​Vulnerable workers bill passes Senate

Young, non-English speaking, migrant workers were often targeted; photo by Shutterstock

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​Vulnerable workers bill passes Senate

Employers who 'rip off' workers face tough new penalties after a bill to protect vulnerable workers passed the Senate on Monday night.

Dodgy franchise operations beware – the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 last night successfully passed through the Senate albeit with amendments.

It has been discovered there is widespread wage-related abuse in Australia, carried out particularly against young, migrant, non-English speaking workers.

Examples of abuse include ordering employees to pay back wages in cash under threat of cancellation of their working visa, outright refusal to pay wages, or deliberately or recklessly not paying appropriate award and penalty rates. Another often encountered tactic was to classify employees as contractors to avoid paying entitlements.

This abuse was often (but not exclusively) carried out by owners of franchise businesses.

FWO powers strengthened


In giving the second reading speech, the Minister for Immigration & Border Protection, Peter Dutton, told the House of Representatives: “We know that the majority of employers do the right thing, but it is also apparent that there are some cases of widespread underpayment or coercion of workers, such as the well-publicised exploitation of workers by some 7-Eleven franchisees. These are the instances this bill seeks to address... The bill will not absolve franchisees or subsidiaries of their responsibility under workplace laws. These employers will remain liable for any breach of the Fair Work Act under existing laws.”

The government’s bill aims to increase the deterrent and punishments of such behaviour. It also strengthens the power of the workplace regulator, the Fair Work Ombudsman.

“The strengthened penalties contained in this bill will act as a significant deterrent to unlawful practices. They will also ensure that the small minority of unscrupulous operators think twice before ripping off workers,” the Minister for Employment, Senator Michaelia Cash said.

When passed into law, the bill will:
  • introduce a higher scale of penalties (up to 10 times the current amount) for a new category of ‘serious contraventions’ of prescribed workplace laws
  • expressly prohibit employers from unreasonably requiring employees to make payments (ie ‘cash-back’ arrangements)
  • strengthen the evidence-gathering powers of the Fair Work Ombudsman (FWO) to ensure that the exploitation of vulnerable workers can be properly investigated and
  • introduce stronger provisions to make franchisors and holding companies responsible for breaches of the Fair Work Act in certain circumstances where they are culpable for the breaches.

Amendments


Although the bill was widely supported in Parliament by politicians from across the political spectrum, it was amended in the Senate last night.

The Australian Labor Party successfully sought amendments that reduced the coercive questioning powers of the Fair Work Ombudsman, confining those powers to investigations of underpayment and exploitation of vulnerable workers. According to the Australian Council of Trade Unions, workers could have been fined if they refused to give evidence against fellow workers or their union.

The onus of proof in claims for unpaid wages was reversed in cases when the employer has not produced wage slips or employment records.

As there were a variety of amendments in the Senate the bill must now go back to the House of Representatives before it can become law.

Joe Murphy, director of Australian Business Lawyers & Advisors, commented: “This vulnerable workers legislation is designed so that a ten-fold increase in fines will create enough of a deterrent for those employers and businesses looking to deliberately and systemically breach the federal workplace laws.

“The new provisions targeting franchises and holding companies will now give the Fair Work Ombudsman the ability to prosecute companies who knew or should have known of contraventions and failed to take reasonable steps in circumstances where they had a significant degree of influence or control over their business networks.”

Further reading

Govt cracks down on widespread worker exploitation
​Industry execs attack vulnerable workers bill
Fair Work amendment bills draw franchising fire
Strong support for tough new FWO powers
Labor vows to criminalise wage underpayments

Disclosure: Australian Business Lawyers & Advisors and WorkplaceInfo are both owned by the NSW Business Chamber.
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