We summarise below the key changes to the FW Act that may impact on you or your business:

Higher penalties

The maximum penalties for civil remedy provisions of the FW Act have now increased tenfold.  An employer who seriously contravenes their obligations under certain provisions of the FW Act may be liable for up to $126,000 per contravention where the employer is an individual and up to $630,000 where the employer is a corporation.

A contravention will be a ‘serious contravention’ where the employer knowingly contravened the provision and that conduct formed part of a pattern of conduct relating to one or more persons, such as previous breaches of other civil remedy provisions.

A person involved in a breach of a civil remedy provision committed by another person will also be deemed to have committed a serious contravention, if the principal’s contravention was a serious contravention and the person involved knew it was a serious contravention.

Increased penalties will also apply to employers who breach their record-keeping obligations under the FW Act.  The maximum penalty for employers who fail to keep employee records or issue pay slips has doubled and employers who knowingly falsify employee records can now be liable for triple the previous maximum penalty.

Reverse onus of proof

If any employee claims there has been a breach of the employer’s obligations and the employer didn’t keep the right records, make those records available or provide the employee with a proper pay slip, the onus will now be on the employer to prove that they did pay the employee correctly or paid them the right entitlements.

Fair Work Ombudsman

The investigative and evidence-gathering powers of the Fair Work Ombudsman (FWO) have also been enhanced.  The FWO can now apply to the Administrative Appeal Tribunal for a FWO Notice if it is reasonably believed that a person or a business has information or documents that will help an investigation and is capable of giving evidence.  A FWO Notice can be used to require a person or business to:

  • give information;
  • produce documents; or
  • attend an interview to answer questions.

The penalty for failing to comply with an FWO Notice is $126,000 for an individual or $630,000 for a corporation.  Penalties also apply to persons who intentionally hinder or obstruct the FWO or its inspectors in the course of their duties.

‘Cash-back’ arrangements expressly prohibited

The changes to the FW Act include an express prohibition against employers from directly or indirectly requiring an employee to spend or pay to the employer, any amount of money or part of the employer’s wage if the requirement is unreasonable in the circumstances and the payment is for the benefit of the employer or a related entity.

Key takeaways for employers – what to do next

  • Ensure your systems for compliance with minimum employment standards under the FW Act, awards and agreements are effective and capture employees at all levels of your organisation.
  • If there is a risk of non-compliance, conduct a desktop audit of your current arrangements for employment record-keeping and issuing of payslips to employees, including any outsourced payroll arrangements.
  • If you receive a FWO Notice, contact your legal adviser.  While some of the changes offer protection from liability relating to information provided in response to a FWO Notice, the privilege against self-incrimination will not apply.