The Federal Government unveiled its plan for reform to the federal industrial relations laws. A new Bill was introduced into Parliament called the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 which proposes to amend the Fair Work Act.
The Bill comes after consultation between the Federal Government, unions and employer groups failed to facilitate changes to the industrial relations system by agreement earlier this year.
The Government’s Bill has been built upon the temporary flexibility that was provided to employers and employees during the COVID-19 pandemic.
It also seeks to pose a ‘solution’ to the issues raised by employers arising out of recent contentious court decisions about casual employment.
Key Reforms
Here is a summary of the key elements of the Bill which are important for you to know:
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Job Advertisement
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- Employers cannot advertise a job at a rate of pay less than the minimum wage.
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| Casual Employment |
- A new definition of casual employment will be created. A person is a casual employee where ‘an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person.’
This definition will apply to offers of casual employment made before or after the new laws come into force.
- If certain criteria are met, an employer must offer a casual employee the ability to convert to full time or part time employment after 12 months of employment.
- Employees claiming that they have been misclassified as casual employees rather than permanent employees will have their claim for entitlements such as annual leave reduced by any casual loading they have received.
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| Part time employment |
- Under certain circumstances, part time employees can agree to work additional hours outside of their ordinary hours at their ordinary rate of pay instead of overtime rates. Penalty rates will still apply.
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This will apply to employees who are covered by certain modern awards such as:
- Vehicle Repair, Services and Retail Award
- Pharmacy Industry Award
- Commercial Sales Award 2020
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| Flexible Work Directions |
- Employers will be allowed to make flexible work directions to employees about their location of work and duties. This is quite similar to the temporary flexibilities which were provided to employers during the JobKeeper scheme. This will apply to employees who are covered by certain modern awards such as those listed above.
- Employers will be able to make the above directions for 2 years once the new laws come into force.
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| Wage Theft |
- Serious situations involving underpayments will be recognized as criminal offences.
- Offending employers can be fined up to $1.11 million and the offence may attract imprisonment for periods of up to 4 years.
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| Small Claims |
- There will be an increase to the current small claims jurisdictional limit from $20,000 to $50,000.
- Courts must also consider whether such matter can be referred to the Fair Work Commission for conciliation or arbitration (by agreement).
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| Enterprise Agreements |
- Currently, an enterprise agreement must pass the “Better Off Overall Test” (“BOOT”) before it is approved by the Fair Work Commission. The BOOT ensures that employees covered by the agreement are better off overall than they would be under the relevant modern award they would otherwise be covered by.
- The new laws will reduce the strict BOOT criteria. For example, it will allow the Fair Work Commission to consider whether an employee will receive non-monetary compensation under the agreement.
- The new laws will even allow enterprise agreements to be approved if they don’t pass the BOOT if it would be in the public interest.
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How the new Bill could affect you
We hold serious concerns about a number of the proposed reforms that will come into effect if the Bill is passed, including:
- Misclassified casuals cannot enforce their claim for permanency against their employer – casuals can only request conversion to permanent employment.
- The extension of the JobKeeper flexibility scheme for two years will allow employers to require employees to work in different locations or to do different work without the agreement of the employee.
- Part time employees may have their take home pay cut by the proposed “part time flexibility” provisions as they are currently entitled to overtime rates or a casual loading if they elected to work the additional hours as a casual employee. This new provision will allow employers to only pay these additional hours at time for time rates.
- Changes to the enterprise agreements approval process undermine the purpose of enterprise agreements. We bargain for better entitlements for members when negotiating agreements, not less than the award safety net minimum entitlements. The proposed changes will allow for agreements to be registered that result in a reduction of employees pay and conditions of employment.
- The bar for holding employers accountable for wage theft has been set too high. Wage theft laws which have only recently been passed in Victoria and Queensland will be overridden by the Bill. This will make it harder for us to hold employers accountable for underpayments unless it involves an egregious offence.
We do welcome however the Government’s proposal to increase the limit of the Federal Circuit Court’s jurisdictional limit for small claims to $50,000.00. Professionals Australia frequently engages in litigation on behalf of our members seeking to recover underpayments and the small claims division does provide a cost-effective jurisdiction to enforce employment entitlements.
When will the proposed changes come into effect?
The Bill was introduced into Federal Parliament last week and will be going to a Senate Committee for examination and will return to Parliament for debate next year.
Our plan of action
We will not accept proposed changes from the government that leave PA members and working people worse off and we will be actively opposing any attempts to water down workplace rights. PA and the ACTU will lobby parliamentarians to fight these changes.
We will also commence a campaign to educate our members and the Australian community on why the negative aspects of this Bill should be rejected.
We will be updating this page when there are new developments.