Federal Government’s New IR Laws: Further Weakening Employee Protections

Despite all the horrors and restrictions of the COVD-19 pandemic period, there was a positive moment towards the beginning that saw the federal Coalition displaying concerns about how everyday Australians on the ground were going to cope with the accompanying economic downturn.

Almost a million locals lost their jobs within weeks of the onset of the crisis, which was about the time the never-before-seen goodwill of Morrison and Co revealed itself: the unemployed would no longer starve, employers would be assisted in paying staff and renters would remain housed.

And, by golly, in early June, industrial relations minister Christian Porter commenced a series of IR reform roundtables, joined by representatives from the ACTU, with the aim of mapping out the nation’s path to a post-COVID economic recovery.

However, the Liberals didn’t even wait until the pandemic passed before removing their gloves, as in early December, the minister introduced a suite of industrial reforms which reveal that the government perceives the current desperation as an opportunity to use to employer advantage.

No underlying position here

Introduced on 9 December, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 addresses all of the key industrial relation concerns considered during the mid-year roundtable deliberations and it legislates responses to the benefit of employers.

“This bill is not ideologically based”, Porter said during his second reading speech on the legislation. And this wasn’t meant to be ironic despite the fact that 12 months earlier, he’d failed in passing another non-ideological bill that was designed to dismantle unions and limit strikes further.

The new IR legislation “is founded on a series of practical, incremental solutions to key issues that are known barriers to creating jobs,” the minister continued. “They are balanced and pragmatic and seek to create a fair and efficient industrial relations framework for all Australians.”

Ensuring insecure work

One of the key amendments Porter’s legislation makes is to insert section 15A into the Fair Work Act 2009 (the FWA) to provide a statutory definition of a “casual employee”.

According to the bill, an employee is hired on a casual basis if they’ve accepted an offer from an employer, which “makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person”.

“To avoid doubt” the section then stipulates that “a regular pattern of hours” does not indicate any firm commitment to ongoing employment, and nor does any “conduct of either party” coming after the offer of casual work has been made.

This clarification of casual work under this broad definition is in no way designed to benefit employees working under such insecure conditions, but rather it’s to guard against a number of recent federal court rulings, which found “casual” employees were entitled to a lot more benefits.

In 2020’s WorkPac versus Rossato, the Federal Court found that an employee – who had worked for a company under six consecutive contracts – was entitled to annual leave, as he was working under “a firm advanced commitment” and any casual loading that was being paid didn’t change this.

So, Porter’s legislation aims to prevent these sorts of rulings by adding section 545A to the FWA, which sets out that if an employer pays an employee an hourly casual loading rate on top of their base, this will be automatically be deducted from any entitlements a court later finds they’re due.

The bill also inserts division 4A into part 2-2 of the FWA, requiring an employer to offer a person employed casually a permanent position after 12 months of work. Although, in the case of a dispute, an employee can only seek arbitration via the Fair Work Commission if the employer agrees.

Less pay for part-timers

Porter’s IR legislation then goes on to ensure that part-time employees can be treated as casuals if need be. Under the provisions of new division 9 of part 2-3 of the FWA, an employer and an employee can enter into a “simplified additional hours agreement”.

This arrangement involves a part-time employee working under a “relevant identified modern award” agreeing to work extra hours – at least three at a time – and these additional hours worked will be exempt from any overtime payment.

Worse off overall

Under the current Fair Work system, the “better off overall test” (BOOT) ensures that any enterprise bargaining agreement cannot lead to an employee being worse off than they would be under the terms of the regular award.

However, Porter wants to amend section 189 of the FWA so that under certain circumstances BOOT wouldn’t apply and the Fair Work Commission could then approve agreements that basically see employees worse off than the award.

Circumstances where undercutting employees in this manner could apply include the views and circumstances of employees and employers, the impact of COVID-19 on a business, the extent of employee support for the arrangement and as well, whether it would be in the public interest.

The overriding of BOOT is an arrangement that would last for two years. However, the enterprise agreements being entered into usually have a four-year lifetime, and even then, they can remain in place after they expire waiting on a new agreement to be drafted.

A “diabolical” bill

The suspension of BOOT does not apply to greenfield agreements, which are industrial arrangements covering new enterprises. However, the minister wants to double the length of greenfield agreements to eight years rather than the current four.

Unions argue that this arrangement locks them into pay and work conditions for a much longer period without any ability to take work stoppages in order to secure better arrangements for the entire eight year period.

Indeed, both federal Labor and the unions are opposed to the industrial relation minister’s bill. ACTU secretary Sally McManus told the AFR that the implications of the suspension of BOOT are “diabolical”.

On the day following its introduction into the federal lower house, the Supporting Australia’s Jobs and Economic Recovery Bill was sent to the Senate Education and Employment Legislation Committee for review.

The committee will be reporting back to parliament on the reform bill by 12 March 2021.