Significant non-compliance in local government security supply chain

The Fair Work Ombudsman has reported on an Australia-wide audit of the security service supply chains of 23 local councils with key findings as follows:

  • non-compliance with workplace laws in the supply chains of 14 (61 per cent) of the 23 councils, with breaches primarily relating to underpayment of minimum award rates as well as under- or non-payment of applicable penalty rates and overtime;
  • 63 per cent of subcontractors were found to be non-compliant compared to 42 per cent of principal contractors, who had a direct relationship with the council.
  • the Fair Work Ombudsman issued 26 formal cautions, 15 compliance notices and four infringement notices to non-compliant contractors and subcontractors.
  • A total of $72,250 was recovered for underpaid workers.

The full media release can be accessed here.

The Fair Work Ombudsman, Ms Natalie James also stated:

“While it is the primary responsibility of the employer to ensure compliance with workplace laws, it is clear that councils could – and should – be doing more to keep tabs on what is going on in their security contracting networks.”

“We’re recommending that local councils amend their security services tender documents to reflect best practice on contracting labour and ensure that the amounts paid in their contracts are sufficient for contractors and subcontractors to cover employee entitlements.

“We also expect that councils are proactive in monitoring their security supply chains, including by requiring contractors to regularly report on their compliance with their workplace obligations.

“Beyond such measures being in line with community expectations, councils should note that it is not just employers who can be held liable for breaches such as underpayments occurring in a supply chain – in certain circumstances councils themselves may be held legally responsible when their contractors or subcontractors are not complying with the law.”

With penalties of up to $630,000 per offence for a corporation and up to $126,000 per offence for an individual, there are also strong commercial grounds for local councils and their officers to follow the Fair Work Ombudsman’s advice.

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