Wednesday, 1 March 2017
Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017; Second Reading
That this bill be now read a second time.
I rise to introduce the Fair Work Amendment (Protecting Vulnerable Workers) Bill. This delivers on the final element of the government's election commitment to protect vulnerable workers.
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 introduces higher penalties for 'serious contraventions' of payment-related workplace laws, which will apply where the underpayments or other breaches are deliberate and systematic. The penalties for these contraventions will be 10 times higher than usual. This will not apply to genuine mistakes, but only deliberate and systematic breaches.
The bill also prohibits employers asking for 'cash back' from their employees. It is of concern to this government that instances have occurred where some young workers have been led from their workplaces to the nearest ATM, and forced to hand back part of their wages in cash. Our amendments will make it clear that this type of practice is unlawful, and employees can get their wages back.
The bill will also clarify the accessorial liability provisions to make them more effective. These changes will ensure that franchisors and holding companies that exercise significant control over their franchisees or subsidiaries will be responsible for underpayments where they turned a blind eye or were complicit in such a breach.
Where the franchisor or holding company should have known of the breach, or a similar breach, but did not take reasonable steps to try to prevent it then they may be liable for the underpayments.
We also recognise that not all franchise networks are the same and not all franchisors will be in a position to influence or control the employment practices of their franchisees. That is why the bill does not mandate a particular requirement for companies who do exercise this control. What is appropriate in any particular case will depend on the size, resources and control exercised by a particular business and what steps they are already taking to encourage compliance with the law within their corporate networks. In many cases, existing measures will be sufficient and there will be no need to take any further action.
The Fair Work Ombudsman will provide advice for businesses seeking further information about the provisions.
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. A franchisor or holding company that is required to rectify underpayments will also be given a statutory right to recover any amounts paid from the franchisee or subsidiary, ensuring that the direct employer continues to be liable for the breach, or can use contractual arrangements to recover in the case of a settlement.
These changes will not hold companies liable for mistakes. The Fair Work Ombudsman is required to act as a model litigant and will pursue prosecution only in cases where penalties are appropriate.
Finally, the bill strengthens the Fair Work Ombudsman's evidence gathering powers to ensure that deliberate and systematic contraventions of workplace laws can be effectively investigated—even if there is no paper trail.
The bill provides the Fair Work Ombudsman with powers similar to those held by other regulators such as ASIC and ACCC. These powers will allow the ombudsman to compel a person to provide information or answer questions if all other avenues of investigation fail. These powers will be accompanied by safeguards to ensure they are used appropriately and consistently.
The bill also expressly prohibits anyone from hindering or obstructing an investigator, or giving the Fair Work Ombudsman false or misleading information or documents.
Combined with the $20.1 million in funding the government has restored to the Fair Work Ombudsman, after Labor ripped away 17 per cent of its funding when in government, our workplace regulator will now be well placed to identify worker exploitation.
The regulator will also be in a position to support businesses, especially franchisors, franchisees and small businesses, to understand these changes and take any necessary simple steps to ensure that their networks are aware of their obligations under the Fair Work Act.
The development of this bill has been informed by evidence from numerous reports and inquiries as well as extensive consultation with community, employer and employee representatives.
I trust that all those in this place who share the government's commitment to stamping out worker exploitation will support our amendments and respect the decision of the Australian community to endorse our policy at the 2016 election.