Employers can face 10 times the current maximum penalties in case of minimum wage disputes under new changes
Vulnerable workers will now have more protection under the Fair Work laws following the passing of the Amendment Bill by the Australian Senate.
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:
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):
"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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