Fair Work Ombudsman’s compliance notice challenged

The FWO has had its first compliance notice judicially challenged, in a recent case in the Federal Circuit Court. The FWO’s compliance notice required a religious body to back pay an employee nearly $78,000 after the FWO determined that the employee was a cook as opposed to an assistant priest, and as such covered by the Restaurant Industry Award 2010.

The religious organisation contested the notice, on the basis that the employee was not a cook, and was not covered by the Award.

This useful decision provides some very clear guidance as to how a Court will assess award coverage for an employee.

The employee had come to Australia as a religious worker, and was under the impression that he would be performing assistant priest duties. It was acknowledged by the Court that in reality, the duties described in the position description, used to secure the visa, and the duties actually performed by the employee on arrival, were substantially different.

It was found that the employee was engaged in the canteen, which formed part of a cultural centre, performing cooking and cleaning duties in the canteen. Significant evidence was provided around the cultural significance of preparing food relative to the religion, but at the end of the day it was found that the majority of the food prepared by the employee, was either given away or sold to devotees who attended the centre.

Having been satisfied that the employee was a cook, the Court also needed to consider whether the canteen was a business covered by the Award.  After much consideration, Judge Reithmuller determined that it was covered by the Award, and commented:

“I note that the definition of restaurant industry in the Award includes businesses that are not traditionally considered restaurants, such as night clubs, reception centres, tea rooms and cafes. It appears that the Award is intended to cover those employed to prepare meals unless in an excluded category. The exclusions in cl.4.8 do not cover the activities of the [employer], even by analogy.”

Judge Reithmuller dismissed the application to cancel the compliance notice, and the Judge’s considerations will assist employers in a number of respects with Award coverage matters. All Employers need to be mindful of getting Award coverage (or not) correct.