On 1 March 2017 the Fair Work Amendment (Protecting Vulnerable Workers) Bill was introduced into Parliament to amend the Fair Work Act 2009 (the Act) to implement the Government’s commitment to protect vulnerable workers. The Bill has arisen, in part, from the recent, and ongoing, prosecution of 7-Eleven franchisees regarding significant underpayment of wages. Here, Emily Shoemark, Senior Associate at Snedden Hall & Gallop Lawyers, discusses the proposed changes.
The proposed changes to the Act include:
- Increased penalties
- Franchisors could become responsible for the conduct of their franchisees
- Increased powers of the Fair Work Ombudsman (FWO)
- New prohibited conduct
1. Increased penalties
Penalties for ‘serious contraventions’ of certain provisions of the Act could be increased to 10 times the current civil penalties. The rationale behind the increase comes from a concern that the current penalties are seen by some employers as an acceptable cost of doing business. The increased penalties would apply to contraventions of the National Employment Standards, Awards, Enterprise Agreements, Workplace Determinations the national minimum wage order, and certain employer obligations (including keeping employee records and providing payslips).
2. Franchisors could become responsible for the conduct of their franchisees
Franchisor entities and holding companies could become responsible for the conduct of franchisees if they know, or should reasonably be expected to know, and failed to take steps to prevent the prohibited conduct. In recent years, there have been a number of cases in the media relating to breaches of the award by fast food pizza stores by not paying delivery drivers properly as employees. If this bill is passed, the head office of such a franchise could be held responsible in addition to, or instead of, the individual outlets.
3. Increased powers of the FWO
It is proposed that the FWO be given new evidence gathering powers, similar to those held by ASIC and the ACCC. This would include the power for the FWO to issue an FWO notice to someone requiring them to provide information, if the FWO believes that person has information or documents relevant to an investigation.
4. New prohibited conduct
The Bill recommends the prohibition of:
- Employers directly or indirectly requesting unreasonable payments from their staff;
- Individuals hindering or obstructing a prescribed official without a reasonable excuse; and
- Individuals giving documents known to be false or misleading to the FWO
What is next?
Our Employment Law team will follow the progress of the Bill and provide updates about any changes made to the Fair Work Act 2009.
How can Snedden Hall & Gallop Lawyers help you?
As an employer, if you have any concerns about compliance with employment obligations contact Snedden Hall & Gallop today on (02) 6285 8000 or by email here. You can find out more about our Employment Law team.