Several key changes will affect Australian workplaces this year, including the commencement of the mandatory data breach notification regime and the replacement of the 457 visa program.

Other employee and industrial relations issues that are likely to impact Australian businesses throughout 2018 include increased penalties for the underpayment of workers and poor record-keeping, as well as the Fair Work Ombudsman’s continued focus on independent contracting arrangements and accessory liability for workplace law contraventions.

All business leaders and managers should assess how the management of their employee and industrial relations will be impacted by these issues and the changes on the horizon.

Key changes to consider in 2018

Mandatory data breach reporting obligations

From 22 February 2018, businesses subject to the new mandatory data breach notification regime will face penalties of up to $1.8 million if they fail to report data breaches in circumstances where serious harm could occur to an individual whose data has been compromised. They highlight the need for all businesses to establish clear data security policies to manage the risk of, and response to, external attacks and internal data breaches arising from the negligent or malicious acts of staff.

Replacement of the 457 visa program

From March 2018, the 457 visa will be abolished and replaced with the new Temporary Skills Shortage (TSS) visa. The TSS will be comprised of a short term stream of up to two years and a medium term stream of up to four years. It will impose more onerous requirements than the current 457 program, including a requirement for visa applicants to have at least two years’ work experience in their skilled occupation. Employers will also need to pass a new non-discriminatory workforce test to ensure they are not actively discriminating against Australian workers. While new 457 visas will no longer be processed, existing 457 visas will continue to remain in effect.

Direct liability of franchisors and parent companies for underpayments

Franchisors and parent companies can now be held directly liable for the underpayments of their franchisees and subsidiaries where they knew or should have reasonably known of the contraventions and failed to take reasonable steps to prevent them. The new offences will capture franchisors and parent companies who have a significant degree of influence or control over their business networks and who fail to take reasonable steps to prevent non-compliance.

Higher penalties for ‘serious contraventions’ and poor record keeping

Following the introduction of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, significantly higher penalties of up to $630,000 for companies and $126,000 for individuals can now be imposed for ‘serious contraventions’ of the Fair Work Act, including repeat instances of underpayment. The maximum penalties that can be imposed on employers who fail to keep proper records have also doubled to $63,000 for companies and $12,600 for individuals. In light of these changes, it is more important than ever for businesses to review their payroll and record keeping practices to ensure that workers are being paid correctly and the required employment records are being retained for a period of seven years.