Most recently the House of Representatives accepted amendments made by the Senate that:
- clarify how the proposed ‘serious contraventions’ regime applies in relation to an alleged accessory to a contravention;
- clarify what a person needs to know about a contravention for it to be considered deliberate under the proposed ‘serious contraventions’ regime;
- supplement the list of matters a court may take into account when determining whether a contravention formed part of a systematic pattern of conduct for the purposes of the ‘serious contraventions’ regime; and
- enable the FWO to exercise coercive evidence gathering powers for breaches of the Fair Work Act 2009 (Cth) (FW Act), subject to oversight by the Australian Administrative Tribunal (AAT).
The Act clarifies what an alleged wrongdoer needs to know, before they may be held responsible for a serious contravention and therefore a higher penalty. The person’s contravening conduct still must form part of a systematic pattern of conduct in order to be considered a serious contravention.
The Supplementary Explanatory Memorandum explains that, to be held responsible for a serious contravention, the alleged wrongdoer must have knowledge of the ‘essential elements’ of the contravention. This includes knowledge of, or at least some appreciation of, the fact that their conduct was unlawful at the time it occurred. For example, an alleged wrongdoer may know:
- their employee or an identifiable class of employees are not receiving their full entitlements under the FW Act; or
- they are not complying with the relevant record-keeping or pay slip requirements under the FW Act and Fair Work Regulations 2009 (Cth) (FW Regulations).
The wrongdoer does not need to know the precise provisions of the FW Act, FW Regulations or relevant industrial instrument to be held responsible. This is consistent with the existing provisions in relation to accessorial liability. The previous requirement to act deliberately was removed by the Senate.
The Act also clarifies how a person ‘involved in’ the contravention of a civil remedy provision (accessory) by the principal wrongdoer (principal) may be penalised for a ‘serious contravention’. Specifically, this will only happen if:
- the principal’s contravention was a serious contravention; and
- the accessory knew that the principal’s contravention was a serious contravention.
The importance of a franchise system’s response to contraventions
Critically, for all franchise systems, the Act includes a person’s response, or failure to respond, to any complaints made about relevant contraventions as a factor in determining whether the person’s conduct constituting the contravention was part of a systematic pattern of conduct. This applies to all responsible franchisor entities and holding companies.
The Supplementary Explanatory Memorandum provides that this may include consideration of the nature and timing of any response, and whether the response achieved, if required, a reasonable and durable solution to the problem for all affected employees.
Where complaints about workplace entitlements are voluntarily and properly addressed as they arise, any contravening conduct is less likely to be considered either deliberate or systematic.
Record-keeping and payslips – reverse onus of proof
Labor’s amendments to reverse the onus of proof in claims for unpaid wages, where the employer has not produced wages slips or employment records, have been accepted. Where an employer has failed to comply with the record-keeping and payslips provisions of the FW Act and the FW Regulations, they may be required to bear the burden of disproving allegations of non-compliance with those provisions.
The employer can provide a reasonable excuse as to why there has not been compliance with the record-keeping and pay-slip obligations. At this stage, it is difficult to conceptualise what may be considered a ‘reasonable’ excuse for not complying with these obligations.
The FWO will now have to apply in writing to a nominated AAT presidential member for the issue of an FWO notice if the FWO reasonably believes that a person is capable of giving evidence that is relevant to any such investigation, or has information or documents relevant to an investigation that relates to:
- the underpayment of wages, or other monetary entitlements of employees;
- the unreasonable deduction of funds from amounts owed to employees; or
- the placing of unreasonable requirements on employees to spend or pay amounts paid, or payable, to employees.
The FWO notice may require the person to give the information, produce the documents or attend before the FWO to answer questions.