Franchisors and holding companies beware: Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Bill) was introduced by the House of Representatives on 1 March 2017.  A report of the Senate Education and Employment Legislation Committee is presently due by 9 May 2017.  It is anticipated that the Bill (in its current form or otherwise with amendments) will receive Royal Assent later this year.

The Bill addresses the findings of various well publicised reports regarding the exploitation of workers (including migrant workers under temporary work visas).  Briefly, the measures to be introduced include:

  1. Higher penalties[1] for “serious contraventions[2]” of various workplace laws[3] (to act as a deterrent);
  2. Prohibitions against employers unreasonably requiring their employees to make payments (e.g. requiring their wages to be paid back in cash);
  3. Making franchisors and holding companies[4] potentially liable for underpayments by their franchisees or subsidiaries where they “knew or could reasonably be expected to have known” that the contraventions, or similar contraventions, would at least be likely to occur and failed to take reasonable steps[5] to prevent them;
  4. Higher penalties for record keeping failures; and
  5. Increased evidence gathering / investigatory powers of the Fair Work Ombudsman.

The following activities are examples of some reasonable steps which could be taken by franchisors and holding companies (who have a significant degree of influence or control over their franchisees or subsidiaries) to try to avoid a contravention of the Bill (if and when enacted), depending on the size and influence of the relevant franchisor or holding company:

  • ensuring that the franchise agreement or other business arrangements require franchisees to comply with workplace laws. Consider appropriate amendments to your franchise manual for example;
  • providing franchisees or subsidiaries with a copy of the FWO’s free Fair Work Handbook and information notices / circulars;
  • encouraging franchisees or subsidiaries to cooperate with any audits by the FWO;
  • establishing a contact or phone number for employees to report any potential underpayment to the business; and
  • auditing of companies in the network.

Contact our Sydney business lawyers for assistance in relation to the above.  Our commercial lawyers, business lawyers, and disputes lawyers provide expertise in corporate and commercial advisory services as well as litigation and dispute resolution.  Take a look also at a sample selection of our more basic fixed fee legal services.

HEATHFIELD GROSVENOR

Level 21, 133 Castlereagh Street

Sydney NSW 2000

Australia

T: +61 2 8005 7388

F: +61 2 8310 9779

E: contact@hglaw.com.au

www.hglaw.com.au

The information provided in this article is provided by way of general information only. It does not constitute legal advice, and should not be relied upon as such. Specific independent legal advice should be obtained before deciding to act, or not to act, upon the views expressed or information contained in this article.

Copyright of Heathfield Grosvenor 2017. All rights reserved.

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[1] Up to $108,000 for individuals and $540,000 for corporations

[2] Where the conduct constituting the contravention was deliberate (i.e. expressly, tacitly, or impliedly authorised) and part of a systematic pattern of conduct bearing in mind the number of contraventions, the period of time during which the contraventions occurred, the effect of the contraventions, and any other relevant considerations

[3] e.g. contravening the National Employment Standards, a modern award, enterprise agreement, workplace determination, national minimum wage order, equal remuneration order, certain payment related provisions and record provisions

[4] Who have a significant degree of influence or control over the affairs of their franchisee or subsidiary

[5] The court will take into account factors such as the size and resources of the franchisor or holding company, their ability to influence or control, any action taken to ensure that the franchisee or subsidiary knew about their obligations under the specific workplace laws, any arrangements in place for assessing compliance with the specific workplace laws, whether there are any complaints related arrangements in place, and the extent to which compliance with the specific workplace laws is encouraged or required by the franchisor or holding company

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