Rising FWO fines a warning to employers

by 24 Aug 2010

Fines issued by the Fair Work Ombudsman have increased significantly in the past year, and experts say employers have to be as vigilant as ever to ensure compliance.

According to new data from the FWO, court-ordered fines issued last year totalled $2.2 million, a 20 per cent rise compared to the previous 12 months. This is despite the number of proceedings filed dropping from 78 to 57.

Tim Capelin, managing partner at Australian Business Lawyers, told HR Leader that increasing fines are forcing employers to be extra careful about industrial relations compliance, but added that it is not always an easy task.

“Everyday day we hear news of successfully recovery of funds by the FWO, so no employer who isn’t compliant with regulations can feel safe that they will slip under the radar,” he said.

“But it is still taking businesses by surprise. That is not a criticism of employers; even those who are diligent about compliance can easily make mistakes, particularly with the Modern Award system which is still evolving and hard to keep up with.

The highest-ever penalty was $288,000 against a small Adelaide cleaning company which had underpaid two vulnerable workers less than $4000.   

“I am sympathetic for those [SMEs] who don’t have instant access to advisors or a HR team looking after it all,” added Capelin.

A spokesman from the FWO said that following the introduction of stronger legislation, the Courts too have been prepared to increase the quantum of their penalties, and FWO regularly receive penalties now in the high $100,000 and mid $200,000 range.

“Penalties being handed down by the Courts show they are taking a dim view of those who deliberately flout the law and refuse to co-operate with us on issues of non-compliance.

“Our approach to compliance has always been fair and flexible. We acknowledge that inadvertent and accidental breaches of workplace laws do and will occur. While we have compliance obligations to fulfil, we want to help employers to "get it right" so we can avoid going to Court,” the spokesman said.


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