The Government has introduced the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 to parliament to “deter unscrupulous employers who exploit vulnerable workers because the costs associated with being caught are seen as an acceptable cost of doing business”. The Explanatory Memorandum (EM) outlines the penalties will rise to $108,000 for individuals and $540,000 for bodies corporate, but only for a “serious contravention”- which is defined as “deliberate and forms part of a systematic pattern of conduct”. It would also increase penalties for employers not complying with record keeping obligations in these circumstances.

In order to target ‘cashback’ practices highlighted by recent franchisees, the bill proposes to prohibit employers from unreasonably requiring their employees to make payments by demanding employees pay a proportion of their wages back in cash. It would also hold companies and franchisors responsible for underpayments by their franchisees or subsidiaries where “they knew or ought reasonably to have known of the contraventions and failed to take reasonable steps to prevent them”. The Fair Work Act currently focuses on accessorial liability where a person or company may be held to be responsible for a contravention if they were directly or indirectly ‘knowingly concerned’ with the contravention, however the new amendment would also apply to circumstances were the franchisor “could reasonably be expected to have known [the contravention] would occur”.

The proposed legislation would further increase the investigative powers of the Fair Work Ombudsman in cases where there are no employee records, such that investigations may still be resolved through new enforceable examination powers. Currently there is no penalty for a person who refuses or fails to answer questions which would not be the case should the amendment bill be passed. Protections put in place by the Bill would require the Ombudsman to have reasonable grounds to believe the person can help with the investigations, allows legal representation for the person under questioning and prohibits employees who are giving evidence for any self-incriminating information, documents or answers being used against the person who is giving evidence in any proceedings. It would also allow the Fair Work Ombudsman to pursue those who hinder and obstruct their inspectors including those who provide false or misleading information and would provide a civil remedy to supplement existing criminal remedies under the Commonwealth Criminal Code.

A separate bill titled the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017 was also introduced. If passed it will repeal the requirement for the Fair Work Commission to conduct 4 yearly reviews from the beginning of 1 January 2018 as the “4 yearly review mechanism is too resource intensive for both the FWC as well as employer and employee organisations taking part in the review.” This would not have any effect on reviews that are not yet concluded under the current process.

The proposed bill would also enable the Fair Work Commission to overlook minor procedural and technical errors in the enterprise agreement approval process, such as errors in the notice of employee’s representational rights, so long as the errors do not disadvantage employees.

If you would like to gain a better understanding of the wide and ever increasing range of laws relating to equal opportunity, industrial relations, worker’s compensation and occupational health and safety attend our Employment Law: A Practical Perspective on 4 April 2017.