With the election due in just over a month, we are expecting to see significant changes to the Fair Work Act 2009 (Cth) (FW Act) in the second half of 2016.

Both parties have flagged proposed changes that we expect will impact:

  • all industries in relation to the engagement of employees and independent contractors
  • franchisor obligations and franchise arrangements
  • supply chain contracting arrangements, and
  • sub-contracting arrangements.

Both the Turnbull Coalition Government and the ALP have recently announced that they will be taking a much tougher stance on non-compliance of the FW Act. Both have proposed significant increases to the maximum civil penalties that can be imposed under the FW Act. These include:

  • an increase from $54,000 per breach for a corporation to $540,000 (Coalition) and three times the underpayment or $1.8 million (ALP); and
  • an increase from $10,800 per breach for an individual to $108,000 (Coalition) and three times the underpayment or $216,000 (ALP).

Other changes to the FW Act are expected, including:

  • the Coalition's amendments to make franchisors, parent companies and directors liable for breaches of the FW Act by their franchisees and subsidiaries, new compulsory powers and additional funding for the Fair Work Ombudsman and a Migrant Workers Taskforce, and
  • the ALP's amendments to change the test for contracting arrangements to a 'reasonable person' test, introduction of a definition for independent contractors, new criminal offences for those who deliberately exploit overseas workers and powers to disqualify directors.

We have also seen a significant increase recently in franchise and subsidiary companies and directors being penalised for non-compliance with award entitlements and the FW Act. We expect to see this trend continue, together with an increase in the concentration on Fair Work compliance.

Penalties are now also regularly being imposed on individuals in their personal capacity, including Human Resources Managers and other business managers that are responsible for the human resources functions and related decisions in businesses. This makes accessorial liability under the FW Act an increasing and very real risk and the Fair Work Ombudsman last week has warned that they will be increasingly pursuing a broader range of accessories.

If you would like the benefit of Holding Redlich's vast experience in order to:

  • ensure your business is compliant with its current obligations under the FW Act
  • prepare your business for the expected changes, and
  • minimise the risks in this area for your business, your managers and directors,

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.