Workplace Watch – 3 February 2025: Wage theft criminalised, annual wage review, recent work health and safety prosecutions
The KHQ Workplace Watch is back for 2025! The action has not stopped over the break, and there is already a lot to report on. The major item, of course, is the new criminal offence for intentional underpayments. We also cover updates in the transport industry, updates from the Fair Work Commission including the annual wage review and the publication of draft model terms for enterprise agreements. We cover a number of cases including a Full Federal Court decision on the Fair Work Commission’s jurisdiction for workplace determinations and a Federal Court decision granting an interlocutory injunction regarding protected industrial action. We also cover various Fair Work Commission decisions regarding flexible working arrangements, dismissals arising from breaches to employer policies. Finally, we look at some recent work health and safety prosecutions.
WAGE THEFT CRIMINALISED
New criminal offence for underpayments now in force
‘Wage theft’ is now a criminal offence.
The amendments introduce criminal penalties in relation to intentional underpayments of amounts owed under the Fair Work Act 2009, including industrial instruments (such as enterprise agreements, modern awards and individual flexibility arrangements) and Fair Work Commission orders. The offence does not apply to certain pay entitlements, such as superannuation contributions, long service leave and paid leave entitlements for being a victim of a crime, and certain payments relating to jury duty and emergency services duties.
The offence only applies to intentional conduct. It is not intended to apply to honest and genuine mistakes. That said, under the Criminal Code Act 1995 (Cth), the intention of a body corporate can be established in a number of ways, including by, for instance, failing to create and maintain a “corporate culture” that required compliance with the law.
The penalties are significant. Individuals will face a maximum of 10 years imprisonment and a maximum penalty of $1.65 million or three times the amount of the underpayment (whichever is greater). For companies, the maximum penalty is $8.25 million or three times the amount of the underpayment (whichever is greater).
On 2 January 2025, the Fair Work Ombudsman published a media release regarding the new criminal underpayment laws. The media release can be viewed here.
Fair Work Ombudsman updates its Compliance and Enforcement Policy
The Fair Work Ombudsman will continue its role in investigating alleged underpayments. If it considers that criminal underpayments have occurred, it may refer the matter to the Commonwealth Director of Public Prosecutions or the Australian Federal Police for prosecution.
The Ombudsman’s Compliance and Enforcement Policy details when matters will be referred for prosecution:
“Referrals will generally be reserved for the most serious conduct, including where there is a greater need for specific or general deterrence than civil litigation. Unlike civil litigation, the FWO will not refer a matter to the CDPP solely for the purpose of clarifying the law (e.g. the interpretation of an entitlement in a fair work instrument).
The FWO recognises that not all conduct potentially amounting to a criminal underpayment offence or a related offence must result in a referral to the CDPP. The FWO will consider entering into a cooperation agreement with a person that has reported conduct to us, has positively engaged with us and agrees to enable the remedying of the effects of their conduct.”
The Ombudsman’s Compliance and Enforcement Policy is available here.
The Ombudsman may enter into a “cooperation agreement” with employers as an alternative to criminal prosecution. The Ombudsman’s decision to enter into a cooperation agreement will be made after assessing a range of factors set out on page 21 of the Policy, including the nature and gravity of the conduct and whether the employer has made a “voluntary, frank and complete disclosure of the conduct”.
Further information about cooperation agreements can be found here.
Small business exemption
Small businesses employers will be exempt from criminal prosecution, provided that they have followed the Voluntary Small Business Wage Compliance Code.
The Ombudsman has reported that: “Small business employers should be assured that honest efforts to pay the right wages and other entitlements for their employees can protect them from prosecution, now that criminal underpayment laws are in effect”.
The Voluntary Small Business Wage Compliance Code Declaration 2024 is available here and the explanatory statement is available here.
The Ombudsman’s ‘Guide to Paying Employees Correctly and the Voluntary Small Business Wage Compliance Code’ is available here.
A media release published by the Ombudsman on 3 January 2025 regarding protections for small businesses can be found here.
LAW REFORM
Senate Inquiry Report on Proposed WGEA Amendments
The Finance and Public Administration Legislation Committee has released its report on the Workplace Gender Equality Amendment (Setting Gender Equality Targets) Bill 2024.
The Bill proposes to amend the Workplace Gender Equality Act 2012. The Report summarised the amendments which:
- change the definition of ‘relevant employer’ to include subsidiaries (with 100 or more employees) as relevant employers;
- provide the Minister with a new power to set targets and specify the rules in relation to the selection of the gender equality targets;
- introduce a new requirement that relevant employers with 500 or more employees will be required to select and meet gender equality targets in a three year period and report on their progress to WGEA; and
- provide that where an employer has not met the gender equality targets or demonstrated improvements within that period, they are considered to have failed to comply with their obligations under the Act.
The Report makes a number of recommendations including that the Australian Government provide “full guidelines” on what WGEA would accept as a ‘reasonable excuse’ for non-compliance and that WGEA include in its reporting framework questions on consultation with employees and workplace delegates.
A dissenting report has also been released by the Opposition.
The Committee’s Inquiry home page is available here and a copy of the report and dissenting report is available here.
WGEA will publish the 2023-24 gender pay gaps on 4 March 2025 for 7,600 private sector employers and 1,600 corporate groups. WGEA has a FAQ page regarding the 2025 publications here.
TRANSPORT INDUSTRY UPDATE
Fair Work Commission proposes to adopt RTAG Advice
In December last year, the Fair Work Commission published advice from the Road Transport Advisory Group (RTAG) in respect of the three applications for minimum standards orders lodged by the Transport Workers’ Union (TWU), a fourth application for a contractual chain order and Menulog’s application to make a modern award to cover the on demand delivery services industry. Parties were invited to file submissions.
The President of the Fair Work Commission has issued a new statement summarising the submissions filed by the parties. Parties will have a further opportunity to provide input as to prioritisation over the initial six-month consultation period.
The President also addressed an application made by Mr Lawrence Hines in August 2024 to vary the Road Transport (Long Distance Operations) Award 2020.CFMEU manufacturing division separation
The President directed the RTAG to commence the consultation process in accordance with its advice and to advise on the Hines application, and to provide a further written advice on the prioritisation of the matters once it had formed a final view.
The statement of Justice Hatcher (citation [2025] FWC 216) can be found here. Submissions may be found on the major case page here, including submissions of Ai Group and ACCI.
FAIR WORK COMMISSION UPDATES
Ballot approved for proposed
In October last year, an application was made for a ballot to be held to determine if the Manufacturing Division should withdraw from the CFMEU. The ballot to withdraw proposes to create two new entities – the Timber, Furnishing and Textiles Union and the Construction and Maritime Employees Union.
The application was determined on the papers. The issues pertaining to the CFMEU’s initial opposition were resolved.
Separate orders will be made containing the conditions of the ballot and the proposed rules.
The Full Bench decision (citation [2025] FWCFB 14) may be found here.
Statement issued in Annual Wage Review
The President of the Fair Work Commission, Justice Hatcher, has issued a statement in the Annual Wage Review 2024–25.
The ACTU made a submission supporting the research program and expressed its interest in continued research on the adequacy of minimum wages having regard to previous observations of the Panel in the 2022-23 Decision which stated:
“We note that in the AWR 2023 decision the Expert Panel said that there should be a comprehensive review of the NMW by reference to the budget standards research and other relevant material to arrive at a NMW amount which is set having proper regard to the needs of the low paid and the other considerations in s 284(1) of the FW Act. However, as already stated, we have now come to the view that it is not currently possible to identify persons to whom the NMW actually applies, and the number of such persons is likely to be very small. In light of this, unless any evidence to the contrary emerges, we do not consider that such a review would be a practical proposition.”
Justice Hatcher stated that interested parties continue to be invited to present emerging evidence not previously submitted in respect of persons to whom the national minimum wage applies.
A copy of the statement is available here and the annual wage review major case page is here.
Draft model terms for enterprise agreements published
The Full Bench of the Fair Work Commission has published a statement with draft amended model terms for enterprise agreements and a new model disputes term for copied State instruments as required by the second tranche of the Closing Loopholes reforms.
The reforms required the Commission to make the following model terms:
- a flexibility term for enterprise agreements;
- a consultation term for enterprise agreements;
- a term about dealing with disputes for enterprise agreements; and
- a term for settling disputes about matters arising under a copied State instrument for a transferring employee.
The Full Bench has also raised some questions for further submissions in respect of the draft model consultation term and whether “the trigger for consultation should be the making of a “definite decision” by the employer or whether consultation should be required when an employer “proposes” to introduce a major change that is likely to have a significant effect on employees.”
The questions are:
“Question 1
[12] A number of authorities addressing the meaning of the word “consult” or “consultation” suggest that, for consultation to be genuine, it must generally occur before a decision has been made, including in the context of s 145A of the Act. Interested parties are invited to comment on whether these authorities should inform the consideration of the necessary and/or desirable trigger point for the consultation obligation under the model term and how these authorities are to be understood in the context of the Termination, Change and Redundancy Case.
Question 2
[13] In response to the submissions of the ACTU, a number of interested parties made submissions to the effect that a trigger for consultation that operated whenever an employer “proposed” to introduce a major change would be uncertain as to its content and would create an obligation to consult at too early a stage in the development of a plan or proposal for change. Interested parties are invited to comment on whether there is any alternative wording that could be considered by the Full Bench that would require consultation prior to a “definite decision” but only where a proposal or plan is sufficiently advanced or firm such that consultation would then be appropriate and useful.
Question 3
[14] If the obligation to consult in the model consultation term were to arise at an earlier point to a “definite decision”, it may be necessary to consider whether explicit provision should be made to ensure that the consultation obligation does not reduce an employer’s ability to respond effectively to crises or urgent circumstances. The parties are invited to comment on whether it would be appropriate to make such provision or whether it is sufficient to rely on existing authority to the effect that the nature of required consultation will vary according to the nature and circumstances of each case.”
(footnotes omitted)
A copy of the statement (which contains the draft model terms) is available here and the major case page here.
Updates for the early childhood education and care supported bargaining agreement
The Fair Work Commission approved the Early Childhood Education and Care Multi-Employer Agreement 2024-2026 (ECEC Multi-Enterprise Agreement). The supported bargaining agreement, the first of its kind, covered 60 employers and over 12,000 employees in the early childhood education and care sector at the time of its decision.
Supported wage bargaining agreements were introduced by the Secure Jobs, Better Pay reforms in 2022 which introduced a new ‘supported bargaining stream’ for multi-enterprise agreements that replaced the ‘low-paid bargaining stream’, with the objects including to assist employers and employees who require support to bargain and to make an enterprise agreement.
The supported bargaining authorisation application was made in 2023 jointly by the United Workers’ Union , the Australian Education Union and the Independent Education Union of Australia in respect of 64 employers who all consented to the application, with the authorisation approved on 27 September 2023 (Application by United Workers’ Union, Australian Education Union and Independent Education Union of Australia [2023] FWCFB 176).
The ECEC Multi-Enterprise Agreement also satisfies the criteria for employers to receive the Early Childhood Education and Care Worker Retention Payment (EWRP), the sector wage subsidy provided by the Commonwealth Government and provides for the on-payment of the EWRP to employees.
A copy of the decision is available here and more information about the EWRP is available from the Fair Work Ombudsman here and the Department of Education here.
Since the initial decision, applications have been made to vary the agreement to add employers and their employees to the coverage of the ECEC Multi-Enterprise Agreement. The Commission approved 33 employer applications to vary the agreement, by adding these 33 employers and their respective employees to the ECEC Multi-Enterprise Agreement’s coverage.
The decision of Deputy President Hampton in Application by Nest Employee Services Pty Ltd & Ors [2025] FWCA 282 can be found here.
Further information regarding the ECEC Multi-Enterprise Agreement, including the details of those employers can be found here.
CASE UPDATES
Full Court settles issue regarding workplace determinations
In March 2024, the Full Bench of the Fair Work Commission decided it had jurisdiction to make a workplace determination even when the relevant employer and its employees had made a new enterprise agreement after the Commission had terminated the protected industrial action.
The employer, the Australian Rail Track Corporation Ltd (ARTC) applied for judicial review of the Full Bench’s decision.
The Full Court found that the Commission did not have jurisdiction to make an industrial action related workplace determination because the Commission’s jurisdiction was spent once the proposed agreement was made and approved.
Justice Katzmann, with whom Justices Collier and Snaden agreed said:
“82 As Easton DP observed at D[48] of the decision, the only matters that can be “at issue” during the post-industrial action bargaining period are matters about a proposed agreement, and the only matters that can be “settled” are matters about a proposed agreement. Once a majority of the eligible employees votes in favour of the agreement and the agreement is made and approved, it is no longer a proposed agreement. I also respectively agree with Easton DP that, while some of the bargaining representatives might not have been satisfied with the terms of the 2023 Agreement and some of the issues they raised during the bargaining process might not have been settled before then, the bargaining representatives have no capacity to settle matters that remain in issue after the agreement was made (at D[49], [53]).
83 Bargaining for a proposed enterprise agreement ends with the making of the agreement. Among the factors the Commission is required to take into account in deciding which terms to include in a workplace determination are “incentives to continue to bargain at a later time” (s 275(h)). That is a strong textual indication that the legislature did not intend that industrial action related workplace determinations were to be made after the proposed agreement is made and approved and before bargaining for a new enterprise agreement begins.”
Australian Rail Track Corporation Limited v Australian Rail, Tram and Bus Industry Union [2024] FCAFC 170
Full Bench upholds reinstatement for cabin crew member
The Full Bench of the Fair Work Commission dismissed Virgin Australia’s appeal against the decision of Commissioner Lim to reinstate a cabin crew member’s employment, following his dismissal for consuming alcohol 7.5 hours prior to his shift in breach of Virgin’s policies.
Permission to appeal was granted on the basis that it was in the public interest, including because the matter concerned circumstances involving a breach of the airline’s drug and alcohol policies in a safety critical industry as well as the relevance of the employee’s subjective understanding of his or her employer’s policies.
The Full Bench dismissed Virgin’s grounds of appeal, finding that the employee genuinely believed that the so called 8 hour rule was a guideline, and rejected the contention that the decision to reinstate the employee was unreasonable or plainly unjust.
The Full Bench held at [65]:
“Virgin’s submission relies on a contention that it was unjust or unreasonable for Mr Macnish to be reinstated in circumstances in which he had breached an important safety rule. We do not agree. Safety is of critical importance in aviation and Virgin appropriately says it adopts a strong stance with respect to safety. However, whether the decision to reinstate Mr Macnish was within the range of permissible legal outcomes must be considered in light of the whole of the circumstances. The Commissioner found that Mr Macnish was well-regarded by cabin crew managers; Mr Macnish genuinely and reasonably understood that the eight-hour rule was a guideline; Mr Macnish took reasonable steps to ensure he was not breaching Virgin’s drug and alcohol policies prior to signing-on for duty on 17 December 2023; the steps taken by Mr Macnish included disclosing his consumption of the glass of prosecco to the cabin crew manager on the flight and seeking guidance, checking the DAMP Manual and using a home breathalyser; Mr Macnish was remorseful and demonstrated contrition once he found out he had breached a policy; and Mr Macnish had learnt a lasting lesson. In those circumstances, in our opinion, it was open to the Commissioner to order reinstatement notwithstanding that Mr Macnish had breached the eight-hour rule. The outcome was not manifestly unreasonable or plainly unjust.”
Virgin Airlines Australia Pty Ltd v Dylan Macnish [2025] FWCFB 6
First Full Bench decision under new flexible working arrangement jurisdiction
The first Full Bench decision concerning a flexible working arrangements dispute has been issued.
The employee’s wife and two children had medical conditions which required the employee’s care. The employee worked 4 days per week, mostly from home. He requested a flexible work arrangement to work from home 100% of the time. At first instance, the Deputy President ordered an alternative arrangement on a three-month trial basis, whereby the employee could work from home 3 days per week and was required in the office one day per week. In refusing permission to appeal, the Full Bench said:
“[41] As will be obvious, the FW Act has as its primary object that of providing a ‘balanced framework for cooperative and productive workplace relations’. Implicit in that language of achieving a balanced framework is the need to reconcile the at times competing interests of employers and employees. Whilst observing that the FW Act is, in many respects, remedial legislation, the objects of the FW Act do not in our view establish a framework that prioritises the interests of employees over those of employers. The promotion of productivity and flexibility for businesses and the balancing of the interests of employers and employees is reinforced through the language in ss 3(a) & (d) of the FW Act. Relevantly, s 3(d) does not mandate that an employee’s caring responsibilities entirely displace the needs of his or her employer. Rather it states that an object of the FW Act includes assisting employees to balance their work and family responsibilities by providing for flexible working arrangements.”
Peter Ridings v Fedex Express Australia Pty Ltd T/A Fedex [2024] FWCFB 473
Dismissal not unfair despite employer’s deviation from own policy
The Full Bench has issued another decision concerning an employee’s dismissal for breaching an employer’s drug and alcohol policy.
Permission to appeal was granted on the basis that it raised issues concerning an employer’s compliance with its own policies and procedures.
The former employee was unsuccessful on all grounds of appeal. Of note, the Full Bench said in respect of a finding by the Commissioner that the employer had deviated from its drug and alcohol procedure:
“[56] While the Commissioner regarded the Respondent’s deviation to be a mitigating factor in Mr Hawken’s favour, it was open to the Commissioner to conclude that the dismissal was not unfair when all the circumstances were taken into account. The weight to be assigned to the conclusions that the Commissioner reached in respect of the matters specified in s 387 of the Act was a matter for the Commissioner. Any disagreement about the weight attributed to these relevant matters, where they were otherwise the subject of proper consideration in the decision, is not a sustainable ground of appeal. In this case, the mitigating factor was balanced by the Commissioner against the fact that Mr Hawken had received two prior written warnings, the second of which remained “in force,” and the safety critical nature of the Respondent’s workplace. Ultimately, the Commissioner was not persuaded that the mitigating circumstances raised by Mr Hawken made his dismissal a “disproportionate response,” and the Commissioner reached an overall conclusion that the dismissal was fair, notwithstanding the Respondent’s deviation from compliance with the D&A Procedure. (…)”
(footnotes omitted)