The importance of compliance in the workplace

Kronos Australia Pty Ltd

Thursday, 18 May, 2017

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Compliance issues such as mismanagement of fatigue, unpaid training and extensive overtime hours can affect the wellbeing of employees and can even have flow-on impacts on customers. This Q&A with Peter Harte, Managing Director, Kronos ANZ SEA, discusses the importance of workplace compliance.

Is compliance a big issue at the moment? If so, why?

In the last year, we’ve seen a surge in cases of business non-compliance with Australian workplace regulations that have been picked up by the Fair Work Ombudsman. In fact, the year prior an estimated 29,000 instances of non-compliance were reported.

With non-compliance so widespread, it is little surprise that news stories on this issue are rampant and feature both small and large organisations in equal measure. Within this, the types of non-compliance are varied, from underpayment of wages, mismanagement of fatigue, unpaid training and extensive overtime hours being administered without the related penalty rates being applied.

For some businesses, it’s a lack of formal processes or inadequate technology which is causing the oversight of regulations. For others, failure to understand the complex Australian laws and how they are applied in different industries can be a factor. But some businesses are simply taking shortcuts to save time and money without considering the bigger picture and the risks to their employees and business brand.

Why is it important for business owners to remain compliant?

The likelihood of a brand-damaging workplace breach is a real risk to business. There are complex rules, regulations, awards and agreements to grapple with as well as the fact decisions are often being made outside of the HR arena or without an HR team to consult. When businesses are found non-compliant it can not only result in legal action but, if the issue is picked up by the media, the business can suffer lasting reputational damage.

Failing to comply can also affect the wellbeing of employees and can even have flow-on impacts on customers. Workers who’re fatigued can put themselves in danger and those without current qualifications and training to undertake the job at hand can leave a business exposed to large fines.

Organisations should take a vested interest in employee mental and physical health and in creating work/life balance to protect their employees. The benefits of this go beyond complying with workplace regulations but can increase engagement and productivity, lead to greater job satisfaction and build stronger retention rates.

Why do you think businesses struggle with compliance?

Compliance with workplace laws is much more than just a box-ticking exercise for an annual report, it has to be inherent in the DNA of a business’s culture. For it to become innate to a company it must be governed by workplace policies and workforce management practices which ensure employees are treated fairly. Organisations that look at compliance simply as a ‘get it done’ job need to change their mindset.

Smaller businesses often struggle to keep up with the complex fair work laws in Australia and some find they’re often caught up in breaches. This is where automating these workflows will give the organisation far more efficiency and build in extra safeguards.

How can business owners prevent compliance issues arising?

Organisations need to take a proactive approach to compliance. Human resources should be brought to the forefront of the strategy rather than left separate from compliance issues within the company. They are the only part of the business which can lead the compliance agenda from the most important perspective: its people.

Automating workflows is also part of the compliance discussion. Our workforce management software for small businesses, Workforce Ready, assists organisations with compliance as well as employee wellbeing practices. The technology automates workforce management tasks, such as scheduling time and attendance, to ensure employees aren’t worked to exhaustion or without relevant qualifications. For this reason, it mitigates the risk, and costs, of non-compliance. Kronos helps organisations gain greater visibility across their business to ensure their employees are operating in a safe environment and to help them remain compliant with current Australian labour laws.

Do you think compliance issues are more prevalent in certain industries?

We know the cases being investigated are often related to issues such as overtime hours, fatigue management, adequate safety equipment and training, wages and expired or non-existent qualification documents. These types of requirements are often more relevant to shift workers, in industries such as retail, healthcare, manufacturing, construction, logistics and transportation, and hospitality. For example, nurses work a range of long-hour shifts in a roster period, including night shifts and morning shifts. It’s important for managers and employers in this field to ensure fatigue is monitored given the work hours necessary to fulfil the job requirements. Other issues affecting these workers could relate to expired or non-existent qualification documents, as nurses need to ensure their registration and other training certificates are up to date.

It’s more likely organisations and workers in these industries will be more invested in the conversation as they face more compliance and culture issues due to working requirements. But all organisations, big and small, need to prioritise compliance as a key HR function exercise and part of the essential operation of their business.

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