13/12/2017Franchising, Legislation

The new Vulnerable Worker laws introduced changes that affect all employers, not just the franchise sector.

Major Changes

The new Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 introduced some major changes that affect all employers, not just the franchise sector where underpayment scandals led to the new legislation.

The changes include significantly increased penalties for employers, a reversed onus of proof for underpayment claims, and strengthened powers of the Fair Work Ombudsman when investigating complaints.

Reversed onus of proof for underpayments

Under new provisions of the Act, if an employer did not meet its record-keeping and payslip obligations (and cannot provide a reasonable excuse for such conduct), the employer will need to disprove any allegations of underpaid wage claims by its employees. This reversed onus of proof places significantly more responsibility on all employers and companies to ensure they comply with their record-keeping obligations under the Fair Work Act.

Significantly Increased Penalties

The new laws have doubled the previous maximum penalty for failing to keep proper employee records and/or issue payslips, and tripled the maximum penalty for knowingly making or keeping false/misleading employee records.

Another major change introduced as a part of these amendments is the introduction of a new class of ‘Serious Contraventions’, where penalties are increased tenfold (on top of the doubling of other penalties). For a serious contravention to be made out, it must be that the person knowingly contravened the provision and that person’s conduct was part of a systematic pattern of non-compliance.

In relation to establishing a systematic pattern, the court may have regard to (but not limited to) factors such as the number of contraventions, the period over which it was committed, the number of people affected, and the person’s response or failure to respond to complaints.

Strengthening the Powers of the Fair Work Ombudsman

Under the new laws, the FWO can now require production of documents and answering questions under oath or affirmation. Given the possible impact of these provisions, the new powers will be overseen by the Administrative Appeals Tribunal and the Commonwealth Ombudsman.

Solutions

With all these new provisions and increased penalties, how do employers protect themselves? Some actions employers need to take include:

·         Knowing your obligations and educating your staff and subsidiaries;

·         Address suspected or identified breaches with care and diligence;

·         Ensuring you have appropriate documentation and / or records;

·         Ensure you have set up appropriate policies, complaint procedures and audits.

Our Services

ER Strategies offer a suite of employment compliance services to best suit your business needs. Our new WorkShield service will ensure you are ‘Employment Compliant’, including regular audits of your employment systems, processes and documentation.

Other WorkShield benefits include –

·         Unlimited telephone advice;

·         Included representation in employment disputes;

·         Confidential employee hotlines to provide an extra avenue for employee issues to be brought to your attention;

·         Management training in employee relations rights, obligations and practices.

Call us on 1300 55 66 37 for more information about how we can be a major part of your employment compliance solution.

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