A Federal Election is anticipated in the first half of this year. If current opinion polls are to be believed there is a real possibility that the Government will change, which is likely to result in industrial relations reform.
It is important for employers to be aware of what a Labor Government may mean for their business and employees. In this article, we discuss Labor’s most significant industrial relations proposals and the impact these proposals will have on Australian workplaces.
Family and domestic violence leave
Currently, employees are entitled to five days’ unpaid family and domestic violence leave each year under the National Employment Standards (NES). Currently, an employee is eligible to take domestic violence leave if they need to do something to deal with the impact of family and domestic violence and it is impractical for the employee to do that something outside of ordinary hours.
Labor has committed to double the entitlement, providing employees with ten days’ paid leave to deal with the effects of family and domestic violence. It is unclear whether the eligibility criteria to take domestic violence leave will change.
Superannuation under the NES
Labor has indicated that it will amend the NES to enable all employees to recover unpaid superannuation through the Fair Work Commission (FWC) or the Federal Court. Currently, many employees are unable to recover unpaid superannuation entitlements given that the contributions are owed to the ATO and the employee must rely on the ATO to pursue the unpaid superannuation on the employee’s behalf.
Labor also plans to:
increase employer penalties for unpaid superannuation; and
increase superannuation guarantee contributions from 9.5% to 12%.
In June 2017 the FWC issued a decision to lower penalty rates in the Retail; Hospitality; Fast-Food; Pharmacy; and Restaurant Awards.
In response, Labor has introduced the Fair Work Amendment (Restoring Penalty Rates) Bill 2018 (Cth) into the House of Representatives. If passed:
any penalty rate determinations of the FWC made after 21 June 2017 will be of no effect; and
a modern award cannot be varied to reduce an employee’s take-home pay.
Penalty rates will only be paid prospectively, ensuring that employers have no retrospective payment obligations should legislation change.
2018 proved to be a year of challenges to the traditional concept of the employment relationship, with both the FWC and the Federal Court decisions sending a warning to employers about correct employee classifications. Key decisions included Klooger v Foodora Australia Pty Ltd and Workpac Pty Ltd v Skene, which extensively examined both the rapidly expanding gig-economy and concept of casual employment.
In response to the decision in Workpac Pty Ltd v Skene, Labor has committed to inserting a legal definition of “casual employment” in the Fair Work Act, creating a legislative test to determine if an employee is casual. A draft definition has not been provided. However, it is anticipated to focus on the regularity and certainty of the employee’s work pattern.
Labor has promised amendments to the Fair Work Act to provide that labour hire workers are guaranteed the same pay and conditions as directly employed workers performing the same role.
However, Labor has indicated that this change will not impact small businesses that engage labour hire workers on a temporary basis, as compared to large employers that use labour hire workers on a regular basis.
Labor has also committed to establishing a national labour hire licensing scheme to regulate the labour hire industry. The licensing scheme will require all labour hire companies to be licensed (including companies that are based overseas).
Labor has indicated that it will consider amendments to the Fair Work Act to allow workers to bargain at an industry wide level. The introduction of industry level bargaining will allow employees to negotiate across entire industries rather than individual workplaces. There have been no policy announcements at this stage to confirm how the system will operate.
Additionally, Labor has committed to preventing the unilateral termination of enterprise agreements that reduce employee entitlements. Details of the proposed policy are yet to be released. Presently, no changes to laws regulating protected and unprotected industrial action have been announced.
Changes to industry bodies
Labor has indicated changes to various industry bodies, including:
abolishing the Australian Building and Construction Commission;
abolishing the Registered Organisations Commission; and
establishing a National Office of Road Safety, which is intended to replace the Road Safety Remuneration Tribunal.
Labor has also indicated that it will repeal the Building and Construction Industry (Improving Productivity) Act and the Code for Tendering and Performance of Building Work 2016.
Currently, eligible employees are entitled to twelve months’ unpaid parental leave under the NES, in addition to a maximum of 18 weeks’ paid parental leave, paid at minimum wage.
Labor has proposed that employees will have access to 26 weeks of paid parental leave plus superannuation, through a government and employer co-contribution scheme.
Presently, there is no indication as to how the co-contribution will operate.
Labor has identified a number of general proposals that are without any additional detail at this stage. These general proposals include:
introducing Federal industrial manslaughter legislation to penalise company directors and individuals responsible for workplace deaths;
establishing a general right for an employee to review an employer refusal of a flexible work request;
introducing a ‘reasonable person’ test to determine if someone is an employee as opposed to a contractor;
‘strengthening protections’ for sham contracting; and
developing guidelines to promote good faith bargaining.
What does this mean for employers?
A lot can change between now and the election. However, there are things employers can be doing now in anticipation of a changed industrial landscape. These include:
auditing wage and superannuation payments;
auditing business use of independent contractors, including whether these contractors are at risk of being deemed employees;
reviewing casual employment engagements, including identifying whether the business has engaged any ‘permanent casuals’;
if relevant, terminating enterprise agreements; and
reviewing domestic violence policies to be compatible with any changes to the NES.
For further information or for advice on how these changes may affect your business, please contact: