Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017
In March 2017, the Turnbull Government introduced an amendment to the Fair Work Act 2009, in a bid to combat the ongoing and escalating issue of worker exploitation and wage fraud in Australian workplaces.
Labelled the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, this bill sought to add six major changes to the Fair Work Act 2009, which are detailed below:
Increasing maximum penalties for contraventions of certain civil remedy provisions
Part 1 of the schedule does two things. First of all, it identifies serious contraventions, wherein misconduct is deliberate and part of a systematic pattern of conduct relating to multiple employees.
Second of all, it seeks to increase the maximum penalties for serious contraventions, from 60 penalty units to 600 penalty units for individuals. As of June 2015, the Federal penalty unit for individuals is $180, meaning individuals found guilty of serious contraventions of the Fair Work Act will see their maximum penalty jump from $10,800 to $108,000.
Liability of responsible franchisor entities and holding companies
Part 2 of the schedule adds new provisions to the Fair Work Act that will make franchisors and holding companies responsible for contraventions of the act by businesses within their networks.
Part 2 is in direct response to the highly-publicised 7-Eleven case, where it was determined that the franchise – as well as others – was pushing a business model that relied on underpaying staff in order to turn a profit.
These changes do not override existing accessorial liability provisions, which states that a person may be held responsible for being involved in a contravention, even if they’re not the direct employer. Accessorial liability does not include situations where the person was genuinely unaware.
The new provisions apply to franchisor entities that exert significant control over franchisees, and will mean those franchisors are no longer able to simply ‘turn a blind eye’ to contraventions.
Unreasonable requirements to make payments
Part 3 of schedule 1 seeks to put an end to the notorious cashback schemes that emerged after the 7-Eleven case came to light.
It amends the Act to clarify that employers are prohibited from – directly or indirectly – requiring employees to give cashback, or to pay any amount of the employee’s money back to the employer in relation to the performance of work.
This act is prohibited regardless whether the request is made by the employer, or an office, employee or agent of the employer. It also applies even if the employee refuses, or fail to make the payment requested of them.
Asking for cashback so an employee can keep their job is prohibited. Asking for cashback in order to undercut their minimum entitlements is prohibited. Asking for any money to be paid that involves undue influence, duress or coercion is prohibited.
This section also increases maximum penalties where there are aggravating circumstances – to 600 penalty units for individuals, and 3000 penalty units for corporations.
These prohibitions do not apply to the request for overpayments to be returned.
Powers of the Fair Work Ombudsman
Part 4 of the schedule amends the Fair Work Act to grant the Fair Work Ombudsman (FWO) with new evidence-gathering powers, similar to those currently available to other regulatory bodies, including the Australian Securities and Investment Commission (ASIC) and the Australian Competition and Consumer Commission (ACCC).
Under this section, the FWO will be able to issue an ‘FWO Notice’ to those they believe have information or documents relevant to an investigation. The FWO notice may require the individual in question to give the FWO any information and documents they have, or to undergo questioning.
This amendment will, for the first time, give the FWO enforceable powers of questioning. While FWO Inspectors may currently interview people, there is no penalty for someone who refuses or fails to answer questions.
The maximum penalty for failure to comply with an FWO notice is 600 penalty units for individuals, and 3000 penalty units for corporations.
Hindering and obstructing the Fair Work Ombudsman and inspectors
Part 5 amends the Fair Work Act, to prohibit any person from hindering or obstructing the FWO or an inspector thereof, including an inspector’s assistant, or any member of staff exercising powers or performing functions in relation to an FWO notice.
This provision only applies to intentionally hindering or obstructing the FWO; it does not apply to conduct that is accidental.
This section does not apply if the person in question has a reasonable excuse, or if they were not shown the Inspector’s identity card (if applicable), or given an appropriate warning about the effect of the section.
False or misleading information or documents
Part 6 amends the Fair Work Act to prohibit a person from deliberately giving false or misleading information or documents to the FWO, an inspector thereof, or any other staff member exercising powers or performing functions in relation to an FWO notice.
This section also amends existing record keeping requirements and obligations, in regards to payslips. These amendments would see the prohibition of making or keeping employee records the employer knows are false, and the giving of a pay slip that the employees knows is false or misleading.
The first reading of this Bill before Parliament occurred on March 1st, 2017; a second reading occurred on March 11th 2017. It is currently still before the House of Representatives; a third reading has been agreed to.
Greens MP, Adam Bandt, has made a number of proposed amendments to the Bill, which we detail here.