Report card: CWH training pay compliance

How well has Chemist Warehouse kept up its end of its compliance partnership with the Fair Work Ombudsman?

The Fair Work Ombudsman (FWO) has released its National Compliance Monitoring Report after re-auditing 479 businesses that had previously breached workplace laws.

As well as the report itself, the Ombudsman also took the step of releasing an interim report solely discussing the activities undertaken by Chemist Warehouse to promote workplace compliance across its network.

Previously, as part of its National Compliance Monitoring program, the FWO audited a number of Chemist Warehouse outlets around the country.

All the audited stores were compliant with the pay rates outlined in the Pharmacy Industry Award 2010, as well as the pay slip and record-keeping obligations of the Fair Work Act and Regulations.

However, the FWO also discovered unpaid training among Chemist Warehouse stores.

While Chemist Warehouse management had previously notified outlets that online training was to be paid, a review found that 294 outlets owed 5,976 employees a total of $3,569,212.

Chemist Warehouse paid back all the affected employees in full and entered into a three-year compliance partnership with the FWO on 24 November 2016.

“Following the commencement of the partnership, the company established a hotline service to help process and resolve employee enquiries,” the FWO’s new report into Chemist Warehouse compliance says.

“It has reported that the volume of all enquiries has significantly declined over the interim reporting period. This suggests that the hotline and the steps taken by the company to investigate and resolve employee enquiries and complaints have been effective.”

Chemist Warehouse reported that it received 347 enquiries in the first year of the Proactive Compliance Deed (PCD), with most (313 or 90%) related to payment for training. The remaining enquiries included issues such as leave entitlements; employee classifications under the Award; breaks, hours of work, rosters and termination; and pay slips and payment summaries.

Chemist Warehouse determined that in most cases there were no entitlements owing. Where it identified outstanding entitlements, it worked with the franchisee and employee to rectify the issue.

“To date, under the terms of the partnership, Chemist Warehouse has investigated and resolved six requests for assistance referred by the FWO,” the report states.

“It has reported on the results of its first external audit, which include underpayments of award entitlements.

“The auditor (FCB Group) has attributed these issues to payroll system deficiencies. Chemist Warehouse has rectified all outstanding entitlements, and has been upgrading its HR administration and payroll systems to ensure they support compliance with workplace laws.

“Chemist Warehouse notes the PCD has reinforced the need to regularly review and upgrade its systems and processes,” the report concludes.

“It recognises that in doing so it benefits from the ‘early detection of issues and errors’, as well as the ability to adapt to changing business needs and workplace relations obligations.”

The general FWO report, covering a number of industries including hospitality, retail, construction and manufacturing, found that 62% of employers re-audited were now meeting their workplace obligations.

Where inspectors identified non-compliance, they recovered $244,246 for 347 workers, issued 16 compliance notices, 56 infringement notices (on-the-spot fines) and 88 formal cautions.

Fair Work Ombudsman Sandra Parker said the results reflected the effectiveness of the agency’s compliance and education activities.

“Once we have identified employers who are breaching the law, we assist them to rectify the situation, educate them about their workplace obligations and provide them with the tools to manage their employees’ pay and entitlements.” 

“We regularly follow up with businesses to ensure they have made the necessary changes to comply with workplace laws. This activity confirms that most employers respond well to initial contact, and we are having a significant impact on long-term behavioural change,” Ms Parker said.

“Any employer found in breach of workplace laws should be aware that we will continue to monitor their compliance and take appropriate action until they meet legal obligations to their employees,” Ms Parker said.

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