SMEs aren’t getting a fair go from the FWO

Almost on a daily basis I get an email from the Fair Work Ombudsman trumpeting the Ombudsman’s latest prosecution of a small business.

Even in the midst of the deluge of emails my inbox receives each day the regularity of the press releases from the Ombudsman still stands out.

It’s a hive of activity down at the Ombudsman’s office, with each day bringing a new prosecution of a business which has underpaid its staff or engaged in “sham contracting” where an employee is incorrectly treated as a contractor.

Before the cases even make it to court the press releases are sent out and media outlets like SmartCompany start ringing the businesses featured to find out what’s going on.

It’s pretty obvious why the Ombudsman wants to publicise these cases; it shows the staff at the FWO aren’t sitting around idly twiddling their thumbs, and the Ombudsman also argues “naming and shaming” the businesses involved serves as a deterrent to other businesses.

But what happens when the Ombudsman gets it wrong?

Yesterday we covered the case of Melbourne hairdresser Craig Lane whose business was “publicly destroyed” by the Ombudsman after Lane was named in an FWO press release which claimed he had underpaid an apprentice.

The matter was eventually settled at mediation and Lane says the Ombudsman actually owes him money, but the damage to Lane’s reputation had already been done.

Lane says the naming goes against the principle of innocent until proven guilty and points out that the local paper which ran the story named him while, on the same page, it withheld the names of a burglar and a paedophile.

Lane says he had to spend about $40,000 in legal fees for the case and estimates the Ombudsman spent around $100,000 fighting it, understandably he’s pretty disenchanted with the process.

“The FWO should work for the employer and employee; they’re not a watchdog, they are a killer,” he says.

“They go out and destroy businesses bit by bit.”

It’s hard not to feel sympathy for Lane, but at the same time it’s difficult to argue against the FWO’s claim there’s a strong deterrence value in “naming and shaming” businesses.

Maybe the Ombudsman should be more careful about the cases it selects to publicise, but what’s undoubtedly true is that the FWO needs to be equally as enthusiastic about publicising those cases where it’s not successful.

A spokesperson for the Ombudsman told SmartCompany the FWO does publicise those cases where it’s unsuccessful, but the same spokesperson was unable to point us in the direction of any press releases of this kind.

There certainly hasn’t been a follow-up press release about Lane.


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