Q. We recently had our paper based employee files scanned to be retained as an electronic record. Our payroll records are kept separately. It appears that a file with a substantial amount of employee information is missing. This was a mistake and not a deliberate act. 

While most of the data on the file relates to an employee’s historical information such as previous warnings, performance appraisals, etc. the company is concerned missing data may breach the Fair Work Act or other legislation. Are there any ramifications for the company? 

A. The loss of an employee file does not automatically mean an employer has breached the Fair Work Act. The first step is to identify exactly what records have been lost and determine whether they are records that the legislation specifically requires employers to keep. 


Fair Work record-keeping obligations

Section 535 of the Fair Work Act 2009 (Cth) requires employers to make and keep certain employee records for seven years. These records must be:

  • retained for the required period;

  • legible and in English;

  • readily accessible to a Fair Work Inspector; and

  • accurate and not false or misleading.

Records prescribed under the Fair Work Regulations generally include information relating to:

  • employee details and commencement dates;

  • pay rates and wages;

  • hours of work;

  • leave entitlements and leave taken;

  • superannuation contributions;

  • termination of employment;

  • individual flexibility arrangements; and

  • guarantees of annual earnings. 

If records that are required under the Fair Work Act or Fair Work Regulations have been lost, the employer may technically be in breach of its record-keeping obligations. Penalties can apply in appropriate circumstances.

 

Not all employee file documents are statutory records

Importantly, many documents commonly held on personnel files are not specifically prescribed records under the Fair Work Act.

For example, the following documents are generally maintained for employee management purposes rather than to satisfy statutory record-keeping requirements:

  • performance reviews;

  • counselling records;

  • disciplinary warnings;

  • training notes;

  • manager file notes; and

  • general employment correspondence. 

Accordingly, if the payroll and employment records required by the Fair Work Act remain intact, the loss of historical HR documents may create evidentiary and employee relations issues without necessarily constituting a breach of the record-keeping provisions. 

 

Privacy and confidentiality considerations

Employers should also consider whether the missing file contained personal or sensitive information, such as:

  • tax file numbers;

  • medical information;

  • identification documents;

  • emergency contact details; or

  • other confidential employee information.

If the records have simply been misplaced internally, the risk may be relatively low. However, if there is any possibility that the records have been accessed or disclosed to an unauthorised person, the employer should assess whether privacy, confidentiality or data breach obligations may arise. Depending on the circumstances, specialist advice may be appropriate.

 

Practical steps to take

Where a personnel file has been lost, employers should take prompt steps to minimise risk and reconstruct missing information where possible.

Practical measures may include:

  1. Documenting when and how the loss occurred.

  2. Conducting a thorough search of physical files, electronic records and archived storage.

  3. Checking whether scanned copies, backups or cloud records exist.

  4. Reviewing payroll, HRIS and leave management systems to confirm statutory records remain available.

  5. Reconstructing records from manager files, emails and correspondence where possible.

  6. Requesting replacement forms or updated information from employees where necessary.

  7. Implementing improved document management and scanning procedures to prevent a recurrence.

Taking prompt corrective action may assist in demonstrating that the employer acted responsibly and took reasonable steps to comply with its obligations. 

 

Pay slips and wage records

Employers should ensure that all wage and employment records remain available and that payslips continue to be issued within one working day of payment. These records are among the key documents that Fair Work inspectors may request to determine compliance with workplace laws. 

 

Bottom line

The loss of an employee file does not automatically mean the employer has breached the Fair Work Act. The critical issue is whether any of the missing documents are records that the legislation specifically requires the employer to keep. If prescribed employment records have been lost, the employer should take immediate steps to reconstruct them, document the circumstances of the loss and implement measures to prevent a recurrence. Employers should also assess whether the missing file contains personal or sensitive information that may raise privacy or confidentiality concerns.