Insights

In brief - While some ‘fine-tuning’ of the Fair Work Act 2009 is likely if the Morrison Government is re-elected, employers should prepare for an industrial relations (IR) overhaul if Labor is elected.

As we head towards the 2019 federal election, IR is at the forefront of the political landscape and a key point of difference between the major political parties.

In this article, we look at the proposed IR reforms by the major political parties and how the changes may impact employers.

National Employment Standards (NES)

Both the Coalition and Labor propose to expand the NES, with broader changes proposed by Labor.
 
COALITION LABOR
Casuals: The Coalition has proposed to legislate to provide regular casual employees the right under the NES to request full-time or part-time employment. This right has been available to casual employees covered by modern awards since 1 October 2018. Superannuation: Labor proposes to include superannuation in the NES. The change would allow employees to pursue unpaid superannuation through the Fair Work Commission or the Federal Court against their employers. Unpaid or underpaid employer superannuation contributions is currently a debt owing to the Australian Taxation Office, not employees. Labor has also said that ‘when prudent’, it will fast-track the Superannuation Guarantee increase to 12% and set a pathway to increase employer contributions to 15%.
  Family and domestic violence leave: Labor has committed to increasing the 5 days unpaid leave entitlement introduced by the Morrison Government late last year to 10 days paid leave. The proposed increase is supported by the Australian Greens.
  Requests for flexible working arrangements: Labor has said it would legislate to include a right of review for employees if a request for flexible working arrangements is unreasonably refused by their employer. Labor’s draft platform provides no detail on the review process, including whether refusals would be reviewed by the employer, or the Fair Work Commission.
  Long service leave: Labor has said it will work with state and territory governments to achieve a national minimum standard for long service leave.

Penalty rates

Labor has committed to restoring Sunday and public holiday penalty rates in the hospitality and retail industries within its first 100 days of office in response to the 2017 Penalty Rates Decision (4 Yearly Review of Modern Awards - Penalty Rates, [2017] FWCFB 1001). Labor also proposes to amend the Fair Work Act to prohibit variations to modern awards that reduce workers’ take home pay. Both proposals are supported by the Australian Greens.

Enterprise bargaining

Enterprise bargaining is set to change under a federal Labor government. Firstly, Labor has said it will consider a return to multi-employer bargaining, a move also supported by the Australian Greens. Shadow IR Minister Brendan O’Connor has said Labor’s focus will be on low-paid workers such as early childhood, aged care and disability services workers, but has not ruled out examining other areas.

Secondly, Labor will prevent the unilateral termination of collective agreements, a position which is again backed by the Australian Greens. The move is in response to the recent trend of unilateral applications by employers under section 225 of the Fair Work Act to terminate enterprise agreements during bargaining for a replacement agreement.

Labor is also committed to a ‘disclosure framework’ in bargaining. This will require employers to provide bargaining representatives with information relied on in rejecting claims during bargaining.

Casual and labour hire workers

Labor has committed to setting an objective statutory test for determining when a worker is a casual in response to the uncertainty for employers from the Full Federal Court’s decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131. There is no detail on how the test may operate, including whether it would operate retrospectively for long-term casuals deemed to be permanent employees.

Labor also proposes to introduce a national labour hire licensing scheme to regulate the industry and ensure labour hire workers receive the same pay and conditions as directly employed workers doing the same work.

Construction industry

Labor has been vocal in its commitment to abolish the Australian Building and Construction Commission, a move supported by the Australian Greens. Labor has also said it would repeal the Building and Construction Industry (Improvement Productivity) Act (BCIIP Act) and the Code for the Tendering and Performance of Building Work 2016 (Building Code).

The proposed changes would be a significant shift in IR policy for employers in the building and construction industry involved in Commonwealth funded building work. While the repeal of the BCIIP Act and Building Code would likely reduce regulatory compliance for building industry participants, whether it also reduces the current rate of industrial disputes and strike action in the industry will remain to be seen.

The Registered Organisations Commission will also be abolished under a federal Labor government leaving serious contraventions by unions to be referred to ASIC for investigation and prosecution.

Pay equity

Labor will address the gender pay gap by requiring the Fair Work Commission to take into account the principle of pay equity when conducting periodic reviews of modern awards, and will ensure that the equal remuneration provisions in the Fair Work Act deliver for low paid women. There will also be a requirement that companies with more than 1,000 employees report their gender pay gap and a prohibition on the use of ‘pay secrecy clauses’.

Working parents

Labor has set a goal for parents to access 26 weeks of paid parental leave plus superannuation through a combination of government and employer contributions. Currently there is no detail about how the system would work, or how much employers would be required to contribute to the proposed increased payments.

IR Minister Kelly O’Dwyer has said the Coalition would not match Labor’s pledge to pay women superannuation while on parental leave, however it would make legislative changes to allow parents to take parental leave in smaller blocks rather than a single 18 week period.

Implications for employers

Based on the IR policy platforms of the major parties, significant IR reform is expected only if Labor comes to power, with employers in building and construction, hospitality, retail and industries relying on low-paid workers, casuals and labour hire to be impacted the most. If there is a change of government, employers will need to be across, and proactively manage compliance with workplace reforms.

SOURCES:
Australian Greens, Good Work The Greens’ 10 principles for rewriting our labour laws (June 2018), The Greens

Labor’s national conference publication, A Fair Go For Australia: National Platform - Final Draft (48th National Conference, Adelaide, 16 - 18 December 2018).
 
This article first appeared in Industrial Relations in Focus 2019 published by the employment and safety team at Colin Biggers & Paisley. If you'd like to know more about this publication, please contact Paul O'Halloran.

This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.​

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