Local Governments To Ensure Contractors Do Not Exploit Workers

As a matter of public policy and good governance Local Governments have a duty to ensure that when they enter into contracting arrangements, the businesses they contract with comply with all workplace laws.

The Fair Work Ombudsman (FWO) has recently announced that it will undertake random audits of local government procurement contracts to ensure the contractors are compliant with federal workplace laws.

In 2009, FWO audited over 300 security businesses and found that less than half were compliant with workplace laws. After a campaign in 2012, this improved to 75% of businesses meeting their obligations.  The current investigation will take a year to complete, with a report due to be released in August 2016. To ensure good procurement practices, organisations contracting in security service (or any other service) are expected to do their due diligence by understanding the cost of employment.

Local governments need to consider when reviewing tenders and contracts that sometimes choosing to engage the lowest cost services may result in engaging contractors who are underpaying employees to achieve that low cost.

The contracting out of labour is a legitimate and essential part of delivering modern local government services, but there remains an obligation on local governments to ensure that such arrangements do not create an environment where workers are open to exploitation.

Resources available from the FWO website to assist with procurement can be found at:


For more information on this update please contact Greg Mohen on (08) 9321 3755.

The information published on this website is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.