Chain reaction: A strategic approach to addressing employment noncompliance in complex supply chains

Abstract

There is an emerging consensus that targeting the direct employer of workers in enforcement action may be both inefficient and ineffective in achieving compliance with employment standards. This article explores some new and innovative ways that the Australian employment standards enforcement agency – the Office of the Fair Work Ombudsman (FWO) – has sought to address the problem of employment non-compliance in complex supply chains. In particular, we examine three distinct mechanisms used by the FWO, namely: supply chain litigation, enforceable undertakings and proactive compliance deeds. We argue that these initiatives illustrate the way in which regulatory agencies can better target their resources and maximise the general deterrence of enforcement action by focusing not only on the direct employer, but on those firms which are in a position to influence compliance behaviour more broadly.