01 June 2022
#Workplace Relations & Safety, #Government
The recent federal election has delivered Australia a new federal government. This is a particularly interesting time in the employment space as Labor has only been able to drive industrial relations change for six of the past 26 years.
With Labor forming a majority government, what reforms should we expect from the Albanese Government in the areas of workplace relations and safety? This article will explore several of the most significant proposed changes.
Federal Labor has pledged to abolish the Registered Organisations Commission (an entity responsible for regulating internal operations of registered organisations that are unions and industry associations) and the Australian Building and Construction Commission.
Labor has argued that the Fair Work Commission (FWC) and Fair Work Ombudsman (FWO) are more than capable of regulating unions and inappropriate behaviours in the construction sector, and stand-alone institutions focusing on these areas cannot be justified. However, Labor may retain a specialist division within the FWO akin to the Fair Work Building Inspectorate that existed under the previous federal Labor Government.
Federal Labor has also foreshadowed taking steps to achieve a more ‘balanced’ composition of FWC members. We should expect that the government will address this in the appointments made to replace retiring members. Another option mooted by commentators is the establishment of a new federal industrial relations court to deal with wage theft and discrimination.
Labor intends to confer on the FWC additional powers to set wages and conditions for ‘employee-like’ workers. A reaction to the gig economy, Labor will target workers who are common law contractors but are vulnerable to exploitation, such as platform delivery workers (see our previous articles on the UK Supreme Court’s Uber ruling here and the High Court’s independent contractor decision here for further background). The proposed changes will give the FWC powers to make new orders and intervene in contractor relationships that are, by their nature, reflective of employment relationships. Although these workers are not common law employees, the FWC will be allowed to establish wage standards and work conditions for contractors. The new jurisdiction is suggested to be similar to the old Road Safety Remuneration Tribunal.
Federal Labor will amend the Fair Work Act 2009 (Cth) (FW Act) to make job security an object of the FW Act. In connection with the above, this provides the FWC with a means to exercise its powers to improve employment security.
Labor will likely change the definition of casual employment inserted into section 15A of the FW Act by the Coalition government last year. The current definition was inserted to deal with the WorkPac rulings. Currently, this definition provides that the assessment of whether an employment relationship is casual is confined to the terms of the original offer and contract. The Labor government wants to change this test to allow the post-contractual conduct to be considered when assessing casual employment. However, since section 15A was inserted, the High Court has handed down its landmark decision on casual employment in WorkPac v Rossato. It is yet to be seen how Labor’s proposed changes will interact with WorkPac v Rossato and whether they will reverse the High Court’s decision.
It is expected that a new National Employment Standard (NES) will introduce a ‘same work, same pay’ obligation within labour hire employment arrangements. Labour hire employers will be obliged to afford deployed employees pay and conditions. These conditions must be no less favourable than those required to be paid to an employee of the host employer performing the same duties, working the same hours or completing the same quantity of work. Host employers may be obliged to:
Exceptions will apply for host employers who employ fewer than 15 employees and on-off temporary assignments of three months or less.
The FW Act will be amended to limit fixed term contracts for the same role to two consecutive contracts or a maximum duration, including renewals, of two years. After the 24 months, there will be an obligation to offer a fixed term employee indefinite ongoing employment. However, exceptions will apply in limited circumstances, i.e. where fixed term contracts have a legitimate purpose, such as where the contract is related to a specific period or project, or to manage an expected but temporary surge in work.
Federal Labor will amend the FW Act to make gender pay equity an express statutory objective. This will enable the government to appoint specialist expert panels within the FWC to improve pay equity and conditions for women working in the care and community sector.
There may be more emphasis on the needs of low paid workers and enable the FWC to set medium or long-term targets for minimum wages.
The Workplace Gender Equality Act 2012 (Cth) (WGE Act) will be amended to require companies with more than 250 employees to report their gender pay gap publicly. It has also been suggested that provisions will be made to prevent employers from requiring employees to keep their pay secret. This will likely have a wider impact beyond the specific industry changes.
Federal Labor will use its power as a purchaser of goods and services to influence its agenda on secure work. A Secure Australian Jobs Code is proposed to establish guidelines for suppliers to the Commonwealth Government regarding job security, fair and reasonable wages and conditions, ethical and sustainable practices such as ensuring environmentally sustainable outcomes, and compliance with the WGE Act. Suppliers will need to agree to these conditions to be successful for government work and contracts.
The Australian Public Service will also use its position as a major employer to promote permanent employment, to only use temporary or fixed term employment contracts where essential, and will take steps to address its own gender pay gap.
Labor have also suggested changes in the Work Health and Safety (WHS) sphere. Although most WHS reform happens at the state government level, the new Labor government can make changes to the Federal WHS Act. For example, they propose including industrial manslaughter provisions in the Federal WHS Act, and developing harmonised industrial manslaughter laws by endorsing their implementation across all jurisdictions.
Furthermore, Labor will also endorse the reverse onus safety model where companies and officers accused of WHS breaches bear the onus of proving they took reasonably practicable steps. However, it is a matter for the states and territories whether they implement these changes within their respective WHS laws. Nonetheless, employers may want to consider these issues, particularly where directors actively perform due diligence to prevent any potential industrial manslaughter prosecutions.
In the next six months, Labor will convene a National Employment Summit comprising industry groups and unions. The Summit will discuss reforms targeting insecure work and policies to improve enterprise bargaining frameworks. This will most likely canvas some of the ideas in which Labor has previously expressed interest, including stronger good faith bargaining principles, greater access to arbitration of disputes, multi-employer agreements, preventing unilateral termination of collective agreements where this reduces employee entitlements, ensuring enterprise agreements can only be made by a ‘representative cohort’ of employees, and enterprise bargaining for ’employment-like’ workers and independent contractors.
Labor will also commission a white paper to develop possible labour market reforms to promote secure work and higher wages. It has already put in a submission to the national current wage case.
Labor will consult with unions, industry groups and state and territory governments (all but one of which are Labor governments) about:
Labor will implement the balance of all 55 recommendations of the Respect@Work Report, including the implementation of the positive duty on employers in the Commonwealth Sex Discrimination Act to take reasonable steps to eliminate sexual harassment.
Finally, Labor will also amend the NES to provide 10 days of paid family and domestic violence leave per year. This will supplement the recent decision of the FWC to amend modern awards to provide for this entitlement.
We will continue to monitor and update you on developments in workplace relations under the new government.
If you have any questions, please contact us below or send in your enquiry here.
Authors: Charles Power & Julia Wyatt
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.