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FWO cracking down on employment conditions in the aged care and disability service industries – it's time to get your house in order!

By Kristin Ramsey12 Sep 2016

In November 2015 the Fair Work Ombudsman (FWO) commenced an audit campaign in the health care and social assistance industry (one of Australia’s largest employing industries).

Initially, the campaign focused on auditing and educating businesses in the medical services and allied health sector, but now has now moved its focus to residential care and disability service providers.

According to the FWO some of the most common compliance issues arising in the sector relate to rostering and the engagement of part-time and casual employees. In our experience, a number of providers do not fully appreciate the rights and entitlements of part-time or casual employees, and this can lead to disputes and potential underpayments.

What happens if you are audited?

If selected for auditing as part of a campaign such as this, or as a result of a complaint made by one of your organisation’s employees, you can expect the FWO to ask to see contracts of employment and time & wages records for a sample of your employees. The inspector will then analyse this information to identify whether or not the organisation is complying with its obligations under the Fair Work Act and the applicable industrial instruments.

In the 2014 / 2015 financial year, 36% of businesses audited by the FWO were found to be non-compliant. If large, well resourced, organisations like Coles and Woolworths can’t always get it right; it is not surprising that very few businesses are 100% compliant with their industrial obligations.

Risks if found to be non-compliant

Non-compliance comes at a high cost as in addition to having to make back payments, organisations and individuals involved in contraventions (such as directors, members of the executive and other senior managers) can be subjected to substantial fines. In this respect, last financial year the FWO:

  • recovered over $22 million in back pay for aggrieved workers;
  • took enforcement action in respect of more than 550 organisations;  and
  • commenced legal action against 26 individuals which resulted in the imposition of over half a million dollars in fines.

What should we do?

Rather than wait for complaints to be made, or the FWO to come knocking, we strongly recommend that providers take positive action to audit their industrial practices to identify any potential areas of non-compliance. This will give the organisation an opportunity to rectify any issues and in turn minimise legal and reputation risks going forward.

How can Hynes Legal help?

Our Employment and Workplace Relations team are experts in this area and can conduct such an audit for a fixed fee. In addition to reviewing compliance issues, our audit service involves a comprehensive business review designed to:

identify key risk areas in respect of an organisation’s industrial and workplace relations practices; and
make recommendations on strategies and actions to improve legislative compliance, workplace relations, productivity and efficiency.

If you would like more information about our audit service or would like to discuss any other employment, industrial relations or HR issue, please contact Kristin Ramsey (Director) on 07 3193 0542.