Wage Theft and secure employment are on the Agenda for the New Government, amongst other policies. We explore what this may mean in terms of changes in industrial relations law and reform in Australia and the impact on employers. Labor released its policy platform in 2021, which includes a number of industrial relations policies, focusing on protecting workers against insecure employment. The key policies in this platform are summarised below.
Casual Employment
Recent amendments to the Fair Work Act 2009 (Cth) and Regulations, as well as the High Court’s decision overturning the Federal Court’s decision in WorkPac matter, have reinforced the importance of the intent and wording of an employment contract in defining whether an employee is casual or permanent.
However, Labor has committed to change the definition of casual employment back to the Federal Court’s WorkPac principles. The proposal includes redefining a casual employee with an emphasis on shift patterns, rather than the intent and wording of the employment contract. Under Labor’s proposal, an employee may be considered permanent if they work regular and systematic shifts for a period of time.
By broadening the workers who may be deemed permanent, Labor hopes that more casual workers will have access to entitlements such as leave.
Portable Entitlements Scheme
The Labor Party’s platform includes a proposal to introduce portable entitlements for industries with a high proportion of casual or insecure work such as the hospitality and tourism sector. Labor has committed to working with State and Territory governments, to create these schemes.
Under a proposed portable entitlements scheme, employees may accrue entitlements, such as long service leave, if they switch jobs but remain employed within the same industry. Portable entitlements schemes are already in place for the construction and mining industry sectors. Whilst these schemes may increase labour costs and are typically complicated and expensive, businesses may also benefit as workers are incentivised to stay in the industry.
Enterprise Bargaining
Labor is proposing a number of reforms to simplify the enterprise bargaining (EA) process and incorporate additional worker protections: These include:
- Preventing employers from unilaterally terminating collective agreements if employee entitlements will be reduced;
- Having a 21-day approval process for all agreements;
- Empowering the Fair Work Commission to directly vary enterprise agreements by modifying any minor errors; and
- Allowing the Fair Work Commission to arbitrate disputes which may arise during the course of negotiating an enterprise agreement.
Whilst some of these proposed reforms are welcomed by businesses, the key factor that is currently impacting on agreement making is the Fair Work Commission’s (FWC) current rigid approach to the BOOT test, where no employee is to be worse off than they would be under the Award, is not likely to be addressed under any such reforms. The approach that is currently being taken means that innovative provisions such as subsidised training and education has no impact on the BOOT test because it cannot be applied to all employees, and therefore not all employees will benefit from such a provision.
The same applies to provisions that seek to simplify and clarify the Award provisions in the EA. The approach that is taken by the FWC is that if it is not precisely in accordance with the Award or the National Employment Standards, then there needs to be significant submissions as to why the employees are “better off”.
Wage Theft
Labor has also committed to criminalising wage theft. This means that where employers have underpaid employees, this will be considered a criminal offence rather than a breach of the Fair Work Act.
Should you require further information in relation to these proposed reforms, please do not hesitate to contact us.
Greg Arnold – Director & Principal Consultant
Disclaimer: This article provides a summary only of the subject matter without the assumption of a duty of care by Effective Workplace Solutions. No person should rely on the contents as a substitute for legal of other professional advice.