There have been a number of recent developments within the workplace relations arena, specifically:
- National Minimum Wage Decision
- Increase to Civil Penalties under the Fair Work Act 2009 (Cth)
- Amendments to the Work Health and Safety Act 2011 (NSW) increasing penalties and prohibiting indemnification of such penalties
- Changes to powers of WHSQ Inspectors under the Work Health and Safety Act 2011 (QLD)
National Minimum Wage Decision
Following the Fair Work Commission's Annual Wage Review, minimum rates of pay in Modern Awards and the National Minimum Wage will increase by 1.75%.
From the first full pay period starting on or after 1 July 2020, the National Minimum Wage will increase to $753.80 per week, or $19.84 per hour.
Given the current economic environment, the Commission's Wage Panel has staggered the implementation of the increase for Modern Awards. Specifically, the Panel has broken the Modern Awards into three groups:
Group 1
From 1 July 2020, the first group of workers will receive the benefit of the minimum increase. This group includes essential services, frontline health care and social assistance workers, teachers and childcare.
Group 2
From 1 November 2020, the minimum increase applies to workers covered by manufacturing, construction, and other similar industry awards.
Group 3
From 1 February 2021, those in the retail, accommodation and food services, arts, recreation, aviation, retail, and tourism industries will receive a 1.75% wage increase.
Employers should remember that the increase is to minimum rates of pay, and as such may be absorbed where employees are already receiving above minimum rates.
Civil Penalties Increased from 1 July 2020
Penalties imposed under the Fair Work Act 2009 (Cth) are subject to indexation as provided for by the Crimes Act 1914 (Cth). Consequently, from 1 July 2020 the penalty unit under the Fair Work Act will increase from $210 to $222. For example the standard 60 penalty units will increase from $63,000 to $66,600 for corporations and for individuals from $12,600 to $13,320. The maximum penalty for serious contraventions will also increase to $133,200 for individuals and $666,000 for corporations.
Amendments to the Work Health and Safety Act 2011 (NSW)
On 10 June 2020, Work Health and Safety Act 2011 (NSW) ('WHS Act') was amended to introduce a penalty unit system and create new offences for entering into, providing or benefiting from indemnification of penalties.
For the 2019-2020 year, the penalty unit is set at $100 and then increases each year based on CPI for the March quarter. Consequently, from 10 June 2020, the maximum penalties for corporate entities will increase:
| Category 1 | $3,463,000 |
| Category 2 | $1,731,500 |
| Category 3 | $577,000 |
The amendments also prohibit a person from:
- "without reasonable excuse" entering into a contract of insurance or other arrangement, under which the person is indemnified for payment of a penalty under the WHS Act;
- Providing insurance or indemnity for a liability to pay a penalty under the WHS Act; or
- Taking the benefit of a contract of insurance, or grant of indemnity, under which the person is indemnified for the payment of a penalty.
The penalties for entering into a contract of insurance which provides indemnity for a penalty imposed under the WHS Act is $25,000 for an individual or $125,000 for a corporation. The penalties for providing, or receiving, indemnity for a penalty under the WHS Act, paragraphs b) or c) above, is $50,000 for an individual or $250,000 for a corporation.
Further, the WHS Act provides that an officer of a corporation who is involved, or essentially knowingly involved by act or omission, in a corporations procurement and use of an insurance policy to cover payment of penalties imposed under the WHS Act, will be exposed to penalties of up to $125,000.
The above amendments with respect to insurance policies are not retrospective and do not apply to policies which may cover legal fees.
Work Health and Safety Act 2011 (Qld)
From 22 June 2020, the Work Health and Safety Act 2011 (QLD) was amended to remove the power of Work Health Safety Queensland Inspectors to determine Right of Entry disputes with Union Officials.
Previously, in the event there was a dispute between a PCBU and Union Official exercising their right of entry powers, a Work Health Safety Queensland Inspector was able to assist in resolving the dispute, essentially determining whether the Union Officials exercise of their right of entry power was valid. However, such a dispute will is to now be determined by the Queensland Industrial Relations Commission. Penalties for hindering a Union Official exercising their right of entry powers under the Act have also been increased to $50,000.
Should you have any queries regarding the above amendments or require further information regarding rates of pay or your organisations capacity to absorb inceases please do not hesitate to get in contact with Alicia Mataere, Partner within Holman Webb's Workplace Relations team.