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UpdatesJanuary 22, 2020

Good intentions do not provide a reasonable excuse for not paying workers

If a Fair Work Ombudsman (FWO) inspector reasonably believes a person has not complied with applicable industrial laws, the inspector can issue a compliance notice requiring compliance. Failure to comply with the notice is itself a breach of the Fair Work Act, unless the person has a ‘reasonable excuse’ for not complying.

By Charles Power

If a Fair Work Ombudsman (FWO) inspector reasonably believes a person has not complied with applicable industrial laws, the inspector can issue a compliance notice requiring compliance. Failure to comply with the notice is itself a breach of the Fair Work Act, unless the person has a ‘reasonable excuse’ for not complying.

A reasonable excuse is an excuse that would be accepted by a reasonable person. It can include physical or practical difficulties in complying with the notice.

The expense and inconvenience in complying will not usually provide a ‘reasonable excuse’ for non-compliance with the notice. It is to be expected that compliance will usually cause some inconvenience and expense. Unless the circumstances are out of the ordinary, this is just part of compliance.

In Fair Work Ombudsman v Joys Child Care Limited & Anor (2019) an FWO inspector investigated a not-for-profit, community-based childcare service for engaging childcare workers under so-called volunteer agreements to perform unpaid work. After the investigation, the FWO inspector issued the employer with compliance notices requiring payment of wages to two employees. The employer did not comply with these notices and was subsequently prosecuted for breaching the notices.

The employer sought to argue that it had a reasonable excuse for non-compliance being that the employees concerned were volunteers working for a community-based, not-for-profit company with registered charity status that paid no wages.

The Court ruled the ‘volunteer’ agreements entered into between the employer and the childcare workers bore no resemblance to the one year traineeship that was advertised by the employer. It required the workers to give ‘everything’ and receive ‘nothing in return’. The employer did everything they possibly could to disguise the arrangement that it had with the workers in ways that sought to avoid the impression of employment. In substance, the Court ruled, the agreement was neither a voluntary arrangement, nor was it an unpaid traineeship.

The Court saw the reality of the situation being that the workers were taken advantage of by the employer. The fact the employer conducted a community based facility, was a not-for-profit company limited by guarantee, and was a registered charity, did not make the slightest difference to the reality of the situation. Neither their intentions, nor any altruistic motives, gave the employer a reasonable excuse for non-compliance. The Court considered that, on the facts of this case, “it would give offence to the notion of reasonable excuse to hold that noble intentions and altruistic motives justifies what happened”.

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