The Issue
Up to 2.2 million Australian workers are directly paid under one of 121 modern awards, each with numerous role classifications, rates of pay, allowances and penalty rates. If businesses incorrectly apply the awards or have flawed payroll or compliance processes, staff could be paid incorrectly and businesses could face back payments and fines.
The Attorney-General's Department (AGD) has released a Regulatory Technology Roadmap (RegTech Roadmap) that supports innovation to assist businesses to better understand and comply with modern awards. A short term initiative outlined in the RegTech Roadmap is to foster a collaborative co-design partnership between government and the regulatory technology sector.
Members of the Association of Digital Service Providers Australia New Zealand (DSPANZ) include B2B Digital Service Providers (DSPs) that facilitate their customers' compliance with awards. Importantly, DSPANZ has a long history of leading collaborative partnerships similar to the one proposed in the RegTech Roadmap.
DSPs have been sharing feedback with us about their greatest challenges in providing award compliance solutions. They are concerned about
the uncertainties and ambiguities in interpreting the Fair Work Act and modern awards, and the liabilities that this may expose them
to.
What's needed?
DSPANZ proposes that the industry working group (IWG) proposed in the RegTech Roadmap be modelled on existing and successful DSP and government collaborations:
- Co-chaired by the AGD and DSPANZ: digitising award compliance has (and will continue to) cost DSPs tens of millions of dollars. The DSP's timelines and priorities are as important to successful outcomes as the AGD's.
- The right people in the room: successful working groups typically have 10-15 members, including representatives of government, DSPANZ and DSPs. The IWG should include at least one member from each of the AGD, Fair Work Ombudsman, Fair Work Commission and ATO. Subcommittees can be established for specific projects.
- Clear governance structures: this would include charters for the IWG and any subcommittee, NDAs (general and for specific projects) and regular meetings. It is important that DSPs have a safe space to discuss and test interpretations and ambiguities.
The IWG's immediate priorities would be:
- Establish the governance structures, including appropriate meeting cadence.
- Share information and perspectives on compliance challenges. Enabling government and industry to better understand each other's perspectives, challenges and plans.
- Develop a process for DSPs to identify ambiguities in the operation of the Fair Work Act and modern awards.
- Develop a process for ambiguities to be resolved. Unless DSPs are certain that they are interpreting relevant awards and laws correctly, they cannot be certain that their products are delivering award compliance.
- Develop a framework for collaboration on medium and long term initiatives as anticipated by the RegTech Roadmap. In particular, DSPs are concerned with the level of risk and liability they will take on by creating automated award compliance solutions.