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Survive the 'Sniff Test' - How the Ombudsman Scans for Risk in Franchisers

Do you think the Fair Work Ombudsman is beyond making a mistake? Think again. Anyone can get caught out by complexity.
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Survive the

Survive the 'Sniff Test' - How the Ombudsman Scans for Risk in Franchisers

15 January 2018

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Below is the transcript of the video:

Joe:  The first thing is that we're talking here about a whole range of reasonably involved processes, but the sorts of things that we find is that a lot of franchisees just don't understand the basis, the absolute basics, about workplace relations, and they seem to think that there's an exemption for friends and family.

They also think that, okay, we know that there's an award there, but we can reach agreement, so the basics is something that you need to start with as well. That needs to be built into these complex systems that we're talking about and risk assessments.

Siobhan:  And that comes out in the cultural assessment. You're absolutely right. I've seen so many examples of that as well during the time.

Joe:  And the second thing is, Siobhan was saying that the modern award ... the awards are complex.

Siobhan:  Yes.

Joe:  That's an understatement. They're not just complex, they're broken. Alana and I have spent the last five-and-a-half years in the Fair Work Commission trying to fix them, and we're battling the unions day on day, trying to fix these problems. There's ambiguities, there's uncertainties. The ombudsmen are still getting it wrong. We liaise with the ombudsmen. We've been liaising with the ombudsmen for seven-and-a-half years about how these provisions operate, and we're not often wrong, but we are sometimes, and the ombudsman's wrong in a lot of these debates that we have with them.

We've had standoffs where we've got the ombudsman, I've written to them and said, "I don't believe that that's the case, but I tell you what, if it is, send it to me in writing, because I've got a whole load of other clients that are interested in that outcome, because there's a benefit and a burden to each of those outcomes."

So the system, it's actually broken. It's not just complex, so it's impossible to comply with everything. It's also impossible to comply when you've got a regulator who also has things that are wrong on their website, about guidance, and they really do have things that are wrong. They're vague, you know, and just like everyone else, they're human beings and they're flawed, so they get it wrong.

And the last thing I wanted to say was, when we're talking about reasonable steps, we're talking about legal concepts now, but really the ombudsman approaches it from quite a practical, instinctive approach, and that is the sniff test. They come in and say, "Someone's not being paid correctly here. Something's wrong." And they'll start with the defense, which is what I do when a client comes to me. I look at the defense straightaway. I think that there's a problem, and then I work back.

And they treat it like a criminal investigation, really. "Someone's been murdered. How do we prove that the suspect did it?" And that's how they go about building a case. They don't look at the threshold issues at the front, so that's why it's really important to focus on the solutions that you're putting in place, and not about how you might be prosecuted at the front end with those threshold issues.

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