13 Sep Fair Work Amendment Bill: Preventing Worker Exploitation
Following reports that migrant workers were underpaid by notable franchisee businesses, the Federal Government has introduced amendments to the Fair Work Act 2009 (Cth), fulfilling its 2016 Election promise to create protections for vulnerable migrant workers by introducing the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Cth) (the Bill) to Parliament.
The proposed Bill, follows reports by the Fair Work Ombudsman, Senate Education and Employment References Committee and Productivity Commission that revealed the franchisees of notable retail and food and beverage businesses in Australia have been involved in the widespread exploitation of migrant workers.
In evidence to the Senate Education and Employment Legislation Committee Inquiry, the Fair Work Ombudsman’s Report indicated cases of individuals being paid under the award rate and in some cases less than $10 an hour. The report found cases were workers were paid the award rate, then told to withdraw money from an ATM and hand it to their employer under threats to their Visa.
One case is the Fair Work Ombudsman v Mai Pty Ltd & Anor  FCCA 1481. This case involved a business that employed a high number of individuals on student visas. Over a 12-month period, the employees paid a cumulative total of $82,661.85 in “cashback” payments requested by the employer. This meant that some employees, usually on a standard award rate of $22 per hour were being paid $14.
The Bill will give greater power to the Fair Work Ombudsman to enforce penalties on franchisees and franchisors for these actions. The primary amendment will enforce on franchisors who have control over their franchisees, the responsibility of appropriate payment by their franchisees to their employees, where they knew or ought reasonably to have known of underpayment, and failed to take reasonable steps to prevent that underpayment.
As the Minister stated in his Second Reading Speech for the Bill:
“These changes will ensure that franchisors and holding companies that exercise significant control over their franchisees or subsidiaries will be responsible for underpayments where they turned a blind eye or were complicit in such a breach.”
This will mean that both the franchisee and franchisor will be held liable for the underpayment and exploitation of their employees. The proposed amendment will also introduce measures to:
- Create a higher scale of penalties for “serious contraventions” of payment-related workplace laws;
- Increase penalties for record-keeping failures;
- Prohibit employers from unreasonably requiring their employees to make payments back to them; and
- Strengthen the evidence-gathering powers of the Fair Work Ombudsman, akin to that of ASIC.
The amendments are positive measures and deterrents to stop the exploitation of employees who are not aware of their legal rights and employers who take advantage of this ignorance.
The Bill was passed by the House of Representatives on 11 May 2017 and the Senate on 5 September 2017, and commenced on 15 September 2017.
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