Organisational conduct and compliance are no longer imperatives that any organisation, nor individual, can ignore. In a period of increasing consumer weariness and distrust, organisations have been called into the spotlight with heightened regulatory and reputational risk. Inaction cannot be a strategy. Organisations and employees must be proactive and own the conduct conversation. Conduct refers to an organisation’s behaviour and practices that deliver fair and sustainable outcomes for customers, employees, suppliers and markets. Responsible business conduct starts from within the workplace. It occurs in alignment with a strong organisational focus on any businesses greatest asset, its employees. In September 2017, the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) (Act) introduced significant regulatory changes for non-compliance with employment obligations. The legislation was initially a response to increasing reports of exploitative business practices within the retail franchise industry. However, it is clear the Fair Work Ombudsman (FWO) is providing a reminder to all employers of their responsibilities and accountabilities for breaching conduct laws. The Amendment introduced a “serious contravention” clause, a new category of contravention that enforces heavy financial penalties of up to $630,000 per organisation or $126,000 per individual. Petrol and convenience retailer 7-Eleven and its systematic underpayment of employees, serves as a relevant example of the regulatory and reputational risks associated with non-compliance. The FWO’s Inquiry determined that 7-Eleven’s payment practices were exploitative of vulnerable workers, resulting in heavy financial penalties in addition to long-standing brand damage. In today’s legislative environment, it clearly is a mandate for all employers and employees to act now, embracing conduct as an opportunity to assert proactive steps to align with compliance and conduct laws. Benefit of proactive compliance The Deloitte report, ‘Are you in? Conduct – it’s everyone’s responsibility’ asserts ‘when organisations are called upon to defend their reputation they should have ready a reasonably defensible position. This means being able to demonstrate proactive efforts to find and fix conduct vulnerabilities’. The Fair Work Ombudsman has partnered with various Australian companies to publicly commit to a compliance partnership through voluntary agreement in a ‘Proactive Compliance Deed’. Retailers such as 7-Eleven, Woolworths, McDonald’s Australia Limited, Domino’s Pizza Enterprises Limited and JB Hi-Fi Group Pty Ltd have formally acknowledged their moral and ethical responsibility for lawful corporate behaviour, a compliant workplace and broader commitment to the Australian community. A Compliance Partnership is a collaboration between the FWO and an organisation to ensure transparency in the market with the intention that ‘systems and processes are working effectively to build a culture of compliance.’ Are you in? Themes to consider Visibility Choose to know Choose to act Be fit for the future Act Now Leadership in conduct is paramount. In context with the banking Royal Commission and other publicised corporate malpractice, it is critical to ensure current organisational actions and practices are not to the detriment of the reputation and prospects of your organisation. Standards of conduct need to be assessed and addressed at an executive leadership level. However, whether you lead 10 or 10,000 employees, clear conduct leadership builds consumer and market trust. Australian workplaces are complex, and legislation is constantly changing to reflect this. HRCovered, a product under Solutions by Deloitte’s portfolio, enables employers within any industry to be compliant with the latest Commonwealth workplace legislation. HRCovered streamlines HR and WHS management in a centralised cloud-based platform, scalable to suit your business. The fully integrated platform eases the compliance burden with end-to-end employee management (including contractors and volunteers), employee records and self service, in addition to customised workflows, templates and guides. Book a demo today for HRCovered, the latest offering from Solutions by Deloitte.