New moves to stem vulnerable worker exploitation

The Fair Work Ombudsman (FWO) has launched four practical guides to help businesses ensure every worker in their contracting networks is being paid fairly and appropriately.

The guides follow the introduction of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 to Parliament in March.

Fair Work Ombudsman Natalie James reports that her agency is still seeing too many cases where vulnerable workers were being ripped-off as complex contracting arrangements allow dodgy operators to infiltrate labour supply chains.

‘We have seen case after case of people such as cleaners, security guards, agriculture and horticulture workers and trolley collectors being forced to accept sub-standard rates of pay through long and complicated contracting arrangements while the beneficiaries of that labour who sit atop the contracting chain, normally a large business, have no oversight of the unlawful practices occurring in their networks,’ says James.

‘The community expects large reputable businesses to make sure the workers in their contracting chain are being paid appropriately, even when that business may not be the direct employer of the workers.’

James adds: ‘If contract prices seem too good to be true, they probably are. In these circumstances, it’s often the workers who are paying the price.’

The guides include recommendations for business owners to understand the pay and conditions that apply in the industry they are contracting for, to use a questionnaire to ask potential contractors about their workplace practices and to check that any contract price is high enough to cover wages.

The guides are:

  1. Guide to labour contracting: for help on how to select a potential contractor and identify if they are complying with workplace laws.
  2. Guide to monitoring your labour contracting: for help on mapping existing contractors and subcontractors, examining compliance and addressing any problems.
  3. Guide to self-auditing your business: for information on how to conduct a general self-audit of your business to ensure you’re complying with workplace laws.
  4. Guide to monitoring your labour contracting for small business: checks for small business owners to minimise your risk of hiring a non-compliant contractor.

James warns that there can be serious consequences for businesses that deliberately ignore what is happening to workers in their supply chain, including significant reputational damage and the potential for financial penalties if they are found to be an accessory to breaches of the Fair Work Act.

The new bill before Parliament will amend the Fair Work Act 2009 to increase penalties for ‘serious contraventions’ of payment-related workplace laws, strengthen the FWO’s power to gather evidence and introduce penalties for giving false or misleading information to, or hindering or obstructing, the FWO.

The maximum penalty for a breach of a serious contravention will be $108,000 for an individual and $540,000 for a body corporate. This is ten times the maximum that currently applies, but the maximum penalty for a contravention not regarded as a serious contravention will not change.

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