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Higher penalties for ‘serious contraventions’ under the Fair Work Act

Employment Law

On 15 September 2017, the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (‘’Act’’) came into operation. The Act introduces wide-ranging changes in the employment sector, including higher penalties for breaches of record-keeping and pay-slip obligations, strengthening the Fair Work Ombudsman’s powers of investigation, and importantly, significantly increasing penalties for ‘serious contraventions’ by employers.

A ‘serious contravention’ involves a person or business knowing they were contravening an obligation under a workplace law, and the contravention was part of a systematic pattern of conduct affecting one or more people. Relevant workplace laws include the National Employment Standards, a modern award or enterprise agreement, and a national minimum wage order (among others).

Prior to the Act, there was no distinction drawn between a serious contravention and a non-serious contravention. Any contravention carried a maximum penalty of $12,600 for individuals and $63,000 for companies. Following the introduction of the Act, the maximum penalty has increased tenfold to $126,000 and $630,000 respectively.

The recent case of Fair Work Ombudsman v NSH North Pty Ltd [2017] FCA 1301 is an example of an employer having been successfully prosecuted for serious contraventions. The penalties were not as high as the maximum available, however they were substantial nonetheless.