A changing of the guard: a critique of the federal enforcement agency since work choices

© 2009 Tess Hardy“In the past year, we moved from being a traditional time and wages inspectorate, and repositioned Workplace Inspectors as fearless, independent, effective protectors of workplace rights, not afraid to use the full range of powers available to them, including using the courts for penalties or deterrence.”1 Soon after the Howard Government announced its industrial relations policy in 2005, concerns were raised that the ‘deregulation’2 of workplace relations brought about by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (Work Choices)3 would lead to exploitation of employees.4 In an attempt to silence the unions and reassure the public in respect of the new laws, the federal government raised the profile of the federal enforcement agency. Amongst other things, it changed the agency’s institutional structure, boosted its funding and strengthened its prosecution policy. The then Minister for Employment and Workplace Relations commented at the time that the revitalized inspectorate establishers ‘the most significant industrial compliance and enforcement regime ever introduced by an Australian government’.5 In addition to the changed emphasis on enforcement, as a result of Work Choices, State regulatory enforcement bodies were sidelined, and the powers of the Australian Industrial Relations commission (AIRC) significantly curbed.6 There was also a further fall in unionization.7 Together, this has meant that, in practice, the federal inspectorate is now the main enforcement body for a significant majority of employers and employees in all States and Territories. While State enforcement agencies are still in operation and the State industrial tribunals continue to largely have the same powers to conciliate and arbitrate, at least 75% of the workforce now fall within the federal system of regulation.8 At the same time, the range of investigation and prosecution responsibilities significantly broadened under Work Choices. The inspectorate was no longer solely concerned with the enforcement of minimum labour standards. Rather, it was charged with the responsibility of ensuring that the burgeoning regime of civil remedy provisions under the Workplace Relations Act 1996 (Cth) (WR Act), the Workplace Relations Regulations 2006 (Cth) (WR Regulations) and the Independent Contractors Act 2006 (Cth), were complied with and enforced. While the Pre-Reform Act had some civil penalty provisions, their number substantially increased under Work Choices, in no small part due to the prescriptive and complex amendments brought about by Work Choices. The increased funding and subsequent rise in prosecutions, combined with the heated debate surrounding Work Choices, a wave of advertising, 9 and the controversial ‘use of the federal enforcement agency to “fire fight” media reports of exploitation’,10 also raised the profile of the federal inspectorate in the post-Work Choices period. In comparison, the ‘traditional time and wages inspectorate’, as it is described by the Workplace Ombudsman in the opening quote to this thesis, was largely perceived as being ineffective and maintained a relatively low profile. In the earlier years of operation, resources were so scarce and penalties so low that investigation and prosecution of miscreant employers was perceived as having little deterrent effect. While legislative deficiencies were slowly rectified and penalties significantly increased, the weak persuasive compliance approach – which dominated enforcement strategies in the pre-Work Choices era – was seen to implicitly condone employer non-compliance.11 It is clear from this summary that the role of the federal enforcement agency has changed since Work Choices. It is not entirely apparent, however, whether inspectors have been positively ‘repositioned’ to the extent suggested by the Workplace Ombudsman in the opening quote – this thesis will explore this question in the context of the shifting legislative and political landscape since Work Choices. (From Introduction