Too Soft Or Too Severe? Enforceable Undertakings and the Regulatory Dilemma Facing the Fair Work Ombudsman

Abstract

The research carried out for this article has been supported by a grant from the Australian Research Council (LP099990298) and is part of a wide research project on the activities and influence of the Fair Work Ombudsman (FWO). This project is partly funded by the FWO. The authors would like to thank the FWO and the anonymous interviewees and participants for cooperating with this research. We would also like to thank Jack Lang for providing research assistance. 1 It should be noted, however, that contravention of an enforceable undertaking does not itself attract a civil penalty.2 From 2006, the federal agency responsible for enforcement, now called the Office of the Fair Work Ombudsman (FWO), was given substantially increased resources along with new powers for labour inspectors, coupled with an earlier, significant increase in the penalties that courts are able to impose for breach of these standards. See Tess Hardy, 'A Changing of the Guard: Enforcement of Workplace Relations Laws since Work Choices and Beyond' in Anthony Forsyth and Andrew Stewart (eds) Fair Work: The New Workplace Laws and the Work Choices Legacy (Federation Press, 2009) and Tess Hardy and John Howe, 'Partners in Enforcement? The New Balance between Government and Trade Union Enforcement of Employment Standards in Australia' ( 2009) 23(3) Australian Journal of Labour Law 306. 3 Technically-speaking, the FWO has entered into 29 enforceable undertakings, however, this includes four enforceable undertakings with the same individual -Mr Sadamatsu Katsuyoshi -in his capacity as director

Challenging new governance: Evaluating new approaches to employment standards enforcement in common law jurisdictions

“…8. That said, Hardy and Howe (2013) observe an overall reduction in the use of litigation with the expansion of the FWO's mandate. While these authors do not attribute this reduction to the expansion of EUs, whose use also levelled off in 2011-2012 as noted above, they observe that in other jurisdictions the use of EUs is often accompanied by a decline in civil penalty litigation.…”

The employer perspective on wage law non‐compliance: State of the field and a framework for new understanding

“…First there is a need for quantitative research to establish rates and types of non-compliance and other trends in particular geographic locations, industries, sectors and business types. In our review sample, only one article included quantitative research based on a representative sample (Hardy & Howe, 2017). While there are obvious limitations to researchers' ability to uncover the true incidence of any unlawful activity, data collected through carefully designed, anonymous surveying of employers can add to our understanding of the extent and nature of the non-compliance problem and complement insights gained from qualitative research.…”

“…Conversely, some employers reported paying staff correctly because of potential consequences of not doing so, a theme featuring in seven of the studies reviewed, and suggesting some conceptual overlap with economic benefits of compliance (Druker et al, 2005;Hardy & Howe, 2017;Heyes & Gray, 2004;Jones et al, 2006;Kellner et al, 2016;Lee, 2019;Ram et al, 2020). Their main fear was that regulatory authorities would discover their business' non-compliance, either because of an employee complaint or the authorities' own detection activities.…”

“…Second, external to the firm, between business actors and a range of actors outside of the firm, drawing on power resources. For example, as demonstrated by Hardy and Howe's (2017) findings, underfunded state enforcement agencies relied on informal, tacit pressures applied to businesses, seeking to influence their perception of risk of detection.…”

The fragmenting occupation of labour inspection and the degradation of regulatory and enforcement work inside the British state

“…Most GLAA inspectors have a background in policing, most HMRC minimum wage enforcement employees are drawn from elsewhere in the civil service, and in the case of the HSE, there has been a move away from recruitment of inspectors with experience of hazardous industries to a model based around a graduate trainee scheme (Mustchin and Martínez Lucio, 2020). Regulators require considerable communication, relational and technical skills in order to properly implement and enforce labour market regulation (Hardy et al, 2013), and simultaneous processes of professionalisation, standardisation and decoupling of regulators from experience of the workplaces where they intervene have considerable implications for the nature of regulatory work and its outcomes.…”