The Federal Election – How Will It Affect Your Business?


The election has come and gone, and we are all settling down with somewhat reduced Liberal Party presence in power. With the Liberal party staying in office we thought it was appropriate that we provide a brief recap on some of the Coalition’s key election policies in relation to employment and industrial relations. We also provide an update on a number of key employment changes since the election took place.

The Liberal party’s key focus ahead of the election was the protection of vulnerable workers. During the election campaign the Liberal Party promised the following:

  • increasing penalties for employers who underpay workers or fail to keep proper employment records (ten times the current maximum);
  • introducing new provisions in the Fair Work Act 2009 (Cth) that will apply to franchisors and parent companies who fail to deal with exploitation by their franchisees (influenced by the recent 7-Eleven scandal);
  • providing a $20 million funding increase for the Fair Work Ombudsman;
  • strengthening the Fair Work Ombudsman evidence-gathering powers to deal with employers who intentionally exploit workers (similar to those held by ASIC, the ACCC and ATO); and
  • establishing a Migrant Workers Taskforce focusing to prosecute employers who exploit migrant workers.

It is pertinent that the Fair Work Ombudsman in a recent speech on 27 July 2016 echoed this sentiment and stated that they would not sit passively while employers avoided the laws that are supposed to hold them to account. The Ombudsman emphasized they were pursing employers who breached their workplace obligations and would ensure there were clear consequences for those undermining workplace laws. Through section 550 of the Fair Work Act all levels of the organisation are being held accountable for the exploitation of vulnerable workers including Human Resources professionals, day to day managers, staff engaged to assist with recruitment and supervision and other companies or individuals involved through a supply chain or franchise network. The Ombudsman will be working with the Government in framing effective and balanced amendments with a key focus on the suggested policies from the election campaign. The Ombudsman also suggested a shift in Courts being more prepared to make a broader range of orders to deter employers including injunctions against future contraventions of the Fair Work Act, freezing order to prevent the shifting of assets to defeat employee creditors, and orders to compel employers and individuals to audits of their entire payroll (at their expense) and training in respect of workplace obligations.

The Coalition also proposed the following workplace relations policies:

  • review the working holiday 417 and 462 visa schemes;
  • adopting recommendation made by the Heydon Royal Commission in relation to the building industry such as re-establishing the Australian Building and Construction Commission, and introducing legislation dealing with union corruption; and
  • providing $4 million to the National Heavy Vehicle Regulator to consult with the trucking industry to improve road safety.

Many of these proposals will depend on the support of the Upper House, however, if these changes do come into effect employers can expect tougher penalties for non-compliance in these areas. It is also abundantly apparent from both the Coalitions position and the recent comments by the Fair Work Ombudsman that they will be far more proactive in pursuing employers who have not complied with their obligations.

Current changes

There have also been a number of relevant changes that came into effect on 1 July 2016. These included:

  • the minimum hourly and weekly pay rates have increased by 2.4%. Employers should check rates of pay for employees under applicable Modern Award and ensure they are paying their employees correctly. The increased rate may also effect employees covered by enterprise agreements as the Fair Work Act stipulates that an employee’s base rate must never fall below the Modern Award rate applicable to the employee.
  • under section 125 of the Fair Work Act employers are required to provide all new employees a copy of the Fair Work Information Statement as published by the Fair Work Ombudsman before or as soon as practical after the employee commences employment. The Ombudsman has recently published a new Information Statement and employers should ensure they issue the most current statement to employees; and
  • the high income threshold has also increased from $136,700 to $138,900. This will impact which employees are entitled to bring a claim for unfair dismissal under the Fair Work Act unfair dismissal regime.

Still to come

Penalty rates are currently being reviewed as part of the Four Yearly Review of Modern Awards conducted by the Fair Work Commission. There has been significant debate regarding this issue and the election campaign by the Labor Party made much of the fact that the Coalition intended to get rid of weekend penalty rates. In fact this is not a matter for the Government, but rather for the Commission, which is yet to confirm the timing of the release of its much anticipated decision. However, according to the Australian Chamber of Commerce and Industry the Fair Work Commission is likely to deliver its decision by 13 September 2016.

Practical steps employers can take to ensure compliance

The Coalition policies on industrial matters do not indicate a significant overhaul or change to the current industrial and employment regime. What has been identified is a far more stringent penalty and enforcement regime. In this regard, we recommend employers:

  • should be proactive in reviewing their record keeping practices;
  • undertake a comprehensive review of the terms and conditions in relevant Modern Awards to ensure compliance;
  • if you have employees covered by an undertaking guaranteeing a minimum salary above the high income threshold, that that guarantee is now above $138,900 per annum;
  • review the visa requirements of your employees and ensure you are complying with visa requirements; and
  • and ensure if you are franchisor that your franchisees are also abiding by their legal requirements.

We regularly advise employers on dealing with compliance matters and can conduct workplace audits and provide strategies to ensure that any non-compliance issue is identified and appropriate steps put in place to limit or prevent legal exposure.

If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to an employment law issue, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

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