Maximum penalties for civil pecuniary have increased significantly.
Recent changes to the Fair Work Act include:
- Increasing the maximum civil pecuniary penalties that can be imposed by a court for specific contraventions; and
- Adjusting the threshold for what constitutes a serious contravention.
These changes commenced in the FW Act on 27 February 2024. Currently, the value of a Commonwealth penalty unit is $313. All figures contained within this article are based on that amount.
Civil remedy provisions for regulated workers or underpayment-related contraventions are not covered in this article. Please reach out to Business Chamber Queensland if you would like to know more about either of these topics.
How have civil pecuniary penalties increased?
The maximum civil pecuniary penalties have increased five-fold for selected civil remedy provisions. This does not apply to employers who are an individual or a small business (i.e. those with 14 or fewer employees).
In the case of a contravention, other than a serious contravention, the maximum civil pecuniary penalty for an individual has increased from 60 penalty units to 300 penalty units. Otherwise, for serious contraventions, the maximum civil pecuniary penalty has increased from 600 penalty units to 3,000 penalty units.
The maximum civil pecuniary penalty (i.e. 300 penalty units or 3,000 penalty units) is five times higher for a body corporate.
See the tables below for an outline of the increases and which civil remedy provisions of the FW Act they apply to.
Table 1
| Individuals | Body Corporates | ||
| For ordinary contraventions | 300 penalty units
($93,900) |
For ordinary contraventions | 1,500 penalty units
($469,500) |
| For serious contraventions | 3,000 penalty units
($939,000) |
For serious contraventions | 15,000 penalty units
($4,695,000) |
The civil pecuniary penalty increases in Table 1 apply to contraventions of the following civil remedy provisions:
| Section 44 | Contravening the National Employment Standards (NES) |
| Section 45 | Contravening a modern award |
| Section 50 | Contravening an enterprise agreement |
| Section 280 | Contravening a workplace determination |
| Section 293 | Contravening a national minimum wage order |
| Section 305 | Contravening an equal remuneration order |
| Section 323 | Method and frequency of payment |
| Section 325 | Unreasonable requirements to spend or pay amounts |
| Section 328 | Employer obligations in relation to a guarantee of annual earnings |
| Sections 535 and 536 | Employer obligations in relation to employee records and pay slips |
Table 2
| Individuals | Body Corporates |
| 300 penalty units
($93,900) |
1,500 penalty units
($469,500) |
The civil pecuniary penalty increases in Table 2 apply to contraventions of the following civil remedy provisions:
| Sections 357, 358 and 359 | Misrepresenting employment as independent contracting arrangement, dismissing to engage as independent contractor and misrepresentation to engage as independent contractor |
| Section 536AA | Employer obligations in relation to advertising rates of pay |
| Section 558B | Responsibility of responsible franchisors entities and holding companies for certain contraventions |
| Section 712 | Power to require persons to produce records or documents |
| Section 718A | False or misleading information or documents |
| Sections 745 and 760 | Contravening the extended parental leave provisions and notice of termination provisions |
Table 3
| Individuals | Small Businesses | Non-Small Businesses |
| 60 penalty units
($18,780) |
300 penalty units
($93,900) |
1,500 penalty units
($469,500) |
The civil pecuniary penalty increases in Table 3 apply to contraventions of the following civil remedy provisions:
| Section 716 | Failure to comply with a compliance notice |
Serious contraventions
What constitutes a serious contravention under section 557A of the FW Act has changed.
Previously, a serious contravention would occur if the person knowingly contravened the civil remedy provision and their conduct constituting the contravention was part of a systemic pattern of conduct relating to one or more persons (i.e. the breach was done ‘knowingly and systematically’).
As a result of the changes, a serious contravention will now occur if the person knowingly contravened the civil remedy provision or was reckless as to whether the contravention would occur (i.e. the breach was done ‘knowingly or recklessly’).
Effectively, the bar for proving serious contraventions has been lowered, and only one of the criteria, ‘knowingly’ or ‘recklessly’, must be satisfied to meet the threshold.
A person is reckless if:
- They are aware of a substantial risk that the contravention would occur; and
- It is unjustifiable to take the risk (having regard to the circumstances known to the person).
This is significant because more individuals or body corporates may be liable for higher maximum civil pecuniary penalties where a serious contravention has occurred.
What does this mean for employers?
The stakes are much higher if you get it wrong. It is essential you ensure you are compliant. Do you have an understanding of your applicable industrial instrument/s (e.g. modern awards or enterprise agreements)? Are you currently meeting your legislative obligations? Is your payroll system fit for purpose?
If you are unsure where to start, review your payroll – not only the technology and procedures but also education and training, particularly for C-suite employees. Business Chamber Queensland is here to support you in getting this right.
