When things go wrong within a high consequence[1] industry such as the employment services industry, a sort of “moral panic” can sometimes set in that sees interest groups demanding tougher penalties and crackdowns. Whilst penalty increases and crackdowns meet a political need to “get tough” on offenders, if one scratches beneath the surface, there is often little substance to them.

Penalties and sentencing measures serve several functions including:

• retribution – assuaging public outrage and demands for “justice”;
• general deterrence – deterring others from committing similar offences;
• rehabilitation – correcting and improving the offender’s conduct [2]

At best, tougher penalties and crackdowns merely serve a short term interest in retribution – and then only if they are sufficiently well-directed to catch the principal offenders and those who benefit from the offence.

It is widely accepted (and you can understand it from a risk management perspective) that the effectiveness of general deterrence depends upon the likelihood of being caught and the consequences of being caught.  Tougher penalties only address the consequences of being caught. Unless there is a commensurate likelihood of being caught, brought about by focussed intent and increased resources in support of enforcement policy, sustained over time, the effectiveness of penalties and crackdowns is rarely as great as one might hope or predict.

Penalties and crackdowns also fail to address rehabilitation, which in the context of employment services industry regulation, can be understood in terms of improvement and correction of business practice concerning the supply and use of labour and employment services.

So whilst there may be many interests clamouring at the moment for tougher penalties and crackdowns, what is really needed is change and industry improvement at a more profound level – and to be effective, it will have to be industry led rather than imposed by courts and tribunals in the form of penalties and sentencing measures.

[1] “High consequence” in terms of the adverse human rights impacts that employment services agencies’ operations may have on work seekers – masking and sometimes legitimising exploitation.

[2] Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 (14 May 2007) at [93] cited in Fair Work Ombudsman v Quincolli Pty Ltd & Anor (No.2) [2013] FMCA 17 (18 February 2013) at [60].