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Vulnerable workers’ Bill introduced into parliament

On 1 March 2017, the Turnbull Government introduced the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.  The Bill follows a commitment by the Government prior to the last federal election to ensure vulnerable workers are not exploited in the workplace.

If the Bill is passed, then the Fair Work Act 2009 will be amended to provide additional protections to vulnerable workers through the following means:

  • It will impose “higher penalties for ‘serious contraventions’ of payment-related workplace laws, which will apply where the underpayments or other breaches are deliberate and systematic. The penalties for these contraventions will be 10 times higher than usual. This will not apply to genuine mistakes, but only deliberate and systematic breaches.”
  • Prohibition of ‘cash back’ schemes where employees are forced to give cash from their wages back to their employers.
  • Introduce changes to ensure that franchisors and holding companies that exercise significant control over their franchisees or subsidiaries will be responsible for underpayments where they turned a blind eye or were complicit in such a breach.”  In short, if the franchisor knew, or should have known of the breach, and did not take steps to prevent the breach, then they may be liable for underpayments.
  • Increasing penalties where employers fail to keep proper employee records.
  • Strengthening the evidence gathering powers of the Fair Work Ombudsman. The increased powers will “allow the [O]mbudsman to compel a person to provide information or answer questions if all other avenues of investigation fail. These powers will be accompanied by safeguards to ensure they are used appropriately and consistently.”

The changes, if passed, could see maximum penalties for ‘serious contraventions’ increase up to $108,000 for individuals and $540,000 for corporations, which would certainly pose a significant threat to the viability of employers who are found to engage in such contraventions.

The Bill undoubtedly is a response to the recent spate of cases involving franchisees, most notably the 7-Eleven franchise cases, and will likely cause a rethink by franchisors in terms of their business models and how they ensure that their franchisees are complying with their obligations under the Fair Work Act 2009 and the modern awards.

Lisa Aitken is an Accredited Specialist in Workplace Relations Law and the Managing Partner of Aitken Legal, a law firm specialising in employment law for employers. www.aitkenlegal.com.au. The information in this column is intended as a guide only.  Liability limited by a scheme approved under professional standards legislation.