Penalty increase for non-compliance

In the wake of several high-profile cases of worker exploitation, along with growing community outrage over the exploitation of migrant workers, the government has introduced new legislation.

The Government last week passed the Fair Work Act 2009 Amendment (Protecting Vulnerable Workers) Bill 2017, which is clearly focused on franchisors and group companies. The Bill will place significant additional responsibility on franchisors and group companies over the employment practices of their franchisees or subsidiaries.

These amendments will effectively create the following:

  • A joint liability between franchisor and franchisee. Franchisors will be directly liable for the underpayment liabilities where they failed to take reasonable steps to prevent non-compliance within their networks.

  • Prohibition against employers unreasonably requiring employees to make payments.

  • A substantial increase in the maximum penalty for serious contraventions of the ACT, up to $540,000 for a corporation and $108,000 for an individual.

In addition, these changes will be enforced by the Fair Work Ombudsman, who have been provided with an additional $20 million in funding to create a Migrant Workers Taskforce, specifically targeting employers who exploit vulnerable migrant workers.

How does the new Protecting Vulnerable Workers Bill affect your organisation?

To mitigate your exposure to the potential for non-compliance, it is important to review your employment obligations and make appropriate changes. If you think this new legislation will affect your organisation, contact us to discuss what your next steps should be.

For more information on workplace compliance and risk mitigation, contact us today.

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