All employers need to be aware of changes that have taken place, as recent as 1 August 2018, and the likely effect on their business. This includes the introduction of unpaid domestic violence leave for award-covered employees and the extension of liability for franchisors and holding companies involved in the exploitation of employees.
New family violence leave entitlements
The Fair Work Commission has updated Modern Awards, effective 1 August 2018, to include a new clause allowing employees to take unpaid leave to deal with family and domestic violence. The new entitlement provides employees with 5 days unpaid family and domestic violence leave each year. The model clause provided by the FWC defines family and domestic violence as ‘violent, threatening or other abusive behaviour by a family member of an employee that seeks to coerce or control the employee and that causes them harm or to be fearful’.
Award-free employees are not covered by the changes. Under the changes:
Give notice to their employer as soon as practicable of the expected period of the leave.
If required, include evidence that would satisfy a reasonable person that the leave is taken for the purpose of family and/or domestic violence i.e. a document issued by the police service, a court or a family violence support service, or a statutory declaration.
Tips for employers:
Employers must ensure that requests for support from employees experiencing domestic violence are adequately responded to. If not, these matters may instead unfold in the media or through litigation against the employer. It is in both parties’ interests to allow the employee the time off that they need to seek the support required.
Information concerning an employee’s experience of family and domestic violence is highly sensitive and if mishandled can have adverse consequences for the employee.
Some businesses may already provide paid or unpaid family and domestic violence leave entitlements in their employment contracts or workplace policies. If an employment contract or workplace policy provides less than the new entitlement, the award entitlement still applies.
The full FWC decision and content of the model term for unpaid leave to deal with family and domestic violence can be accessed here.
Amendment to the Fair Work Act to protect vulnerable workers
Following the controversy surrounding the 7-Eleven underpayments scandal in 2016, the Fair Work Act 2009 has been varied with provisions aimed at deterring the deliberate and systematic exploitation of vulnerable workers, such as migrants and those who work in the franchisee sector.
Some of the key changes of the Bill, which became effective in September 2017, that employers should be aware of are:
Extending liability for franchisors and holding companies for contraventions: The amendments provide that franchisors and holding companies will also be held responsible for the contraventions of their franchisees or subsidiaries if they ‘knew or could reasonably have been expected to have known’ that the contravention, or a similar contravention, would occur.
Prohibition against ‘cash-back’ arrangements: Employers are strictly prohibited from operating ‘cash-back’ schemes (as was done by certain 7-Eleven franchisees), which requires employees to make wage repayments back to their employer.
Reverse onus of proof for unmet record keeping: Where an employer has failed to keep employee records, and it is alleged that an employer has contravened the FWA, the onus of proof will revert to the employer to disprove the allegation.
Introducing higher penalties for ‘serious contravention’ of workplace laws: Employers who engage in ‘serious contraventions’ risk facing substantial financial penalties, which now stand at $126,000 per contravention for individuals and $630,000 for corporations.
Enhanced Fair Work Ombudsman powers: The Bill strengthens the investigative and evidence-gathering powers of the FWO. The FWO may issue a notice which will require persons to provide information, documents or attend and answer questions relevant to an investigation, even if doing so incriminates them. This amendment represents a significant modification to the previous position, where a person had the right to silence and could not be compelled to answer questions.
Tips for Employers:
Employers must know the award applicable to their employees to ensure compliance. Employees are to be afforded the minimum entitlements set out in the award.
Employers should review their record keeping system and the way pay-slips are issued. Employers who keep good records will be in the best position possible to defend underpayment claims.
HR advisers, managers and recruiters should be wary of the advice they provide their employers or clients as there is now greater risk for personal liability.
Tips specifically for franchisors and holding companies:
Franchisors and holding companies can no longer turn a blind eye to activities of franchisees or associated entities. They are required to take reasonable steps to prevent contraventions of the FWA and take necessary measures to confirm compliance with workplace laws.
Review franchise agreements and ensure provisions are included which deal with obligations upon franchisees to follow the FWA and provide consequences for breaches.
To minimise the risk of liability for contraventions, the franchisors or holding companies must be able to demonstrate that they have taken reasonable steps to prevent the contravention from occurring. When determining whether ‘reasonable steps’ were taken, a court may consider factors such as the level of influence or control the franchisor has over the franchisee’s activities and whether the franchisor took any action directed at ensuring franchisees had a reasonable knowledge and understanding of the relevant laws.
Aimee Saaib is the Practice Manager of O'Connell The Employment Law Specialists, a Sydney-based employment law firm. She is currently completing a Graduate Diploma in Legal Practice at the College of Law.