Business owners in Australia have many responsibilities and duties.
If you employ people or run a business, you must know the organisations and authorities that govern workplaces. There are severe penalties and fines if, as an employer, you fail to keep up with your obligations.
You may have read about the Fair Work Ombudsman or heard the term in the news. In recent years, many Australian companies have come under the scrutiny of the Fair Work Ombudsman, so it's a governmental organisation employers in all industries should know about.
In this guide for business owners, we explain the role of the Fair Work Ombudsman, the difference between the Fair Work Ombudsman and Fair Work Commission (FWC) and your obligations as an employer.
The Fair Work Ombudsman
The Fair Work Ombudsman (the Ombudsman) is an Australian government agency responsible for promoting and monitoring compliance with Australian workplace laws. Some of these obligations include the application of Modern Awards and Enterprise Agreements, as well as rates of pay. If you are an employer and unsure of your Fair Work obligations, the Ombudsman's office is available to offer advice where necessary.
The office of the Fair Work Ombudsman is an independent statutory agency created by the Fair Work Act. The Fair Work Ombudsman (FWO) has offices in every capital city and in regional locations across Australia.
While the Ombudsman may appear to some employers as an active agent designed to help people understand Fair Work legislation, they also serve other helpful purposes. By providing advice and education to businesses and employers in general, the Australian work environment is made a much more efficient and comfortable place for all involved. They also offer clarifiction to avoid misunderstandings or confusions with the Fair Work Act. Employers and employees can contact the Fair Work Ombudsman for advice on terms associated with an applicable Modern Award for their industry or role. Alternatively, there is also the opportunity to check and clarify entitlements within an Enterprise Agreement such as pay rates, holidays or allowances.
Functions
Some of the key functions and responsibilities of the FWO set out in the Fair Work Act 2009 are:
- To provide education, assistance, advice and guidance to employers, employees, outworkers, outworker entities and organisations.
- Promote and monitor compliance with workplace laws.
- Inquire into and investigate breaches of the Fair Work Act.
- Take appropriate enforcement action.
- Perform statutory functions efficiently, effectively, economically and ethically.
The FWO also appoints Fair Work Inspectors to investigate and enforce compliance with Australia’s workplace laws.
Services
The FWO provides some free services in Australia. These free services include:
- A single point of contact for reliable and timely information about Australia’s workplace relations system.
- Educating people working in Australia about fair work practices, rights and obligations.
- Assessing complaints or suspected breaches of workplace laws, awards and registered agreements and some Fair Work Commission orders.
- Litigating in some circumstances to enforce workplace laws and deter people from doing wrong in the community.
- Building strong and effective relationships with industry, unions and other stakeholders.
The Ombudsman offers employers and employees free information and advice on pay, conditions, and workplace rights and obligations.
Fair work inspectors
Fair Work Inspectors are government officials appointed by the Fair Work Ombudsman under the Fair Work Act. This gives the Fair Work Inspectors certain powers to perform their role to promote and monitor compliance with relevant Commonwealth workplace laws.
A Fair Work Inspector can:
- Investigate suspected violations of relevant Commonwealth workplace laws and Fair Work instruments.
- Conduct compliance audits.
- Investigate workplace complaints.
- Take steps to enforce relevant Commonwealth workplace laws and Fair Work instruments through the court system, where necessary.
- Conduct targeted education campaigns in industries and regions.
They have powers to enter premises for compliance purposes if they believe either the Fair Work Act or a Fair Work instrument applies to the workplace or records or documents relevant to compliance are on the business premises. While on the premises, they have powers to inspect any work, process or object and interview anyone with their consent. They have more powers when on the premises that involve investigations and documents. A suitably qualified or experienced person may accompany a Fair Work Inspector on the premises.
The Fair Work Act prohibits a person from intentionally hindering or obstructing a Fair Work Inspector (or a person assisting a Fair Work Inspector on premises) while performing functions or exercising powers. This includes denying entry to a premise or intentionally withholding documents.
Fair work notice
The FWO can give a person a written notice called Fair Work Notice compelling them to provide information to the FWO.
It is issued under the Fair Work Act during certain investigations and can specify a requirement for the person to give information to the FWO, produce documents to the FWO or attend before the FWO at a specific time and place to answer questions relevant to an investigation.
The Administrative Appeals Tribunal (AAT) issues a Fair Work Notice on application by the FWO. The Fair Work Notice can be given to a person or a company, however only individuals can attend to answer questions.
You must comply with a Fair Work Notice. Failure to comply with a Fair Work Notice can result in penalties of up to $19,800 for individuals and $99,000 for small businesses (fewer than 15 people) up to $495,000 for larger companies.
Fair Work Ombudsman vs Fair Work Commission
The Fair Work Commission (FWC) is the independent national workplace relations tribunal. It is responsible for maintaining a safety net of minimum wages and employment conditions, as well as a range of other workplace functions and regulations.
What it can do:
- Help employees and employers bargain in good faith and to make, vary or terminate enterprise agreements.
- Deal with applications relating to ending employment including unfair dismissal, unlawful termination or general protections.
- Deal with applications for an order to stop bullying at work.
- Make orders about industrial action, including strikes, work bans and lock outs.
- Provide mediation, conciliation and in some cases hold public tribunal hearings to resolve various individual and collective workplace disputes.
- Make workplace determinations, hear and decide on equal remuneration claims, and deal with applications about transfer of business, stand down, general protections and right of entry disputes.
What it can’t do:
- Provide advice on entitlements under an award or registered agreements.
- Enforce minimum pay and award entitlements.
Like the FWC, the Fair Work Ombudsman (FWO) works to ensure the correct understanding and implementation of the Fair Work Act’s legislation in Australia. However, unlike the FWC’s tribunal-nature, the FWO works to help employees, employers, contractors and the wider workplace community understand their workplace rights and responsibilities, with the key agenda being to keep workplaces fair through education and mediation. All of the FWO’s services are free and rather than operating in an enforcement capacity, they offer information, tools, templates and help for individuals to resolve workplace matters without the need for intervention.
What they can do:
- Educate people about fair work practices, rights and obligations.
- Resolve workplace issues by promoting and monitoring compliance with suspected breaches of workplace laws, awards and registered agreements.
- Enforce workplace laws and seek penalties for breaches of workplace laws.
- Enforce certain orders made by the Fair Work Commission.
What they can’t do
- Investigate unfair dismissal and unlawful termination applications.
- Make changes to the legislation, awards or registered agreements.
- Investigate bullying and harassment complaints or claims.
Resolving workplace matters
The ideal scenario for a workplace issue would be to have it resolved prior to any regulatory bodies becoming involved – this would not only save time but also reduce any discomfort between the parties. However, that is not always possible. If an employee suspects, or is aware of the fact, they are not receiving the correct entitlements as per Fair Work legislation, the Ombudsman is available to help resolve the issue through processes like mediation. However, there's always the option to seek advice before a problem arises.
While it may seem like a big deal to have the Ombudsman involved in your employees’ work relations, their emphasis is on early intervention and resolution by providing advice and support. Seeking advice from the Ombudsman well in advance of any issues arising is the best way to prevent them occurring in the first place.
In some cases, though, employers and employees do not seek the advice of the Ombudsman and serious instances of non-compliance can occur. If this happens the Fair Work Ombudsman may investigate any possible breaches of workplace laws. You should know that Ombudsman inspectors have a high level of power when they are conducting investigations. They are permitted access to inspect workplaces, review and copy documentation and records and even interview any person they believe will be able to assist with determining an outcome. For the most part, Ombudsman respond to employee complaints to conduct investigations. For example, if any employee has underpayment queries or makes complaints about actions and entitlements in the workplace, you will most likely receive a visit from an inspector.
Sometimes Ombudsman inspectors review businesses at random. You should ensure you and your employees understand the Fair Work legislation relating to your industry and you are compliant.
Even though the Ombudsman may receive a lot of complaints, they do not necessarily investigate every single request for assistance. As it is a relatively simple process to put forward a complaint, there needs to be some discretion in deciding which complaints are legitimate and require investigation. The Ombudsman chooses to investigate if the request for assistance is fairly significant or is of public interest.
If your business is facing an investigation, it is in your best interest as the business owner to cooperate with the Ombudsman. You should consent to all their requests and make it as easy as possible for them to conduct the investigation. The best remedy for an investigation, and to guarantee you are not investigated in the first place, is to ensure you have a detailed understanding of your employment obligations. Be sure to have the correct documents, policies and procedures in place and are providing the correct entitlements to your employees. So, before any considerations of whether you may or may not be investigated by the Ombudsman, make sure you are aware of your requirements under the Fair Work Act 2009.
If faced with an investigation, employers should seek professional advice on how to respond.
Create fair workplaces with Peninsula
Peninsula helps businesses understand and implement the correct workplace requirements in line with the Fair Work Act. We advise on how you can better comply with Fair Work legislation by calling one of our expert team.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.