Changes to the Fair Work Act – What you Need to Know as an Employer
The Fair Work Amendment (protecting Vulnerable Workers) Act 2017 came into effect on 15 September 2017, and this amended the Fair Work Act 2009 (CTH) (FW Act). Below are a few of the most important changes that could have an effect on you or your business.
Maximum penalties for any civil remedy provisions of the FW Act have increased by as much as tenfold. An employer who seriously contravenes any of their obligations under specific provisions of the FW Act could find himself or herself being liable for up to $126,000 per contravention if the employer is an individual and up to $630,000 in cases where the employer is a corporation.
A contravention will be a ‘serious offence’ in cases where the employer knowingly contravened the provision and that conduct formed part of a routine of conduct that relates to one or more persons, and this can also include previous breaches of any other civil remedy provisions.
Any person who is involved in a contravention of a civil remedy provision that has been committed by another person will also be deemed to have committed a serious offence, if the principal’s contravention was a serious one and the person involved was aware that it was a serious contravention.
Increased penalties will also be applied to employers who are in contravention of their record-keeping obligations under the Fair Work Act. The maximum penalty for any employer who does not keep the required employee records or issue compliant pay slips has doubled and employers who falsify any employee records will now be held liable for triple the previous maximum penalty amount.
Fair Work Ombudsman
The evidence-gathering and investigative powers of the Fair Work Ombudsman (FWO) have also been improved. It is now possible for the FWO to apply to the Administrative Appeal Tribunal for an FWO notice if it is reasonably believed that a business or person has documentation or information that will assist with an investigation and is able to provide evidence thereof.
An FWO Notice can be utlised to require a business or person to:
- Supply documentation
- Provide information, or
- Attend an interview to answer questions
Failure to comply with any FWO Notice will result in a penalty of $126,000 being applied to an individual and $630,000 if a corporation is concerned. Penalty amounts will also apply to anyone who intentionally obstructs the FWO or any of its inspectors during the course of their duties and functions.
‘Cash-back’ Agreements Strictly Prohibited
Changes to the Fair Work Act now also include a strict prohibition against employers from indirectly or directly requiring a staff member to spend or pay to the employer, any amount of funds or a portion of the staff member’s wage if this requirement is deemed to be unreasonable in the specific circumstances and if the payment is for the benefit of the employer or any related entity.
Reverse Onus of Proof
If any employee makes claims with regards to there being a contravention of the employer’s obligations and the employer in question did not keep the required records, make the records available and provide a compliant pay slip to the employee, the responsibility will now fall on the employer to prove that they have indeed paid the employee correctly and that the appropriate entitlements have also been paid.
What Employers must do now
- Ensure that all systems for compliance with minimum employment standards under the Fair Work Act, agreements and awards are effective and pertain to all employees in your company or organisation
- If there is any chance of non-compliance, perform a complete desktop audit of your current processes for employment record keeping and provision of employee pay slips. This must include any outsourced payroll arrangements if applicable.
- If an FWO Notice is issued to you, contact your legal advisor immediately. Although some of the changes will provide protection from liability relating to information given in response to an FWO notice, the privilege against any form of self-incrimination will not apply.