FWO will take industry, finance into account when calculating fines in 2021

Sandra Parker FWO

The Fair Work Ombudsman has said it will seek to take the ongoing economic impact of the Covid-19 pandemic into account when holding business to account in 2020-21.

The decision comes as several industries, notably hospitality, travel and retail, have been impacted disproportionately by the pandemic, and temporary amendments to the Fair Work Act. 

“Some of our priority sectors have been seriously impacted by the pandemic and are under considerable financial strain. We are mindful that our regulatory efforts do not negatively affect already struggling industries,” Ombudsman Sandra Parker said. 

“A business’ financial position and viability will be considered when deciding whether to commence litigation for serious non-compliance, or determining the size of any contrition payment included in any enforceable undertaking.

“Companies will benefit from early engagement and cooperation with the Fair Work Ombudsman, and we will take account of their financial circumstances in considering our response,” Parker said. 

Underpayments in the retail sector have become increasingly common, with many large-scale retailers such as Woolworths, Super Retail Group, Coles, and Michael Hill failing to meet workers entitlements, but largely self-disclosing the mistake to the FWO.

Several of these underpayments were initially understated and were later revised to be far larger than initially expected – with Woolworths revising its initial figure of $300 million to $315 million, while Super Retail upped its estimate of $53.2 million to $61.2 million. 

And with a bill penalising the act of wage theft passing with up to 10 years jail in Victoria in June, the issue of underpayment, intentional or not, is likely to continue to be a hot topic in the year ahead. 

The Minister for Workplace Safety Jill Hennessy said, when introducing the bill in March, that employers that make honest mistakes will not be guilty of wage theft offenses under these laws.

“Employers who steal money and entitlements from their workers deserve to face the full force of the law, which will include substantial fines or jail time for the worst offenders,” Hennessy said.

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