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As employment law has undergone significant reforms over the years, the director and senior legal writer from Practical Law at Thomson Reuters have provided insights into these pivotal reforms, which will substantially impact law firms.
Australia has recently witnessed a series of transformative reforms in its employment legislation, altering the landscape for both businesses and employers. Given the implications of these reforms, both law firms and lawyers operating in this field must understand the legislative changes to navigate this evolving environment effectively.
In a recent live stream hosted by Lawyers Weekly in collaboration with Thomson Reuters, Tim Perry, the director of Practical Law at Thomson Reuters, and Sophie Bonnette, a senior lawyer writer in employment law for Practical Law, discussed the most significant reforms in employment law that are expected to have a substantial impact.
In the same webcast, they shared insights into potential reforms from this coalition that could significantly impact employee rights and business regulations.
Bonnette reflected that the criminalisation of wage theft has garnered considerable attention; however, she argued it may not represent the most consequential reform in this domain.
She said this reform primarily addresses the “most egregious, very minor portion of employer conduct” and is focused on the “really nasty end of the spectrum” behaviour.
Instead, Bonnette suggested that reforms towards the civil penalty regime would likely have a more enduring and lasting effect on the employment law landscape.
Through this reform, she explained, the Albanese government has strengthened its “civil enforcement and compliance of civil remedies” to address the pervasive issue of wage underpayment.
While Bonnette stated that “all underpayments shouldn’t happen”, she acknowledged that, regrettably, such occurrences arise due to the “sheer complexity of our system”.
Under the new reforms, she explained how they have caused a substantial shift, resulting in increased “heftiness of penalties” for businesses that fail to comply with their wage obligations.
Bonnette further detailed that the government’s approach has shifted away from a previously “tired penalty system” with these more stringent laws resulting in a “fivefold increase in maximum civil penalties”.
Additionally, she acknowledged that the government has “lowered the threshold for what’s considered a serious contravention”, meaning that the “risk levels” associated have been affected.
The implementation of more stringent legislation focusing on civil penalties for wage violations is expected to have significant repercussions for businesses of all sizes.
However, Tim Perry cautioned that businesses and firms that are particularly vulnerable to instances of underpayment may include those utilising “old software or systems”, as these may not be “appropriately” integrated.
Bonnette stressed that a critical piece of advice that business and firm owners need to understand in light of recent employment law reforms is: “Your wage compliance mechanisms need to be in good hygiene. It is no longer enough for businesses to sit back and say, ‘we’ve got a tool that might be a bit old,’ and let it sit and run.”
“The messaging we’ve seen from the courts and the messaging from the Fair Work Ombudsman and other regulators in this space is that you need to be proactive; you need to get on top of things.
“So auditing, either internally or externally, those regular hygiene points and seeing any issues come up and rectifying them quickly is the key takeaway businesses need to be running in the future,” she said.
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