Employers beware: the Fair Work Act is getting even tougher

All businesses and employers need to be aware of the recent amendments to the Fair Work Act 2009 (Cth) (Act). The amendments were part of a number of changes made by Parliament in the wake of recent underpayment scandals, particularly those involving prominent franchise operations.

The amendments include the introduction of penalties for ‘serious contraventions’. Each contravention of the Act attracts a penalty of up to $63,000 for a body corporate and up to $12,600 for an individual. Certain contraventions of the Act, including breach of any term of the National Employment Standards or an applicable modern award or enterprise agreement, can now also attract a ‘serious contravention’ penalty. The new serious contravention penalties are 1000% greater, with penalties now available of up to $630,000 for a body corporate and up to $126,000 for an individual, for each contravention of the relevant provisions of the Act.

A serious contravention occurs when a person knowingly contravenes a relevant civil remedy provision of the Act and the person’s contravening conduct was part of a systematic pattern of conduct relating to one or more persons. The higher penalties can also apply if a person is found to have been involved in another person’s serious contravention of the Act.

A franchisor or holding company can now be found to have contravened a new provision of the Act if its franchisee or subsidiary contravenes a specified provision of the Act in certain circumstances. Such circumstances include when the franchisor or holding company knew, or could be reasonably expected to have known, the contravention by the franchisee or subsidiary would occur or was likely to occur.  Liability can be avoided if the franchisor or holding company can demonstrate that it took reasonable steps to avoid contravention by the franchisee or subsidiary.

Employers are now also prohibited under the Act from making or keeping false or misleading employee records, and from knowingly giving employees false or misleading payslips. Prohibitions on arrangements where employees are required to spend or pay money to their employer have also been broadened under the recent amendments, and now apply before employment commences.

Employers should also be aware that the changes to the Act also strengthened the Fair Work Ombudsman’s investigative and evidence-gathering powers. We urge all employers to ensure they keep proper employee records, comply with the Act, and to seek legal advice where necessary to ensure compliance with the Act.

If you need assistance with understanding your obligations under the Fair Work Act, or advice about any other workplace matter, please contact:

Jim Rutherford
Principal
Harwood Andrews
T: 03 5226 8579
E: jrutherford@ha.legal

Sonia McCabe
Senior Associate
Harwood Andrews
T: 03 5226 8558
E: smccabe@ha.legal

Jenni Walker
Lawyer
Harwood Andrews
T: 03 5226 8577
E: jwalker@ha.legal