Clampdown on rogue employers

Changes will come into effect on 1 April 2017 and apply to all employers intending to recruit labour market-tested migrant workers. This includes employers who are supporting work visa applications and approvals in principle; seeking accredited employer status or supporting residence class visa applications based on employment; and employers who are part of the Recognised Seasonal Employer scheme.

‘Migrant workers make a valuable contribution to our workforce and have the same rights as any other worker,’ Mr Woodhouse says. ‘It is simply unacceptable that those employers who exploit migrant workers are still able to recruit from the international labour market and disadvantage those employers who do the right thing.

‘That’s why the Government is introducing stand-down periods during which time employers who flout the law will be banned from recruiting further migrant workers.

‘Employers who have incurred an employment standards-related penalty will be banned from recruiting migrant labour for defined stand-down periods ranging from six months to two years, depending on the severity of the case.’

Published guidelines and criteria will ensure that stand-down periods are applied fairly, consistently and transparently.

‘Access to the international labour market is a privilege, not a right and if employers abuse that privilege by exploiting migrants or failing to comply with employment law, there will be consequences,’ Mr Woodhouse says.

Penalties

Employment standards-related penalties extend from formal infringement notices issued by the Labour Inspectorate (following a Labour Inspectorate investigation) through to penalties issued by the Employment Relations Authority or the Employment Court, a declaration of breach or banning order issued by the Employment Court.  Employers issued with penalties as a result of private actions taken by employees either through the Employment Relations Authority or the Employment Court will also be included.

The threshold for non-compliance would not include employers at the very minor end of breaches, such as those who have entered into an enforceable undertaking with the Labour Inspectorate. These are employers with mostly adequate wage and time records who demonstrate a desire to comply by agreeing with a Labour Inspector to a written undertaking for how and when they will rectify their breaches.

While non-compliant employers would not be eligible to recruit further migrant workers for the duration of their stand-down period, some employers who meet the threshold for non-compliance with employment standards will already have migrant workers in their employment. These employees will be able to work out the duration of their work visa, but will not be granted further work visas to work for the non-compliant employer.

Franchises vulnerable

Employment fraud has been a hot topic in the franchise sector recently, following a number of high profile cases featuring big brand names in Australia. The Labour Inspectorate in New Zealand has suggested that it will be targeting small businesses including franchises here, and has warned: ‘Time for franchisors to ensure franchisees are complying with employment law.’

An aspect that is not clear from the Minister’s announcement today is how franchisors – or other franchisees within the same chain – might be affected if one or more franchisees were found to be breaking employment laws. Although franchisors are not employers of franchisees’ staff, there is a trend internationally towards making them jointly responsible for employment practices.

 At the very least, a case involving one franchisee might be expected to trigger a Labour Inspectorate investigation throughout the franchise network.

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