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The Fair Work Ombudsman has the authority to issue a compliance notice where a Fair Work Inspector “reasonably believes” an employer has contravened workplace laws. Such as underpaying an employee there lawful entitlements.

Reports by the Fair Work Ombudsman shows a significant increase in the regulator’s enforcement activities. In particular, a staggering 10-fold increase over the past five years in the number of compliance notices that have been issued to employers.

What is a compliance notice?

A compliance notice issued by a Fair Work Inspector is a written notice requiring an employer to fix contraventions of workplace laws within a specified timeframe (for example, 28 days).

Failure to comply with a compliance notice constitutes a breach of section 716 of the Fair Work Act and normally results in prosecution (both for the original alleged non-compliance issue as well as for the failure to comply with the compliance notice).

When is a compliance notice issued?

When a Fair Work Inspector reasonably believes an employer has contravened workplace laws, they can issue a compliance notice instead of commencing Court proceedings against an employer for the contraventions. The compliance notice provides the employer an opportunity to fix the issue without going to court and possibly having to pay significant penalties.

What does a compliance notice look like?

See images of ‘Example – Compliance Notice’ at the bottom of this article.

What is considered before issuing a compliance notice?

Fair Work Inspectors look at what the employee’s legal minimum entitlements are and if they have been met. They consider the evidence available, which may include statements, pay slips and time and wages records the employer or employee have provided.

When enforcing minimum entitlements, a Fair Work Inspector can’t consider:

  • agreements to be paid less (employees cannot agree to be paid less than their minimum entitlements)
  • debts owed by the employee (an employer cannot automatically take money from an employee’s pay because of things like breakages, unreturned uniforms, vehicle damage, etc.)
  • poor performance or behaviour by the employee
  • the employer not being aware of the applicable minimum entitlements.

What should I do when I receive a compliance notice?

It’s in your best interests to take action in response to a compliance notice by the due date. If you comply and provide evidence of compliance by the due date, the Fair Work Ombudsman cannot take further action against you for the breaches outlined in the compliance notice. Complying with a compliance notice is not an admission that the contraventions occurred. If you do not believe you have committed the contraventions in the compliance notice you may apply for a review of the compliance notice prior to the due date (see ‘What if I don’t agree with the compliance notice?’ below).

How do I comply?

There are 4 key steps you need to take to comply with a compliance notice:

1. Read the compliance notice
2. Calculate the amount owed to the employee(s)
3. Pay the employee(s) what they are owed
4. Provide proof of payment to the Fair Work Inspector.

Can the Fair Work Ombudsman commence legal proceedings if I don’t comply?

Yes. Failing to comply with a compliance notice by the due date without a reasonable excuse may result in the Fair Work Ombudsman commencing legal proceedings against the employer. People involved in the non-compliance can also be personally penalised. Courts can impose penalties of up to $33,300 (for a company) or $6,660 (for an individual) for failing to comply with a compliance notice. This is in addition to any money owed to your employees.

What if I can’t comply on time?

Contact the Fair Work Inspector who issued the compliance notice to discuss the situation as soon as possible. In limited circumstances a payment plan may be considered if there is proof of genuine financial hardship. If you are unable to comply because you don’t have the records needed to calculate what is owed, the Fair Work Inspector may be able to provide information or records kept by the employee to assist you. Note: Providing false or misleading documents or information to the FWO is unlawful and carries maximum penalties (up to $66,600 per breach for a company), higher still if the conduct is a serious contravention.

What if I don’t agree with the compliance notice?

You can apply to the Federal Court, the Federal Circuit and Family Court (Division 2) or an eligible State or Territory Court to review the compliance notice on the following grounds:

  • the contraventions in the compliance notice did not occur, and/or
  • the compliance notice does not comply with the Fair Work Act 2009.

If you’re considering this option, we recommend you promptly seek legal advice and apply to the Court before the compliance notice due date.

What does a compliance notice look like?