IR Bill Welcome But More Needs To Be Done To Protect Business Owners

Published December 09, 2020 (last updated January 25, 2022) -
IR Bill

More safeguards need to be implemented to help protect honest small business owners from proposed new wage theft laws, according to Employsure, Australia’s largest workplace relations advisor.

Under a measure in the Federal Government’s proposed Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, individuals found to be deliberately underpaying their staff could be jailed for up to four years, or fined almost $1.11 million. Companies face a fine of almost $5.5 million.

While the bill states employers will be helped in complying with their obligations, it fails to mention how those who make an honest mistake when paying their staff can avoid being penalised.

“Businesses, both large and small, have had to wade through an already difficult system to ensure they are doing right by their employees,” said Employsure Managing Director Ed Mallett.

“As a result, wage underpayment is one of the biggest issues that is affecting employers across the country. You see in the news on almost a weekly basis big companies failing to pay their employees correctly.

“This new legislation has been designed to catch employers who are deliberately doing the wrong thing, but for most business owners, if they were to make an honest mistake when paying staff, they now run the risk of criminal action.

“Of the $123m recovered by the FWO last financial year, $90m of that was self-reported by employers who realised their error. If big businesses can’t get it right, what hope is there for small business?”

Of the other measures in the bill that the Federal Government hopes will improve Australia’s IR system, the issue of casual employment is one that has drawn controversy. While unions opposed to the bill believe having more people in secure work is the main priority, they are concerned what is being tabled to parliament is a direct attack on job security.

If passed, a new definition of what a casual worker is will come into law, following a previous Federal Court ruling that casual employees firmly committed in advance to ongoing work are, in fact, permanent employees entitled to seek paid annual leave, paid personal/carer’s leave and paid compassionate leave.

Employers would also have to offer those working regular shifts the opportunity to convert to permanent roles after 12 months if they wish to do so under the proposed changes.

“There has never been a clear, legal definition of casual employment in the Fair Work Act before. What we currently assume to be a casual worker is subjective, and lacks any real sense of clarity if brought before a court,” continued Mr Mallett.

“These changes if they pass, will help deny double dipping claims by empowering employers to convert their regular and systematic casuals into permanent employees.

“Business owners have been trying to save money any way they can as a result of the pandemic. With initiatives like JobKeeper coming to an end in coming months, a change like this, if executed correctly, would be the kickstart employers need to start the new year on the front foot.”


Further enquiries:

Matthew Bridges

[email protected]

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