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Improving protections of employees’ wages and entitlements: Strengthening penalties for non-compliance

The submission to the AttorneyGeneral’s Department in response to the Discussion Paper entitled Improving protections of employees’ wages and entitlements: Strengthening penalties for noncompliance (Discussion Paper) was prepared by the Law Council. 

The Law Council acknowledges that underpayment by employers, whether as a result of genuine mistake or systemic exploitation, can significantly impact on the lives of underpaid workers. Employees, employers and the community at large all have a shared interest in ensuring the adequate protection of wages and entitlements.

The Law Council makes the following submissions in relation to a number of the questions raised in the Discussion Paper:

(a) The Law Council is generally supportive of increased pecuniary penalties, particularly where employers deliberately or knowingly underpay employees.

(b) A number of factors have been developed at common law in relation to the determination of the size of a pecuniary penalty. The level of penalty imposed upon a business should be determined by consideration of these factors and any material departure from this approach should only occur if it is underpinned by a clear and persuasive rationale.

(c) Existing ‘course of conduct’ provisions should be maintained. However, the Law Council also recommends the inclusion of an express provision to clarify the penalty imposed for continuing or maintaining the breach.

(d) The existing arrangements regulating the behaviour of lead firms/head contractors in relation to employees in their immediate supply chains have not been shown to be inadequate and are being utilised effectively.

(e) Accessorial liability provisions could be expanded to also include situations in which a person is reckless as to whether their involvement contributes to a contravention of a workplace law. Should such an approach be implemented, it is important that it be clear as to the type of conduct that will be sufficient to prove a contravention of this type. Noting the serious penalties that are attached to a contravention, the Law Council suggests that it should be necessary to prove that the purported accessory was aware of the probable consequences of the conduct.

(f) While criminal sanctions could play an important deterrent effect, they alone will not assist to alter the vast majority of cases of underpayment of wages or address the financial or other concerns of underpaid workers. The Law Council instead considers the adequacy of compliance and enforcement tools and resources available to regulators and the courts to be particularly relevant considerations.

You can read the full submission below.
 

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