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What to expect for workplace law reform under the Albanese-led Government

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Author:  Chao Ni, Principal

With the Albanese-led Australian Labor Party (ALP) securing a majority Parliament following the 2022 federal election, we look backwards at the ALP’s “Secure Australian Jobs Plan” as an indicator of potential workplace and industrial relations changes heading into the future.

The ALP’s IR policy heading into the 2022 federal election had outlined the following goals:

  1. Updating the objective of the Fair Work Act 2009 (FW Act) to include “job security” as a significant objective, alongside other objectives, such as achieving productivity and economic growth, the importance of work and family balance and fairness at work.

This is a low hanging fruit and we expect the Government to be able to gather bipartisan support for this change.

  1. Empowering the Fair Work Commission (FWC) to introduce new minimum workplace entitlements for “employee-like” forms of work (such as gig work) and to intervene or inquire into such forms of work.

The current accepted legal approach to determine whether a gig worker is an employee or a contractor in a particular setting, is to examine the contractual rights and obligations of the worker on a case-by-case basis.  This is a highly complex area, and it will be interesting to see how the FWC defines “employee-like” work.

  1. Amending the definition of casual employment in the FW Act to focus on the overall circumstances of the engagement (such as the duration and subsequent hours of work). The current definition of casual employment focuses on the offer/formation of the casual employment, instead of what happens during the employment period.

It would certainly be a step back towards uncertainty for businesses if the definition of casual employee were to be amended to take into account matters arising after the initial engagement of the worker.  We expect there to be significant resistance against this proposed change.

  1. Upholding the principle of same job, same pay. This is particularly relevant to ensure that workers employed through labour hire companies, receive no less than workers employed directly.

This change is expected to bring upheaval to the labour hire industry because labour hire businesses will no longer be able to control their own wage costs. 

These cost increases will likely be felt most significantly in industries that have a strong union presence and pattern enterprise agreements (e.g. horticulture, construction and manufacturing).

  1. Making wage theft a Federal criminal offence. Notably, wage theft laws have been in place in Victoria since 1 July 2021 and, so far, these laws have not been tested in Court.  In our view, these laws will eventually be enacted, will serve to further deter workplace law non-compliance, but will rarely be enforced, due to the high burden of proof that will be required to prove the offence.
  1. Inserting a right to superannuation within the National Employment Standards so that employees can directly sue their employers for unpaid superannuation instead of having to go through the Australian Taxation Office.

Currently it is not possible to contract out of superannuation entitlements through a private settlement.  It will be interesting to see whether these changes will open the door for settlements to be negotiated in relation to superannuation entitlements.

  1. Capping the use of back to back fixed-term contracts to 24 months (as another way of reducing insecure work). The Government recognises that fixed term contracts do have a legitimate role to play in terms of, allowing employers to bring in staff to add skills and expertise required for a specific time period or project, or to manage an expected but temporary surge in work.
  1. Creating new portable entitlement schemes for workers who are employed to perform insecure work. Long service leave and redundancy pay portable schemes already exist in certain industries.
  1. Implement all 55 recommendations of the Respect@Work Report written by the Australian Human Rights Commission, including:
    • Legislating the right to 10 days paid family and domestic violence leave as a National Employment Standard.
    • Closing the gender pay gap by legislating so companies with more than 250 employees will have to report their gender pay gap publicly, prohibit pay secrecy clauses and give employees the right to disclose their pay if they want to.
  1. Abolishing the Registered Organisations Commission (ROC) and the Australian Building and Construction Commission (ABCC). These changes are made to keep the unions on side.  The savings in funding is likely to go towards the Fair Work Ombudsman.

There is also speculation that the new Government might look at:

  1. ‘Rebalancing’ the make-up of the Fair Work Commission by appointing people whose history is not exclusively one of representing employers.
  2. Potentially creating a Fair Work Court to sit alongside the Fair Work Commission or creating a new judicial arm for the Fair Work Commission.
  3. Abolishing ‘zombie enterprise agreements’ that have passed their nominal expiry dates (whilst not disturbing those agreements that are supported by a union).

In summary, the ALP victory at the polls means that businesses are in for more changes and more turbulence when it comes to employing workers.  At times like these, it is important for employers to stay in touch with a specialist workplace lawyer to navigate these challenges.

The Workplace Law Team at MST Lawyers is always happy to help.  Please contact us by email on workplace@mst.com.au or by phone on +61 3 8540 0200.