As the Coalition promises increased penalties against employers for non-compliance with workplace laws, the Fair Work Ombudsman (FWO) has emphasised its message that compliance involves looking beyond the legal risk.
Speaking last week, FWO, Natalie James, looked at the question “where does responsibility for compliance with the law begin and end?”
The Fair Work Act states that if there is a breach of the Act, then it is not just the organisation that is liable, but anyone involved in the contravention is individually liable. This is called accessorial liability. Similar accessorial liability provisions are found in work health and safety legislation and competition and consumer laws.
These provisions are not new, but as individuals, we can sometimes forget that we can be personally liable for workplace breaches; the relevant enforcement agencies will not overlook this aspect of the law. In the last financial year, 46 out of 50 of the matters filed in court by the FWO sought orders against individuals for personal liability. This increased 20% from the previous 12 months.
Not only is the FWO enforcing this provision more regularly, it is also expanding its reach. It is not uncommon for directors to be held individually liable for breaches in which they have played a part, but more recently, we are also seeing people as all levels of an organisation being held accountable.
If a finding is made that you contributed to a breach in your role in your organisation, then you can be fined, and also ordered to reimburse the affected individual for any financial loss suffered. For example, in a recent case, a company director was fined $51,400 for underpaying eight employees, and ordered to personally repay the employees almost $23,000 in lost wages. For more serious offences, particularly under competition and consumer law, the offence can be punishable by imprisonment.
As we were reminded by the FWO “Compliance with workplace laws is not simply a question of tick and flick”. The first step is to analyse your risk, and, wherever you sit on the scale, consider your strategy for ensuring that no workplace laws are breached – you can be personally liable for action or inaction by your organisation.
The message from the FWO is clear- “call them out, for their sake and yours”. The spotlight is on unethical practices and poor culture. Getting these wrong can quickly destroy organisational brand and individual reputation.
Once you have identified your risk, move to prevent and deter future breaches, and constantly align the behaviour of your staff. The FWO affirms that it will look beyond the law and is moving to drive cultural change.
Consider your options for developing a thorough compliance training program that doesn’t merely tick the box at the end of the year. Go beyond meeting and delivering minimum compliance training obligations within your organisation, and start a campaign for change.
- Call upon your leaders to revisit your organisation’s values and vision and how they translate that into desired behaviours and actions that employees learn from.
- Revisit workplace policies and procedures to ensure they’re updated to reflect the changing landscape of the modern workplace, legal obligations and your organisation’s values.
- Online and face-to-face training are considered equally as effective as compliance training – providing that they meet the legal tests – simply having training is not enough. Check that your training has been written by legal experts and that it complies with Australian law.