In the federal election of May 2022, the Labor Party made several announcements about its prospective reforms to certain aspects of Australia’s workplace laws. Much of its policy approach is set out in general terms in its Secure Jobs Plan, which focuses on delivering job security and better pay by targeting casual employment and protecting low-paid and vulnerable workers in the gig economy and labour hire industry.
Following the Labor Party’s election victory, Australian businesses can anticipate several changes to the industrial relations landscape.
Fair Work Act amendments
The new Federal Government (the Government) proposes to enshrine ‘secure work’ as an object of the Fair Work Act 2009 (Cth) (FW Act) with a view to targeting parts of the economy which the Government perceives as driving insecure work, such as casualisation and the gig economy.
While it remains to be seen how these amendments will apply in practice, and interact with other areas of the FW Act, it is likely to permeate different areas of the Fair Work Commission’s decision making processes across its jurisdiction and may impact the exercise of managerial prerogative in businesses.
The Government has also committed to amending the National Employment Standards (NES) to include superannuation. Where the recovery of unpaid superannuation currently lies with the ATO, the insertion of superannuation entitlements into the NES means that employees will have recourse to pursue employers for unpaid superannuation directly. The Government will also consider making superannuation payable on paid parental leave.
The Gig economy
Where other jurisdictions have attempted to regulate the gig economy by expanding the definition of an “employee” or “employment”, the Government proposes to expand the power and remit of the Fair Work Commission to cover “employee-like” forms of work.
The Government has not given voice to how this category would be defined, however it has stated that the Fair Work Commission would have power to set minimum entitlements for workers in this category under its expanded jurisdiction. Depending on the scope of the definition, the “employee-like” category may capture what would otherwise be borderline independent contracting arrangements.
The Government considers casual employment to be a key driver of insecure work and has foreshadowed amending the definition of casual employment which was legislated by the previous government, in order to provide casual employees with a clear pathway to permanency based on their ongoing employment relationship, rather than the terms and conditions agreed at commencement.
Changes to the statutory definition of casual employment will require businesses to review their casual arrangements to ensure they continue to satisfy the definition and are compliant.
The Government has promised to address wage inequities by addressing the following three key areas:
- Wage parity for Labor hire workers (“Same Job, Same Pay”);
- The gender pay gap; and
- Criminalising wage theft under federal laws.
It will require wage parity for Labor hire workers to ensure they are remunerated the same as direct employees they work with. This will impact labour-hire companies primarily, but host companies will experience secondary effects, including increased service costs.
It has proposed to address the gender pay gap by:
- Increasing the Fair Work Commission’s capacity to order pay increases for workers in low-paid, female dominated industries; and
- Legislating for companies with more than 250 employees to publicly report their gender pay gap and cease using pay secrecy clauses in their contracts, giving employees the right to disclose their pay.
It also intends to make wage theft a federal offence. However, it has suggested that federal wage theft laws will not override existing state laws, including those operating in Queensland, Victoria and South Australia.
The Government has promised to implement all 55 recommendations of the Respect@Work Report. This includes legislating a positive duty for employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation, as far as possible. It is likely to continue consultation with stakeholders about the interaction of this duty with existing legal frameworks.
Abolishing the ROC and the ABCC
The Registered Organisations Commission and the Australian Building and Construction Commission are at risk of being decommissioned under the Government. At present, employer and employee organisations are subject to similar levels of transparency and accountability as companies. This framework will be significantly altered in the absence of these regulators.
Limiting consecutive fixed term contracts
The Government has promised to limit the number of consecutive fixed term contracts for the same role to 24 months. If an employer requires the role beyond that upper limit, it would need to offer permanency. The instance of a workforce becoming surplus to business demands may arise more frequently as a result.
National work health and safety agenda
The Government has indicated that it will refinance and enhance Safe Work Australia to make it a tripartite regulator with increased enforcement powers in relation to genuine consultation with workers. It has also intimated that it would enable unions and workers, or their families, affected by work incidents to initiate WHS prosecutions.
Key takeaways for employers
The Government has already made administrative changes which removes the industrial relations portfolio from the Attorney-General and creates a new Department of Employment and Workplace Relations that is focused on implementing and administering its workplace relations, jobs, skills and training agenda.
It is anticipated that the Government will convene an employment summit, as foreshadowed by the Prime Minister, to engage with employers and unions on its proposed reforms. Businesses ought to remain alert to the proposed changes and how they will be implemented at law.
This article was written by Thea Price, Partner and Francesca Musumeci, Associate.