14 Jul 2016

Following the Coalition claiming the Federal Election, the new Government may consider it has a mandate to seek to legislate for the “Protect Vulnerable Workers” policy which was developed following the high profiled 7-eleven scandal.

 

On 11 April 2016, the Fair Work Commission released a report regarding 7-eleven which found that franchisees had:

  1. been unpaying workers;
  2. deliberately falsified records to camouflage underpayment of workers; and
  3. threatened to report migrants workers who had been working in excess of the hours allowed by their visa when they complained about the irregularities in their pay. 

The Coalition Government is now expected to implement the following reforms to the Fair Work Act in response to exploitation of employees:

  1. increase penalties by ten fold for employers who intentionally and systematically underpay employees and fail to keep current records. The current penalties are $10,800 per breach for a natural person or $54,000 per breach for a corporation;
  2. introduce new offences for employers who pay the correct wage but then force the employee to repay a portion of this wage in cash; and
  3. introduce new offences and liability for  franchisors and holding companies for failing to deal with the exploitation of the employees, where they should have been alerted to a breach of the Fair Work Act and could have reasonably prevented those breaches.  

These changes are significant as the current Fair Work Act sets a high threshold for assessorial liability which has historically prevented prosecution of franchisors. If these policies are implemented, franchisors will no longer be able to turn a blind eye to the indiscretions of their franchisees.

 

Other policies which will affect franchisors and are expected be implemented include:

  1. the creation of a ‘Migrant Workers Taskforce’ which would seek to focus on the exploitation of migrant workers by Australian employers; and
  2. increase funding to the Fair Work Commission by $20 million.

This is general information only, and does not constitute specific legal advice. If you would like further information in relation to this matter or other legal matters please contact our office on Freecall 1800 609 945 or email us now.



 

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