The Fair Work Ombudsman (FWO) has wide-ranging powers to attend businesses unannounced to check compliance (and identify compliance issues) with workplace laws.

Sometimes the FWO conducts random inspections, other times it visits premises as a result of complaints or “tip-offs”. Offending employers are “named and shamed” on its website and can be subject to significant fines if the FWO decides to pursue breaches of workplace laws through the courts.

A recent media release on its website indicates the FWO has recovered $233,087 in unpaid wages for 353 workers following an investigation into 19 outlets of fried chicken franchise chain Gami Chicken & Beer.

This followed surprise visits to 15 outlets across Australia as a result of complaints (some anonymous) from workers in the businesses. Inspectors attending the outlets interviewed employees, managers and store owners on-site and used their powers to check employment records and payslips.

The FWO indicated that it found that all the outlets it had audited had underpaid employees, and 15 were not meeting payslip and record-keeping obligations. The most common breaches/compliance issues found were underpaying penalty rates (33 per cent) and underpaying the minimum hourly rate (13 per cent). Inspectors reported that the most common reason given by employers for non-compliance was a lack of awareness of all workplace obligations (68 per cent).

In a statement, the FWO said that “A lack of awareness is not a valid excuse for a business to breach workplace laws”.


How EI Legal can help with compliance issues?

Given the Fair Work Act 2009 operates so that franchisors can be liable for breaches of workplace laws by franchisees in certain circumstances, it is prudent for franchisors to put in place measures to assess whether franchisees are complying with their legal obligations.

EI Legal regularly conducts pay audits on behalf of franchisors (and other business owners) to assess compliance with workplace laws. A cost-effective way to do this is – rather than auditing each individual employee’s earnings – is to take a range of employees working in different roles and to review the hours that they worked against the amount they were paid over one or two pay periods. If issues are uncovered then it is always possible to do a more in-depth audit thereafter.

Often where discrepancies appear it is a result of employers not fully understanding award provisions dealing with overtime, penalty rates (e.g. for working evenings or weekends) and allowances (e.g. an allowance for an employee laundering their own uniform).

An audit report of this nature can give businesses the peace of mind that they are complying with their obligations under workplace laws, or alerting them to the matters they need to put right to avoid facing legal action.

If you require any assistance in this area please contact EI Legal.