The federal government has finally put in place changes to the Fair Work Act designed to deal with “dodgy bosses” more decisively. It includes tougher penalties and some new powers for the Fair Work Ombudsman.
This follows Employment Minister Michaelia Cash’s earlier pledged to weed out employers who fail to comply with minimum payment standards or fail to act on lack of compliance in their franchise networks.
But franchising experts are opposed to the bill as they believe it would discourage operators starting new businesses because of the potential liability franchise owners, and operators could face under the new rules.
Standing its ground
The government has however continued to stand its ground, insisting that vulnerable workers – usually labourers who have migrated to Australia – are firmly in their focus following high-profile cases of employees being underpaid as in the case of the 7-Eleven scandal that was exposed in 2015.
The legislation is an amendment to the Fair Work Act and gives the Fair Work Ombudsman additional investigative powers while increasing funding by $20 million. It was approved by the Senate on 4th September with amendments from Labor.
The areas it covers are:
- It makes it explicitly illegal for employers to have “cash back” arrangements in their workplace. This is where employers pay wages to their workers and then ask them to payback some of the cash.
- It places more emphasis on “serious contraventions” of workplace law and slaps higher penalties for non-compliance
- It has put in place new provisions which place greater responsibility on holding companies for failure to comply with regulations by their franchises, particularly where it is proven that they are aware of such breaches.
- Increasing the FWOs powers to gather evidence
- Revisiting the level of responsibility placed on companies that contravene record keeping rules.
It defines “serious contravention” of workplace laws as situations where an employer is found to have participated in a systematic and deliberate behaviour pattern that undermines the Fair Work Act, and prescribes fines that are up to 10 times higher than was the case previously. These include penalties of to $126,000 for individuals and $630,000 for a corporation.
Liability of franchise operators and holding companies
The legislation further expounds the Fair Work Act to increase liability for a franchise entity or holding company for breaches like underpayments if they “knew or could reasonably be expected to have known” that a contravention of a workplace law happened or was likely to happen.
Powers of the Fair Work Ombudsman
The Bill initially gave the FWO investigative powers “even if no documents had been produced” about a company’s transgressions, however, Labor amendments limits how the Ombudsman can use these powers,
in cases where a claim has been lodged about a possible breach of workplace law, but the employer has failed to keep detailed records that would exonerate them, businesses will now be forced to find an alternative way of showing compliance.
What this means to migrant workers in Australia
The changes should come as welcome news to migrants on work visa sponsorship programs who will now feel more protected by the law, as they go about earning their daily bread.