The Turnbull Government is following through with its election promise to deliver greater protection to Australia’s vulnerable workers by strengthening the powers of the Fair Work Ombudsman.

In early 2017, new laws will be introduced that will enhance the FWO’s examination powers and expressly prohibit employers from providing false and misleading information to Fair Work Inspectors. The Government also plans to increase the penalties (up to ten times the current maximum) that apply to employers who underpay workers or who fail to keep sufficient employment records.  The intention is to deter businesses from engaging in practises that exploit vulnerable workers and to equal the playing field for compliant businesses doing the right thing.

In addition, a migrant workers taskforce has been established to improve employee protections for overseas workers. One of the key functions of the taskforce is to monitor 7-Eleven’s progress in rectifying their breaches which included the significant underpayment of wages, the manipulation of the payroll system and the doctoring of false employment records. The taskforce, chaired by Allan Fells, will include members from the FWO, the Department of Employment, the Department of Immigration and Border Protection and other agencies, who are committed to cracking down on cases of non-compliance with laws prohibiting the exploitation of vulnerable workers.

Fair Work Ombudsman Natalie James welcomes the changes, claiming that an enhanced power to compel employers to produce information as evidence ensures franchisors (like 7-Eleven) will be held accountable in court. Importantly, Ombudsman James has also commented on the targeting of ‘accessories’ (such as HR advisors, managers, recruiters, supply chains and franchises) for workplace breaches. Usually, employers and company directors are in the line of fire for personal liability, but now accessories are also at risk. The extension of liability, alongside a hefty penalty, should encourage all parties involved in the course of business to be wary of falling foul of their legal obligations.

Lessons for employers

• When employing or sponsoring overseas/migrant workers, employers should be familiar with their legal obligations, including the minimum wage, NES and other employee entitlements.
• Ensure all employees are paid in full, at least monthly, amounts payable for performance of work. Employers are only permitted to deduct money from an employee’s pay in limited circumstances.
• Ensure all employment records, timesheets and payroll systems are up-to-date and accurate.
• If dealing with Fair Work Inspectors, ensure that company records or information collected is accurate and assist the investigation in any way possible.
• HR advisers, managers and recruiters should be wary of the advice they provide their employers or clients as there is now greater risk for personal liability.
• Remember it is unlawful to discriminate against a worker on the basis of their race, colour, descent, nationality, origin or ethnic origin.

Summary

The Australian government is committed to protecting Australia’s vulnerable workers from exploitation. Since the 7-Eleven scandal, the pressure for change is as strong as ever. In 2017, new laws will be introduced to strengthen the examination powers of the FWO and to prohibit employers from providing false and misleading information.