Federal Government Industrial Relations Reform - Counsel ...
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1 September 2020
Federal Government
Industrial Relations Reform
The Prime Minister and Attorney General and Industrial Relations Minister, Christian Porter, have
announced a major industrial relations reform agenda which will see proposed changes to enterprise
agreements and awards.
The Federal Government will introduce the reforms as part of the JobMaker plan, with details to be
outlined in the lead up to the October 2020 Budget.
The proposed reforms include changes to:
• Greenfield Agreements
• Enterprise Agreements
• Casual and fixed-term employees
• Compliance and enforcement
• Award simplification
The Federal Government has established five working groups to focus on areas of predetermined “specific
known problems” in the industrial relations system, with Attorney General Christian Porter outlining “the
problems within each of the five areas we have chosen to focus on are well known and I am confident that
if we can work cooperatively, an opportunity exists to make meaningful progress at developing solutions
that will make a significant difference to how quickly we can recover from this crisis.”
Reform agenda
The majority of meetings will be conducted during July with the intention of concluding the process at the
beginning of September for actioning via legislation, regulation, and in the October Federal Budget. On 27
May, Attorney General Christian Porter indicated the process would “result in legislation” by the end of the
year.
Greenfield agreements for new projects
Attorney General Christian Porter has outlined there will be a focus on establishing enterprise agreements
for the life of mining, oil and gas projects, which have traditionally been limited by the “structure of the
system”. The Federal Government has expressed support for new deals that lock in pay rates and prevent
legal industrial action for the life of new projects.
The working group convened to examine greenfield agreements for new projects will consist of five
members from employee associations and five members from employer associations, and it is reported
that proposed legislation in this area is already “well developed”. The working group will also be tasked
with facilitating consultation with stakeholders with a view to progressing a pipeline of investments for job
creation.Enterprise agreements making In proposing reform to enterprise agreements, Attorney General Christian Porter has indicated the Government will examine the Better Off Overall Test (BOOT), suggesting ‘‘the BOOT test is something that needs to have a really, really fine look at because the way it’s being applied at the moment is causing fewer and fewer enterprise agreements to be concluded.” The Better Off Overall Test has previously been highlighted as an area in need of reform by key business and industry groups, who advocate for it to be replaced with the formerly used No Disadvantage Test. The Australian Council of Trade Unions has indicated they are open to examining lowering requirements of the Better Off Overall Test when agreed to by unions and employers. Federal Labor Shadow Minister for Industrial Relations Tony Burke said in May that Labor would oppose scrapping the BOOT because it would not improve wage growth. Casual and fixed-term employees Attorney General Christian Porter stated in May there was a “strong argument” to extend the right of casuals who have worked regular shifts for 12 months to request permanent employment. These comments come as industry groups have called on the Federal Government to change the definition of a casual employee to avoid large backpay claims arising from the Workpac v Skene decision entitling some casual employees to leave and other entitlements. Attorney General Christian Porter indicated the working group would be “looking at a range of known problems” including “problems associated with the definition of casual employment”. Compliance and enforcement The Federal Government has reportedly drafted a bill to criminalise serious forms of wage theft. The working group established to examine compliance and enforcement will examine options including banning directors from boards of those companies which underpay workers, stopping the company from employing migrant workers, and displaying a notice about the company’s breach. Unions have indicated they believe the Federal Government may set the bar too high for a “serious” form of wage theft. Award simplification The Federal Government has proposed to introduce award simplification changes, with an initial focus on simplifying a small number of awards in “distressed industries” as a result of COVID- 19. Attorney General Christian Porter has named these industries as retail, hospitality, restaurants and tourism. Key sector input The Australia Industry Group has called for the modification and simplification of modern awards to remove matters and conditions that are dealt with in legislation such as leave, notice of termination, dispute resolution processes, flexibility agreements and redundancy payments. Specifically, on enterprise agreements, AIG has called for: • The Better Off Overall Test to be replaced with the formerly used No Disadvantage Test • New objectives for the agreement approval process to avoid delays to agreements • The prevention of unions from engaging on the approval process unless they have affected members • Simplified explanation processes of new agreements to employers prior to votes.
Secretary of the Australian Council of Trade Unions, Sally McManus, has confirmed the unions will move to
block and stop industrial relations changes that are not in the interest of working people. On enterprise
agreements, the ACTU will:
• Seek an approval process with less process for new agreements
• Modification to lower requirements of the Better Off Overall Test when agreed to by unions and employers
• Industry and enterprise level bargaining for smaller businesses.
Working groups
On 3 June, the industrial relations reform working groups met for the first time for an economic briefing from
Treasury officials and government officials on the scale of the sector-by-sector challenge faced to create jobs
and chart a path to economic recovery.
Unions and employers will reportedly be required to submit proposed industrial relations changes for scrutiny
by senior Treasury officials, who will “stress test” them for productivity benefits, costs to the economy and
job creation.
Each working group will consist of a maximum of 15 members who will be able to call on predetermined
industry and subject experts throughout the process. All working groups will be chaired by the Attorney
General and Deputy Chair Tim Marney, a former Secretary of the Western Australian Treasury. Staff from
Treasury and Finance will form a secretariat and will analyse proposals from working groups on the basis of
productivity benefits, costs to the economy and job creation potential.
On 12 June, Attorney General Christian Porter announced the membership of each of these working groups:
Working group Employer organisations Unions
Casuals and fixed term Australian Chamber of Commerce and Australian Council of Trade Unions
employees Industry (ACCI), Ai Group, Council of (ACTU), National Tertiary Education
Small Business Associations of Australia Union (NTEU), Australian Nursing and
(COSBOA), Australian Retailers Midwifery Federation (ANMF), United
Association (ARA), Australian Higher Workers Union (UWU), Health Services
Education Industrial Association Union (HSU)
Award simplification ACCI, Ai Group, COSBOA, Australian ACTU (2 reps), UWU, Australian Workers
Hotels Association (AHA), National Retail Union (AWU), Shop Distributive and
Association (NRA) Allied Employees Association (SDA)
Enterprise Agreement ACCI, Ai Group, AMMA Australian ACTU, SDA, Community and Public
Making Resources and Energy Group, Business Sector Union (CPSU), Transport Workers
Council of Australia (BCA), Master Union (TWU), Electrical Trades Union
Builders Australia (MBA) (ETU)
Compliance and ACCI, Ai Group, National Farmers ACTU (2 reps), Finance Sector Union
enforcement Federation (NFF), COSBOA, AHA (FSU), Australian Services Union (ASU),
Independent Education Union (IEU)
Greenfields ACCI, AMMA, Minerals Council of ACTU, Construction Forestry Mining
Agreements Australia (MCA), Australian Constructors Maritime and Energy Union (CFMMEU),
Association (ACA), MBA AWU, Australian Manufacturing Workers
Union (AMWU), ETUEmergency measure removed
On 11 June, Attorney General Christian Porter reversed a Fair Work Regulation that allowed employers to
provide just 24 hours notice to proposed changes to an Enterprise Bargaining Agreement. Following a review
by Attorney General’s Department, the reversal returns the notice period to seven days. Announcing this
change, Porter said the “emergency measure” was no longer required and that “this was only ever intended
to be an immediate, temporary measure.” The Federal Court was due to deliver its verdict on a challenge to
the Regulation by the Construction, Forestry, Maritime, Mining and Energy Union this week.
On the same day, the Federal Government also formally discharged the Ensuring Integrity Bill from the
Senate notice paper, after Labor put forward a motion to Parliament.
Flexible IR arrangements
On 26 August, Federal Treasurer Josh Frydenberg introduced an Amendment Bill to Parliament that would
extend the JobKeeper scheme until March 2021. That Bill would also amendment the JobKeeper provisions of
the Fair Work Act made earlier in the year to temporarily provide employers flexibility whilst the pandemic is
managed, and to meet the aim of the JobKeeper scheme in maintaining the employment relationship between
the employee and employer.
The amendments, Part 6-4C of the Fair Work Act, will allow eligible JobKeeper businesses to utilise flexible
arrangement and create a new category of employer, legacy employers, for businesses that have previously
received JobKeeper, are no long eligible for JobKeeper but are able to certify a 10 per cent reduction in
turnover. Legacy employers would have access to modified flexibility arrangements, also referred to as
JobKeeper enabled directions.
Flexible arrangement in place and proposed to be extended are:
• Employees may direct a change in duties, location of work, days and hours worked
• Legacy employers must provide 7 days’ notice of a JobKeeper enabled direction rather than 3 days
and have further consultation requirements
• Employees cannot work less than 2 hours in a day
• Employees on reduced hours may request secondary employment, or undertake professional
development/ training
• Stand down orders, including zero hours when the criteria is met
• Legacy employers may reduce hours to 60 per cent of an employee’s ordinary hours
• Employers must not remunerate an employee less than the base hour rate despite any JobKeeper
enabled direction on duties or hours worked
• Fair Work Commission may, by arbitration, resolve disputes
• Employers from 28 September may no longer request employees agree to take Annual Leave until two
weeks of annual leave remain, and may no longer also agree to take annual leave at half pay
All employers must still meet their full obligations under the Fair Work Act to pay wages in full and any
applicable penalties. Additional penalties of $13,200 for individuals and $66,600 for body corporates that are
found to have misused legacy employer status would apply.All employers must still meet their full obligations under the Fair Work Act to pay wages in full and any applicable penalties. Additional penalties of $13,200 for individuals and $66,600 for body corporates that are found to have misused legacy employer status would apply. Labor have moved an amendment to the Bill to remove the Fair Work provisions for legacy employers, citing concerns it may be misused by employers. The amendment would also introduce a safety net to ensure low- paid workers can't be directed to work less under legacy employer provisions and receive a wage less than what they would if eligible for JobKeeper. The Bill will resume in the Senate for the week starting 31 August.
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