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Consultation commences on further reforms to Fair Work laws

27 April 2023

4 min read

#Workplace Relations & Safety

Published by:

Adrian Zagami

Consultation commences on further reforms to Fair Work laws

In the next phase of the Federal Government’s reform to workplace and industrial relations legislation, consultation papers addressing the following issues have been released:

  • Stronger protections for workers against discrimination
  • Criminalising wage theft
  • ‘Same Job, Same Pay’
  • ‘Employee-like’ forms of work and stronger protections for independent contractors.

The consultation papers were released on Thursday, 13 April 2023, and submissions close on Friday, 12 May 2023 at 11 pm.

This article sets out the key changes proposed in the consultation papers.

Stronger protections for workers against discrimination

Anti-discrimination laws are dealt with across the Commonwealth, State and Territory jurisdictions, including the Fair Work Act 2009 (Cth) (FW Act). The frameworks across the jurisdictions are not entirely consistent and are difficult for employers and employees to navigate.

The consultation paper proposes various amendments to the FW Act to address this issue, including:

  • prohibiting indirect discrimination by expressly including it in section 351
  • adopting the definition of ‘disability’ in the Disability Discrimination Act 1992, including to clarify that the FW Act protects characteristics or manifestations of a disability
  • making the inherent requirements exemption to discrimination conditional on considering if reasonable adjustments can be made to the role to cater for an individual’s disability
  • extending the anti-discrimination protections to people who may have a protected attribute because of particular characteristics (known as attribute extension provisions). The consultation paper uses the example that it is unlawful to discriminate against a woman because she may become pregnant
  • adopting the vicarious liability provision that applies in relation to the FW Act’s new sexual harassment jurisdiction and other discrimination laws to FW Act discrimination, so that vicarious liability is easier to establish and is not limited to where the employer was “involved in” the contravention
  • including family and domestic violence (FDV) as a protected attribute so that it is unlawful for an employer to take adverse action (for example, through a demotion) against a person because of their FDV status.

The consultation paper also seeks views on whether improvements can be made to the general protections provisions to “clarify protections for a person engaging, or not engaging, in industrial action”.

Criminalising wage theft

Despite the current compliance and enforcement framework and measures taken by the Fair Work Ombudsman, underpayment and non-payment of wages is stated to be a widespread and significant issue across Australian businesses of all sizes.

The consultation paper proposes:

  • options for a criminal offence for wage underpayments
  • methods for increasing penalties for wage exploitation to curb non-compliance
  • to reform the defence to sham contracting, to provide for no liability for an employer who “reasonably believed” at the time of the misrepresentation that the contract was for services and not for employment. The consultation paper says independent reports have described the current ‘recklessness’ test as ambiguous and more subjective, making the defence ineffective at deterring sham contracting.

‘Same Job, Same Pay’

The Federal Government seeks to legislate the same pay for those performing the same job. The purpose of this reform is to prevent host employers from using labour hire to undercut wages and conditions set out in their enterprise agreements.

The consultation paper considers:

  • which labour hire arrangements are within the scope of the reform
  • a criteria to determine when a labour hire worker is performing the “same job” as an employee
  • the approach to calculating the “same pay” and pay-related benefits.

The consultation paper also proposes for the Fair Work Commission’s powers to extend to resolving disputes about the ‘Same Job, Same Pay’ scheme and if the ‘Same Job, Same Pay’ provisions should be characterised as civil remedy provisions for the purposes of enforcement.

‘Employee-like’ forms of work and stronger protections for independent contractors

The characterisation of a person as an employee or independent contractor is a topical debate which the High Court has recently addressed. The rapid expansion of the gig economy is increasing the number of individuals being characterised as independent contractors, despite them performing ‘employee-like’ forms of work.

The distinction is significant as independent contractors are generally not entitled to the safety net of minimum conditions that apply to employees, including annual leave, sick leave, minimum rates of pay and superannuation.

The consultation paper seeks to address this issue by proposing to expand the capacity of the Fair Work Commission to:

  • assess the working arrangements or characteristics of specific cohorts of workers
  • set minimum standards for those performing similar ‘employee-like’ forms of work, including in relation to minimum rates of pay, defining ‘work’ time, payment times, workplace conditions, business costs, record keeping, training and skill development and dispute resolution
  • approve consent agreements between individual businesses and groups of independent contractors that supply services to them
  • resolve disputes about the application of, or arising under dispute resolution terms contained in, minimum standard orders
  • potentially deal with unfair contract disputes for certain classes of independent contractors.

What’s next?

Submissions in response to any of the four consultation papers close on Friday, 12 May 2023 at 11 pm. We will update you on what some of the response submissions say and what will happen next.

If you have any questions about these consultation papers, please get in touch with a member of our team below.

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Adrian Zagami

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