All employers, not just those who operate in the franchise sector, face significant new responsibility and stiff new penalties after the Parliament voted to pass the long anticipated Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017.
The Protecting Vulnerable Workers Bill was introduced by the Government as part of their election commitment to do more to protect vulnerable workers, and follows revelations of systematic exploitation and wage fraud involving some of Australia’s biggest businesses.
The legislation aims to protect vulnerable workers by:
- introducing a higher scale of penalties for ‘serious contraventions’ of payment-related workplace laws, specifically a tenfold increase in the maximum penalty for serious contraventions of the Fair Work Act 2009, up to $630,000 for a corporation and $126,000 for an individual;
- trebling the maximum penalties for failing to comply with record-keeping obligations;
- making franchisors and holding companies responsible for underpayments by their franchisees or subsidiaries where they knew or ought to have reasonably known of the contraventions and failed to take reasonable steps to prevent them;
- strengthening the evidence-gathering powers of the Fair Work Ombudsman to ensure that the exploitation of vulnerable workers can be effectively investigated; and
- expressly prohibiting employers from unreasonably requiring their employees to make payments back to the business (e.g. demanding a proportion of their wages be paid back in cash).
While high-profile cases such as 7-Eleven are credited with bringing about the changes, it is worth noting that the application of the new laws are not solely restricted to the franchise sector. Any employer who is found to have committed ‘serious contraventions’ of payment-related workplace laws now faces much harsher penalties and an ombudsman with sweeping new powers.
What are the chances of getting caught?
The Fair Work Ombudsman has been given new evidence-gathering powers to ensure that the exploitation of vulnerable workers can be effectively investigated.
The Fair Work Ombudsman, Ms Natalie James stated:
“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 FWO has also received an increase in funding to help put more inspectors on the road. All employers should brace themselves to be ready for when the FWO comes knocking.
When will the new laws commence?
The legislation that has now been passed represents a dramatic shift in the operational framework of the industry. Most of the new provisions are set to commence upon being given royal assent, meaning that you have no time to waste in getting your house in order.
It is clear that turning a blind eye to workplace non-compliance is no longer a viable option. The new legislation will sit alongside the existing accessorial liability provisions, which meaning that Directors, Payroll Managers and Advisors are all susceptible to the risk of hefty penalties for getting it wrong.
How HR Assured can help:
Our market-leading technology solution, HRA Cloud, is a complete risk management system, providing you with access to everything you need to meet your workplace compliance obligations – right at your fingertips!
A key feature of the HRA Cloud platform is centralised records management. This helps ensure that you are meeting your record keeping obligations by storing everything you need in the one place. Combined with employee Self Service (eSS), our clients love having a fully streamlined and completely paperless employee management system.
The best part? HR Assured is backed by of Australia’s leading workplace relations firm, FCB Workplace Law. Through leveraging their experience, you have everything you need to ensure you meet your current and ongoing workplace compliance obligations under the new legislation.
HR Assured takes care of the administrative part of HR by keeping you up-to-date with employee records, drafting up policies and implementing contracts. Contact us or call us today for a free consultation on 1300 345 875