Employers, particularly franchisors and holding companies, should remain vigilant – the Fair Work Ombudsman is ready to strike. And when it does, the recent changes to the Fair Work Act aimed at protecting vulnerable workers and holding franchisors to account may see penalties higher than ever before, with maximum penalties increasing to $126,000 per contravention for individuals and $630,000 per contravention for companies.
The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) was enacted to provide increased protection for vulnerable workers.
The need for legislative change was sparked by increased community concern about the exploitation of vulnerable workers, particularly migrant workers, by employers.
In particular, an inquiry into 7-Eleven attracted significant public attention when it revealed the systematic underpayment of workers through a “cash back” practice. 7-Eleven franchisees would pay their employees a lawful rate and later coerce them to pay back a proportion of their wages. The inquiry revealed that this practice was, to a certain extent, aided by the 7-Eleven franchise business model. It has been reported that the agreement between the franchisor and franchisee was such that the franchisee could not be profitable without underpaying or overworking their employees.
The amendments to the Fair Work Act 2009 (Cth) (FW Act) are aimed at curbing unlawful practices such as these through increasing penalties, extending the chain of responsibility for contraventions of workplace laws to franchisors and holding companies, and equipping the Fair Work Ombudsman (FWO) with greater investigatory powers.
Many of the changes to the FW Act came into effect on 15 September 2017, whilst others commenced on 27 October 2017.
The changes apply to all employers, companies and employees covered by the FW Act, but will be particularly important for:
The franchise sector publicly lobbied the government to alter the Fair Work Amendment (Protecting Vulnerable Workers) Bill as it progressed through parliament. Franchisors were concerned that the proposed changes, particularly those that recognised a level of control between franchisor and franchisee, would unfairly impact their sector and could deter international companies from entering the local market.
Despite their lobbying, a franchisor can now be held liable in circumstances where it exercised significant influence or control over the franchisee and did not take reasonable steps to prevent contraventions of workplace law before they occurred.
Similarly, a holding company can be liable if it has exercised significant influence or control over a subsidiary in circumstances where the holding company knew, or ought reasonably to have known, that the subsidiary wasn’t following workplace laws and it didn’t take reasonable steps to prevent the contravention.
Increased penalties for serious contraventions of prescribed workplace laws.
A serious contravention occurs when a person or business knowingly contravenes a workplace law and the contravention was part of a systematic pattern of conduct affecting more than one person.
There was some concern that the penalties under the FW Act were too low to deter employers and that the cost associated with being “caught” was considered an acceptable cost of doing business.
Under the new provisions the maximum penalty for a serious contravention by an individual is significantly higher at $126,000 per contravention. The maximum penalty for a serious contravention by a company is $630,000 per contravention.
Increased penalties for breaches of record-keeping and pay slip obligations.
Increased penalties also apply to businesses that fail to maintain accurate records and fail to ensure that proper payslips are provided to employees. Employers who knowingly provide their employees with pay slips that are false or misleading will also face increased penalties.
Further, employers who do not meet their record-keeping obligations and cannot give a reasonable excuse for the failure will bear the onus of disproving wage claims in the event that the claim is before a court.
Liability for franchisors and holding companies
As mentioned above, the new provisions provide that franchisors and holding companies will be held responsible for underpayments by franchisees or subsidiaries where they knew, or ought reasonably to have known, of the contraventions and failed to take reasonable steps to prevent them.
In a similar vein, officers of the franchisor or holding company can be held liable as an accessory to a contravention by the franchisor or holding company.
Cash back schemes expressly prohibited
Employers are now expressly prohibited from unreasonably requiring their employees to pay them money. This is intended to capture the “cash back” practices that were employed by 7-Eleven franchisees.
Strengthening of the Fair Work Ombudsman’s powers
The evidence-gathering powers of the FWO have also been strengthened to ensure that the exploitation of vulnerable workers can be effectively investigated. The changes give the FWO new avenues to pursue employers and businesses that obstruct investigations by providing false or misleading information.
The changes do not significantly alter existing obligations placed on employers under the FW Act. However, the increased penalties for contraventions of workplace laws, including record keeping failures, mean that it is extremely important for employers to be aware of their legal obligations. Employers must have procedures in place to ensure that employee records are accurately kept and up to date.
In a press release issued on 9 October 2017, Fair Work Ombudsman Natalie James said “We will apply the new laws judiciously and fairly but we will not hesitate to use them to the fullest extent to protect vulnerable workers, I encourage franchisors to be proactive in taking steps to promote compliance in their networks.”
It is still too early to say whether the amendments to the FW Act will have the desired effect.
A recent study, has challenged the perception that vulnerable workers are underpaid because they are not aware of their entitlement to a minimum wage. The report confirmed that ‘”wage theft”, as it has been called, among Australia’s temporary migrant workers is endemic, but also found that the majority of workers surveyed (international students and backpackers) were aware that they were being underpaid.
The new provisions of the FW Act may go some way to protecting vulnerable workers. However, as this new study reveals, other factors, such as immigration-reporting threats, may prevent vulnerable employees from speaking out about unfair and unlawful employment practices.
 Senate Education and Employment References Committee, A National Disgrace: Exploitation of Temporary Work Visa Holders, 17 March 2016.
 Laurie Berg and Bassina Farbenblum, ‘Wage Theft in Australia: Findings of the National Temporary Migrant Worker Survey’ (Report, UNSW and UTS, 2017).
In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract. Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed. Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph , Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)." Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter. Judgment At paragraph , Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship. Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph : "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the dictionary.com definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest. What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.
The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane  NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty. The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.
The recent decision in New Aim Pty Ltd v Leung  FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.