Legislation passed to protect vulnerable workers

Legislation passed to protect vulnerable workers


Vulnerable workers are set to receive better protection after the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 passed on 5 September.

The Bill contains measures such as an increase in the maximum penalties for employers who deliberately flaunt the minimum wage and other entitlements under the Fair Work Act 2009.

The new laws will apply from the day after the Bill receives royal assent, except for the new franchisor and holding company liability which will start six weeks later.

Franchisors and holding companies will be held responsible for underpayments by their franchisees where they know, or reasonably should have known, about the contraventions and failed to take reasonable steps to prevent them.

The new laws will:
– Apply to franchisors that have a significant degree of influence or control over the franchisee’s affairs.
– Apply new, higher financial penalties to ‘serious contraventions’ which are 10 times the current maximum penalties. A court could impose these higher penalties where an employer knew they were breaching their obligations and this conduct is part of a systematic pattern of behaviour. Maximum penalties of $630,000 and $126,000 per contravention could apply to corporations and individuals respectively.
– Double the maximum penalties for record-keeping and pay slip breaches, to $12,600 per contravention for individuals and $63,000 for companies, and triple existing penalties where employers give false or misleading pay slips to workers, or provide the Fair Work Ombudsman (FWO) with false information or documents.

Furthermore, where an employer has not met their record-keeping or pay slip obligations, the employer will have to disprove a wage claim put before a Court unless the employer has a reasonable excuse for not keeping records or issuing pay slips.

The Fair Work Ombudsman will be given new evidence gathering powers to require a person to provide information or documents to the FWO or to attend before senior FWO officials to answer questions on oath or affirmation relating to underpayment of workers.

Individuals will have stronger protections with the strengthening of the FWO’s new evidence powers including rules preventing the evidence a person gives from being used against them personally, the right to have a lawyer present if they attend to answer questions, the right to claim reimbursement of reasonable expenses and supervision by the Administrative Appeals Tribunal and the Commonwealth Ombudsman.

While the FWO acknowledges most employers work with the FWO to address concerns about an employee’s entitlements, those engaging in deliberate breaches of the law often do not cooperate. The new powers will help address serious cases of non-compliance and exploitation, especially in protecting the most vulnerable community members.

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If you believe the matters discussed above are relevant to your business, please contact Darren Smith of our office to discuss further.


Darren is a Chartered Accountant with extensive experience, including working in the big 4 and medium sized firms before becoming a partner of a city based firm in 2000.

He has gained much experience and has extensive knowledge in providing business and taxation advice, superannuation planning, negotiation of sales and acquisitions of businesses and property development. His client base covers a wide range of industry groups.

Darren works with business owners to grow their businesses and create personal wealth within and outside of their business.


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