Maximum fines for breaches of the Fair Work Act 2009 (the “FW Act”) have seen an increase this financial year, with the value of a federal penalty unit increasing from $180 to $210.
What is a penalty unit?
The value of a penalty unit is determined by the Commonwealth Crimes Act 1914. Civil monetary penalties under federal legislation (such as the FW Act) are calculated using “penalty units”, rather than a dollar amount.
What is its relevance to workplace law?
Majority of the FW Act provisions which impose obligations are civil remedy provisions, for example, breaching an industrial instrument (such as a modern award or enterprise agreement), taking prohibited adverse action or breaching the National Employment Standards.
If an individual and/or corporation breaches one or more of these civil remedy provisions, a court may make a penalty order against the individual and/or corporation for those breaches.
What does the increase mean?
From 1 July 2017, the maximum penalty for a single breach of the FW Act is $63,000.00 for a corporation (increased from $54,000.00) and $12,600.00 for an individual (increased from $10,800.00).
Who could be held liable?
The scope for being found liable for a breach of the FW Act is wider than you may realise. In addition to an employer being held liable for any contraventions of the FW Act, individuals found to be “involved” in contraventions of the FW Act may also be held liable.
Under section 550 of the FW Act, an individual will be found to be “involved” in a contravention, if they have:
(a) aided, abetted, counselled or procured the contravention; or
(b) induced the contravention, whether by threats or promises or otherwise; or
(c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d) has conspired with others to effect the contravention.
This can potentially result in directors, HR personnel, managers, payroll and others having civil penalty orders made against them.
What should Employers do?
Fines can be extremely damaging to a business’ finances and reputation. Employers need to ensure that they are complying with the obligations owed to employees under workplace law to avoid any penalties.
What should individuals do?
Individuals also have to ensure that these obligations are complied with. If they are not being complied with, individuals should attempt to raise this with their employer. If their employer refuses to consider any issues raised, the individual should keep records of attempts they have made to discuss the issue. This may assist their case if they are subject to allegations regarding their involvement in a contravention of the FW Act in the future.
If you are unsure about your obligations and whether your business is compliant, contact the team at HR Law for advice.
