Employer compliance with the Fair Work Act: A major risk to your business?

  • Penalties have increased for organisations that are non-compliant with workplace law or regulations.
  • The most common breaches relate to incorrect payments and the major driver of underpayments was a lack of knowledge and understanding of awards, agreements and contracts.
  • The most effective mitigation strategy is appropriate compliance checks to ensure that the organisation is carrying out all of the obligations imposed on it by the relevant legislation and awards.

Blurred businessman pressing a work safety sign button

The purpose of this article is to raise awareness of officers and senior managers to the more common breaches of workplace laws which have been occurring. It discusses the potential costs (financial and non-financial) to an organisation which is found guilty of underpayments or other civil breaches of the Fair Work Act 2009 (‘the Act’)1, then provides some discussion about the best governance responses to remove or at least mitigate the risk of non-compliance.

It is important to state at the outset that the article concentrates on minimum entitlements under an employee’s modern award, enterprise agreement or common-law contract of employment, with a brief discussion on flexible work arrangements, discrimination and other provisions relating to general fairness in the workplace as required by the Act. The article does not deal specifically with all of the changes in workplace laws which have been passed into law of recent times which should be compulsory reading prior to the commencement of any Workplace Compliance Project.

Officers and senior managers responsible for governance activities in their organisations will have a particular interest in all of three amendment Acts2, especially given the maximum penalties enacted have been increased tenfold.

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