very important for the Workplace
Ombudsman to meet regularly with key stakeholders - and we do that both formally and informally.
I like to think we have an open door policy for all – employer groups and unions alike – to come and speak with me and my executive team about what we’re doing and why.
Last year a team from our External Affairs Branch spent four days based at Parliament House in Canberra to brief interested Federal parliamentarians and their staff on how we can better assist them respond to constituent inquiries.
Each month our executive board meets in a different capital city and where possible we try to schedule meetings with external groups.
My state directors and campaign co-ordinators similarly work with a range of organisations at a local and state level.
We do want to hear your thoughts … how you think we can make our compliance campaigns more meaningful … any suggestions on helping us to achieve lasting compliance!
SLIDE 12 – TAILORED COMPLIANCE RESPONSES
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We acknowledge that one size does not fit all. We are flexible enough to work with the smallest employers to the largest public companies and industrial associations. Sometimes our investigations – by necessity – will mean we work simultaneously with both.
We did that recently with an extremely large and complex inquiry that required us to investigate the behaviour of a big employer – a national icon - and not one but three prominent unions in a highly-charged political environment.
Presently, we are working to bring to a conclusion 18-months of negotiations with a major national employer which has underpaid hundreds of junior workers – past and present – almost
$1 million because an agreement it struck with the relevant union was never certified.
This employer has learned that we are extremely dedicated to fulfilling our role and we will work persistently over long periods to ensure compliance, particularly when vulnerable workers are involved.
Because the company is cooperating with us, it is possible that the matter may not result in prosecution. However, the investigation remains ongoing and litigation is, as always, an option available to us.
Individual business experiences will depend on their interaction with our office.
We are, and have for some time, been concerned about sham contracting arrangements being implemented by some employers as a means of avoiding their responsibilities to employees.
Recently, in order to fully satisfy ourselves that one major company was not engaging its workers in this way, teams of our inspectors simultaneously visited its officers in Sydney,
Melbourne, Perth, Adelaide and Brisbane to gather information, interview staff and ensure employees are receiving their proper entitlements.
Our inspectors have the power to interview any person on your premises and to request and copy your employment records – even specific documentation for individuals.
If the request is declined, our inspectors are able to formally request them by issuing a Notice to Produce or a Request for Records – and continued refusal may result in an infringement notice, or as two employers in Adelaide and Perth recently discovered, a criminal record and a court-imposed penalty.
Under the Fair Work Act’s expanded powers, Workplace Inspectors will not only be able to require records to be produced, they will now be able to require that documents are created.
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As I mentioned earlier, our reputation as a strong, but fair, regulator has prompted a number of very large companies to voluntarily come forward with admissions about contraventions of the
Workplace Relations Act.
To that end, Enforceable Undertakings – as an alternative to litigation - are becoming a part of our creative compliance.
Mid-way through last year, a very big company came to us to declare that a large number of
Australian Workplace Agreements they had entered into with employees had not been lodged with the Workplace Authority, as required.
As the company had approached the Workplace Ombudsman voluntarily – and as it demonstrated a strong commitment to rectify its processes and rectify the contraventions – it was deemed appropriate in the circumstances to provide the company with an opportunity to avert legal proceedings on the condition that it entered into an Enforceable Undertaking.
As part of the Undertaking – which is publicly posted on our website - the company agreed to make a written apology to the employees involved, to back-pay those who were underpaid and to make a voluntary donation of $23,000 to a community legal centre providing legal advice and referrals to vulnerable workers.
This is a company which deserves praise for coming forward once it discovered its error to seek advice on how to rectify the matter, and we hope that other companies that find themselves in a similar situation will follow that lead.
SLIDE 13 – CONCLUSION
Although it has not always been an easy road, the Workplace Ombudsman has evolved into an effective regulator with a strong public presence.
Although we are not yet at our destination, we have come a long way down the road of ensuring that Australian’s are working in fair workplaces.
The short history of the Workplace Ombudsman has shown that the movement from being perceived as a ‘dog with fleas’ to a well-respected watchdog has only come from applying a fresh approach to workplace regulation.
The successes of my agency are largely attributable to the effective use of creative compliance.
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As I have discussed today, our compliance model works because it is multifaceted, flexible and fair.
Through our use of voluntary compliance, proactive targeted campaigns, education, the media, working closely with stakeholders and initiating civil penalty proceedings, I am proud to report that my agency is creating fairer workplaces every day.
This presentation has been prepared for me with the assistance of the Workplace
Ombudsman’s External Affairs Branch, and I acknowledge in particular the superlative speech writing of Craig Bildstien, and the splendid research abilities of Jessica Cohen and Anthony
Fogarty.
SLIDE 14 – QUESTIONS & CONTACT DETAILS
Thank you for your time this morning. I hope that you have learned about the work we do right now, as well as the work we expect to be doing in a couple of months. If time allows, I would be pleased to take your questions.
For future contact, I may be reached as follows:
• Workplace Ombudsman Help Line 1300 724 200
• Internet site: www.wo.gov.au
• GPO Box 9887 in each capital city
• Direct contact details for Nicholas Wilson, Workplace Ombudsman
– Location 414 Latrobe Street, Melbourne
– Postal
– Telephone
GPO Box 9887, Melbourne
03 9954 2611
– Mobile 0408 058 560
– Email nicholas.wilson@wo.gov.au
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