Fair Work Amendment Bill passes Parliament

Employers can face 10 times the current maximum penalties in case of minimum wage disputes under new changes

Fair Work Amendment Bill passes Parliament
The amendments passed by the Senate give the Fair Work Ombudsman more investigative powers.


Vulnerable workers will now have more protection under the Fair Work laws following the passing of the Amendment Bill by the Australian Senate yesterday.

Welcoming the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, Fair Work Ombudsman Natalie James says the changes will give Fair Work more powers to take action in cases of worker exploitation.

The amendment includes an increase in maximum penalties for employers who deliberately flout minimum wage and other entitlements’ rules under the Fair Work Act 2009.

In case of serious contraventions, the employers can face up to 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," the FWO states.

"In such cases maximum penalties of $630,000 and $126,000 per contravention could apply to corporations and individuals respectively."

The Ombudsman states that during the previous financial year, up to two-thirds of the FWO’s court cases involved alleged record-keeping or payslip contraventions, with nearly one third involving allegations of false or misleading records provided to the FWO.

The amendments moved by the Senate will double the maximum penalties for record-keeping and payslip breaches to:

  • $12,600 per contravention for individuals
  • $63,000 for companies
  • triple existing penalties in cases where employers give false or misleading pay slips to workers, or provide the FWO false information.

In cases where an employer has not met their record-keeping or pay slip obligations, they will have to disprove a wage claim put before a Court unless the employer has a "reasonable excuse" for not doing so.

The changes will come into effect once the Bill has received royal assent, although the new franchisor and holding company liability will begin six weeks after the Bill becomes law.

Summary of key changes (as outlined by the FWO):

  • Certain franchisors and holding companies become responsible for underpayments by their franchisees or subsidiaries where they knew, or reasonably ought to have known, about the contraventions and failed to take reasonable steps to prevent them
  • A new category of serious contraventions has been introduced, with penalties that are ten times the current maximum where employers knowingly contravene and it is part of a systematic pattern of contravening conduct
  • New penalties for providing Fair Work inspectors with false or misleading information or records, and new prohibitions for hindering or obstructing them
  • "The prohibitions against unreasonably requiring employees to make payments, commonly seen as cashback arrangements, have been strengthened and extended to prospective employees
  • Maximum penalties for record-keeping and pay slip breaches have been doubled, and the maximum penalty for false or misleading employment records has been tripled.  New penalties apply for giving false or misleading pay slips
  • Employers who do not meet record keeping or pay slip obligations and cannot show a reasonable excuse, will need to disprove wage claims made in a court
  • The Fair Work Ombudsman’s evidence-gathering powers have been strengthened.

"The new law will hold certain franchisors and holding companies 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 FWO states.

"The laws will apply to franchisors that have a significant degree of influence or control over the franchisee’s affairs."

The Ombudsman says while in most cases employers cooperate with the FWO to address concerns about an employee’s entitlements, there are those who do not work with the authorities.

James says such employers are generally those who deliberately breach the laws despite being aware of their workplace obligations.

In such cases, the FWO’s office will "use all the powers" at its disposal under the enhanced evidence-gathering powers of Fair Work Australia.

James says she looks forward to working with the community, including franchisors and their advocates and advisers, to help them understand the new laws and the ways they can contribute to building a culture of compliance with them.

"Now is the time for franchise systems that care about their reputation to take steps to ensure their employees receive their lawful entitlements," James says.

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

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