Workplace laws are subject to constant change. Human resource managers need to keep abreast of these changes and understand the impact on their business. Regular workplace audits are one way that employers can be sure that they are adhering to relevant state and federal government legislation. They can also identify areas for improvement.


A recent case before the Federal Circuit Court shows the importance of organisations adhering to relevant legislation. The employee was a tea attendant in a Mahjong club. The employee commenced work with the employer in August 1994.

The employee claimed that he was informed upon being hired: “You have to work from 8am to about 9pm except Mondays, Saturdays and Sundays when you have to work from 8am to about 12am and sometimes even longer. The finish time is not fixed and change every day. The hours are long so you can sleep at the premises. You can start whenever you are ready.”

This was contradicted by a witness for the company who said: “The operating hours of the Company were 10am to 6pm. The front gate of the premises was closed from 6pm onwards and no further patrons were received unless with the Company’s consent.”
Ultimately, (the employee) treated the Company as his home and did as he pleased, including taking naps during the day.

“(The employee) did not mention or complain to me that he was working after 6pm. I observed that (the employee) did enjoy staying back after work and socialising with other Company members. However, this was not a requirement of his role within the Company. It was a reflection of the generosity of the Company that permitted him to use its facilities after hours.”

The judge found that the employee worked 90 hours a week, over six days, including weekends, for more than seven years until injuring his leg at work in January, 2012.

After injuring his leg, the employee made a workers’ compensation claim and the treating doctor restricted his working hours to eight hours a day, five days a week. Limits were also placed on lifting, walking and standing.

The employee alleges that he was forced to resign in late 2012 when the employer reduced his hours and work status from full-time to part-time in response to his worker’s compensation claim.

The judge ordered that the Mahjong club to pay more than $415,000 in compensation for breaching state and federal IR laws and engaging in adverse action when changing the full-time tea attendant to a part-time role because of his workers’ compensation claim.

The judge also ordered another $50,000 in penalties, which he described as at the “upper end of the scale” because the non-compliance was “significant”, as was the former tea attendant’s financial loss and inability to find alternative employment.


Human resources audits can prevent an organisation becoming involved in such a costly and time consuming legal dispute by identifying areas of non-compliance. In this case, a human resources audit could have identified that the employer was not complying with several State or Federal workplace laws. A workplace audit can also identify areas for improvement and improve the workplace culture.

iHR strongly believes that human resource audits can prevent organisations being involved in costly and time consuming legal disputes such as this. A human resource audit is a pre-emptive measure that can be taken to prevent workplace issues escalating into costly legal disputes. Such audits can help an organisation foster a culture of continuous improvement and help them identify their successes.

An iHR human resources audit is an independent, objective and systematic review of an organisation’s HR function, encompassing the following:

• Legislative Compliance (Industrial Relations, EEO)
• Strategy
• Benefits and Compensation
• Training and Staff Development
• Recruitment
• Employee Engagement
• Performance Management

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