The Fair Work Ombudsman (FWO) has declared an intention to be ‘hard handed’ with large businesses who engage in underpayments, even if they are forthcoming and self-reporting.
Speaking at a Council of Small Businesses Australia summit in Melbourne on Thursday, Ms Parker said some large companies have been “sloppy” in their payroll practices, failing to keep their houses in order.
She said the increasing calls to criminalise wage theft indicates a big change for the watchdog, “I think the government’s announcement about criminalising wage theft – which is the language that is being used in the community, it is not the language we use at the Ombudsman – it is a huge shift.”
“That has made everybody stop and think about what that means,” she said. “We have never had a criminal system in workplace relations.”
“We have a lot more companies coming to us and declaring large underpayments, many of them going back many years. They have been previously saying to us that they are fixing it and we should leave them alone to get on with it,” Ms Parker said. “Our view of that is that is not what we are going to do.”
Ms Parker revealed the watchdog will require evidence from businesses that they have worked out exactly what needs to be paid back and will require them to sign up “as a minimum” to court enforceable undertakings and external audits.
“If they are not willing to co-operate with us on that basis then we will obviously carefully consider litigation,” she said. “We use [litigation] when we see serious non-compliance or serious neglect of the law. We will publicly name employers who break the law. We think it is important to get the message out that it is not acceptable to underpay workers.”
Ms Parker said these tougher measures would mainly be aimed at larger businesses while compliance notices would be used for smaller businesses.
She said this will offer a “quicker solution” with no penalty or record kept if the money is paid back.
“We will issue them more quickly and they will be more often,” she said. “If it comes across as tougher than it is, then you are right. The community is saying ‘Enough, there is too much of this going on.’
Big businesses confessing underpayments to the FWO will be required to, at a minimum, enter into court-enforceable undertakings.
Ms Parker said that of particular interest to the FWO are the horticulture, hospitality, fast food, café, restaurant sectors, as well as franchisors.
More broadly, she said that supply chain risks and sham contracting are also a core part of its investigative and enforcement action.
“The aim of announcing our priorities is for increased transparency, so that the community does know where we are directing our resources, and it does mean that small business will know what to expect from us, and that sets some expectations obviously of what we expect,” she said
Ms Parker also said that the FWO is looking to test the law or use new laws where applicable as part of its bid to drive a culture of compliance.