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New amendment to protect vulnerable workers

Posted on : Friday, 17 November 2017

In September 2017, the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 was passed and became law by amending the Fair Work Act 2009 (Cth).

 

Background

 

The Bill was introduced into Parliament following a number of high profile cases surrounding underpayment of wages at franchise chains 7-Eleven, Caltex and Dominos. These cases involved the exploitation of temporary work visa employees and other vulnerable workers, especially in relation to underpayments and sham contracting.

 
Changes to the Fair Work Act

 

While the focus of this Bill and subsequent variation to the Fair Work Act revolved around franchisees, the same requirements apply across all industry sectors and so the effect of the addition of new sections into the Fair Work Act is an important factor.

 
Key features of the Act

 

  • A higher scale of civil penalties for certain serious contraventions of the Fair Work Act that are 10 times the current maximum civil penalty (up to $540,000 for a corporation and $108,000 for individuals);
  • Ensures that franchisors and holding companies can be held to be liable for certain contraventions of the Act by their franchisees or subsidiaries where they knew or ought reasonably to have known of the of the contraventions and failed to take reasonable preventative steps;
  • Strengthen the evidence gathering powers of the Fair Work Ombudsman (FWO);
  • Introduce a reverse onus of proof where an employer has failed to comply with its record-keeping obligations.

 

New Sections 557A, 557B and 557C set the changes to the Act which includes the introduction of a "serious contravention" (s.557A) and includes a reference to a systematic pattern of conduct; the liability of bodies corporate for serious contravention - "expressly, tacitly or impliedly authorised the contravention" (s. 557B); and the matter of reversal of onus of proof, which comes back to the fundamentally important area of documentation (s. 557C).

 
Section 557A (2) provides the explanation of a systematic pattern of conduct as one where a court may have regard to the number of contraventions of the Act committed by the person and the period over which the relevant contraventions occurred and the number of persons affected by the relevant contraventions as well as the response or failure to respond to any complaints that are made about the contraventions.

 
Section 557C reinforces the requirements concerning record-keeping in that if an employer has failed to comply with its existing obligations under the Fair Work Act to keep records or issue payslips, the employer will have the "burden of disproving the allegation".

 
New penalties will arise should an employer provide the FWO with false or misleading information or records and new prohibitions for hindering or obstructing them.

 
The prohibitions against unreasonably requiring employees to make payments ("cashback" arrangements) have been strengthened.


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