During 2016, Australian workplace regulators tested concepts in a number of prosecutions, and were involved in new compliance initiatives.

Launch of FWO 'Anonymous Report' function

May 2016 saw the launch of the Anonymous Report function on the Fair Work Ombudsman (FWO) website. This allows employees to make reports about employers, and employers to report on other businesses, when concerned about unlawful behaviour but unwilling to be directly involved in a complaint. This action has been taken in response to community demand for such a service, and has already received a substantial number of 'tip-offs', largely about wage rates thus far.

For more information, visit the Fair Work Ombudsman website www.fwo.gov.au

Significant WHS convictions and prosecutions for employer companies, directors and employees

Momentum for prosecutions and penalties under various state based model workplace health and safety (WHS) legislation is growing, as shown by a number of recent convictions with substantial fines ordered.

Essential Energy was convicted in relation to a fatal electrocution of a worker and fined $300,000, taking account of multiple prior convictions. In September, a sole trader was convicted and fined $160,000 also relating to a workplace fatality.

Meanwhile, a limestone quarry operator and two of its workers are the first defendants to face charges for a Category 1 breach in NSW for reckless conduct, following the introduction of new reckless conduct laws in 2012. The prosecution in this instance relates to the death of a non-worker. The outcome for this matter has not yet been reached. However, Category 1 offences attract fines up to $3 million.

First WHS conviction for failing to consult

The South Australian Industrial Relations Court has recorded the first conviction against a company for failing to comply with the duty to consult, cooperate and coordinate activities with other duty holders in relation to WHS matters. In this case, a trainee and apprentice placement organisation placed an apprentice in a position with a roofing company. The apprentice suffered 'horrific injuries' as a result of a workplace incident. The failure of the placement organisation to engage in a consultation process with the roofing company about its WHS policies and procedures resulted in a $12,000 fine (a fraction of the potential maximum penalty of $100,000 for a corporation).

Consultation with other duty holders should form a standard compliance measure in any engagement, placement or audit process. Failing to comply with consultation duties can lead to significant penalties and safety convictions recorded against the company.

Aside from statutory compliance, failing to consult with other parties may prevent an employer from obtaining all of the information required to make a proper assessment about safety.

See Boland v Trainee and Apprentice Placement Service Inc. [2016] SAIRC 14.

Migrant Workers Taskforce

The Migrant Workers Taskforce, lead by Professor Allan Fels, has been formed to consult the Coalition on policies to improve employment protections for overseas workers. This action is part of the efforts to ‘crack down’ on employers who take advantage of vulnerable migrant workers through underpayments and other contraventions of Australia’s employment standards. The Taskforce will assess the issue in a range of industries, with a focus on use of short-term, short-stay visa contract labour. See https://ministers.employment.gov.au/cash/coalition-delivers-election-commitment-protect-migrant-workers for more details.

Penalty risks for unpaid internships

The FWO has continued its focus on unlawful unpaid internship schemes. In June 2016, the Federal Circuit Court issued a fine of over $270,000 to AIMG BQ, an Australian-based Chinese language media agency, for exploiting a student who worked as an 'intern' for 180 hours over a period of four months, unpaid. The Federal Court found that it was unlawful for the internship to be unpaid because it was not a formal part of the student's studies.

See Fair Work Ombudsman v AIMG BQ Pty Ltd & Anor [2016] FCCA 1024.

Increased focus on accessorial liability by FWO

Section 550 of the Fair Work Act 2009 (Cth) allows persons involved in a contravention of a civil remedy provision to be held liable for the contravention in addition to, or instead of, the employer business. In July 2016 the Office of the FWO confirmed that this provision has been increasingly used to penalise and recover compensation for the mistreatment of employees.

Accessorial liability has become a common tool in cases where the employer business is distressed, and where there is a risk of "phoenix" behaviour to avoid liability for industrial breach. Courts have imposed penalties and liability for back-payments on individuals involved in the breach where an employer company has been, or is likely to be, wound up. This prevents employers from escaping consequences of their breach by hiding behind the ‘corporate veil’. See Fair Work Ombudsman v Step Ahead Security Services Pty Ltd & Anor [2016] FCCA 1482, where a sole director was penalised $51,400 for the underpayment of employees in circumstances of ‘real doubt’ that the company itself was in a financial position to compensate the employees for their loss.

Accessorial liability is being used to target larger businesses in relation to contracting cases, where subcontractor personnel have been underpaid. In Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832, a company was penalised $38,000 for knowing involvement in the underpayment of trolley collectors by a subcontractor entity.

Accessorial liability is increasingly extending beyond company directors to individuals working in human resources, management and recruitment. See Cerin v ACI Operations Pty Ltd & Ors [2015] FCCA 2762, in which a human resources manager was fined for issuing a defective notice.