I Promised You a Miracle! – The Fair Work Ombudsman and Enforceable Undertakings

The Fair Work Ombudsman (FWO) continues to successfully prosecute and investigate businesses that exploit workers from overseas.

In a recent investigation of a Perth restaurant, the FWO found that two overseas workers had been underpaid by their employer to the tune of $13,822.  After admitting to a number of contraventions, the employer agreed to enter into an enforceable undertaking with the FWO to make good.

Enforceable undertakings permit the FWO to take legal action against an employer if any terms of the undertaking are not complied with and often go beyond requiring that any underpayments be rectified. In the case of the Perth restaurant, the terms of the enforceable undertaking required the employer to:

  • Register online with the FWO, use FWO resources to learn about its employment obligations and provide evidence of such to a FWO inspector;
  • Provide the FWO with evidence that it has systems and processes in place to ensure it pays employees correctly, issues payslips and keeps records;
  • Post a notice in its workplace (accessible to all employees) setting out its contraventions and admitting to them;
  • Provide photographic evidence that it displayed the notice to the FWO;
  • Hire an external auditor to audit its compliance with workplace laws;
  • Provide a copy of the audit report to the FWO;
  • Provide evidence to the FWO of making employee super contributions; and
  • Not make any statements inconsistent with the undertaking.

In addition to all this, the employer also had to publically admit to its failings by consenting to a press release about them, apologise to employees and pay a fine for not issuing payslips.

Clearly, the terms of an enforceable undertaking can be onerous for a business and employers should carefully weigh up whether an undertaking is in fact preferable to an adverse judgment before agreeing to an undertaking. 

It’s not just the FWO using enforceable undertakings – other bodies also use them as a tool to creatively encourage employers to take responsibility for their actions and make a positive contribution for the future.

SafeWork NSW entered into an enforceable undertaking with Caltex Australia Pty Ltd (Caltex) in 2012 following a petrol spill that was stopped by a fire fighter from Fire and Rescue NSW (FRNSW).

In that enforceable undertaking, Caltex agreed to a range of terms including developing a mobile app about contractor work health and safety that was made available publically, and committed to funding various training initiatives for FRNSW (who were the ones who saved the day). The total expenditure of the undertaking was $805,500.

Whilst the Perth restaurant did not face any of the costly development and training undertakings that Caltex did, it still committed to a wide variety of matters - including hefty naming and shaming.

The scope of an enforceable undertaking is only limited by the imagination and employers should be aware of this when proposing such an undertaking as an alternative to prosecution.

Obviously, the bottom line is that employers need to ensure compliance with their workplace legal obligations, especially when it comes to paying vulnerable employees.  This will mean that compliant employers never need to choose between an enforceable undertaking and a prosecution! 

Shane Koelmeyer is a leading workplace relations lawyer and Director at Workplace Law.
Workplace Law is a specialist law firm providing employers with legal advice, training and representation in all aspects of workplace relations, employment-related matters and WH&S.

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