Vulnerable workers protected by new laws

New laws to protect vulnerable workers have been introduced by the Fair Work Ombudsman.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 passed the parliament on 5 September.

This amendment will increase the maximum penalties for employers who deliberately disregard the minimum wage and other entitlements under the Fair Work Act 2009.

Certain franchisors and holding companies will be held responsible for underpayments by their franchisees where they knew, or reasonably should have known, about the contraventions and failed to take reasonable steps to prevent them.

The laws apply new, higher financial penalties to ‘serious contraventions’ which are 10 times the current maximum penalties. A court could impose these higher penalties where an employer knew they were breaching their obligations and this conduct is part of a systematic pattern of behaviour. In such cases maximum penalties of $630,000 and $126,000 per contravention could apply to corporations and individuals respectively.

The new laws will double the maximum penalties for record-keeping and pay slip breaches to $12,600 per contravention for individuals and $63,000 for companies, and triple existing penalties in cases where employers give false or misleading pay slips to workers, or provide the Fair Work Ombudsman with false information or documents.

“New evidence gathering powers contained in the legislation will allow the Fair Work Ombudsman to require a person to provide information or documents to the FWO or to attend before senior FWO officials to answer questions on oath or affirmation that relate to underpayment of workers,” said Fair Work Ombudsman Natalie James.

Amendments moved by the Senate will also provide that where an employer has not met their record-keeping or pay slip obligations, the employer will have to disprove a wage claim put before a Court unless the employer has a reasonable excuse for not keeping records or issuing pay slips.

James also welcomed the strengthening of laws governing “cashback” arrangements with the legislation specifically prohibiting unreasonable requirements for an employee to pay money to their employer or another person. These protections will now also extend to prospective employees unreasonably required to pay their own money to get a job.

There are strong protections for individuals in relation to these evidence-gathering powers including: supervision by the Administrative Appeals Tribunal and the Commonwealth Ombudsman, rules preventing the evidence a person gives from being used against them personally, the right to have a lawyer present if they attend to answer questions and the right to claim reimbursement of reasonable expenses.

“My agency will continue to be fair and balanced in its approach and will to operate in accordance with our compliance and enforcement policy,” said James.

“However, employers who know their obligations and systematically fail to meet their workplace obligations should be on notice that we will use all the powers at our disposal.

“The Fair Work Ombudsman will work with any franchise that is serious about doing the right thing by its workers.”