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Update: Sharp Increase to Fair Work Act Fine Amounts from 1 July 2017

by 10 July 2017Fair Work Act, Workplace News

The June and July period has heralded a number of important changes to workplace laws.

Included in those changes is a 1 July increase to the value of a Commonwealth penalty unit.

The flow on effect is that maximum fines for breaches of the Fair Work Act have risen sharply.

In this update, we explain why understanding the consequence of this change is so important for employers.

What is the increase?

From 1 July 2017, penalty units under federal laws (including the federal Fair Work Act) increased – from $180 to $210.

What is a penalty unit?

For federal legislation, the value of a penalty unit is determined by the Commonwealth Crimes Act 1914.

Civil (monetary) penalties under federal legislation are calculated using “penalty units” rather than expressing the fine as a dollar amount.

How does it relate to workplace law?

Most of the federal Fair Work Act’s provisions which impose obligations (e.g. on employers) are also designated as civil remedy provisions.

Civil (monetary) penalties in the Fair Work Act are expressed as multiples of a penalty unit (not a dollar value).

For example, civil penalties attach to the following:

  • Breaching the National Employment Standards;
  • Breaching a modern award;
  • Breaching an enterprise agreement;
  • Engaging in prohibited adverse action (general protections);
  • Breaching right of entry requirements;
  • Breaching a stop bullying order;
  • Breaching orders relating to unlawful industrial action.

A court may make a pecuniary (monetary) penalty order against a person (including a corporation) if that person has breached a civil remedy provision.

Why should employers be concerned about the increase?

Put simply, fines are bad for business, especially big ones.

From 1 July, the maximum penalty (for a single breach) is $63,000 for a corporation (increased from $54,000), and $12,600 for an individual (increased from $10,800).

A civil penalty order could have a crippling effect on an organisation, particularly if there are multiple breaches of the Fair Work Act.

The reality of many workplaces is that policies and processes (if not reviewed) can become out of date.

Some managers may become blasé about their obligations.  New managers may escape the induction process.

Out of date or substandard workplace policies can lead managers into error.

Even where policies are up-to-date, there needs to be a continuous program of ensuring that managers are aware of their responsibilities.

What should employers do?

Employers should do two things immediately:

  1. Review their policies and procedures to ensure they are compliant with the Fair Work Act.
  2. Organise refresher training for managers about workplace policies and procedures to reduce the risk of inadvertent breaches of the Fair Work Act.

A process of regular “review and refresh” is an effective risk minimisation strategy.

Who can help?

Acumen Lawyers – we are experts at ensuring employers’ policies and procedures are bulletproof.

We can review and update your existing policies.

We can provide effective, easy-to-understand workplace training to ensure that obligations are understood and followed.

Get it wrong and the impact of a penalty order could be crippling.

Contact us to find out how we can help you.

Acknowledgement: The assistance of Acumen Lawyers solicitor, Matthew Jansa, is acknowledged in the preparation of this article.

About the author

Brad PetleyBrad Petley, is the Principal of Acumen Lawyers, a boutique employment and safety legal practice based in Brisbane, but happily solving workplace issues for clients Australia-wide.

Brad is a QLS Accredited Specialist in Workplace Relations Law.

This publication is intended only to provide a summary of the subject matter covered. It does not purport to be comprehensive or to provide legal advice. No reader should act or rely on the basis of any matter contained in this publication without first obtaining specific professional advice.

This article is copyright. For permission to reproduce this article please email your request to us for consideration.

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