Industrial relations: an ever changing landscape

Many people will recall the hotly debated Secure Jobs, Better Pay Bill which passed in late 2022 and introduced significant amendments to the Fair Work Act 2009 (Cth) (FW Act). Those amendments, which concerned matters such as pay secrecy clauses in employment contracts, use of fixed term contracts and, most controversially, various aspects of the enterprise bargaining system, have progressively taken effect through the course of this year.

The Federal Government has been in consultation with business and union groups for much of this year about further changes to be made to the FW Act, some of which were foreshadowed in the Government’s election platform last year.

The recently introduced Closing Loopholes Bill (Bill) proposes further industrial relations reform. As we head towards the end of the year, businesses will need to monitor the progress of the Bill to ensure they are in a position to be compliant with any amendments which ultimately pass.

If passed, employers which intentionally underpay employees amounts due to them under the FW Act or an applicable award or enterprise agreement (such as wages, leave payments, overtime and penalty rates) will be guilty of a criminal offence. Maximum penalties will range from 10 years’ imprisonment to fines in excess of $7 million (or three times the amount of the underpayment, if greater).

If passed, the Fair Work Commission (FWC) will be empowered to make orders requiring operators of certain kinds of digital platforms to comply with minimum terms and conditions in relation to the engagement of their contractors.

It is also proposed to extend the existing unfair dismissal regime to these ‘employee-like workers’ in the event they are de-activated by the platform operator.

A similar regime is intended to apply to contractors who work in the road transport industry.

The Bill introduces new rights for casuals to convert to permanent employment (if they wish to do so). If passed, employers will have to comply with prescribed requirements when responding to an employee who chooses to utilise the newly available pathway.

The Government is proposing to overturn two decisions of the High Court delivered in 2022 (CFMMEU v Personnel Contracting Pty Ltd and ZG Operations Australia Pty Ltd v Jamsek) concerning the test for determining whether a person is an employee or an independent contractor. The proposed new definition of ‘employee’ is likely to result in greater uncertainty for businesses about the legal status of their contractors.

It is proposed that the FWC will be granted new powers to regulate certain kinds of labour hire arrangements. Where such orders are made, labour hire businesses will be obligated to ensure that employees who perform work for a host business are paid the same rate of pay as the host’s own workers.

This article provides general comments only. It does not purport to be legal advice. Before acting on the basis of any material contained in this article, we recommend that you seek professional advice.

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