Government’s IR Bill contains measured and incremental changes to support recovery

“The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, as introduced into Parliament today, contains important measures that will support the recovery from the pandemic-induced recession. The Bill is a balanced and measured response that deserves the support of all Parliamentarians and it should be passed without delay,” Innes Willox, Chief Executive of the national employer association Ai Group, said.

“The Bill includes measured and incremental changes to the IR system based on extensive consultation with business and unions. All were given a welcome opportunity to have their say and influence the outcome.

“While the unions will most likely try to paint various measures in the Bill as unnecessary and unfair, such claims do not stand up to scrutiny, and the amendments are in the shared interests of employers, employees and the broader community,” Mr Willox said.

Casual employment

“For the past two years, businesses that employ casual employees have faced uncertainty and cost-risks due to the Federal Court’s controversial decisions in the WorkPac v Skene and WorkPac v Rossato cases, which awarded annual leave and other entitlements to 2 employees who were engaged and paid as casuals, have become major barriers to casual jobs.

“Certainty needs to be restored without delay to encourage employers to employ the hundreds of thousands of casuals who have lost their jobs since the onset of COVID-19 (see Attachment below).

“The Bill defines a ‘casual employee’ and, importantly, prevents people who have been engaged and paid as a casual from pursuing back-pay claims for entitlements which they have been paid a 25% casual loading in lieu of. Allowing ‘double-dipping’ is obviously unfair and, unless addressed, could cripple countless businesses at a cost of up to $39 billion.

Awards and flexible part-time employment

The Bill contains some important flexibilities for award-covered employers and employees in industries particularly hard-hit by the pandemic, including more flexible part-time provisions.

“There is nothing particularly unusual about the idea of part-time workers agreeing to work additional ordinary hours (up to the hours worked by full-time employees) without the payment of overtime. For example, the current Restaurants, Hospitality, Clubs, Telecommunications, Contract Call Centres and Nurses Awards already provide for this. The Fast Food Award was also varied earlier this year to provide this flexibility.

“This flexibility will allow a lot of employees to work additional hours that they want to work, and receive additional pay for doing so. Without this flexibility, on many occasions the additional hours will not be offered by the employer because of the hefty overtime penalty rates that would apply, and part-time employees will lose the opportunity to earn additional income.

“Another benefit of more flexible part-time employment provisions is that it gives employers and employees a viable alternative to casual employment when irregular hours are worked.

Enterprise agreements

“The Bill contains important provisions to restore practicality and common-sense to the enterprise agreement making system. Enterprise agreements have the potential to play an important role in the recovery from the pandemic, but not without some significant changes to the system. The system has become a minefield of technicalities and it is not surprising that the number of enterprise agreements has halved in the past 10 years.

“Under the provisions in the Bill, the Fair Work Commission’s role will become more facilitative. The agreements reached between bargaining parties will be required to be respected, and agreements will need to be approved quickly unless it is clear that their terms are unlawful.

“The Better Off Overall Test (BOOT) will need to be applied by the Commission in a practical manner and on the basis of rosters and types of work that are either being worked or reasonably likely to be worked, not on the basis of far-fetched, hypothetical scenarios. The procedural requirements for the approval of an agreement will be clearer and more readily complied with.

“There are longstanding provisions in the Fair Work Act, and in prior legislation, that allow enterprise agreements which do not pass the BOOT to be approved in very limited circumstances. During the recovery from the pandemic, it is important that the Fair Work Commission has increased discretion to approve enterprise agreements which do not pass the BOOT, in genuine and limited circumstances where approval of the agreement is in the interests of all parties. The Bill makes a modest amendment to the current provisions to address this.

Compliance and enforcement

“The Bill contains criminal penalties and higher civil penalties for serious and deliberate wage underpayments.

“The Australian Industry Group opposes criminal penalties for wage underpayments but we recognise that the provisions in the Bill have been drafted in a balanced manner. The criminal offences only apply to deliberate and dishonest conduct, not to payroll errors.

“We also recognise that the new criminal and civil penalties for non-compliance are accompanied by measures to simplify the workplace relations system, including in respect of casual employment, awards and enterprise agreements. The vast majority of underpayments are the result of the current overly complex IR system,” Mr Willox said.

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