Welcome to our first Employment and Industrial Relations newsletter of 2019.

We hope all our clients and business partners enjoyed a restful break and have had a great start to the year.

In this newsletter, we provide an update on the Victorian inquiry into the on-demand workforce. We also look at some recent changes in relation to whistleblower laws, as well as the Fair Work Ombudsman’s first litigation relying on the new “reverse onus of proof laws”.

Victorian inquiry into the on-demand workforce

An Inquiry into the Victorian on-demand workforce is currently underway[1] (Victorian Inquiry). The Victorian Inquiry will investigate[2]:

  • the extent and nature of the on-demand economy in Victoria;
  • the impact of on-demand work on both the Victorian labour market and Victorian economy more broadly;
  • the legal and work status of people working for, or with, businesses using online platforms;
  • the application of workplace laws and instruments, (including accident compensation, payroll tax, superannuation and workplace health and safety laws) to people working for, or with, businesses using online platforms;
  • whether contracting or other arrangements are being used to avoid the application of workplace laws and other statutory obligations; and
  • the effectiveness of the enforcement of those laws.

The Inquiry is being conducted by former Fair Work Ombudsman, Natalie James.

Recent developments in the gig economy

The Victorian Inquiry follows a number of high profile matters, including proceedings commenced by the Fair Work Ombudsman alleging that Foodora Australia Pty Ltd (Foodora) engaged in sham contracting and underpaid three workers[3] and the recent finding by the Fair Work Commission (Commission) that a former Foodora rider was an employee.[4]

In making that finding, the Commission made the observation that under its service contract, Foodora had “considerable capacity to control the manner in which the applicant performed work, and it fixed the place of work and the start and finish times of each engagement or shift”.[5] Whether the Commission’s approach in that matter will be applied to other situations is yet to be seen.

In 2018, a Senate Committee recommended that the Australian Government broaden the definition of “employee” in legislation to capture gig economy workers and ensure that those workers have full access to protection under Australia's industrial relations system[6].

There is also a Treasury consultation process underway regarding the proposal that gig economy platforms such as Uber should be required to share data about their users with the Australian Taxation Office[7].

Submissions to the Victorian Inquiry

Interested parties can make submissions to the Victorian Inquiry until 20 February 2019. It is anticipated that the Victorian Inquiry will provide a final report to the Government later this year.

Whistleblower updates

On 6 December 2018, the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2017 (Cth) was passed, with amendments, by the Australian Senate. The Bill will next be considered by the House of Representatives.

The stated purpose of the Bill is to:

  • consolidate and broaden the whistleblower protection regime for the corporate and financial sector, by amending the Corporations Act 2001 (Cth); and
  • create a whistleblower protection regime for disclosures of breaches of tax laws and tax avoidance, by amending the Taxation Administration Act 1953 (Cth).

Requirement to have a whistleblower policy

If the Bill is passed, public companies, large proprietary companies and proprietary companies that are the trustee of a registrable superannuation entity will be required to establish a policy which contains information including:

  • protections available to whistleblowers;
  • how and to whom disclosures that qualify for protection can be made;
  • how the company will support whistleblowers and protect them from detriment;
  • how the company will investigate disclosures that qualify for protection; and
  • how the company will ensure fair treatment of employees who are mentioned in a disclosure or to whom the disclosure relates.

The policy must be made available to officers and employees of the relevant company. It will be an offence for companies covered by the new laws not to have a policy of this kind.

Proposed whistleblower regime in the banking sector

The Federal Opposition has also announced plans for a new whistleblower system in the banking and financial sector, which would consist of a new “Whistleblower Act”, establishment of a new Whistleblower Protection Authority and a whistleblower rewards scheme. Under the proposal, rewards for eligible individuals would be funded by the penalties collected by the Government.

Employers should be aware of the whistleblower obligations which apply to them and review their policies to ensure consistency with current laws.

FWO using record-keeping “reverse onus of proof” laws

The Fair Work Ombudsman (FWO) has launched legal action against an employer, relying upon recently introduced “reverse onus of proof’ laws for the first time.

The new laws put the burden on an employer to disprove underpayment allegations, where the employer has failed to issue pay slips or has not maintained adequate time and wages records.

The proceedings have been issued in the Federal Circuit Court against the operator of two “Sushi 79” outlets in Queensland, along with its directors.

The FWO is alleging that workers were not paid their minimum entitlements, including minimum wages and penalty rates, under the Fast Food Industry Award 2010.

Acting Fair Work Ombudsman, Kristen Hannah, said: “In the past some employers had avoided facing litigation by FWO because they had breached their record-keeping obligations, and we could not present sufficient evidence in Court to prove underpayments. Employers should be on notice that this loophole is now closed and the Fair Work Ombudsman will make full use of the new laws to protect vulnerable workers.”[1]

Penalties of up to $12,600 for an individual and $63,000 for a corporation can apply for each breach of relevant obligations under the Fair Work Act 2009 (Cth) (FW Act) provisions or under an applicable modern award. Higher penalties of up to $126,000 for an individual and $630,000 for a corporation can apply for certain serious breaches of the FW Act.

There have been a number of significant penalties imposed by the Courts recently, including $335,664 in penalties for underpayments of workers at a Melbourne CBD restaurant and 7-Eleven store[2] and over $250,000 in penalties for underpayments at a Crown Casino café[3].

Employers should review their record keeping practices and pay slips on a regular basis to ensure compliance with applicable obligations. Employers should also ensure that staff are receiving at least their minimum employment entitlements.