INSIGHTS: Increased Powers of the Fair Work Ombudsman – Is your Business Vulnerable?

November 14, 2017


New legislation has recently been introduced which was sparked by the discovery of a number of large organisations found to have engaged in systematic underpayments and exploitation of workers.

The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 provides the Fair Work Ombudsman with greater investigative and enforcement powers, introduces penalties for providing false or misleading information to inspectors and sees penalties increase tenfold.  Corporate entities found to have seriously contravened a civil remedy provision can face maximum financial penalties of $630,000 while individuals can face a maximum of $126,000.

Franchise operations are clearly in the FWO’s sights with new provisions meaning franchisors and holding companies can be found liable for the conduct of its franchisees and subsidiaries.  A franchisor or holding company that knew, or ought reasonably to have known, about serious contraventions such as underpayment of wages by the franchisee or subsidiary entity could face crippling compensation orders.

A number of factors will determine whether a franchisor or holding company has taken reasonable steps to identify and rectify non-compliance by its franchisees and subsidiaries.  In order to avoid scrutiny by the FWO, all employers, franchisors and holding companies should review their operations and ensure adequate measures are in place.

If you would like more information about the new legislation or steps that you can take to protect yourself and your business please contact our Employment Team.

Are you flexible?

We continue to see an increase in the request by employees for flexible working arrangements.  Although a Modern Award provides for the minimum terms and conditions of employment, it is a collective arrangement that applies to a large number of employees and may not effectively cater for the specific circumstances of individual employees and employers.

An employer can mutually agree to enter into an Individual Flexibility Arrangement (IFA) with an Award covered employee which has the effect of varying certain terms of a Modern Award.  An IFA for an Award covered employee can vary:

  • Arrangements for when work is performed;
  • Overtime rates;
  • Penalty rates;
  • Allowances; and
  • Leave Loading.

An IFA will only be enforceable if it:

  • is in writing signed by both the employee and the employer;
  • is limited to variation of the above provisions;
  • is entered into after employment commences; and
  • means that the employee is ‘better off overall’.

Ensuring an IFA is made properly can be difficult and requires a thorough review of the variations requested.  An employer that fails to ensure that an IFA is made properly and in accordance with the Fair Work Act 2009 can be liable to penalties of up to $54,000 if the employer is a body corporate or $10,800 for an individual.

IFA’s are able to be terminated and are not a substitute for and do not replace employment contracts.

If you would like assistance with IFAs, employment contracts or understanding award obligations, please contact Principal Sharlene Wellard.


Disclaimer: This information is current as of November 2017. This article does not constitute legal advice and does not give rise to any solicitor/client relationship between Meridian Lawyers and the reader. Professional legal advice should be sought before acting or relying upon the content of this article.