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Labour Hire Back on the Agenda - August 2019

Labour Hire Back on the Agenda

Earlier this year, the Labour Hire Licensing Act 2018 (Victoria) came into effect making Victoria the third state (after South Australia and Queensland) to enact legislation requiring labour hire providers to hold a licence.

Licences are granted by the Victorian Labour Hire Licensing Authority for a 3-year period, provided the labour hire provider passes the “fit and proper person” test (demonstrating compliance with industrial and taxation laws).

In a recently-publicised briefing document provided to the IR Minister after the federal election in May 2019, the Government has agreed to provide funding to the Fair Work Ombudsman to enable it to set up a National Labour Hire Registration Scheme early in 2020.

The Scheme was recommended by Professor Allan Fels, head of the migrant worker taskforce, with a view to reducing worker exploitation in four high risk sectors- namely horticulture, meat processing, cleaning and security.

Consultation on the proposed national scheme will need to occur before any changes are introduced.

Once the new scheme is

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FWO cashed up to investigate and prosecute sham contract arrangements - April 2019

The Federal government has announced the Fair Work Ombudsman will receive $2.3 million each year for the next 4 years to establish a dedicated unit to address sham contracting.

While part of the objective is to increase education and encourage compliance, the unit will also dedicate funds to investigation of and litigation against employers who are participating in sham contractor arrangements.

Sham contractor arrangements refers to a situation where a worker is being engaged as a contractor but is in fact an employee. The effect of this is that the employer avoids its usual employment obligations such as paid leave, notice and redundancy.

It is well established that courts will look further than the written agreement between the parties to determine the true nature of the working relationship. Considerations including who has effective control of how and when the work is done, whether the worker performs work for others and whether the worker can refuse or delegate the work all form part of the assessment of the true nature of

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The Fair Work Act fights back to protect vulnerable workers - July 2018

Following the outbreak of the 7/11 underpayments scandal in 2016, the Australian Government responded to the controversy by introducing the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (“Bill”). In September last year the Bill passed through parliament, bringing with it a series of significant amendments to the Fair Work Act 2009 (“FWA”) designed to prevent the deliberate and systematic exploitation of vulnerable workers, such as migrants and those who work in the franchisee sector.

All employers, particularly franchisors and holding companies, should be aware of the changes and how they are likely to affect business operations. Those who breach the new laws can expect to face hefty penalties, along with the wrath of the all-powerful Fair Work Ombudsman (FWO), who does not take contraventions of Australian workplace law lightly. The FWA amendments include the following:

  1. Introducing higher penalties for ‘serious contravention’ of workplace laws

Employers who engage in ‘serious contraventions’ risk facing substantial financial penalties, which now stand at $126,000 per contravention for individuals and $630,000 for corporations. A

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Accountancy firm held liable for client’s breaches of the Fair Work Act - September 2017

Recently, the issue of accessorial liability has been at the forefront of the Fair Work Ombudsman’s (FWO) agenda and it’s not a subject being taken lightly.

The Federal Circuit Court recently handed down a decision in a case that dealt with third party advisers who were knowingly aware of their client’s breaches of the Fair Work Act.

Accountancy Firm, Ezy Accounting, was found liable as an accessory for its involvement in a Japanese restaurant operator’s underpayments to its staff. The contraventions included failure to pay the minimum hourly rate of pay, the evening loading, the Saturday and Sunday loading, the public holiday penalty rate, the special clothing allowance, and failure to provide rest breaks and meal breaks.

Ezy Accounting was alert to the fact that the restaurant was failing to meet award obligations and paying their staff incorrect rates, however the company chose to “deliberately shut its eyes” to the contraventions occurring. Whilst the Court is yet to make a determination on the penalties against the accountancy firm, it could

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A tougher FWO to protect Australia’s vulnerable workers

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

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The Fair Work Ombudsman (FWO) has recently commended McDonald’s Australia for conducting a self- audit on its employees’ wages and other entitlements, leading to improved workplace relations for the 90,000-strong restaurant chain.

McDonald’s had agreed to participate in the self-audit following an unsuccessful attempt to have an enterprise agreement approved by Fair Work Australia. Although the enterprise agreement was approved on appeal, McDonald’s agreed to enter into a Deed to achieve two compliance activities:

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