In the February 2017 Update and the June 2017 Update, we reported on the Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 (Cth). 

On 4 September 2017, the bill was passed by the Senate with significant amendments to section 557A ("Serious contravention of civil remedy provisions"). 

Prior to the amendments, section 557A(1) of the Fair Work Act 2009 (Cth) provided that a contravention of a civil remedy provision under the bill would be a "serious contravention" if a person's conduct was "deliberate" and "part of a systematic pattern of conduct relating to one or more other persons". This section has since been clarified such that a contravention will be taken to be deliberate if the person knowingly contravened the "essential elements" of that contravention. This would include knowledge, or at least some appreciation, of the fact that the conduct was unlawful at the time it occurred. For example, an alleged wrongdoer may have known that their employee or an identifiable class of employees is not receiving their full entitlements under the Act or the person is contravening the applicable record-keeping or payslip requirements under the Act or the Fair Work Regulations 2009 (Cth). 

In addition, section 557A(2) provides a non-exhaustive list of matters that a court may consider when determining whether a person's conduct was part of a "systematic pattern" for the purposes of section 557A. Among other things, the section states that a court may consider the number of contraventions of the Act committed by the person and the period over which the relevant contraventions occurred. The amendments to the bill added a further matter to the list—namely, that a court may have regard to the person's response, or failure to respond, to any complaints about the relevant contraventions. This may include consideration of the nature and timing of any response, and whether the response achieved a reasonable solution to the problem for all affected employees. 

In addition, a new subsection 557(5A) was inserted which provides that an accessory commits a "serious contravention" if the principal/franchisee's contravention was a "serious contravention" and the accessory/franchisee knew that the principal's contravention was a "serious contravention". In circumstances where the accessory was knowingly involved in the principal's contraventions (which the accessory knew to be deliberate and systematic at the time of the contravention), the accessory will be subject to higher penalties. 

The enactment of the bill will have far-reaching implications for franchisors. However, it is hoped that the amendments made to the bill prior to its passage through the Senate will clarify what an alleged wrongdoer needs to know before he or she may be held accountable for a "serious contravention" under section 557A.