Labor Foreshadows Tougher Penalties and Imprisonment for Underpayment of Wages

The Federal opposition has foreshadowed that if elected to Government this year, it intends to advance a number of reforms to substantially increase the penalties associated with breaches of the Fair Work Act 2009(Cth) and the underpayment of wages and employment-related entitlements. 

The Labor party argues that current penalties are inadequate. Currently, if an employer fails to pay an employee's wages, they may be fined up to $10,800 as an individual and $54,000 as a corporation. Labor proposes an increase in these fines to $216,000 for an individual and approximately $1 million for a corporation. 

Further, Labor's proposed reforms also include a plan to extend the accessorial liability provisions of the Act such that company directors are personally liable for unpaid wages owed to employees by the companies they manage (and civil penalties imposed on corporate employers by the Courts) and the introduction of a criminal offence (carrying up to two years' imprisonment) to cover instances of deliberate and intentional exploitation of migrant labour. 

New Legislation to Resurrect the Australian Building and Construction Commission Faces Uncertain Future 

In response to one of 79 recommendations made by Commissioner Dyson Heydon in his Final Report to the Royal Commission into Trade Union Governance and Corruption, the Federal Government has introduced a bill to re-establish the Australian Building and Construction Commission (the "ABCC") as the prime regulator of industrial relations within the building and construction industry. 

As part of his Final Report, Commissioner Heydon recommended that legislation be enacted conferring a regulatory body with compulsory investigatory and information-gathering powers. This recommendation was made in response to the Royal Commission's uncovering of evidence of "widespread" and "deep-seated" failures in corporate governance within Australian trade unions. 

On 2 February 2016, the Building and Construction Industry (Improving Productivity) Bill 2013 was re-introduced into the lower house. The Bill was unchanged from legislation originally introduced by the Abbott Government in 2013 and rejected by the Senate in 2014. 

The ABCC will be tasked with promoting respect for the rule of law and for the rights of building industry participants by ensuring participants are held accountable for unlawful conduct. For this purpose, the ABCC will be granted extensive powers of investigation and enforcement to enable it to uphold the Act, designated building laws and the Commonwealth Building Code. Importantly, the ABCC will be able to impose harsher penalties for those participants engaging in unlawful industrial action. This includes penalties for breaches of laws specific to the building industry accompanied by a broadening of the circumstances under which industrial action may attract penalties. For instance, in response to a contravention of the civil penalty provisions (that include unlawful industrial action and picketing, coercion and discrimination), an authorised applicant (such as an inspector or affected person) may apply to a court for orders including pecuniary penalties, compensation orders or any other order the court considers appropriate. Further, a court may make an order for an injunction (including interim injunction) in respect of the contravention. At the same time, the ABCC will work to improve the bargaining framework to facilitate genuine bargaining at a workplace level. 

The ABCC was first introduced by the Liberal Government in 2005 (by Prime Minister Howard) and then later abolished by the Labor Government in 2012 and replaced with the Fair Work Building Industry Inspectorate (operating as the Fair Work Building and Construction, or FWBC). In contrast to the dramatically reduced powers of the FWBC, the ABCC had a full suite of coercive capabilities at its disposal, including the ability to serve examination notices on persons the ABCC reasonably believed had information (or documents) relevant to an investigation or who were capable of giving relevant evidence. Such persons could be required to give such information or documents or attend before the ABCC (with a failure to comply constituting a criminal offence). 

The Government may have hoped that the outcome of the Royal Commission would persuade cross-bench senators to give their support to the Bill (with the Government needing the support of six out of eight cross-bench senators to ensure its passage). However, on 6 February 2016, the vote on the Bill was delayed after several cross-bench senators sided with Labor and the Greens to have the Bill sent to the Australian Senate's Standing Committee on Education and Employment (which does not report until 15 March 2016). 

This move will reduce the time the Government has to debate and pass the Bill before delivery of the Federal Budget on 10 May 2016 and will also further narrow the constitutional window that would permit a double-dissolution of parliament (and send the nation to an early election). Therefore, the fate of the Bill (and the potential resurrection of the ABCC) still hangs in the balance.