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Fair Work Amendment Bill 2017: An In-Depth Look

Vulnerable workers may finally get the protection they need against shady business practices, thanks to a proposed amendment to the Fair Work Act.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 was introduced to Parliament on 1 March 2017, and it’s expected to pass through the Senate with ease. The Bill aims to implement more severe penalties to serious violations of the Fair Work Act 2009, in light of the numerous underpayment cases in recent years.

Following is a brief summary of the most important points of the new bill:

Amendment #1: Harsher penalties for serious contraventions

The Amendment Bill proposes to increase the current maximum civil penalties for ‘serious contraventions’ tenfold, from $10,800.00 to $108,000.00 for individuals and from $54,000.00 to $540,000.00 for corporations.

A contravention of the Fair Work Act is deemed ‘serious’ if the person’s conduct was both deliberate and part of a systemic pattern relating to one or more other persons.

Such conduct by an organisation will be found to be deliberate if they expressly or impliedly authorised the contravention. This authorisation can come from:

  • An individual within the organisation; or
  • A policy, rule or practice implemented within the organisation.

A systemic pattern of conduct refers to a recurring, methodical act or a series of coordinated acts over a period of time. To determine whether a person’s conduct was part of a systemic pattern, a Court may consider:

  • The number of contraventions committed;
  • The number of people affected by the contravention;
  • The period of time over which the contravention(s) happened;
  • Whether employment records were kept in accordance with the Act; and
  • Whether payslips were provided in accordance with the Act.

Amendment #2: New franchisor liabilities

Once the Bill passes, franchisors will no longer have carte-blanche to ignore their obligations under the Act, as they will also be held responsible and liable for contraventions by their franchisees over which they have significant influence or control. The same applies to the holding companies of subsidiaries.

A new civil penalty liability will be imposed to a responsible franchisor whose franchisee contravenes the Act if the franchisor or one of its officers knew, or could reasonably be expected to know, that a franchisee would commit, or was likely to commit, a contravention.

The amendment aims to make franchisors more proactive in preventing contraventions of the Fair Work Act so they can no longer ‘turn a blind eye’ over their franchisees’ affairs.

To balance and limit a franchisor’s exposure to this new liability, the bill adds that the franchisor will not be held liable if, at the time of or prior to the franchisee’s contravention, the franchisor took reasonable steps to prevent it.

To determine whether reasonable steps were taken, a Court may consider:

  • The franchise’s size and resources;
  • The degree of influence or control the franchisor has over the franchisee in relation to the contravention;
  • The actions the franchisor took to ensure the franchisee is informed of the requirements of the applicable provisions of the Act;
  • The franchisor’s process for receiving and addressing complaints regarding possible contraventions;
  • The franchisor’s processes for assessing franchisee compliance with workplace laws; and
  • The franchisor’s arrangements and actions for requiring or encouraging franchisee compliance.

Amendment #3: Increased powers of the Fair Work Ombudsman

The bill will give the FWO a broader and stronger reach in its ability to gather information when conducting an investigation into a suspected contravention, comparable to powers already exercised by regulators such as the ACCC and ASIC.

The FWO will be able to require a person to provide information or evidence relevant to any such investigation, extending its ability to serve employers a ‘Notice to Produce’ to demand employment records.

These extended powers were proposed as a direct result of the FWO’s investigation regarding the 7-Eleven scandal, in which the FWO admits that it did not have sufficient power to compel evidence from persons who may have had evidence for further prosecutions for violations of the Act.

How Certica helps you review your arrangements

Organisations who will be affected by the Fair Work Amendment Bill 2017 will need to keep a close eye on the bill’s progress while ensuring that they reassess their compliance with workplace laws, as well as that of their franchisees and subsidiaries.

Note that being contacted by the FWO regarding compliance complaints already amounts to a legal process, which may have serious implications for your organisation. Do not wait for it to happen – take proactive measures today to ensure that you meet all compliance requirements and limit your exposure to liability.

As advocates of independent contracting, Certica wholeheartedly applauds the much needed protections for vulnerable workers afforded by the new bill. We have repeatedly condemned sham contracting practices that have smeared the public’s perception on all contracting arrangements.

Our IR champions are ready to instill Certainty in your organisation – contact us today to learn how we can help.

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