Most of the amendments made to the Fair Work Act as a result of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 came into operation on 15 September 2017.

New “serious contravention” penalties

New, much higher penalties apply for a “serious contravention” of the provisions of the Fair Work Act dealing with the entitlements of employees under awards, enterprise agreements, the National Employment Standards (NES) and other specified provisions of the Act.

The maximum penalty for a “serious contravention” is $630,000 per breach for a company (10 times the current maximum penalty).

A contravention by a person (including a business) is a serious contravention if:

• the person knowingly contravened the provision; and
• the person’s conduct constituting the contravention was part of a systematic pattern of conduct relating to one or more other persons.

Without limiting what a Court can consider, the legislation provides that in determining whether a person’s conduct constitutes “part of a systematic pattern of conduct”, a Court may have regard to:

• the number of contraventions of the Act committed by the person;
• the period over which the relevant contraventions occurred;
• the number of persons affected by the relevant contraventions;
• the person’s response, or failure to respond, to any complaints made about the relevant contraventions;
• whether the person failed to keep employee records; and
• whether the person complied with the pay slip requirements of the Fair Work Act.

Importantly, the legislation extends liability to directors and managers who are involved in a “serious contravention” by a business and knew the contravention was serious.

Record keeping and pay slip obligations

Penalties for breaches of pay slip and employee record keeping requirements of the Fair Work Act have increased to $63,000 per contravention (double the current maximum) and up to $630,000 for a “serious contravention” (20 times the current maximum).

Further, employers who fail to keep employee records or issue pay slips will now bear the onus of disproving any allegation that they contravened relevant provisions of the Fair Work Act (for example, under payment of an employee).

Franchisors and holding companies

The Fair Work Act has been amended to impose responsibilities upon franchisors and holding companies for breaches of workplace relations laws and instruments by franchisees and subsidiaries in many circumstances.

Where a person (including a business)

• is a franchisor, and
• has a significant degree of influence or control over the franchisee’s affairs,

they will be a “responsible franchisor entity” and have responsibility for certain breaches of the Act by their franchisees.

If the franchisor or holding company knew, or could reasonably be expected to have known, that the contravention would occur, they may be held responsible for contraventions by franchisees and subsidiaries. This includes contraventions of provisions in the Fair Work Act dealing with the entitlements of employees under awards, enterprise agreements, the NES and other specified provisions of the Act.

The legislation provides a defence for a franchisor or holding company that is able to demonstrate that it took reasonable steps to prevent the contravention by the franchisee or subsidiary.

These provisions come into operation on 27 October 2017.

Unreasonable requirements for employees

The legislative amendments prohibit an employer requiring an employee to spend, or pay to the employer or another person, any of the employee’s money or any amount payable to the employee for work performed, if the requirement:

• is unreasonable; and
• the payment is for the benefit of the employer or a party related to the employer.

Increased Powers for the FWO

The amendments also give the Fair Work Ombudsman (FWO) greater investigative and enforcement powers.

The FWO may compel a person to provide information, documents, or attend an interview to answer questions relating to an investigation by an FWO inspector into a suspected contravention of specified provisions of the Fair Work Act. The provisions include those dealing with the entitlements of employees under awards, enterprise agreements, and the NES.

Various protections are included within the amendments to ensure fairness to those who are subjected to the use of the new powers.

Ai Group’s submission on the Bill is available on Ai Group’s website.

If you would like more information complying with the new legislative provisions, please contact Ai Group’s Workplace Advice Service on 1300 55 66 77.

Alternatively, if you would like assistance in complying with any of the new provisions, please contact your local employment, workplace and industrial lawyer in Sydney, Newcastle, Wollongong, Melbourne or Brisbane or email Ai Group Workplace Lawyers at info@aigroupworkplacelawyers.com.au.