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Education and Employment Legislation Committee
Fair Work Ombudsman

Fair Work Ombudsman

CHAIR: We will convene. I welcome representatives from the Fair Work Ombudsman and welcome Ms Sandra Parker, Fair Work Ombudsman. Ms Parker, do you wish to make an opening statement?

Ms Parker : No, thank you.

CHAIR: I will hand over to Labor for questions.

Senator SHELDON: Good afternoon, Ms Parker and Mr Campbell. Firstly, I want to ask some questions about coronavirus and the preparedness of the Fair Work Ombudsman in communicating concerns. As you know, there are various categories of employees/owner-operators—owner-drivers, gig workers, contract labour. In some areas it is contested as to whether they're employees or contractors, but there are certainly areas where employers would consider those workers as not coming under the normal employee arrangements. We had evidence earlier today that there was pro forma advice which you give to people that are contacting the ombudsman. If you might be able to step us through that briefly, that would be helpful.

Ms Hannah : We do have some information that we put up on 4 February on our website. It covers issues like where you can get information on health and safety, what happens if an employee is sick, what happens if an employee is stuck overseas or quarantined, what happens if an employee wants to stay at home as a precaution and what happens if an employer wants their workers to stay at home, so it's quite general.

Senator SHELDON: Does it deal with if an employee contracts coronavirus in the way of their work? They could be a food delivery worker, a ride-share worker, an aviation worker—

Ms Hannah : It doesn't give specific case studies; it's just quite general information.

Senator SHELDON: Is there an intention to provide that information to the public?

Ms Hannah : Not at this stage. We haven't had any requests for assistance with that sort of information.

Ms Parker : Do you mean the general information? That's certainly on our website. People can contact us. If they have a specific set of circumstances—and there will be lots of different ones; you've already named a few—they can contact our infoline and we can provide some assistance to them. That would be about working through their individual circumstances, whether they're covered by an enterprise agreement, whether they're on an award, and each one of those will be different. We have provided advice for a long time around national disasters and emergencies; it's not a new area. This one is more complicated because of the overseas and other elements that are involved in it, but we also provided advice similarly around the bushfires and what happens there with businesses and individuals, so it is really case by case.

Senator SHELDON: Has there been a noticeable increase of inquiries coming through regarding coronavirus?

Mr Campbell : We've had a small number of inquiries. We take hundreds of thousands of phone calls a year. We had in the vicinity of 200 contacts since around January, the Chinese New Year period, from employees and employers with questions around entitlements around sick leave, largely, associated with potential coronavirus.

Ms Hannah : From a social media perspective we haven't seen a significant spike in inquiries.

Senator SHELDON: In forecasting, do you have a strategy if there is a heightened warning? Do you have a strategy for additional resources to be allocated to queries that are likely to come?

Mr Campbell : We don't have a specific plan for responding to this, because I'm not sure that is going to drive a disproportionate number of inquiries to the Fair Work Infoline. Depending on how you want to frame it, the question you ask seems to be about the potential to catch coronavirus in the course of your work, and that would obviously bring in OH&S jurisdictions. What we'd be taking calls about is a person's entitlement to take sick leave or a person's entitlement to take carer's leave to look after someone who has it. That is a feature of our work already, not just because of coronavirus but because of illness generally, so we will obviously track it. If it became an issue, we could resource it differently, but right now we don't need to.

Senator SHELDON: There is a capacity to up the resources if that were required?

Mr Campbell : We'd ultimately have to redirect resources to that if we needed to.

Ms Parker : One of the things we did, for example, during the bushfire emergency was to have a fast-track system. If somebody phoned to get assistance, the question was asked, 'Are you affected by bushfires?' If so, they went to the front of the queue for phone requests. We could do the same if this were to ramp up. We're ready for that if we need to. We can do it quite quickly. It would mean that people can come to the front and it would mean that the other calls would go to the back. We don't get new resources, but we would redistribute for that purpose.

Ms Hannah : Likewise, with the bushfires, when we started to get some additional inquiries for more detailed information, we did provide that on the website. If there is a need, a call, or specific issues people are asking about, we have the ability to ramp up that information.

Senator SHELDON: There wasn't new resources for the bushfire calls?

Ms Parker : Not new.

Senator SHELDON: This may be for the minister, but is there an intention for new resources if the coronavirus does become a deeper concern and there is a higher flux of calls coming through to the Fair Work Ombudsman about entitlements?

Ms Parker : I don't think we would need to. We would talk to the department and the minister if it became a real issue, but we also work with other organisations to help get information out. We talk to a range of stakeholders. They also provide information. We've talked to Peter Strong of COSBOA about the bushfire emergency, Kate Carnell about advising small business and Michelle Baxter about work health and safety issues. We link our stuff. We're not the only place they will be going to for help. I would imagine workers will come to us potentially on their entitlements and what that means, leave et cetera, but they will be going to their state and territory regulatory agency about the health and safety side or, if they're a small business, to Peter Strong or Kate Carnell for their information. I would say with a lot of confidence that our information lines up pretty well.

Senator SHELDON: There's a growing concern about casual employees not being able to take time off, because they're financially at risk if they take time off, so they are more likely, economically, to take more chances by attending work. If you are a contractor who may have contracted coronavirus anywhere, in the same circumstance normally as a precarious worker in other types of work, as casuals, and they contract it as a result of work then I'm not aware of a jurisdiction that covers contractors for workers comp in the vast majority, 99.9 per cent, of cases. Obviously we're concerned about the immediate responses to those people in those circumstances.

Ms Parker : Some will have insurance; some will not have insurance. That's exactly what you're saying. If they are employees they will have access to workers' compensation, but it's a case-by-case approach; agreed.

Senator SHELDON: I want to move to the issue of wage theft and a few scenarios. Under John Howard there were 1,500 different awards. Under the Rudd-Gillard government it was reduced to 122 awards. We saw the circumstances with Woolworths, as an example—unfortunately there are many more—where they actually have within their own corporate business, buying and selling, over three million transactions per week. They keep track of use-by dates to comply with food safety standards and they certainly keep track of their tax obligations—there's no suggestion I'm aware of that they're doing anything inappropriately with regard to tax—and then we have the issue regarding wage theft. In November 2019 you may be aware that PwC looked at industries with a high prevalence of underpayment of workers' entitlements, undertook modelling using the Fair Work Ombudsman's data and estimates and found that there is in the order of $1.35 billion in underpayments per year. How much wage theft did you recover in the last financial year?

Ms Parker : Before I respond to that, I note that the PwC data is very loosely based on our data. It is probably important to note that. I'm not saying there is not a major issue with wage underpayment; there obviously is. One of the things that we have pointed out in the past is: when we audit and when we target particular areas, we do it on the basis of assessment of risk. We go after businesses that we know are likely to be noncompliant; we know that because of requests for assistance from workers, our own intelligence from what we have found out in the past, et cetera. We have priorities and we announce them. Ours is based on targeted—our data cannot be extrapolated across the whole Australian population, because it is based on higher risk. PwC has extrapolated our data across the whole population. That means that it's inaccurate; in other words, we don't know what the whole evenly approximate level of wage underpayments is but $1.35 billion is not a figure we would use, because we think it is misleading.

Senator O'NEILL: To be clear, Ms Parker: you've just indicated that PwC, despite their reputation as one of the big four auditing companies who report on the billions of dollars of transactions in the Australian economy in annual reports every year, are, in a task of estimating the underpayment of wages, incapable of using your data and making sufficient interpretation, and are putting out a document that is inaccurate. Is that your evidence to us, Ms Parker?

Ms Parker : My evidence is that we have met with PwC. We were unable to ascertain whether it accurately reflects the total amount of underpayments, and that is because attempting to model economy-wide underpayments is potentially misleading. PwC have said that it's approximately, in their view, $1.35 billion a year and that wage underpayments affect about 13 per cent of the total workforce. What we would say is: we are unable to determine how they have come to that figure, and we have assumed therefore—

Senator O'NEILL: We're not asking you to provide verification for PwC's figures; we're asking you about your work. This is a matter of public record. It's got PwC's logo all over it. Are you saying they are incapable of providing sufficient data that would inform public debate about the scale of wage theft?

Ms Parker : I'm not commenting on their capacity. I'm saying the data they're using—

Senator O'NEILL: Is wrong?

Ms Parker : has the potential to be misleading.

Senator O'NEILL: 'Potential' is a different thing to saying they're wrong. Are they wrong?

Ms Parker : We are not able to determine the methodology they used. If they used our data, which they say they did, our data is based on targeted audits and is not able to be extrapolated across the whole Australian population. That appears to be what they have done, so, therefore, it is misleading.

Senator O'NEILL: Ms Parker, with respect, PwC are well and truly capable of making those determinations about the use of data. They do it every day; in fact, your department and many others pay them millions of dollars every year to do it.

Ms Parker : We're not a department; we're an independent agency. You would have to ask PwC yourself.

Senator O'NEILL: That's right. So I don't think it's appropriate for you to be calling their figures wrong.

Ms Parker : I've met with PwC—

Senator O'NEILL: Australians know the start of this. They know it's a big problem.

CHAIR: Senator O'Neill, the witness is answering your question. Please stop interrupting.

Senator Payne: Senator O'Neill, in fairness, Ms Parker has drawn to the attention of the committee a matter she thinks is pertinent to this discussion. That is something I would assume, in encouraging transparency, you would prefer; that is the point you were making earlier this morning. You may disagree with Ms Parker but she in fact has an obligation to advise the committee if she has a disagreement in relation to this matter. That's what she's done.

Senator O'NEILL: She hasn't provided us with what she considers more accurate figures.

Senator Payne: That's incorrect.

Senator O'NEILL: If you have more accurate figures than PwC, let us know.

Senator Payne: If you review the transcript I think you will see Ms Parker referred to the figures derived by her organisation, the way in which they are derived and the way in which they are applied. She made that quite clear.

Senator SHELDON: Can I ask: how much wage theft did you recover in the last financial year? That was my original question.

Mr Campbell : Last year the agency recovered a touch over $40 million.

Senator SHELDON: So there's $40 million and the only standing report we have is the PwC report, which says $1.35 billion in underpayments per year. How much wage theft is estimated to take place annually?

Ms Parker : We don't have that figure. As I said, we do targeted audits. We're not able to extrapolate.

Senator SHELDON: I respect you said that.

Ms Parker : My apologies, sorry.

Senator SHELDON: I respect that answer; you gave that before. I appreciate there's a PwC report that says $1.35 billion and there's a recovery of $40 million, and that there isn't an estimation of wage theft that takes place annually from the Fair Work Ombudsman.

Ms Parker : That is correct.

Senator SHELDON: The only standing document we have says $1.35 billion. What percentage of the amount of stolen wages do you estimate you've recovered?

Ms Parker : We can't answer that, on the basis I said before. We target our audits where there are high levels of noncompliance.

Senator SHELDON: How many inspectors do you currently have investigating worksite compliance?

Mr Campbell : We have 177 inspectors.

Senator SHELDON: Thank you.

Senator STERLE: That's down from last year, isn't it?

Mr Campbell : I can't remember what I said to you last year.

Senator STERLE: It was 204, I think.

Mr Campbell : Well done! I can't recall the evidence I gave there.

Senator SHELDON: So there has been a reduction in workplace inspectors?

Mr Campbell : Sorry, what was the question?

Senator SHELDON: You were saying there was a figure put for 204 last year—

Mr Campbell : I didn't say that; Senator Sterle said that.

CHAIR: The witness said he couldn't recall.

Mr Campbell : I will have to check, but I respectfully accept that that is his recollection.

Senator WALSH: But has there been a reduction in the number of inspectors?

Ms Parker : No. We've received additional funding for inspectors.

Mr Campbell : Can I give you a year-on-year number of inspectors on notice? I don't want to confuse the conversation.

Senator SHELDON: Thank you. I understand the number of worksites stands around 1.2 million.

Mr Campbell : That figure sounds about right, yes.

Senator SHELDON: In the PwC report, sectors of construction had $320 million, they estimate, in underpayments; health care and social assistance, $220 million; accommodation and food services, $190 million; and retail, $180 million. There's 21 per cent of the workforce. Did you find the amount of underpayments astonishing? What did you make of these figures? I appreciate you gave evidence before about the PwC report, but did you find it astonishing that this amount of money has been alleged to have been taken in wage theft within those industries?

Ms Parker : I've said publicly that it's not good enough that underpayments are going on across Australia. It doesn't matter whether we've got correct figures or not; it's not acceptable. We're doing our very best to try and change the culture and improve it, particularly, in recent times, in the corporate entities that are creating a lot of work for the Fair Work Ombudsman. It's not good enough and it's not acceptable.

CHAIR: I might go to Senator Roberts now.

Senator ROBERTS: Thank you all for coming. How many casual black-coal miners from the Hunter Valley have referred complaints or matters relating to their pay and entitlements to your office since 2014?

Mr Campbell : I can take that on notice. I would say the number is very, very small, but I will take it on notice.

Senator ROBERTS: Thank you. Is it true that the Fair Work Ombudsman's website says you cannot be a casual mine worker under the black coal award?

Mr Campbell : I'd have to check. I'm not sure the award provides a classification for casuals. If that's what the award says, that's what our website would say.

Senator ROBERTS: We know there are casual black-coal miners working in Australia in production capacities. We know there have been for several years—at least five, possibly six, years—including in the Hunter Valley and possibly Queensland. How do you know that you're not getting complaints or accurately representing those complaints?

Mr Campbell : I get periodic reporting on the nature of the contacts we have from the public about the subjects of the calls and contacts and also the industries in which they work, and black coalmining is not one that features on those reports. My experience tells me it's not an area of our jurisdiction that is often exercised.

Senator ROBERTS: Where do you get your statistics from on black coalmining?

Mr Campbell : It's based on the contacts that we have from the community. So we receive about—

Senator ROBERTS: The hours worked, the number of people employed or the production—do you use any of those statistics?

Mr Campbell : No, because it's not our role to record that information. What we do is record the industries in which employees and employers operate when they contact us so we can confirm that they are covered by the black coalmining award and therefore provide advice about that award to the individuals that are calling, for example.

Senator ROBERTS: Why does the Fair Work Ombudsman do nothing when everyday Australians, such as Simon Turner, send them complaints and a lot of information to investigate? The Fair Work Ombudsman's response was: 'You have lawyers, and they can sort it out'?

Mr Campbell : I'll happily take that on notice. The case doesn't ring any bells for me.

Senator ROBERTS: I know it's a complex issue. It's taken me a long while—and I've got some background in the area—to understand it. No-one else has approached it; they've all run. Just because it's complex doesn't mean it shouldn't be approached. This man's had serious difficulties for six years. He's working in a situation that we believe hundreds of coalminers are in, in Queensland and the Hunter Valley, where there are probably thousands—actually, hundreds at one particular mine we know of—working under unlawful, unethical and immoral practices. It seems to be deliberate wage theft calculated to go around the Australian industrial relations framework. He can't get any help from your office.

Mr Campbell : Senator, I' m sorry: I just don't know the case. I'm happy to take it on notice and have a look at what assistance or otherwise we're able to—

Senator ROBERTS: Would you be open to doing an audit as to how many other people have had dealings with your organisation as well from black coal?

Mr Campbell : I'm happy to look at the figures to get a feel for how big this part of the regulator community is from our perspective. I wouldn't commit to doing an audit based on the information you've shared with me. What I would say is that, if an employee's complained to us about an entitlement that we can enforce and we didn't, that'd be something I'd be worried about. But if a person is seeking to secure access to an entitlement that we don't have jurisdiction over, then I can't help them.

Senator ROBERTS: I accept that.

Mr Campbell : I'd need to test that we actually have jurisdiction to assist your constituent. If we can, then I wouldn't know why we wouldn't. Again, there are lots of issues why we can't help certain people along the way, so I'd need to test all that to work out—

Senator ROBERTS: I'll look forward to your answer. Changing topics slightly: how many labour hire employees work at the Fair Work Ombudsman's office currently and have done since 2010?

Ms Parker : One moment: we'll get our head of corporate to respond.

Mr Scully : The answer I'll give you will relate to contractors rather than labour hire because that's the way we classify them internally. For the 2018-19 financial year, which is the latest information we have, 34 contractors were engaged in the organisation across that year at different times, for different periods.

Senator ROBERTS: Do Chandler Macleod employees work for Fair Work Ombudsman; and do they, or other labour hire employees, handle complaints for other matters that relate to Chandler Macleod or other labour hire employee complainants?

Mr Scully : I'd need to take that question on notice—I don't know the answer.

Senator ROBERTS: What is your policy, and how do you manage this potential conflict—well, it is a conflict—of interest, if someone who's employed by Chandler Macleod somewhere else has a complaint about Chandler Macleod and is talking to a Chandler Macleod person in your office?

Mr Campbell : A couple of things: our inspectors have to be Australian public servants; they can't be contractors. That takes care of that part of the business, so we couldn't have a Chandler Macleod inspector.

Senator ROBERTS: What about talking to someone else?

Mr Campbell : Advisers on our front line or in our assistance and dispute resolution areas are, again, public servants. We don't have contractors delivering those services to the community. I'd probably guess that contractors in our organisation are generally involved in specific skill sets like communications activities or IT.

Mr Scully : Computer programmers and IT.

Ms Parker : We have a conflict of interest policy as well, which is a general conflict of interest policy for all employees, including me, and they are required to follow that as well.

Senator ROBERTS: When you reply to the other question on notice, could you send that, please.

Ms Parker : The policy?

Senator ROBERTS: The conflict of interest policy.

Ms Parker : Certainly.

Senator ROBERTS: Do you have employees from other labour hire companies, including but not limited to Hays, that may be in positions either to influence policy or process or to handle case management in the Fair Work Ombudsman?

Mr Scully : No, our contractors are more in support roles such as in IT, around project delivery and the like.

Senator ROBERTS: Thank you very much.

Senator SHELDON: Ms Parker, this is not directed at the competency of the Fair Work Ombudsman at all. It's a question about the satisfaction that you have as a team about the fact that there's $40 million that's been recouped, yet the only figure we have, which is from PwC, is a $1.35 billion underpayment. Are you satisfied with the recoupment rates for workers who have suffered from wage theft, with $1.35 billion in underpayment and only $40 million being recouped? Are you satisfied with that sort of figure?

Ms Parker : Well, it's the highest that we have ever got back into the hands of workers last financial year. We would always want it to be more. Actually, we'd want it to be zero and there to be no underpayment. It's obviously something that we work really hard at in determining where we can best target our resources. We've said before many times that we can't be in every workplace. Therefore, we need to prioritise our resources and go after those activities where we think there's the biggest risk of underpayment. So our priorities include where there are vulnerable workers. So we'll obviously put less of our resources into areas where people are high paid compared to where they are low paid—where they're migrant workers, young et cetera. Certain industry sectors are much more notorious, if you like, than others, and we'll put our efforts there. In terms of what we call corporate misconduct, that is a relatively new area in the sense that many corporates are disclosing significant wage underpayments. I'd consider our role to be to work with them to make sure the money is back in the hands of the workers and to institute appropriate compliance and enforcement, depending on the nature of what's happened. But, in answer to your question, we can always do more, and we'll try to do more, but we aim for deterrence, so a big part of our job is to take cases where we think they'll get maximum deterrence. We take them to court or institute other compliance and enforcement so that the message will get out there that this is not acceptable. We also rely on community pressure, with things like the maid that you mentioned earlier in the estimate hearings and the George Calombaris matter. Part of that was significant attention to this issue—more than there has ever been, really, on a corporate. We think that has a strong deterrence factor. It's very difficult to cost that, but we think it's pretty significant and it will make a difference.

Senator SHELDON: Ms Parker, I'm not taking issue with your comments. I'm putting it this way: if there's $1.31 billion per year in continuing underpayments, and you've recovered $40 million, do you find that satisfactory?

Ms Parker : As with all regulators, we work within the legislation and the resources that we have. I would say I'm very proud of the work we're doing. I'm satisfied we're doing as good a job as we can do, and we'll continue to work on improving it, targeting it and doing better. But it's a difficult question to answer.

Mr Hehir : I think that in one of my answers earlier today I mentioned that one of the discussion papers that's already closed, and another one that's currently out, had specifically looked at what more can be done here. The first paper looked at both criminalisation and higher penalties in terms of ensuring that the worst form of behaviours are appropriately penalised but also by having a look at what other deterrents can be added into the system. So, Ms Parker's right: deterrence is absolutely part of what we're trying to achieve. The second paper is out there at the moment looking at: does the Fair Work Ombudsman need more powers? Does it need more tools in its belt to actually work and improve recovery and improve deterrence? We're certainly not suggesting, and Ms Parker's not suggesting, that we're comfortable with where the position is. That's why the discussion papers are out there. We're looking to see what else we can do to improve compliance and improve recovery.

Senator O'NEILL: In that discussion paper, if I can, Mr Hehir, which does set the context for the discussion, do you ask the question: is 177 people to monitor wage theft across this country a sufficient number? Did you put that into the brief for people to discuss? Because it seems to me, given the scale of what's going on, that that's a completely inadequate resourcing of the Fair Work Ombudsman?

Mr Hehir : We certainly ask what more can be done to achieve better compliance and whether there's additional resources or tools the ombudsman might need. So we don't specifically identify the number of inspectors from my recollection, but the general principle of are there additional powers or tools that the Ombudsman can use to improve recovery is certainly party of the thrust.

Senator SHELDON: What are the additional tools? What are the additional resources? I've got these figures: there's $1.31 billion—I should add the $40 million that Fair Work has achieved on top of the $1.35 billion PwC have already identified as ongoing wage theft. But to reduce that by one per cent, eight per cent, 10 per cent or 13 per cent—is there a figure that you have in your mind for the amount of resources that you would need for the question of wage theft to start reducing it within the Fair Work Ombudsman? There are other aspects. There are unions in this field that do that work, and I'll come to that question in a minute.

Ms Parker : Again, like any department or agency, we have an annual appropriation which is determined by the government and we obviously have the legislation that's determined by the parliament. We, like every agency or regulator, work within that appropriation. We have a certain number of inspectors, but overall we have 741 ASL. So part of our business is inspectors, absolutely, but a lot of our business is also about education and putting up self-help tools for workers that are extensively used.

We also have teams of lawyers because we do a lot of legal work, and that includes using all of our compliance enforcement tools. Taking matters to court is one component of what we're actually doing. Of course we're working very closely with other agencies. We work with Home Affairs on migrant workers, with the tax office on the issues they deal with around superannuation and with many other agencies. We do everything we can from education through to litigation. So all of those things come into play, but we're very cognisant also of the budget we have and to stick within that budget. So, with that, we have to prioritise, as any other agency has to do.

Senator SHELDON: If the figures—and apologies for my calculations; they're out of my head without using a calculator, so they're going to be rough—are around 11 or 12 per cent, using the figures of the PwC report, to actually get to a doubling of those figures, a tripling of those figures and getting closer to 100 per cent, what are the additional resources that are required to do that from the point of view of the Fair Work Ombudsman? I appreciate you're operating within your budget. Those are the handcuffs that the Fair Work Ombudsman has on them. When we've got such massive wage theft across the industry, how many inspectors do we need; how many lawyers do we need; and what are the people we need to be doing inquiries?

Senator Payne: I'll ask Ms Parker to answer that question, obviously. But, to be fair and to accurately reflect the situation, the $1.3 billion figure is a figure that Ms Parker has taken some issue with. She has explained that to the committee, and it is difficult to decide that that is a source of truth here today simply because it is being asserted by you and other senators. But I think we have undersold the achievements of the ombudsman. With some additional financial support from government, including a $60 million injection in terms of funding—if I can find the page I was looking for—what they have been able to achieve in terms of the returns to workers—that being the priority, absolutely—is an extremely powerful story. The work that they are doing is not necessarily being recorded here today. We funded $60 million in recent years, and the returns are a significant increase on where they were six or seven years ago.

Senator SHELDON: Thank you, Minister. I've already recognised what Ms Parker has given as evidence, and it is not a criticism of the Fair Work Ombudsman. The question I've clearly asked is about the PwC report. One of the four big firms has turned around and said there is a $1.35 billion wage theft. I think everybody in this room and right across the country knows that wages are being stolen at an exorbitant rate, that we've got a business model of wage theft in this country and that decent companies are being unfairly competed with. What I'm asking is: what's required to be done, from the inspectorate's point of view? What resources does the Fair Work Ombudsman require to turn around and wrestle with the major epidemic we have in this country now? The government hasn't been able to do it to date.

Senator Payne: You can't keep using that figure and asserting that it is correct.

Senator STERLE: It's probably higher.

CHAIR: Senator Sterle!

Senator STERLE: Sorry. I was whispering.

Senator Payne: Not quite.

CHAIR: Inside voice, please.

Mr Hehir : If I may add to—

Senator SHELDON: No, you may not, because I put the question to Ms Parker, thank you. I've now had three diversions from this question, from other people answering a question I put to Ms Parker. Three is enough.

Ms Parker : So you're asking me what we think we would need. I haven't done that modelling. Part of the role of agency heads of the public service is that we work within the resources that we are appropriated. We've been given additional funding for specific purposes such as sham contracting, labour hire—at some point—et cetera. We work within that and we then prioritise. At the moment, one of the key things we are working on is strategies to deal with the corporate underpayments, so we're moving resources around, like anyone would when they get a new priority. We talked about the virus. When you get a new priority that comes in, you reprioritise and you change—

Senator SHELDON: I'm not disrespecting the evidence you gave before. You gave me the evidence that you don't have a view about what would need to be done. This comes back to a very serious question about an inquiry that's supposed to be taking place into wage theft. There's a paper that's been put together by the government on wage theft, and yet they haven't asked the Fair Work Ombudsman to come up with a figure on what's needed to deal with wage theft. This sounds like an absolute bogus inquiry.

Senator Payne: I'm not willing to have that conversation, because we have zero tolerance for any exploitation of workers—

Senator SHELDON: Zero tolerance—$1.35 billion!

CHAIR: Order, Senator Sheldon!

Senator Payne: This government has increased penalties against law-breaking employers by up to tenfold—

Senator SHELDON: $1.35 billion!

CHAIR: Senator Sheldon!

Senator Payne: The increased funding means the FWO is better resourced to do the work that it is doing, which is so important. We have recovered 64 per cent more money for workers in the last financial year than you did in your last year of office in 2012-13, and we've secured more than double the amount of court ordered penalties against employers. Yes, Senator Sheldon, there is more work to do.

Senator O'NEILL: A lot more work!

CHAIR: Senator O'Neill!

Senator Payne: But, quite frankly, this government takes it very seriously, as does the Minister for Industrial Relations and the Attorney-General, and we have made a difference to the operation of this organisation.

Senator O'Neill interjecting

CHAIR: Senator O'Neill, if you don't have a question to ask, please give a speech outside in the courtyard.

Senator SHELDON: There is a substantial amount of money which is still outstanding. There hasn't been a remedy for that, and the Fair Work Ombudsman, an organisation which is competently working within its resources, has not put a proposal together about what's required to deal with wage theft. I think that's concerning.

Senator Payne: The government has, and the government is—

Senator SHELDON: The question I'm asking is: given that the same PwC report—

Senator Payne: This government introduced the Protecting Vulnerable Workers legislation.

Senator SHELDON: It was introduced by the minister initially. I'm going to another question. The same PwC report acknowledged the important role traditionally played by unions in identifying and uncovering wage theft when it said, 'The decline of union presence in Australian workplaces has led to a decline in the policing of employee entitlements.' I am directing this to Ms Parker: do you agree with that statement?

Ms Parker : You're asking me to comment on whether that's had an effect? What I can say is: currently, our role in terms of working with unions—over many years, the regulator has encouraged unions to work with us and share concerns. That hasn't changed. We have a very positive relationship with unions. We encourage them to come forward and share noncompliance.

Senator O'NEILL: But it's a bit hard if they can't actually go in and look at the books and do the discerning that they once used to do.

Ms Parker : They actually can go in and look at the books. Quite obviously, if they are a registered organisation, they have rights under the Fair Work Act that allow them to enter a workplace under right-of-entry provisions, and they may inspect books. So that's not quite correct.

Senator SHELDON: What the PwC report is saying is: there's a decline in union membership and that has led to the problem of wage theft occurring. And, as we're all aware, it's at epidemic proportions. What I'm asking is: do you see a correlation between that decline and wage theft?

Ms Parker : I don't think I could comment on it. What I would say is that in the time that I have been in this role—union membership is a separate question altogether, and we work with every worker, not just union members. So the difference between the unions, with their ability to represent their members, and us, with our ability to cover every worker in Australia, means that we have the much broader remit, as the regulator. We're much more active in the sense that we can take action on behalf of any employee, regardless of their membership or otherwise of a union. Obviously, there's less imperative where the union takes the action. But we are there for—as I said—every worker.

CHAIR: What I might do is shift to Senator O'Sullivan now.

Senator O'SULLIVAN: The Fair Work Ombudsman has adopted a more aggressive enforcement posture recently as far as compliance action is concerned. Can you talk me through that please.

Ms Parker : I'd say 'assertive' rather than 'aggressive', but that's okay. Do you mean in terms of our approach?

Senator O'SULLIVAN: Yes. What are you doing? How would do describe it?

Ms Parker : In 2019 we reviewed our enforcement posture, and the way we did that was to update our compliance enforcement policy. We made a decision, as an agency, to take a firmer approach—that we would look at every compliance and enforcement tool that was available to us under the Fair Work Act and that we would review whether or not we were using them as effectively as we could. Our regulatory model was reviewed. I announced, in June last year, our compliance and enforcement priorities. I also announced, as part of our review of our posture, if you like, that we would be using significantly more compliance notices, and we have been doing so. I also said that companies that self-disclose underpayments to us could expect us to investigate them and that we would expect an appropriate compliance and enforcement response. Depending on what's happened—whether they cooperate with us, how much the underpayment is, how far it's been going back et cetera—we expect companies to work with us. That could result in an enforceable undertaking or it may result in litigation, depending on the nature of the underpayment. So we have significantly increased our use of compliance notices, as I said. We've increased our litigations and commenced more, and we've accepted more enforceable undertakings and issued more infringement notices, compared to previous years.

Senator O'SULLIVAN: This posture, as you put it—how is it tangibly working out? Are you able to recover more money for workers, among other things?

Ms Parker : Yes. We've recovered more this year than in previous years. We were talking about that earlier in the hearing. We've returned significant amounts over the years, but, yes, in the last year we've recovered $40 million. In the last few months we've had many, many self-disclosures of very large underpayments, including Woolworths, which was $300 million-plus. That is arguably a result of the attention on this matter, through the Calombaris and other matters—we negotiated an enforceable undertaking with that company; we investigated that company and uncovered a lot more underpayment than they had originally found themselves. All of that has resulted in many more companies coming forward, and we would take credit for that. We're getting out there. We're getting attention to the fact that we will take stronger action and that we expect companies to respond. And we think that is happening.

Senator O'SULLIVAN: In 2017 the Protecting Vulnerable Workers legislation, which this government was able to pass through parliament, provided you with extra powers. How is that helping?

Ms Parker : We have been using those powers. Again, it's about sending strong deterrence messages to employers who exploit vulnerable workers. In the 22 months since that act came in, we've commenced 13 litigations using the new provisions, and court ordered penalties have been secured in each of the three decisions handed down in that time. The 13 litigations relate to serious contraventions. They include providing false or misleading records, giving false or misleading pay slips, hindering or obstructing a Fair Work inspector and matters, using the reverse onus of proof, where there are no records kept or pay slips issued. We note the provisions are not retrospective. They apply to contraventions that occurred from 15 September 2017. So we're still waiting for some of those. We do note that it takes about 15 months or more once a matter gets to court, so those are still flowing through. But we are actively looking for opportunities to use those provisions.

Senator O'SULLIVAN: In relation to the government's reform proposals, have you had the opportunity to engage the government in contributing to the thinking behind the proposals and development of the discussion paper?

Ms Parker : We have discussed those with the department and we've provided input to those, yes—those that are relevant to the agency.

CHAIR: Following on from Senator Sheldon's line of questioning, would you like to see the unions actually exercising their legal entitlements a bit more in this space by attending worksites, inspecting the books and taking people to court, given they have the power to do so? Do you think they're doing it enough?

Ms Parker : We support the use of court processes to enforce workplace rights, and, as you point out, it doesn't have to be the Fair Work Ombudsman that brings matters through the courts. Unions or any organisation can bring those matters to court, and, absolutely, we'd encourage that.

Senator O'SULLIVAN: Do you think, for instance, that the $21 million of union money that the ACTU alone spent on trying to make Bill Shorten Prime Minister could have been better used by those unions in employing officials to inspect worksites and take recovery action?

Senator STERLE: What an absolutely stupid question!

Senator WALSH: Ms Parker, you'd be aware that the Senate Economic References Committee is holding an inquiry into underpayment. Are you making a submission?

Ms Parker : Yes, we are.

Senator WALSH: Will that submission go to any of the questions that we talked about earlier in respect of the level of resources, inspectors and people on the phones that might be required to be able to do more in this space?

Ms Parker : It will talk about what we're currently doing. We're still clearing that, Senator, but it will point out that we are seeing significant increases in corporate underpayment—at least self-disclosures of those. That is putting some pressure on the agency. I've said before that I've reviewed what we do in the agency to take account of that, as you would with any new priority. One of the things we will do is establish a task force around corporate assurance. It will require us to shift some other work, but we will put some effort into that because I think we need to send a strong message of deterrence to those companies. We'll also be proactive around writing to corporate entities who haven't self-disclosed to point out to them our expectations and to call on members of boards to seek assurance from their own organisations and from their CEOs that they are looking at payroll and that they are assuring themselves that people are being paid correctly. That's our response, and our submission will outline that.

Senator WALSH: I want to try to understand how many complaints you receive and how many are actioned in certain ways. I understand that there'd be different ways of categorising and looking at things, but I'm hoping to try to keep it fairly simple. Are you able to tell us how many complaints about employer noncompliance with the act were made in calendar year 2019?

Ms Parker : We'd have to take that on notice. Are you asking about complaints about employers?

Senator WALSH: Yes; complaints about employer noncompliance with the act.

Mr Campbell : Senator, you're right: we describe our work in specific ways depending on the nature of the contact from the community. We have a class of disputes which we call 'formal dispute lodgements' but they all sort of fit within the category of request for assistance from a member of the community—so if somebody rings up and asks for our assistance or help.

Senator WALSH: How many of those requests have you had?

Mr Campbell : I'll give you the disputes completed. Last year, we had 29,130. That's just people lodging with us for some level of assistance. Then the subclass of formal disputes were 7,600 last financial year.

Senator WALSH: So that 29,130 perhaps does not include a question that you were just able to answer on the phone and then that's closed; these are things that require a follow-up?

Mr Campbell : The total calls answered last year was 383,000. On top of that, there are about 60,000 online queries.

Senator WALSH: So 29,130 require some sort of follow-up?

Mr Campbell : Yes. There was an intervention from our organisation in a way, whether it be a contact with the employer or some specific assistance given to an employee. It's not a full-blown investigation, though, is what I'm saying.

Senator WALSH: How would you describe the 7,600 for us again?

Mr Campbell : I'd have to say that's a specific complaint that an employee is putting to us that has characteristics that we think require a more detailed examination by our organisation. It doesn't mean that it's going to end in a compliance and enforcement outcome, but the shape of the complaint is one where we need to seek evidence in some form to help form a decision around compliance response.

Senator WALSH: In layman's terms—I'm not trying to be tricky—you might consider that 7,600 claims were investigated in some way?

Mr Campbell : Yes.

Senator WALSH: And is this the calendar year 2019 figures?

Mr Campbell : Yes. It's '18-19, last financial year.

Senator WALSH: That's the financial year. Okay, we'll go with that for the moment. How many of the 7,600 were resolved and how many were resolved in a way that involved recovery of money.

Mr Campbell : I don't have the breakdown of the subsets and the recoveries, but we've given evidence that we recovered $40 million last financial year, and that's as a result of all of our efforts, whether it be our assisted dispute resolution or the investigations or our proactive work.

Senator WALSH: Of 29,000 complaints or issues that came in that required some action, 7,600 were investigated, but you're not able to tell us how many of those 7,600 were closed or resolved?

Mr Campbell : No, not on the spot. They were all resolved. They'll have all been dealt with in some way; I just don't have a breakdown of the way in which they were resolved.

Senator WALSH: You can't tell us at the moment how many were resolved and how many resulted in a payment to a worker.

Mr Campbell : I can tell you that in that financial year 17,718 employees received some recovered wages, but I can't tell you whereabouts on that spectrum of our interventions those employees sit.

Senator WALSH: Are you able to tell us how many of the complaints that we've been talking about were specifically about underpayment of wages and superannuation?

Mr Campbell : Speaking not to superannuation but to entitlements around wages, overtime, nonpayment of annual leave or termination entitlements, I can tell you they make up the majority of them.

Senator WALSH: It's basically all of it.

Mr Campbell : Yes.

Senator WALSH: That's as opposed to record keeping or something else like that.

Mr Campbell : Some of them are records; some of them will involve both.

Senator WALSH: Before I ask this question, I'll say I understand that you have different ways of resolving things. How many of the 7,600 investigations were litigated?

Mr Campbell : I can tell you that, in total, there were 1,256 matters resolved by way of a compliance and enforcement response last financial year. There are a whole spectrum of matters in that—infringement notices, compliance notices, enforceable undertakings and litigation. They're the compliance and enforcement tools that Ms Parker was talking about before. That's how many of those were used to resolve a portion of those matters I said were investigated.

Senator WALSH: I said I understand that there are a variety of ways, but I was specifically interested in how many were litigated.

Mr Campbell : That's right. I was just trying to help. With litigation this financial year, I think we've filed 33 matters so far—sorry, I've undersold the excellent work of our legal team! There were 41 matters filed this financial year.

Senator WALSH: This financial year?

Mr Campbell : That's this financial year.

Senator WALSH: So, in the last financial year, there were 7,600 claims investigated, and there were 41 litigated in this financial year.

Mr Campbell : Yes.

Senator WALSH: How many of the 7,600 in the last financial year were litigated? I think you are being provided with an answer.

Mr O'Sullivan : You're quite right: we filed 41 this financial year. Last financial year it was 23, and the year before that it was 35. These things can be a bit patchy. Filing the litigations and dealing with litigations don't fit well within a calendar year, but I think—to echo Ms Parker's earlier comments—we're really adopting a much more robust litigation stance. So already, two-thirds into this year, we've doubled our litigations or thereabouts.

Senator WALSH: Thank you. I just want to go to the question of the use of non-disclosure agreements and confidential settlements, because it's a matter that has broad interest in the community in relation to a range of broader employment issues. Do some of your settlements involve non-disclosure agreements or requirements for confidentiality on the part of the worker, and can you explain the circumstances under which that might arise?

Ms Parker : Certainly with our enforceable undertakings, which are one of our key tools, we publish the full content of those agreements on the website,. Not all regulators do that, but we made a decision some years ago that they should be published. In terms of payments back to individuals, we don't involve ourselves in or accept non-disclosure agreements.

Mr O'Sullivan : Perhaps I can add to that. In the use of our statutory enforcement tools, I cannot imagine a situation where we would countenance confidentiality agreements. Indeed, one of the tools we use to ensure compliance is that it's quite transparent and that some of it is, if you like, a lesson to other non-complying employers.

Senator WALSH: Yes. Just to be clear, I understand that sometimes the Fair Work Ombudsman itself is effectively bringing groups of—

Mr Campbell : Senator, we—

Senator WALSH: Sorry, I'll just finish my question, because otherwise I will lose it. I think I just did, but I'm going to get it back. I understand that sometimes the Fair Work Ombudsman is actually bringing workers and employers together to reach their own settlement, if you like. In some of those cases, do employers require a non-disclosure agreement or a confidentiality agreement in matters that the Fair Work Ombudsman has been involved in?

Mr Campbell : In a mediation setting, where the parties seek to resolve the matter together, we don't require the parties to enter into a settlement agreement. If the parties choose to, that's up to them, and the terms of those settlements are those of the parties, so we don't look to influence what's in them. It's not uncommon that parties will seek to set out what the terms of any mediated outcome are. If they choose to make that a full and final settlement of the dispute, including that the parties won't speak of the terms or whatever, that's up to them as well. But it's not something that we require of any party.

Senator WALSH: But it does occur in processes under the auspices of the ombudsman in the way that you've described?

Mr Campbell : It occurs in every federal organisation that's involved in dispute resolution. The Fair Work Commission, for example, has exactly the same process for dealing with unfair dismissal matters. Parties are not required to enter into settlement arrangements, but they can, and the content is a matter for them. In the small number of mediations that we conduct each year, there may be a settlement agreement associated with that, and there may be terms regarding confidentiality, but again it's not something that we require.

Senator WALSH: I'm not sure what the level of community interest in that might be and whether there is a level of community interest in that. Do you have any reflections on that? Do you have any concerns about it occurring in mediations under your auspices, given that you don't enter into it yourself?

Ms Parker : We don't do a lot of mediation, but it's usually only where neither side really has all the facts. The employer might be saying, 'This is what happened,' and the worker is saying, 'Well, this is what happened,' and we're not able to work it out. We can't determine it, because it's contested: 'I said I was working on those days. The employer said I wasn't,' and we don't have any record from either side of whether they were or not. It's those kinds of issues where mediation may be the best outcome, because it's so unclear what the facts of the matter actually are. We've moved much more now to, as I mentioned before, the use of compliance notices in some of these cases. That is, where an inspector has a reasonable belief that underpayment has occurred, they can issue a notice, and the employer is required to prove that they did or didn't have to pay it. They can dispute it if they wish, but they have to do that through a court. We have shifted somewhat into that sort of space now, and so there'll be less of the mediation.

Mr Campbell : It's been practiced in workplace relations as long as I've been around in this space. Unions use them to resolve matters. Private citizens use them to resolve matters. It's open to parties in disputes before the Fair Work Ombudsman to use them. We don't judge them, so we can't comment on them. It's just a standard practice in workplace relations.

Ms Parker : We certainly don't encourage it and we would certainly say, if there's a belief that there's an underpayment, our job is to pursue that and make sure the money is paid back.

Senator WALSH: Finally on this topic, if one group of workers who were being underpaid by an employer entered into such an arrangement, that would not prevent you from pursuing a matter on behalf of another group of workers with the same employer.

Ms Parker : No, it wouldn't.

Senator WALSH: Thank you.

Senator RENNICK: How would the inclusion of banning orders as an option for you to pursue through the courts in appropriate circumstances assist you in doing your work?

Ms Parker : Is this one of the suggestions in the minister's discussion paper?

Senator RENNICK: Yes.

Ms Parker : That would allow us to seek that as an additional penalty against an employer who's underpaying a worker.

Senator RENNICK: What about the potential for disqualification orders against directors of companies being made by the court?

Ms Parker : Similarly, it would add to our toolkit, if you like, in terms of seeking from courts and it would have a deterrence effect. We believe it would have a strong deterrence effect for those who would be underpaying.

Senator RENNICK: How about the idea of naming and shaming orders being made by the court? Is this something that you'd think would cut through and ensure businesses abide by their obligations?

Ms Parker : We already require that, really. When we negotiate enforceable undertakings and companies offer those to us, part of the requirement is often that they publicly apologise and also that they put up on websites and notice boards that they have underpaid workers and that they are sorry and have paid the money back. I guess we would say we've been naming and shaming for quite some time already.

Senator RENNICK: Setting aside the criminal penalties legislation, which I understand the government will be introducing shortly, in a separate discussion paper issued last year, the government also raised the idea of higher civil penalties. Is this something you see as potentially having an impact?

Ms Parker : I've never seen a regulator who would say no to higher penalties, so yes.

Senator RENNICK: I'm not sure if I should ask you or the Fair Work Commission this. I've got a mate who runs a newsagents. He works from five o'clock in the morning to six o'clock at night five days a week and then five o'clock in the morning until 12 o'clock Saturday and Sunday. He has rung Fair Work before, because he has wanted employment advice and can't afford to pay for an IR lawyer. Is there a helpline that he can ring to give small business advice on doing the right thing. Is it possible to put a safe harbour around that advice? Some of the feedback we get is that small businesses are uncertain about the IR laws because they're not trained in law. Is there some way we can make it easier for small businesses to have greater confidence in employing people?

Mr Campbell : We have a small business hotline. You can dial 131394 and select the small business hotline. That's a queue where the call will be put into a specialist set of advisers who are able to provide advice specifically for the small business community. That said, we don't provide legal advice. We provide advice about the law. We explain obligations to employers. To your friend in the newsagent we might explain the award as it applies to them and the rates that will be payable to their employees. Those advisers are not looking to judge the caller, so if the employer called and said, 'I'm having difficulties with an employee and I want to understand rules around termination', we would tell them the rules without any judgement. We would obviously also steer a caller away from doing something that might lead them into affray.

Senator CICCONE: I've got a couple of questions with respect to temporary migrant workers. I'm happy for you to take some of this on notice as well. Are you able to advise how many of the requests for assistance that have been received by the ombudsman in the past 12 months have been from temporary migrant workers? Could you provide me with the number and also how many were holders of subclass 417 and 457 visas?

Mr Campbell : Last financial year we received 532 formal dispute lodgements, using the language I used for Senator Walsh before. That's 532 from 417 visa holders. From 457 and 482 in the last financial year it was 137 formal disputes. Overall lodgements from all visa types were 1,647.

Senator CICCONE: How many prosecutions has the Fair Work Ombudsman undertaken on behalf of temporary migrant workers in the past 12 months?

Ms Parker : Litigation?

Mr Campbell : In this financial year, so 2019-20, we have commenced 13 litigations that involve migrant workers.

Senator CICCONE: Could you take that question for the previous financial year, so we have the current one and the last one. If you could do that for the previous question that I asked too, that would be great.

Ms Parker : This doesn't count the compliance notices issued to employers where they have migrant workers, which will be significant as well.

Senator CICCONE: Can you provide a table that shows the outcomes of those prosecutions?

Mr Campbell : Yes.

Senator CICCONE: Have there been limitations around any of the undertakings by any of the prosecutions undertaken by the Fair Work Ombudsman?

Mr Campbell : No, not specifically.

Senator CICCONE: What's the total value of funds that the Fair Work Ombudsman has recovered for temporary workers in the same current financial year, and also for the previous financial year?

Mr Campbell : All migrant workers last financial year was $3,191,341. So far this financial year, for all visa types, it is $1,222,271.

Senator CICCONE: For those amounts, is there a breakdown by 417 and 457 visas?

Mr Campbell : I can take you to 417s and 457s. For 417s, for the last financial year it was $174,839, for 457 and 482, last financial year was $493,761. This financial year so far, for 417 visa holders it is $262,314. For 457 and 482 for this financial year so far, $65,817.

Ms Parker : Border Force is also—

Senator CICCONE: I'm aware of that. Is the Fair Work Ombudsman concerned at the level of exploitation of temporary migrant workers?

Ms Parker : Yes. One of our compliance and enforcement priorities is vulnerable workers including migrant workers. We put a significant amount of our proactive effort into working with, for example, the harvest trail, the horticulture sector, where there are often many migrant workers. Also the fast food restaurants and cafe sector nearly always has migrant workers involved. They're one of our priorities as well.

Ms Hannah : A large proportion of our education resources are directed towards migrant workers.

Senator CICCONE: As you know, the government's expanded the Working Holiday Maker Program to allow visa holders to stay in Australia for a third year after completing six months of additional work. Was the Fair Work Ombudsman consulted on the proposal to extend the program to a third year?

Ms Parker : No, we weren't.

Senator CICCONE: Would you have ordinarily been consulted on that program in the past?

Ms Parker : It depends. As the regulator, we will regulate what we're required to, but it depends. Sometimes and not always.

Senator CICCONE: Has the Fair Work Ombudsman expressed any concern since the announcement or about the proposal at the time to add an extra year to the program?

Ms Parker : What I would say is that we will monitor this and we will certainly provide feedback if we have concerns. That's what we would normally do. We do that already through other programs that involve migrant workers.

Senator CICCONE: You haven't provided concerns?

Ms Parker : Not specifically. But we will if the issue becomes significant.

Senator CICCONE: Has the Fair Work Ombudsman received any additional resources to deal with the issue at large, but specifically also around the extension or expansion of the program?

Ms Parker : Not specifically, no. We've received additional resources more broadly for undertaking our work. We have specific funding for the seasonal worker and those related programs. Obviously that is included in our regulatory activities.

Senator CICCONE: Have you received any additional powers as well?

Ms Parker : No. Only that, as we said, the protecting vulnerable workers legislation is what we would use in some circumstances there.

Senator CICCONE: I'm assuming you would like to see more resources to deal with the issue of temporary migrant workers exploitation?

Ms Parker : We work within our budget. I would say that we provide advice regularly to government on what we're doing. We are encouraged to raise issues. The department regularly consults with us. It's an open door there, so if we have significant concerns or we think we're under pressure in a particular area, then that's the mechanism by which we would raise it.

Senator CICCONE: Is there a specific budget that deals with temporary migrant exploitation?

Ms Parker : In the Fair Work Ombudsman?

Senator CICCONE: Yes.

Ms Parker : We do have particular measures that were appropriated for specific things. For example, we have a sham contracting budget. We have money to go with the Seasonal Worker Program and monitoring that and Pacific strategy et cetera. Generally we allocate it on the basis of the priorities I mentioned.

Senator CICCONE: I could be wrong, but I've heard this figure before: is it the case that there are about 50 cases that the Fair Work Ombudsman is funded to prosecute with respect to temporary migrant worker exploitation? Is there a cap on how many—

Ms Parker : Litigations? What we have is a nominal budget within the Fair Work Ombudsman that we allocate for legal expenses, and we take cases against the priorities. If there's a need to litigate more, for example, we would look at that across the whole agency and move resources as needed. We wouldn't stop a litigation if we'd met our budget. We would reallocate within and look at what our priorities are within the agency. There is no requirement, for example, for us to bring a certain number of cases per year. We've determined a nominal KPI, if you like. It's around that number. It's 40 to 50.

Senator CICCONE: If you want to go over that, you will find the resources?

Ms Parker : Yes, but if we were to decide to litigate a very large corporate, for example, that might take up a lot of our time and resources. It would mean that we'd have fewer litigations overall, but we will be taking a larger matter.

Senator CICCONE: Does that mean that the Fair Work Ombudsman will be less likely to be engaging in some litigations because you're low on budget or have gone over your budget?

Mr Campbell : I gave evidence before that we have commenced, thanks to a reminder from my colleague, 41 litigations so far this financial year. We will comfortably achieve that internal target, because there are sufficient matters to file and there's an appetite and budget to do so.

Senator CICCONE: How do you determine whether something goes to litigation or not?

Mr Campbell : It's all set out in our compliance and enforcement policy—how we determine which matters we are going to take to court and which matters we will prioritise.

Ms Parker : Things like whether the matter is serious or widespread, if it involves vulnerable workers, if it's about exploitation, if the matter's been going on for some time, if it's systemic, if it's testing the law—those kinds of things we would prioritise for litigation. There are others we would settle in other ways.

Senator CICCONE: On Twitter there is a hashtag called '88 days a slave' where a number of working holiday-makers share their stories on Twitter about their exploitation, the financial and physical abuse while they are trying to achieve the 88 days for their extension. Are you aware of that presence on social media?

Ms Hannah : We monitor social media very, very closely. We do see some of those comments. I'd have to take it on notice whether we are tracking that specific hashtag. Comments like that are certainly on our radar and we monitor and report on them.

Senator CICCONE: From the perspective of minimising workplace law breaches, does the Fair Work Ombudsman believe that the Seasonal Worker Program administered by the department of employment serves as a more suitable means of facilitating temporary worker migration than the Working Holiday-Maker Program?

Ms Parker : I'd say there is a place for both those things. Obviously it's not for us to comment on whether there should be less or more migration or visas. Obviously we work really closely with the department on the Seasonal Worker Program. It's a successful program. There is a lot of activity there with the department and with Home Affairs, Border Force, as well, around some of those issues more generally. I don't think we would be able to comment on the visa system as a whole.

Senator CICCONE: Are there any agreements between the Fair Work Ombudsman and the Australian Border Force?

Mr Campbell : There are a number of MOUs.

Senator CICCONE: Can you provide a copy?

Mr Campbell : There's a number of them. They facilitate information sharing, intelligence sharing and how we coordinate joint operations. I think we can share those which are able to be put into the public domain.

Senator CICCONE: Looking at matters where someone wants to report or is subject to deportation, there might be an understanding between the two agencies, like whistleblower protection, that we won't deport someone because—

Mr Campbell : If a visa-holder is assisting us with inquiries with regard to a specific investigation, we can ask the Border Force to consider not exercising its discretion to have a person deported if they don't have a valid visa or reason to be in the country. They're available to us should we need it.

Senator CICCONE: Are you able to provide copies?

Mr Campbell : Some of it is in the public domain. If we can share that with you, that's not a problem.

CHAIR: I understand Senator O'Sullivan has some questions.

Senator O'SULLIVAN: If we've run out of time, I can put them on notice.

Senator O'NEILL: Can I have five minutes?

CHAIR: If I give you five minutes, I have to give him five minutes. I want to try and finish on time. So how do you want to do this? I still want to finish at quarter to five for the afternoon tea break. We're going to eat into the Fair Work Commission.

Unidentified speaker: We're trying to avoid a spillover.

CHAIR: I want to avoid a spillover. I'm happy to do these negotiations live on air, but you've had plenty of time. I'm happy to go through the timing if you want me to. I think you're about four to one in favour against other members of the Senate. Remember that—

Senator O'NEILL: We've got a big agenda to prosecute for the people of Australia.

CHAIR: And we have a big agenda also in terms of asking our own questions. I'm sure we can work something out. You're saying you want another five minutes?

Senator O'NEILL: Yes. Just a bit of a clean-up, if I can, please.

CHAIR: And I think Senator O'Sullivan would like five minutes also. We're going to eat into the Fair Work Commission.

Senator O'NEILL: I will be very quick. The first question is just to clean up from questions asked by Senator Walsh. You gave her an indication relating to if there was a confidential settlement with an employer for 20 employees in that worksite. The question I want to ask is: what happens to the other 80 out of 100? What do you do about that?

Mr Campbell : It is a hypothetical question. I'm happy to look at any specific cases you've got. I've already given evidence—

Senator O'NEILL: I'm asking for your standard operating procedure. You're in one workplace. There are 20 that you act for; there are 80 that you don't secure the confidential settlement for. What happens to those other 80? That's my question.

Mr Campbell : We don't secure confidential settlement. That was the discussion we had with Senator Walsh before—

Senator O'NEILL: Right. So, if you secure a settlement, then what happens to the other 80?

Mr Campbell : If we investigate a workplace and we identify that a class of employees is being underpaid and we issue a compliance notice, for example, we will ask for the class of employees' underpayments to be made good.

Ms Parker : Across the whole organisation.

Mr Campbell : Yes. If there is no evidence to support that, then we can't ask an employer to make good an underpayment.

Senator O'NEILL: Thank you. That is very helpful. With regard to the Commonwealth Bank, the Financial Services Union has done significant work in this area. My question is: how did your agency become involved?

Ms Parker : When we receive reports of corporate noncompliance, it is usual for us to undertake an investigation.

Senator O'NEILL: Did you receive it from a media report or by self-disclosure by the Commonwealth Bank?

Mr Campbell : CBA self-disclosed to us.

Senator O'NEILL: Thank you. If you could provide any documentation around that, that would be of quite considerable interest. On 10 February, the Financial Services Union National Secretary, Julia Angrisano, wrote to you, seeking commitment from you to consult the union before you pursue an enforcement outcome in these matters. The FSU said in that letter that its members have an interest, given the FSU's capacity to commence its own enforcement proceedings in these matters that could be prejudiced by the Fair Work Ombudsman's actions, and requested a commitment to consultation by 21 February 2020. My understanding is that you rejected that request for consultation. Why did you do that and deny them the opportunity to have input into the decisions that you make?

Mr Campbell : For the same reason we don't consult with employer groups. We're an independent agency that makes decisions on circumstances of noncompliance and the enforcement tools that we are going to use in accordance with our compliance and enforcement policy. We make our decisions through the lens of the public interest. Interested parties are welcome to share their views with us, but we are not going to be bound by them, nor are we going to be guided by them necessarily.

Senator O'NEILL: In terms of the time line, the FSU and the media preceded the declaration by the Commonwealth Bank. Is that correct?

Mr Campbell : There have been a series of issues the Commonwealth Bank has had to deal with over the last couple of years, so I couldn't speak to the timing. But the Commonwealth Bank has made disclosures to us regarding the underpayments that have been identified for both superannuation and ordinary hours.

Senator O'NEILL: So I guess the question there is—

Mr Campbell : What I'm saying is, if there is a time line where there was a media article and then, after that, the self-disclosure was made to us, this organisation, we would say that's not a self-disclosure because it is already in the public domain.

Senator O'NEILL: Okay. So you're saying it was a self-disclosure by the Commonwealth Bank.

Mr Campbell : My belief is—

Senator O'NEILL: If you could clarify that time line, that would be good.

Mr Campbell : Sure.

Senator O'NEILL: What is your policy regarding keeping unions apprised of developments in matters brought to your attention by those unions on behalf of their members?

Mr Campbell : It's a hard one, because we respect, obviously, an employee's right to be a member, and a union has a right to advocate on behalf of that member. But we will share information with them so long as it is pertinent and relevant to that individual but not in a way that compromises our investigation or discloses information that we've attained during the course of the execution of our statutory powers. I'm sorry that's not a perfect answer for you, but we treat them like they're a lawyer on behalf of an employee. We will deal with them directly because they are their representative. We will answer their questions because they're the representative of the employee. But we don't necessarily keep them informed about decisions we're going to take or consult with them along the way.

Senator O'NEILL: With respect to the Fair Work Ombudsman's legal advice regarding Uber. In the last round of estimates you declined to provide the legal advice that assisted your determination that Uber drivers were not employees but contractors. This decision of yours flies in the face of other countries, such as the UK, which found the opposite in fact, that Uber drivers were workers and not contractors. Can you, once more, explain the different decisions based on the same business model?

Ms Parker : The UK definition of 'employee' is different to Australia's, and that's the bottom line.

Senator O'NEILL: It sounds like they get a better deal over there.

Ms Parker : They have a broader definition. As I said last time, we can only operate within the legislation that is currently there for us.

Senator O'NEILL: Are you continuing to refuse to release the legal advice you received?

Ms Parker : It's covered under legal professional privilege.

Senator O'NEILL: Yes, but—

Ms Parker : But I did explain the written legal advice, so what I—

CHAIR: Senator O'Neill, you've had your last question—unless Ms Parker has something she wishes to add—Senator O'Sullivan, what do you want to do with your questions?

Senator O'SULLIVAN: I do have quite a few. I'll put most of them on notice but I do want to ask one.

CHAIR: Okay.

Senator O'SULLIVAN: In relation to PwC, what are your concerns about the methodology that they used?

Ms Parker : If you take FWO's data out of our recoveries—what recoveries we have got back for workers—and you do it by industry sector, and you then assume that it can be extrapolated across the whole economy, it would be incorrect. That is because we only go after businesses that we're pretty confident are not complying. What it doesn’t take account of is all of those that are complying and that we don't know about.

Senator O'SULLIVAN: It makes an assumption that many more are not complying?

Ms Parker : Well, you can. The point is that we get a fair bit of intelligence about those that are not complying and they're the ones we're going after. We're leaving the others alone, unless people come forward to us and make a complaint. So, to extrapolate the data in that way and, say, for example, 'Because we found five cases of underpayment in health; therefore, across the whole population that means that this is this amount', is very misleading.

Senator O'SULLIVAN: Okay. I'm interested in pursuing this more but I'll put those on notice.

CHAIR: Excellent. Thank you. That completes questions for the Fair Work Ombudsman. Ms Parker, we thank you and your officers for coming along this afternoon. You are released. I now call representatives from the Fair Work Commission.