Fair Work Bill: what are its sanctions and penalties?

Analysis

Fair Work Bill: what are its sanctions and penalties?

The Fair Work Bill 2008 contains a long list of penalties for breaches of various provisions of the legislation, as was the case with WorkChoices. This article notes the contraventions and offences listed in the Bill and the sanctions or penalties that apply in each case.

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The Fair Work Bill 2008 contains a long list of penalties for breaches of various provisions of the legislation, as was the case with WorkChoices. This article notes the contraventions and offences listed in the Bill and the sanctions or penalties that apply in each case.
 
Where to find them
 
Chapter 4 of the Bill is entitled 'Compliance and Enforcement'. It sets out the majority of contraventions, including all those that attract civil remedies. Where offences are listed elsewhere in the Bill, the relevant section is noted.
 
If a civil penalty provision is breached, the affected party may apply to a court for an order against the other party, which may include payment of financial compensation. The courts will usually be the Fair Work Divisions of the Federal Court and Federal Magistrates Court, or it is possible to use the small claims procedure set out in the Bill. It is also possible in some cases to use an eligible state or territory court.
 
Part 4–1 of the Bill (s539) contains a summary table of civil remedy provisions. It sets out who may apply for a remedy in each case, which courts they can apply to, and what types of remedies the courts can award, including the maximum financial penalty.
 
What’s covered
 
The table sets out the following breaches:
 
NES
  • Contravention of any of the National Employment Standards. However, exceptions apply where an employer has refused an employee’s application for either flexible working arrangements or extended unpaid parental leave 'on reasonable business grounds'.
 
Awards
  • Contravention of a modern award provision.
 
Enterprise agreements
  • Contravention of the provisions of an enterprise agreement.
  • Refusal to recognise or bargain with an employee’s bargaining representative in relation to an enterprise agreement.
  • Contravention of a bargaining order made by Fair Work Australia (FWA).
 
FWA determinations and orders
  • Contravention of a workplace determination issued by FWA.
  • Contravention of a FWA order made when dealing with or arbitrating a dispute. Also applies to an order issued by FWA restricting the exercise of power by an organisation or its officials.
 
Remuneration
  • Contravention of a national minimum wage order or equal remuneration order.
  • Failure to pay wages in full, in money (unless a modern award or enterprise agreement allows some other form of payment), and at least monthly.
  • Directly or indirectly requiring an employee to spend any part of remuneration owing to him or her in relation to performance of his or her work if the requirement is unreasonable in the circumstances. The Explanatory Memo says that it would be reasonable to require a tradesperson to purchase tools, but not to require an employee to make a donation to a charitable or religious organisation. Regulations may set out particular requirements that are unreasonable.
  • Failure to comply with a guarantee of annual earnings to an employee while the employee is a 'high income employee' (ie earning more than $100,000 per year or the rate that will be indexed on 1 July each year) and is covered by a modern award. Where the employer and employee agree to guaranteed earnings that vary over a period of time, the employer must not disadvantage the employee in the event of early termination of employment or transfer of business. Failure to notify an employee covered by a modern award in writing of the consequences of becoming a 'high income employee' (ie that the award will not continue to apply) is also a contravention.
 
Workplace rights
  • Preventing a person from exercising a workplace right (as defined by s341), or treating him or her adversely (defined by s342) for exercising it.
  • Coercion in relation to exercising a workplace right (other than protected industrial action, which is covered by separate provisions). Also covers misrepresentations made in relation to workplace rights.
 
Coercion
  • Exerting undue influence or pressure on an employee in relation to an NES matter, agreement-making, individual flexibility arrangement, guarantee of annual earnings or deduction from earnings payable.
  • Taking adverse action against a person because of his or her membership or non-membership of an industrial association or involvement in the association’s industrial activities.
  • Coercion of another person to take part in industrial activity. Also covers misrepresentation, eg in regard to a person’s obligations to disclose whether he or she does or does not belong to an association or has taken part in industrial activity.
  • Inducing an employee or independent contractor in relation to membership of an industrial association (eg to join, not join or resign from it).
  • Coercion in relation to employing or not employing a particular person, engaging or not engaging a particular contractor, or allocating or not allocating particular work duties or responsibilities to either.
 
Discrimination, unlawful termination of employment
  • Taking adverse action against an employee (eg dismissal) on discriminatory grounds such as sex, race and other grounds covered by anti-discrimination legislation, subject to exceptions provided by s351(2) of the Bill.
  • Dismissal because of temporary absence due to illness or injury.
  • Discrimination against an employer because its employees are or are not covered by the NES, an enterprise agreement that does or does not cover members of a particular association, or another form of workplace instrument — this does not apply to protected industrial action.
  • Contravention of the requirement to consult with employees and notify Centrelink when retrenching 15 or more employees. **
  • Contravention of the provisions for extended notice of termination of employment.
  • Termination of employment for any of the prohibited reasons listed in s772(1) of the Bill.
 
Bargaining services fee
  • Demanding that an employee pay a bargaining services fee to a union, unless there is a contract for provision of bargaining services.
 
Independent contractors
  • Misrepresenting employment as an 'independent contractor' arrangement, ie sham contractor arrangements.
  • Dismissing an employee in order to hire him or her as an independent contractor to perform substantially the same work. Also, making misrepresentations to an employee in order to achieve a similar aim.
 
Costs
  • Contravention of a costs order where a lawyer represented a party at an FWA conference.
  • Contravention of a costs order in relation to a dismissal claim.
  • Contravention of a costs order issued by FWA, including orders against lawyers and paid agents.
 
Industrial action
  • Taking industrial action during the term of an enterprise agreement or determination by FWA (ie between its commencement and nominal expiry date), regardless of whether it relates to the content of those documents.
  • Contravention of an FWA order to cease industrial action.
  • Contravention of a direction by the Minister in relation to industrial action.
  • Where a secret ballot is conducted by an organisation other than the Australian Electoral Commission and complaints are received about the conduct of the ballot, it is an offence for the conducting organisation not to provide a written report to FWA. **
  • Contraventions in relation to protected action ballots, including coercion/intimidation, threats, hindering/obstructing the ballot, fraud/forgery, sabotage, or showing a completed ballot paper to another person. **
  • Contravention of a protected action ballot order.
  • Disclosure of information about employees who are on a roll of voters in connection with a ballot, unless the employee gave written consent.
  • Payment made by an employer to employees in relation to a period of industrial action, other than a partial work ban. 'Work ban' does not include failure to attend work, failure to perform any work at all or overtime bans. Conversely, an employee cannot accept or ask for payment, nor can a union do so on the employee’s behalf.
 
Right of entry, Fair Work Inspectors
  • Contravention of right of entry provisions, including provision of access to records.
  • An official of an organisation must not exercise a state or territory OHS right unless the official is a permit holder. It is also a contravention if the official breaches any right-of-entry obligations (eg breaching any of the permit requirements, refusing reasonable requests by the employer, wrongful disclosure of employee records or failure to return permit to FWA when required).
  • Failure to supply correct name and address to a Fair Work Inspector if the Inspector reasonably believes that the person has contravened a civil remedy provision. **
  • Failure to produce records to a Fair Work Inspector after receiving notice to do so.
  • Failure to comply with a compliance notice issued by a Fair Work Inspector without reasonable excuse. **
 
Employee records, pay slips
  • Contravention of provisions covering employee records and pay slips. **
 
Time limit
 
A six-year time limit applies to making applications for orders in relation to any of the above.
 
How much are the penalties?
 
In the above list, most contraventions attract a maximum penalty of 60 penalty units, which currently equates to $6600. However, those marked ** above attract a maximum penalty of 30 units or $3300.
 
As with the current Act, the Bill (s546(2)(b)) provides that maximum penalties for corporations may be five times greater than for individuals, meaning that corporations will be subject to maxima of $33,000 for most contraventions.
 
Regulations to come
 
Note that the Bill also contains provisions for Regulations under the new Act to prescribe penalties for offences against the Regulations and civil penalties for contravening the Regulations. The penalties for offences cannot exceed 20 units ($2200) and those for contravention cannot exceed 20 units for an individual and 100 units ($11,000) for a corporation.
 
Offences
 
It will be an offence subject to 12 months imprisonment to do any of the following in relation to the operations of FWA:
  • insult or disturb a FWA Member in the course of performing his or her FWA work
  • use insulting language to an FWA Member, or language intended to improperly influence the Member
  • conduct that interrupts a matter before FWA
  • any statement likely to adversely affect confidence in FWA (eg incorrect allegations of misconduct)
  • contravening an FWA order other than one specified in the list under What’s Covered above, ie other than one covering modern awards, bargaining, scope, minimum wages, equal remuneration, transfer of business, suspension or termination of industrial action, protected action ballots or stand-downs
  • intimidating, threatening or coercing another person who has made information available to FWA
  • failure either attend before FWA when required, take an oath before it or answer questions asked by it (penalty is six months imprisonment)
  • providing false or misleading evidence to FWA or coercing another person to do so.
 
Note: These provisions and penalties are largely carried over from the current Workplace Relations Act 1996, although they apply in relation to the organisations that FWA will replace. They are set out in s674 to s678 of the Bill.
 
 
Source: Mike Toten, HR writer.
 
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