Managing Workplace Investigations
On any view, employment law can be a minefield, beset by complexity. The various rights and duties established by the Fair Work Act 2009 (Cth), and the Awards made under it, are navigated on a daily basis by employers, employees, human resources advisors, accountants and lawyers. It should be unsurprising that some sectors of the economy have high levels of underpayments.
When underpayments arise, they are typically dealt with by the Fair Work Ombudsman. The Ombudsman possesses deep corporate knowledge about industrial legislation, and vast powers to investigate the underpayment of wages. These powers include the ability to demand production of documents which tend to demonstrate an employer has underpaid wages.
When powers to enter premises are granted to a state agency, they are normally subject to strict controls and judicial oversight. However, under the Fair Work Act 2009 (Cth), all that is required is a belief that a Modern Award or enterprise agreement applies to work performed at the premises. This is not a high bar to pass.
Once on premises, the Ombudsman is able to command production of documents. If critical documents are held offsite, the Ombudsman may issue a notice requiring production of documents at a later date. The grounds upon which these notices can be resisted are exceedingly narrow. Essentially, a notice must, on a non-technical and fair reading, make clear it is issued under the Act, specify the documents to be disclosed, and explain the relationship between the documents and the suspected contravention. As the Ombudsman recently discovered, whilst these requirements are limited, they are exceptionally important.
The Ombudsman exercised its search powers on United Petroleum Pty Ltd, a franchisor, in relation to underpayment of a franchisee’s wages. After attending the site, the Ombudsman issued a notice to United Petroleum, commanding it to produce the evidence which would be used against it. United Petroleum successfully resisted the notice, refusing to produce the documents, and contending the Ombudsman failed to particularise the contraventions it was investigating.
In employment law contesting a notice to produce documents, and preventing self-incrimination, is fought on tight arguments about whether a notice specifies what is required of it. This as true for right of entry notices issued by trade unions as it is for notices to produce issued by the Ombudsman.
Unions are vested with similar and, in some respects, broader powers than those exercised by the Ombudsman. A Union Official may enter a right of entry into a business where he or she reasonably suspects a contravention is occurring and it affects a member. However, even under this unique power, an official must specify each of the facts making up the contravention, and explain how the contravention is said to have occurred.
Whilst these limitations on the exercise of a statutory power might seem arcane, these are of paramount importance. A fundamental tenet of any fair system of law is that a person accused of wrongdoing, be apprised of the details of the allegation. Where this does not occur an employer simply cannot assess their rights or determine whether to comply with a contingent demand or resist it.