Michaelia Cash announces tough new powers for workplace watchdog

by Victoria Bruce24 May 2016
Cracking down on wage fraud will be central to a Coalition election policy, with all eyes on embattled convenience chain 7-Eleven, which has received considerable media attention for its systemic underpayment of workers.

The policy would include a $20 million injection of funding and tough new powers for the workplace watchdog, plus a ten-fold increase in fines for non-compliant employers.

Employment Minister Michaelia Cash has released a new set of policies, sending a warning to employers that intentionally exploit workers.

The new penalties for "serious contraventions" will be 10 times higher than the current maximum penalty for underpayment of workers of $10,800 for an individual and $54,000 for a corporation, Fairfax Media reported.

The franchise industry will also face an employment law shakeup, with franchisors who fail to manage worker exploitation now to be held accountable for any wage abuse in their stores.

The $170 billion franchise industry has also been put on notice, with franchisors charged under newly created offences designed to them accountable for wage abuse in their stores if they fail to deal with worker exploitation.

While convenience giant 7-Eleven has been in the spotlight over widespread non-compliance and systemic wage fraud, these new policies would apply to all business sectors across Australia.

"The widespread non-compliance within the 7-Eleven chain is perhaps the most well-known example, however unfortunately is by no means the only one," Senator Cash said in a statement.

The FWO has taken eight 7-Eleven franchisees to court since 2009 and stung one store with a record $214,200 for the underpayment of two migrant employees and falsifying records, and has said the convience store giant needs to root out and deal with systemic non-compliance.

Cash's announcement closely followed the controversial removal of the former head of the Australian Competition & Consumer Commission, Allan Fels by 7-Eleven.

Fels had headed up a panel assessing the company's wage fraud pay claims and was sacked after 7-Eleven decided to take the compensation panel "in-house" in what Professor Fels described as "bogus" and would result in the company returning to "lawlessness", Fairfax reported.

Professor Fels would gain a new appointment as the head of a new Migrant Worker Taskforce within Fair Work.

"The taskforce, with advice from Professor Fels and Dr David Cousins, will provide oversight and advice to the Fair Work Ombudsman to ensure that 7-Eleven rectifies the serious breaches committed by its franchise network and to ensure 7-Eleven takes responsibility for addressing its systematic failing to provide minimum entitlements to 7-Eleven franchise employees," Senator Cash said.

If re-elected, the government would grant the FWO evidence-gathering power similar to those of the Australian Securities and Investments Commission and the Australian Taxation Office, plus introduce a new penalty for obstructing Fair Work inspectors.
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