Factual Background. In August last year,
allegations came to light that large numbers of retail franchisees
had systematically underpaid migrant workers, using threats and
coercion to maintain workers' silence. The revelations drew
public condemnation and forced the federal government and
opposition to consider amendments to the Fair Work Act
2009 (Cth) ("FWA") to counter employee
In the past few months, the two major parties have announced
proposals to tackle the problem. In our
January 2016 Update we reported on the Australian
Labor Party's early proposals, and in our
March 2016 Update, we analysed a bill introduced into
the Senate by Labor. On 19 May 2016, the Liberal Party announced
its proposals to deal with employee exploitation, and this
Update will primarily focus on those proposals.
Liberal Party Proposals. On 19 May 2016, a
policy document was released by the Minister for Employment,
Senator Michaelia Cash. The document, The Coalition's Policy to Protect
Vulnerable Workers ("Policy"), outlines in broad
strokes the Liberal Party's proposals to crack down on
employers exploiting vulnerable employees. The Policy is an
important blueprint of what a Liberal Government bill might look
like. Important proposals within the Policy include:
Amending the FWA to increase
penalties payable by employers who deliberately and systematically
underpay workers and fail to keep proper pay records. The current
maximum penalties for underpaying employees is $10,800 per breach
for individuals and $54,000 per breach for corporations. The
proposed penalties for underpaying employees is $108,000 per breach
for individuals and $540,000 per breach for corporations. These are
significant increases in pecuniary penalties.
Introducing a new offence that makes
franchisors and parent companies liable for breaches of the FWA by
their franchisees or subsidiaries, in circumstances where the
franchisor should reasonably have been aware of the breaches and
could reasonably have taken action to prevent the breaches from
Amending the FWA to strengthen the
investigatory powers of the Fair Work Ombudsman. The Policy
proposes that the Ombudsman be given powers that resemble the
powers of the Australian Securities and Investments Commission, the
Australian Competition and Consumer Commission and the Australian
Taxation Office—currently the most powerful federal
Establishing a Migrant Worker
Taskforce within the office of the Fair Work Ombudsman.
A promise to inject an additional $20
million of funding to the Fair Work Ombudsman.
In a statement released on 19 May 2016, Senator
Cash remarked that these proposals were intended to improve
safeguards for "vulnerable workers who have been let down ...
by blatant non-compliance with workplace laws by employers across a
number of industries and in many cases, multinational corporations
who ignore their obligations under Australian laws." Senator
Cash went on to criticise Labor's Bill, arguing that the
proposed changes would fail to address the particular conduct that
was leading to the exploitation of employees.
Labor Party Proposals. In our
January 2016 Update, we reported on policy
announcements that the Labor Party made early in the year. In our
March 2016 Update, we reported on the Fair Work
Amendment (Protecting Australian Workers) Bill 2016 introduced by
Labor into the Senate. That bill lapsed when Parliament was
prorogued on 15 April 2016, and a Senate Inquiry into the bill by
the Senate Standing Committee on Education and Employment also
lapsed on 9 May 2016, when Parliament was dissolved by the
Governor-General in preparation for the 2 July election.
Consequences. Whatever the eventual outcome of
the 2 July Federal Election, the Labor Bill is due to be debated
soon. If the Labor Party form government, they will presumably seek
to implement the bill in its current form. On the other hand, the
Policy released by Senator Cash on 19 May gives an indication of
the key amendments that would likely form part of a Liberal bill.
If the Liberal Party are able to form government, they would
presumably seek to pass a bill that incorporates the key changes
outlined in the Policy.
At the time of writing, the outcome of the 2 July election is
not at all clear. It appears that whichever party forms government
will be required to negotiate with the other major party and a
whole host of other parliamentarians in the Senate and potentially
also in the House. Ultimately both major parties have put forward a
legislative package that shares a common objective and many common
mechanisms and features. With popular support and bipartisan
parliamentary support to introduce legislation on this topic, this
bill might be the only industrial relations bill that is written
into law in the next Parliament.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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An employee that refused a reasonable offer of settlement was ordered by the FWC to pay his ex-employer's legal costs.
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