The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) takes the penalties under the Fair Work Act 2009 (Cth) to new heights for wrongdoings committed by employer entities against workers.
The changes apply to everyone but have particular significance for workers, franchisors, holding companies, and people or companies who do not voluntarily cooperate with Fair Work Ombudsman (FWO) investigators. Most amendments came into operation on 15 September 2017 and the changes for franchisors and holding companies will apply from 27 October 2017.
Firstly, the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) (Amendment Act) increases penalties for "serious contraventions" of the Fair Work Act 2009 (Cth) (Fair Work Act). A "serious contravention" occurs when:
Maximum penalties of $126,000 and $630,000 per contravention apply to individuals and corporations respectively.
Secondly, the Amendment Act makes it clear that employers may not ask for money from employees or prospective employees under a 'cashback scheme'. This means that employers may not require an employee or prospective employee to spend their own money, or give them money, when it is:
Thirdly, the Amendment Act significantly raises the penalties for breaches of record-keeping and payslip obligations. Penalties for failing to keep employee records or issue payslips, or giving payslips to employees that the employer knows are false or misleading have increased to $12,600 per contravention for individuals and $63,000 per contravention for companies.
Further to this, employers who do not meet record-keeping or payslip obligations and cannot give a reasonable excuse, bear the onus of disproving allegations in subsequent wage claims brought against them in court.
Fourthly, franchisors and holding companies can be held responsible if their franchisee or subsidiary does not follow workplace laws about minimum entitlements, the National Employment Standards, awards, sham contracts, record-keeping or payslips. If the franchisor or holding company knew, or reasonably ought to have known, about the contraventions and failed to take reasonable steps to prevent them, they will be held responsible if they had a significant degree of influence or control over the franchisee’s or subsidiary’s affairs.
Fifthly, the Amendment Act strengthens the FWO’s powers to collect evidence in investigations and allows the FWO to apply to the Administrative Appeals Tribunal for a FWO notice if it reasonably believes that a person or a business has information or documents that will help an investigation. The penalties for failing to comply with a FWO notice are up to $126,000 for an individual and $630,000 for a company. The Amendment Act also introduces new contraventions for giving the FWO false or misleading information, or hindering or obstructing FWO investigations, attracting maximum penalties of $12,600 for an individual and $63,000 for a company.
These changes have significant consequences for employers who intentionally or unintentionally disadvantage workers. Due to the application of the new laws to franchisors and holding companies as well, a closer look at workplace procedures is required at all levels.
If you have any questions regarding how these changes affect you or your company, contact Lavan’s Employment and Safety team.