How the new government plans to reform industrial relations

By Zill Efrat – journalist

In the run-up to the May federal election, the Labor Party promised a range of major legislative reforms that could transform the industrial relations (IR) arena and may have implications for your business.

One of its commitments has already been achieved. It said it would formally advocate for workers on the minimum wage to get a pay rise. The Fair Work Commission (FWC) listened and gave these workers a 5.2 per pay rise from 1 July 2022.

Another commitment was to hold a Jobs and Skills summit. In July, Prime Minister Anthony Albanese announced that this two-day summit would be held in Canberra at the beginning of September.

It would bring unions, employers, civil society and governments together to address shared challenges, he said.

Also in July, workplace relations minister, Tony Burke, introduced the Paid Family and Domestic Violence Leave Bill into Parliament. It provides for 10 days of paid domestic and family violence leave in a 12-month period and enables an employee and employer to agree to additional paid or unpaid leave to be taken. It clarifies and expands on the reasons for which a person can take the violence leave.

But Labor has a long To Do list to get through.

During his election campaign, Albanese pledged to simplify the impenetrable award system for small businesses and get rid of the impediments that discourage the use of enterprise bargaining.

In May, Albanese said work was already underway between the Australian Council of Trade Unions (ACTU) and the Council of Small Business Organisations Australia (COSBOA) to do this.

That could be good news.

Before the election, COSBOA noted that a major problem for small businesses is IR’s complexity.

“Australia’s current system of Modern Awards is far too detailed for the average, time-poor small business owner to navigate,” it said in a statement.

“The Fair Work Act includes 800 sections and 122 Modern Awards – at 214,000 words, it’s longer than Dostoevsky’s Crime and Punishment.

“That may sound appetising to a team of lawyers looking for a juicy stack of paper, but it’s enough to fill a small business person with dread. Take that dread and amplify it by 100 for those small business owners who don’t speak English as a first language.”

Meanwhile, Albanese said he would not get rid of the restrictive Better Off Overall Test that underpins the enterprise bargaining system and replace it with the original no-disadvantage test.

But he did promise to extend the powers of the FWC to include “employee-like” forms of work and to make orders for minimum pay and standards for new forms of work, such as gig work.

Gig economy workers are categorised as contractors, meaning they don’t get sick leave, superannuation, worker’s compensation or the minimum wage. Labor wants to change that.

Labor also has plans to enshrine secure work as an objective of the Fair Work Act and require the FWC to put job security at the heart of its decision-making.

On the cards too are commitments to ensure that people doing the same job get the same pay. This, it says, will stop companies from using labour-hire to undercut the negotiated pay and conditions of workers who are employed directly.

Labor also wants casuals doing the same work with the same qualifications to be paid more – the same hourly rate plus the 25 per cent casual loading.

In addition, it has promised to legislate to make wage theft a criminal offence to stop companies from underpaying workers the wages or benefits rightfully owed to them.

Another commitment is to limit the number of consecutive fixed-term contracts an employer can offer for the same role, with an overall cap of 24 months. It says back-to-back, fixed-term contracts have become another form of insecure work.

Labor says where practical, it will also consult with state and territory governments, unions and industry to develop, portable entitlement schemes for Australians in insecure work.

Portable long service leave schemes, for example, allow workers who move from project to project or job to job within a single industry to accumulate an entitlement to long service leave that would be denied to them because of the nature of their work.

And, in a bid to get a better deal for women, Labor plans to strengthen the ability and capacity of the FWC to order pay increases for workers in low-paid, female-dominated industries.

Labor says it will also implement all 55 recommendations of the Respect@Work Report, aimed at the prevention and reporting of sexual harassment.

Looking ahead, business bodies expect there to be lots of consultations over Labor’s proposals. Watch this space!

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