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The changing face of the FWO: What you need 

to know
Wednesday, 6th August 2014, by Loran McDougall

In today's Workplace Bulletin:
  • An insight into the Fair Work Ombudsman
Dear Reader,
Are you familiar with the Fair Work Ombudsman’s (FWO) process for dealing with employee complaints?
In today’s article, Charles Power draws on recently published research findings (The transformation of enforcement of minimum employment standards in Australia: A review of the FWO’s activities from 2006–2012) to explain:
  • changes that have affected the FWO in recent  years;
  • how these changes have led the FWO to change their focus when dealing with employee complaints; and
  • the step-by-step FWO process you will go through if a complaint is ever made against you.
Until next time,
Jessica Oldfield
Loran McDougall
Workplace Bulletin
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An insight into the Fair Work Ombudsman
by Charles Power
Editor-in-Chief, Employment Law Practical Handbook

The federal enforcement agency, now called the Office of the Fair Work Ombudsman (FWO), has come a long way since 2006.
What changes have affected the FWO in recent years?
Between 2006 and 2010, the FWO benefited from:
  • substantially increased resources;
  • new powers for labour inspectors;
  • a significant increase in the penalties that courts can impose for any breach of industrial standards; and
  • since the Fair Work Act 2009 (Cth) took effect, additional administrative enforcement tools.
An important enforcement tool is an enforceable undertaking. An enforceable undertaking is a written deed executed between the party and the FWO containing:
  • an admission of contraventions;
  • an agreement by the party to perform specific actions to remedy the contraventions, e.g. creating a payment plan to rectify underpayments, making an apology, printing a public notice; and
  • usually, a commitment to certain future compliance measures, e.g. regular internal audits, training for managers and staff, implementing compliance measures, future reporting to the Fair Work Ombudsman.
Between 2005 and 2010, the number of matters litigated by the FWO increased sharply from 4 completed matters to 58 completed matters. This number fell to 36 in 2010–2011, and then to 31 in 2011–2012.
The most common targets of this litigation were small to medium enterprises in the accommodation and food services, administrative support services, and retail trade industries.
The fall in the number of litigated matters coincided with a significant decline in resourcing. The last three federal budgets have delivered substantial cuts to the FWO’s annual funding. During this time, the number of Fair Work Inspectors has declined by nearly 40%.
How has the FWO’s focus changed?
These changes have resulted in the FWO changing its approach to enforcement. There is now less focus on litigation and detailed investigations of every workplace complaint.
The FWO are now increasingly focusing on resolving matters between parties at a workplace level, through:
  • educational seminars by Fair Work Inspectors; and
  • self-help mechanisms, including best-practice guides, fact sheets and pay-checking tools.
What is the FWO’s process for dealing with employee complaints?
Today, the typical approach taken by the FWO upon receiving an employee complaint is as follows:
Step 1
The FWO encourages the complainant to raise the relevant issues of concern with the employer.
Step 2
If the matter is not resolved, the FWO assesses:
  • whether the complaint is a ‘routine’ matter or a ‘complex’ matter;
  • whether the employee falls within a vulnerable category, e.g. youth, casuals; and
  • the compliance history of the employer.
If the matter is deemed to be serious and/or ‘complex’, voluntary resolution mechanisms (see Step 3) are bypassed in favour of a more formal investigation process (see Step 5).
Step 3
In less serious cases, the FWO invites the complainant to participate in an ‘assisted voluntary resolution’ process administered by a Fair Work Inspector.
The inspector contacts the employer and the employee separately by telephone in order to work through the issues and discuss potential solutions.
Step 4
If the matter is still unresolved, the complaint is subject to telephone mediation by an accredited FWO mediator. The mediation is informal, voluntary and confidential.
Step 5
If the matter is unresolved by mediation, inspectors conduct a condensed investigation process to determine who, if anyone, has failed to comply with Commonwealth workplace laws.
If somebody has failed to comply, the FWO will also determine what is needed to fix the problem.
Step 6
To enforce compliance with Commonwealth workplace laws, the FWO may issue:
  • infringement notices (i.e. fines);
  • compliance notices (i.e. formal directions to take certain remedial steps and are enforceable in court);
  • enforceable undertakings (i.e. a formalised commitment to comply); or
  • court-ordered penalties (in cases where an employer chooses not to fix a contravention of a workplace law).
Charles Power
Charles Power

Employment Law Practical Handbook

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