Raising the bar for employee record keeping

Articles Written by Ruveni Kelleher (Partner)

The obligations of employers in relation to employee records have become more important under the recent changes to the Fair Work Act 2009 (Cth) (Act) as a result of the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017, which came into effect on 15 September 2017.

Under the Act, employers are required to keep certain records for seven years regarding their employees, which include records of:

  • remuneration paid to employees, including taxation and other deductions, incentive based payments, overtime hours, averaging arrangements, loading, rates, penalty rates and allowances;
  • leave taken and outstanding leave balances; and
  • whether the employment was terminated by consent, notice, summarily or in some other manner, and the name of the person who acted to terminate the employment.

Reversed onus of proof on employers

Section 557C of the Act now reverses the onus of proof in proceedings which involve an allegation relating to a contravention of the provisions of the Act dealing with the National Employment Standards, modern awards, enterprise agreements, workplace determinations, minimum wage orders, method and frequency of payment, unreasonable requirements to pay amounts and any other matter specified by the regulations.  

Employers will have the burden of disproving such allegations in circumstances where they were required by the Act and failed to:

  • make and keep a record, or keep it in a specified form;
  • provide records for inspection; or
  • provide a payslip.

There is a defence available to employers in respect of a claim for breach of the record keeping obligations set out above, which requires the employer to demonstrate that they had a “reasonable excuse” as to why there has not been compliance. The Act provides no guidance on what may constitute a reasonable excuse in the circumstances.

These provisions have been designed to improve and support the Fair Work Ombudsman’s investigative powers, particularly in cases of systematic and deliberate contraventions of workplace laws.

Further, to ensure deterrence and compliance with record keeping obligations, higher penalties have been introduced for contravention of obligations in relation to ‘serious contraventions’ including employee record keeping.  For individuals the maximum penalty has been increased to $126,000 and for body corporates the penalties have increased to $630,000.1


1 These maximum penalties also apply to serious contraventions of the other civil penalty provisions referred to in our previous article on the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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