SECURITY
• SA – Adelaide City Council, Adelaide Hills
Council, Barossa Council
• TAS – City of Hobart, Kingborough Council
• WA – City of Perth, Town of Cambridge
• VIC – Melbourne City Council, Moreland City
Council, Ballarat City Council
At least one instance of non-compliance was
identified in each state. No instances of non-
compliance were found in the Northern Territory,
where the majority of councils audited directly
employed security workers.
With regard to Councils, the Inquiry findings
included:
• 61% of Councils had a non-compliant labour
supply chain;
• Councils failed to utilise their respective local
government association for procurement
support or advice;
• contracts contained generic references
requiring principal contractors to be compliant
with all relevant State and Commonwealth
legislation but silent on any requirement
relating to ‘real-time’ compliance auditing;
• some contracts contained generic references to
an obligation by principal contractors to seek
permission from the relevant Council before
subcontracting, although in many instances this
wasn’t referenced;
• an absence of any proactive governance
measures or real-time compliance auditing
once a principal contractor was engaged;
With regard to the principal contractors and
subcontractors, the Inquiry found:
• 42% of principal contractors and 63%
of subcontractors failed to comply with
Commonwealth workplace laws, with every
state (but not the NT) having at least one
instance of non-compliance
• evidence of underpayments of employees and
non-compliance with employees entitlements.
Other findings made by the Inquiry included
that NSW and QLD had more levels of
subcontracting than the other states and
principal contractors were subcontracting
without the knowledge or consent of the
Councils in some instances. In some cases,
subcontracting agreements were silent on
any requirement to be compliant with the
Fair Work Act. Likewise, subcontracting
agreements were silent on any measures
relating to proactive governance or
compliance auditing on its part.
The FWO’s experience conducting Inquiries
of this nature is that multiple levels of
subcontracting can create conditions which
allow non-compliance to occur. The reasons for
this include pressures of multiple businesses
taking a profit as additional subcontractors
are added to the contracting chain, and the
perceived ability to hide non-compliance within
convoluted business structures.
Further, the FWO has identified that those at
the top of supply chains must have robust
monitoring and governance in place so they
have clear visibility of what is occurring
throughout their supply chains. Failing to
do so risks those at the top being blind to
the potential unlawful conduct by those
engaging the workers providing them with
their services, and could potentially expose
those businesses to action under section
550 of the Fair Work Act as accessories to the
unlawful conduct.
The report highlights the important role that
organisations at the top of labour supply
chains can play in influencing workplace
practices and promoting compliance with
workplace laws.
On the release of the report Fair Work
Ombudsman Natalie James said “The
findings reinforce something the Fair
Work Ombudsman has been warning
businesses about for some time now: a lack
of oversight and accountability on the part
GOVLINK » ISSUE 2 2018
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