Proposed changes by the Greens

Proposed Amendments to the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 by Greens MP Adam Bandt

In March 2017, the Turnbull Government put forward changes to the Fair Work Act 2009, under the banner of the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017. This Bill has been put forth in an effort to stamp out the systemic and widespread issue of wage underpayments in Australian workplaces.

The Bill proposes six major changes, which we’ve outlined in this post.

On May 10th 2017, Greens MP Adam Bandt proposed an addition to the Bill, centred around the recovery of unpaid amounts for franchisee employees.

Division 2 of this proposed amendment is broken into six parts, which we’ve detailed below.

789GC When this Division applies

The first part of Division 2 outlines when this Division would apply. The proposed amendment has been written with care, to ensure that it covers a significant percentage of adversely affected franchise employees.

789GC decrees that the Division applies when a franchisee employer (that is, a franchise owner-operator) does not pay a franchisee employee (that is, someone who performs business activities for the franchise entity) does not pay an amount that is payable to the employee on or before the day when the amount is due for payment.

The unpaid amount must be payable under a contract, the Fair Work Act, or any instruments thereof, another law of the Commonwealth, a transitional instrument as continued in existence by Schedule 3, or a State or Territory industrial law.

789GC also defines what classifies as an unpaid amount. It includes remuneration, commission, leave, reimbursement of expenses and superannuation contributions.

789GD Liability of responsible franchisor entity for unpaid amount

This part of Division 2 outlines the liable parties in the event an unpaid amount is owed to a franchisee employee.

Each franchisor entity responsible for the franchisee employer is liable to pay the unpaid amount. If there are two or more responsible entities, those entities are jointly liable for the payment of the unpaid amount.

This section does not affect the liability of the franchisee employer to pay the unpaid amount.

798GE Demand for payment from an apparent responsible franchisor entity

This section of Division 2 declares the circumstances in which a franchise employee can demand payment from a responsible franchisor entity.

It indicates that the employee, or someone acting on behalf of said employee, can give a franchisor entity that is responsible for the franchisee employer a written demand for payment of the amount that the employee believes the entity is liable for.

This section specifies that the employee can demand payment from the apparent responsible franchisor entity, which is defined as an entity that the employee reasonably believes is responsible for the franchisee employer.

The written demand from the employer must:

  • Specify the amount owed
  • Identify the franchisee employer
  • Include particulars of the franchise-related work to which the amount relates
  • Include particulars as to why the amount is payable by the entity the demand is made to
  • State that if payment is not made by a specified time, proceedings may be commenced under section 789GF

789GF Court order for entity to pay amount demanded

This section outlines further action in relation to 789GF.

If an apparent responsible franchisor entity for the franchisee employer receives a written demand for payment from a franchisee employee, and that entity does not pay the full amount by the date stated in the demand, then proceedings can commence for an order requiring the franchisor entity to pay the specified amount.

Proceedings can be commenced by either the franchisee employee, an organisation acting on their behalf, or an FWO Inspector.

Proceedings may be commenced in the Federal Court, the Federal Circuit Court or an eligible State or Territory Court. The court may make an order requiring a responsible franchisor entity to pay the specified amount to the employee, or as much as the applicant claims is still owing.

The court must not make an order if the entity satisfies the court that the entity is not liable to pay the specified amount. The court must also not  make an order requiring the entity to pay the employee more than is owed.

In making the order, the court must, in application, include an amount of interest, unless good cause is shown to the contrary. The amount of interest will be determined by the period of time that has occurred from the day the unpaid payment was initially due, and the day the order is made.

Proceedings cannot be commenced more than six years after the unpaid amount became due for payment.

789GG Effect of payment by entity (including entity’s rights to recover from franchisee employer)

This section details what happens in the event that a franchisor entity is made to pay a franchisee employee for a payment not made by a franchisee employer.

It’s important to note that if the franchisor entity makes a payment, it then discharges the liability of the franchisee employer for the unpaid amount. However, that does not mean the entity does not have the right to recover an equivalent amount from the franchisee employer.

The entity may recover the amount paid to the franchisee employee, as well as any interest accrued, from the franchisee employee. The entity can choose to recover this amount either by offsetting it against any amount that the entity owes to the franchisee employer, or by action against the franchisee employer.

The entity may commence proceedings to recover the amount in the Federal, Federal Circuit or eligible State or Territory Courts.

The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017, as well as the amendments proposed by Adam Bandt, are still before the House of Representatives.

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