24 June 2020

During 2019, the Australian Building and Construction Commission (ABCC) engaged in an audit program targeting labour hire employers. Sixty-three labour hire companies were audited across Australia finding that 79% of employers were not complying with workplace laws.

It is worth noting that while this audit targeted construction based labor hire employers, under the Building and Construction General On-Site Award 2010, it represents the types of experiences MEA members face in their underpayment claims.

The focus of these audits was to ensure that employees were being correctly paid, including their base rate of pay, penalty rates, overtime rates and allowances. The audits also checked the employers’ record keeping and pay slips.

Key Findings

Almost half of the non-compliant employers had contravened the record keeping and/or pay slip provisions of the Fair Work Act. The ABCC identified non-compliance issues including:

• failure to keep a record of overtime hours worked by an employee
• incorrect ABN/employer name on the pay slip
• pay slip not recording the pay period for which the payment related
• pay slip not recording the date the payment was made.

Monetary Entitlements

Sixty-four per cent of non-compliant employers had failed to pay correctly, including:

• base rate for ordinary hours
• allowances
• overtime or
• penalties.

Image credit: ABCC

The rate of non-compliance between employers that were covered by a modern award compared to those using an enterprise agreement was found to be statistically insignificant. Fifty of the sixty-three employers audited were non-compliant with Australian workplace laws.

In recent years numerous inquiries undertaken by all levels of government have highlighted the vulnerability of labour hire employees. Several jurisdictions have introduced labour hire licensing schemes as result. Further, significant, high profile underpayment cases such as those by George Calombaris’ Made Establishment ($8M), Coles ($20M), Woolworths ($315M) and the ABC ($12M) to name a few. Have led to significant increases in penalties and focus on record keeping obligations for employers and overall focus by regulators on the fundamental aspects of employers paying workers correctly.

MEA would recommend that members periodically:

• perform spot audits of their time and wages records
• consider how they are expressing any ‘loaded’ or ‘flat rate’ remuneration arrangements in employment contracts, and
• test their understanding of common award interpretation ‘trouble spots’ such as the travel allowance provisions.

If you have questions about the application of certain award conditions to your workers, please contact the MEA Workplace Relations Team on 1300 889 198.