The Fair Work Ombudsman (FWO) provides education, advice and guidance to employers and employees on workplace relations and laws. However, its role as a regulator is an important part of its function.
As part of its regulatory power, the FWO investigates allegations of non-compliance and has a range of enforcement options to ensure compliance and to resolve the issue. One of the most common enforcement tools at their disposal is a compliance notice for contraventions of the Fair Work Act 2009 (Cth) (FW Act) or workplace law.
What is a compliance notice?
A compliance notice is a notice issued by Fair Work Inspectors to an employer requiring them to rectify a breach of a workplace law which has been identified following an investigation. Compliance notices are commonly used as an alternative to commencing legal proceedings for non-compliance.
The notice informs an employer that a contravention has been identified (e.g. an underpayment of entitlements) and that they are required to take action to rectify that contravention (e.g. calculate and pay entitlements that are due to one or more employees or provide evidence that payment has been made).
Importantly:
- Complying with a notice will not be taken as admitting to the contraventions in question; and
- If an employer complies with the notice, the FWO cannot later commence court proceedings with respect to that contravention.
Enforcement of compliance notices
Under section 716 (5) of the FW Act, a person must comply with a compliance notice if it is issued. Where an employer fails to comply with the compliance notice without reasonable excuse, the FWO may commence court proceedings to enforce the compliance notice and seek significant penalties. The maximum penalty that can be issued for non-compliance with a compliance notice is currently $99,000 per breach for a corporation and $19,800 per breach for an individual.
Fair Work Ombudsman v KRC Pty Ltd and Rishi Chaudhari [2025]
In a recent Federal Circuit and Family Court case, Fair Work Ombudsman v KRC Pty Ltd [2025], the FWO sought and obtained civil penalties against an employer and its business manager for non-compliance with a compliance notice.[1]
KRC Pty Ltd owned and operated a café in Black Rock, Victoria, and Rishi Chaudhari was its manager. In June 2022, Fair Work Inspector Stafford commenced an investigation into KRC’s employment of Ms Chunu Rai – a former employee who worked as a cook at the café for approximately 12 months. From this investigation, the FWO found that KRC failed to pay Ms Rai her accrued annual leave and annual leave loading at termination on 13 February 2022, and therefore contravened s 90(2) of the FW Act. The accrued leave and loading entitlement was $3,410.
On 7 August 2023, Fair Work Inspector Stafford issued a compliance notice pursuant to s 716(2) to KRC to pay any outstanding amounts to Ms Rai by 4 September 2023, and to provide evidence of this rectification by 11 September 2023. KRC failed to comply with this notice.
Following this non-compliance, the FWO gave both KRC and Mr Chaudhari multiple opportunities to remedy the breach specified in the compliance notice, and/or to give reasons for non-compliance. Following a lack of response from both KRC and Mr Chaudhari, the FWO commenced court proceedings against both parties seeking financial penalties for the contravention of section 716.
One day before the matter was first listed in court for directions, KRC made payment of the outstanding amount to Ms Rai required by the Notice. In doing so, KRC hoped to resolve any non-compliance.
Judge Forbes, who heard the matter, characterised the late payment as KRC’s “last minute attempt” after being “stunned into action” by the FWO commencing legal proceedings.
KRC’s payment of Ms Rai’s entitlement eventually mitigated her loss, but that payment did not “wipe the slate clean”. Judge Forbes noted that there was a complete failure by the Respondents to take actions specified in the compliance notice, a deliberate disregard of their obligations under the FW Act and indifference to the FWO. Judge Forbes held that “when put on notice as to the serious consequences of non-compliance, putting one’s head in the sand is no excuse”.[2]
Additionally, no leniency was made for the financial position of KRC as a small business, as the obligation to comply with compliance notices is equal, regardless of the size of the employer.[3]
Penalties
A penalty of 50% of the maximum amount was imposed on the Respondents, being $23,475 for KRC and $4,695 for Mr Chaudhari.
What this means for employers
Employers need to treat compliance notices seriously and deal with them promptly. Failing to act on a compliance notice risks further enforcement options including legal proceedings and financial penalties for the failure in addition to the underlying contraventions identified by the notice. Employers in hospitality including fast food, restaurants and cafes are being specifically targeted by the FWO as a top priority.
For employers facing a compliance notice or Fair Work investigation, early advice from our Employment Law team can help manage the issue and reduce the risk of further enforcement action.
[1] Fair Work Ombudsman v KRC Pty Ltd [2025] FEDCFAMC2G 153
[2] Para 40
[3] Para 52
