The Federal Government has announced that it will soon release a series of discussion papers on possible workplace reforms, on what has become known as “wage theft”.

IR Minister Christian Porter was reported in Workplace Express as saying, “The issue of wage theft, and specifically the criminalisation of deliberate underpayments, is one of the areas that will be examined as a priority.”
The government has yet to release any timetable for the discussion papers or the review.
A briefing document provided to the Minister states the Coalition has also made commitments to:
• introduce criminal sanctions for the most serious and deliberate exploitation of workers;
• draft a Bill giving casual workers the right to request to convert to part-time or full-time employment; and
• impose higher penalties for breaches of the sham contracting provisions.

What Actions Can Should Employer’s Take
• Regarding possible underpayment, audit your time and wages records and ensure your employees are being paid as required by the relevant Award, this includes allowances, loadings and overtime, as well as the ordinary hourly rate.

Employer’s who pay their employee’s a “flat” hourly rate that is purported to cover all award payments are particularly at risk, especially if the employee works a regular amount of overtime or weekends.

• Several Awards now provide a casual conversion clause, where an employee has been employed on a regular and systematic for a set period, either 6 months or 12 months, depending on the Award, can elect to move into permanent employment. It is envisaged that any addition to the National Employment Standards (NES) would roughly reflect the Award condition.

• A sham contracting arrangement occurs when an employer attempts to disguise an employment relationship as an independent contracting arrangement. This is usually done to avoid responsibility for employee entitlements.

The Fair Work Act 2009 provides for serious penalties for contravention of these provision. In addition, where a Court is of the opinion that a designated “contractor” is in fact a bona fide employee, the court as well as fining the employer, can require that all Award provisions are deemed to have applied from the commencement of the designated “contract”. This will include any back payment required and accrual of annual leave, personal/carer’s leave as well as other leave types.

Employer’s who may find themselves in this situation should have a critical look at the relationship between the designated “contractor’ and the employer and take the necessary action to limit their exposure to litigation.

Should you need any clarification on any of the above, send me an email to john@lambwrc.com or call me on 0428 112 009.