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ANNUAL REPORT the Fair Work Ombudsman and Registered

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ANNUAL REPORT the Fair Work Ombudsman and Registered The Fair Work Ombudsman and Registered Organisations Commission Entity ANNUAL REPORT 18 – 19 Year in review Entity overview FWO performance report ROC performance report Management and accountability Financial statements Reference materials The Fair Work Ombudsman and Registered Organisations Commission Entity Annual Report 2018–19 4 The Hon Christian Porter MP Attorney-General and Minister for Industrial Relations Parliament House CANBERRA ACT 2600 20 September 2019 Dear Minister In accordance with section 686 of the Fair Work Act 2009, section 329FC of the Fair Work (Registered Organisations) Act 2009 and section 46 of the Public Governance, Performance and Accountability (PGPA) Act 2013, I am pleased to submit the Fair Work Ombudsman (FWO) and Registered Organisations Commission (ROC) Entity annual report for the financial year ending 30 June 2019. It includes information on the Entity’s general organisation, administration and performance. As the accountable authority for the FWO and ROC Entity, pursuant to section 17AG of the PGPA Rule 2014, I certify that we have: • fraud risk assessments and fraud control plans • appropriate fraud prevention, detection, investigation and reporting mechanisms that meet the FWO’s and ROC’s specific needs • taken all reasonable measures to appropriately deal with fraud. Yours sincerely, Sandra Parker Fair Work Ombudsman 5 Year in review Entity overview FWO performance report ROC performance report Management and accountability Financial statements Reference materials Contents Letter of transmittal iii Year in review 1 01: Entity overview 6 Outcome and planned performance 6 Entity structure 7 02: FWO performance report 10 Fair Work Ombudsman annual performance statement 11 Performance snapshot 13 03: ROC performance report 28 Review by the Commissioner 29 Registered Organisations Commission annual performance 32 statement ROC priorities and activities: driving and influencing 33 compliance 04: Management and accountability 44 Workforce demographics 45 Workforce management 46 Governance 51 External scrutiny 52 Financial management 54 05: Financial statements 58 Agency Resource Statement 2018–19 59 Independent auditor’s report 61 Statement by the accountable authority and Chief Financial 63 Officer Primary financial statements and notes 65 06: Reference materials 98 Reporting on specific legislation 99 Glossary 100 Abbreviations and acronyms 103 List of requirements 105 Index 109 Contact 114 6 Year in review Pictured: Sandra Parker, Fair Work Ombudsman. A key question I asked when I took up the appointment of Australia’s Fair Work Ombudsman in mid July–2018, was whether the agency has the right capability to discharge its functions effectively. I commissioned an independent capability review of the agency. Image: Fair Work Ombudsman Purpose and Functions In response to the recommendations from the review, In 2018–19, our intelligence-led approach to education we reaffirmed our purpose under the Fair Work Act and compliance activities resulted in recoveries of over 2009 (Fair Work Act), announced annual compliance $40 million for nearly 18,000 workers. We conducted and enforcement priorities underpinned by over 2800 workplace audits nationally, with our strengthened policy and implementation governance, proactive investigations strategically targeting sectors and established new corporate governance at high risk of non-compliance. arrangements in consultation with our Audit and Risk Committee. The courts also imposed penalties of $4.4 million as a result of our litigation action during the year. This Australian workplaces are changing, as are the included $383,616 in combined penalties against the community’s expectations of its regulators. There is operators of three sushi outlets in regional NSW, for now much greater community awareness about the underpaying vulnerable employees over $70,000. need to uphold standards across the whole labour market. This is evident from the findings of the Banking Royal Commission and the Migrant Workers’ Firm but fair approach to non-compliance Taskforce, which urged regulators to take a firmer It’s a fact that mistakes happen, and this can lead stance and use all their regulatory tools, particularly to underpayments. However, the onus is on the where vulnerable members of the community are employer to comply with workplace laws, and involved. immediately rectify any issues that arise. Under our new Compliance and Enforcement Policy, I announced that we would increase our use of compliance notices. Fair Work Inspectors issue compliance notices if they reasonably believe an employer has breached workplace laws. 1 Year in review Entity overview FWO performance report ROC performance report Management and accountability Financial statements Reference materials If the breach isn’t fixed, we won’t resile from taking the industry group for disputes across the last five matter to court. financial years. Compliance notices are an important tool for us Our Harvest Trail Inquiry also found widespread non- in addressing and rectifying alleged breaches compliance in the horticulture industry, where labour expeditiously. In 2018–19, we recovered more than hire and supply chain issues are rife. This activity $1 million in unpaid wages through 274 compliance recovered more than $1 million in unpaid wages for notices. over 2500 horticulture workers. We note the effort by key stakeholders in continuing to work with us in We have seen an increase in self-reporting of implementing the recommendations in the report to underpayments to us, mainly from businesses address the issues identified. with large workforces and complex payroll errors. I welcome self-disclosures, as they suggest our These industries remain a priority for us. We are compliance and enforcement activities are creating considering all options for driving sustainable the desired deterrence effect. behavioural change, including education, compliance and enforcement, and raising consumer awareness to Where companies self-disclose, the Fair Work help people make informed purchasing decisions. Ombudsman (FWO) will consider all appropriate enforcement options, and litigation may still be the Advice, education and assistance most appropriate for serious non-compliance and/or late or incomplete disclosure. While we are taking a more transparent and consistent approach to compliance and enforcement using all We expect non-compliant employers as a minimum the tools available to us under the Fair Work Act, we to enter into a court enforceable undertaking (EU) also have a critical role under the Act to educate and and immediately pay back money plus interest owed advise employers, workers and the community about to workers. We also expect them to pay for ongoing workplace rights and legal obligations. independent audits of their payroll, with FWO oversight, to ensure underpayments don’t happen I’m extremely proud of the work that our frontline again. Companies that do not comply with the EU staff do every day, resolving workplace disputes and companies that do not work cooperatively with through education, advice and assistance. Nearly us can expect litigation. Consistent with open and $30 million was returned to underpaid workers transparent governance, FWO will publish EUs on our through assisted dispute resolution and our Infoline website. answered more than 380,000 calls. Strategic enforcement Our online channels and resources continue to grow in popularity. There were nearly 18 million visits to The flow-on effect of requiring employers to take our website. Our new tools and resources received responsibility, in this way, is that we can direct our positive feedback and engagement. We provided finite resources to serious matters or industries with advice and assistance to more people through our systemic problems. social media channels and online portal. And the community lodged more anonymous reports of We are charged with regulating nearly 13 million suspected non-compliance. workers1 and over 2 million businesses.2 This makes an intelligence-led and risk-based approach critical for Protecting vulnerable workers determining our priorities and the most effective ways to make an impact on key sectors of the economy. Increased powers and additional resources are enabling us to send a strong message of deterrence to 3 Intelligence, data and experience show that non- would-be lawbreakers. In the past year, we have filed compliance rates remain high in the fast food, five Protecting Vulnerable Workers Act matters before restaurants and cafes sector. It’s the highest ranked the courts. 1 Australian Bureau of Statistics (ABS) Labour Force, Aug 2019, cat. No. 6202.0 3 Employers now face penalties of $630,000 for a company and $126,000 for 2 Australian Bureau of Statistics (ABS) Counts of Australian Businesses, including an individual per serious contravention. Entries and Exits, June 2014 to June 2018, cat. No. 8165.0 2 These matters involve allegations of false and We will continue to focus on matters that are of misleading information being provided to a Fair Work significant public interest, demonstrate a blatant Inspector4, and one matter where we successfully disregard for the law, are of a significant scale or used the ‘reverse onus’ provisions for failure to keep impact on workers or the community, or where we can records or issue payslips.5 Our most recent matter test the law or use new laws. involves allegations of ‘serious contraventions’ and is the first where we have sought the new higher It is my intention
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