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Government gets tough on exploitation of vulnerable workers.

Government gets tough on exploitation of vulnerable workers.

The government is sending a strong message to businesses that it will not tolerate the exploitation of vulnerable workers. The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Bill) was introduced into Parliament in March this year. The Bill, if it becomes law, will impact on employers, related body corporates, franchisors, and franchisees.

The Bill was introduced in the wake of several well-publicised underpayment scandals, the most notable of which involved 7-Eleven, where vulnerable workers (eg young and migrant workers) were systematically underpaid by their employers and in some cases, payroll records doctored to cover up underpayments. The Fair Work Ombudsman has been targeting the underpayment of vulnerable workers, with investigations into household brands such as Caltex, Pizza Hut, and Domino’s. The Bill looks to be a further attempt to protect vulnerable workers from the small group of dishonest business owners that try to take advantage of these workers.

What do the potential changes mean?

The main features of the proposed legislation are:

  • the introduction and definition of ‘serious contraventions’ under the Fair Work Act (Act) which would apply to ‘deliberate and systematic’ breaches of the Act, as opposed to genuine mistakes or inadvertent conduct
  • increased penalties for businesses and entities that carry out serious contraventions of the Act (up to $108,000 for individuals and $540,000 for body corporates)
  • increased penalties for failures in record keeping, for example pay slips
  • an extension of accessorial liability to franchisors which will ensure that franchisors are held responsible for underpayments by their franchisees where the franchisor knew or ought reasonably to have known of the underpayments and did not take reasonable steps to prevent those underpayments

The Bill is targeting those business owners that engage in intentional and repeated behaviours in breach of the  Act. This would include concurrent breaches of the Act; breaches occurring over an extended period of time or after complaints have been raised; multiple workers being impacted; and a failure to keep pay slip records. Importantly, this kind of behaviour is to be treated differently to genuine mistakes or inadvertently over-looking record-keeping requirements.

The proposed legislation, along with the Fair Work Ombudsman’s recent history of chasing accessories to breaches of the Act mean that business owners need to be vigilant in ensuring that they know their obligations to their workers under the Act and that they comply with these obligations.

Changes to 457 visa regime. 

There is another change for employers of migrant workers to be aware of following last month’s announcement that the 457 Visa Program will be abolished and replaced. Employers are being advised to consult their registered migration agent or the Department of Immigration and Border Protection for more information.

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