It’s finally been confirmed; the Coalition will be returned to Government with Malcolm Turnbull leading the charge (at least for the moment).

During the election, the Liberal Party had a number of Industrial Relations policies relating to the protection and increased safeguard of vulnerable workers.  During the election campaign, if returned to power, the Coalition indicated it would increase the general protections available to vulnerable workers by:

  • Increasing penalties to employers who underpay their employees (whether knowingly or not);
  • Increasing penalties to employers who fail to keep proper employment records;
  • Introducing a new category “serious contraventions” applying to circumstances where an employer intentionally “ripped off” workers regardless of the employer’s size (up to 10 x the existing maximum penalties);
  • Creating a new offence provision so that parent companies and franchisors can be held liable for breaches by their subsidiaries or franchisees;
  • Providing the Fair Work Ombudsman with an additional $20 million in funding; and
  • Establishing within the Office of the Fair Work Ombudsman a Migrant Workers Task Force to be responsible for targeting employers that exploit migrant workers.

Many of these actions have been as a result of the widespread non-compliance by the Franchisor 7-Eleven, their breaches have been widely reported in the media over the past year.

So what does this mean if you are an Employer?

It is the employer’s responsibility to know whether or not they fall into any of the points above. Knowingly or not if you are in breach then you are placing yourself at great risk of being caught, your penalties will now be greater and your brand and reputation will almost certainly be placed under the spotlight.

As a proactive employer you should:

  • Conduct an audit of your industrial instrument (i.e. employment agreements, EBA etc.), the relevant Modern Award(s), Fair Work Act & Regulations etc. to ensure compliance;
  • Review record keeping requirements & pay slip content ensuring all details are properly recorded;
  • Double check visa requirements of any international employees who may be working for you.

Stringent further actions if you are a franchisor and or parent company

There are more significant steps that you should consider if you are a franchisor or parent company which includes improving visibility of the employment practices of the franchisees and subsidiaries in order to limit your exposure for their breaches.

You should consider:

  • Establishing and implementing reporting lines of escalation for staff complaints;
  • Educating franchisees and subsidiaries regarding employment and industrial obligations;
  • Introducing a regular auditing and monitoring compliance process;
  • A review and update of franchise and service agreements to cover these issues.

If the laws haven’t yet been introduced, why should I act now?

The above actions take substantial time to implement, particularly so for parent companies and franchisors.  As such, it is best practice to start thinking about these matters and how they could affect your business rather than waiting to see what will happen from a legislative perspective.

Even if the laws don’t change, it will place your business in a more comfortable position should an employee issue arise i.e. adverse action, unfair dismissal, breach of an employee general protection.  It will also improve your overall compliance with the relevant legislation, avoid negative publicity and will reduce the risk of personal liability for directors and senior management.  Of course, the positive is that your staff are likely to feel more engaged and productive if they are being paid and treated fairly.

If you have any questions about this article and the possible implications the proposed legislative changes could have on your business, please call us for an obligation free conversation.