The following article is an extract from our publication, the Kingston Reid Review: Your Guide to 2025. The full link to this publication can be found here.

When it comes to workplace relations, the last 12 months have been a wild ride, with a host of significant labour hire reforms, changes to the multi-employer bargaining framework, a new ‘right to disconnect’ for workers, expanded union delegate rights and the introduction of a federal wage (and superannuation) theft offence, amongst many other changes.

The Federal Government’s Closing Loopholes reforms, introduced in two tranches over the course of 2024 (with a range of commencement dates), proved an even greater shakeup of Australia’s workplace relations system than the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (SJBP Act).

Of course, the first part of 2025 will set the stage for a federal election, so to an extent, the future is uncertain until the outcome of the election is known. But for now, join us as we take a quick look at what employers can expect in 2025.

Working with our clients as they deal with enterprise bargaining and protected industrial action has kept our national team extraordinarily busy in 2024 across the board, with no signs of slowing into the new year.

On a more positive note, for some clients, the expansive legislative reforms over the last 12-18 months have acted as something of a catalyst – offering up a unique opportunity to support clients with a more strategic conversation about their industrial instrument landscape and to look at some really exciting and novel strategies to meet their forward-looking objectives.

In September 2024, the Full Bench of the Fair Work Commission (FWC) ruled on the jurisdictional scope of the FWC to deal with disputes under s240 of the Fair Work Act 2009 (Cth) (FW Act), shedding light on what the FWC will deem to be a dispute “about the agreement” for the purposes of s240 and when it can be said that those parties are “unable to resolve the dispute”.

Essentially, the FWC clarified in Qube Ports[1] that s240 of the FW Act encompasses disputes about both the content and the process of bargaining. As such, bargaining employers should be prepared for the possibility that disputes about the bargaining process, not just the content of agreements, can be brought before the FWC, following the decision.

This means that procedural disagreements, such as the method of bargaining, may be subject to the FWC’s intervention. However, it is important to note that the FWC can only make a recommendation and cannot arbitrate an outcome without the agreement of all parties.

Multi-employer bargaining
After a reasonably slow (and mostly, non-adversarial) uptake in the second half of 2024, four major black coal industry operators and APESMA[2] compelled the FWC to analyse the multi-employer bargaining provisions under the microscope in the Ulan Coal Mines[3] case – the first significant contested application of its kind since the commencement of the SJBP Act.

Without a definition under the FW Act, the FWC found that the term “common interests” should be given its ordinary meaning. That is, “common” means “shared, joint, united” and “shared or joint” consistent with previous decisions. Similarly, “interests” means “concernment”, “business, concerns or cause”, “goals, principles and business concerns” and “characteristics or matters that impact or influence the organisation”. That is to say that where the employers have shared or joint business concern, goals or principles (among others), it will be difficult to argue against the common interest.

The FWC also identified that the “common interests” must be clearly identifiable, or plainly discernible or recognisable, however they need not be self-evident. The matter is on appeal and will be listed for hearing before a Federal Court Full Court in March 2025.

If you are an employer who is faced with an application for a single interest authorisation, understanding the differences and similarities between you and your co-employers is important. However, the next layer of that analysis needs to be on developing how these matters impact bargaining interests, goals and objectives such that it may be a point of distinction from another entity who may be at the bargaining table. Through this approach, a more refined defence to an application, which not only goes to distinguish an employer from its counterparts, but also informs how those distinctions will impact an employer’s bargaining stance, interests, goals, objectives and drivers and ultimately mitigate against a finding that multi-employer bargaining should occur, will be possible.

Whether this line of reasoning prevails before the Federal Court is yet to be seen.

So, with some significant cases expected to be heard in the early part of 2025, there will be an opportunity for the FWC and the courts to shed some much-needed light on the intended operation of the multi-employer bargaining rules, amid the potential for increased contestation in the coming year. Whilst most of the multi-employer bargaining cases have to date been resolved by consent, it’s safe to expect that 2025 will be a year in which we see more of these applications contested, which will, at least, lead to clearer guidelines and the setting of precedents for future applications.

Intractable bargaining provisions
Back in mid-2023, the intractable bargaining provisions replaced the old schemes of issuing “serious breach declarations” and “bargaining related workplace determinations”, under which the FWC could make “serious breach declarations” (i.e. where there were serious and sustained contraventions of a good faith bargaining order that significantly undermined the bargaining process), which then gave the FWC scope to make “bargaining related workplace determinations” if negotiations remained unfruitful. The language in the old schemes (think “serious and sustained”, “significantly undermined”, “exhausted all other reasonable alternatives to reach agreement” and “agreement will not be reached”) created a high bar for applicants to meet in order to satisfy the FWC that a “serious breach declaration” should be made.

The upshot is that the old schemes were not used and the FWC was never called on to make a “serious breach declaration”. However, under the current intractable bargaining scheme, it is significantly easier for employees, unions and employers to request the FWC’s intervention in making bargaining determinations.

Throughout 2024, a number of intractable bargaining declaration applications were made, and our prediction is that this will continue to be a really interesting area to watch over the next 12 months.

These new provisions represent one of the most fundamental shifts to the industrial relations landscape in decades, as there is now a realistic alternative to impasse or agreement – with a readily accessible pathway for the FWC to determine bargaining outcomes.

The intractable bargaining framework allows the FWC to make an intractable bargaining declaration, in effect bringing bargaining to an end and setting the stage for the FWC to arbitrate bargaining outcomes, where it is satisfied that:

• it has dealt with the dispute through the existing bargaining dispute resolution processes (under s240 of the FW Act)
• that there is nevertheless no reasonable prospect of the parties reaching an agreement; and
• it is reasonable in all the circumstances to make the declaration.

Having done so, the FWC must substantively resolve bargaining by making an intractable bargaining workplace determination “as quickly as possible” – although some post-declaration negotiating period can be afforded to the parties.

The “post declaration negotiating period” assumes some significance, given that the workplace determination ultimately made by the FWC must include any “agreed terms” between the bargaining representatives as defined in s274(3) of the FW Act. This requires an assessment of the agreed terms at three stages including at the end of the post declaration negotiation period. Moreover, following the passage of the second tranche of Closing Loopholes reforms, an intractable bargaining workplace determination cannot include any term which is less favourable to any employee (or employee organisation) than a term of the existing enterprise agreement dealing with the same matter (other than a term that provides for a wage increase). The FWC’s approach to its new powers is important for all employers who engage in enterprise bargaining to be across.

2024 was also a year of reckoning for the CFMEU, with one of the most notable developments being the administration of the Construction and General Division of the union. Mark Irving KC took on the formidable task of cleaning up Australia’s most notorious union, amidst allegations of bribery, corruption, and links to outlaw motorcycle gangs. These revelations have sparked widespread controversy, igniting urgent calls for reform, and exposing a troubling picture of union leadership plagued by criminal influence and self-interest.

These developments raise pressing questions about the state of workplace law in Australia, sparking renewed debate over union oversight and regulation, and reinforcing the need for stronger mechanisms to prevent and address misconduct within unions[4].

Meanwhile, whilst the CFMEU is somewhat subdued, there are several other unions who are actively stepping into the “void”, particularly on the Australian east coast within the construction industry, where unions such as the EPU, CEPU and AWU are taking advantage of an opportunity to grow their existing membership bases. Alongside the changes in the representatives sitting across the bargaining table, we have also seen the continuation of a post-COVID era trend, in which increasingly assertive unions are more aggressively calling for significant wage increases that many employers may be unable to afford, particularly in light of current economic conditions.

Wage theft
New wage theft provisions commenced operation on 1 January 2025, aimed at criminalising intentional conduct that results in the failure to pay an employee their minimum statutory entitlements (that is, entitlements arising under the FW Act, or a Fair Work instrument such as a modern award or enterprise agreement), with penalties for “related offences” also on the table.

Importantly, employees, officers and agents of an employer may be implicated by these related offence provisions, with penalties including a term of up to 10 years’ imprisonment or significant fines being imposed. Further, whilst non-payment of superannuation was initially excluded from the new wage theft provisions, readers may recall that a last-minute deal with the Greens in early 2024 secured amendments to extend the new offence to unpaid superannuation. As a result, superannuation entitlements for the vast majority of national system employees will have an additional layer of protection afforded to them by the new criminal offence.

These amendments and the serious contravention regime under the FW Act significantly raise the risk/penalty profile associated with underpayments, and our team has been working tirelessly with clients during 2024 to help them understand how these new provisions will apply and to ensure their payroll and HR processes and systems are compliant and functioning as intended.

We have also been seeing underpayment claims filed in state and territory courts with federal jurisdiction, seeking penalties in relation to unintentional underpayments. These underpayment claims are designed to see pay contraventions addressed in a shorter timeframe than filing in the Federal Court or Federal Circuit and Family Court of Australia. In some cases, these local courts are being asked to consider significant and serious contraventions as forming the basis of relief (even where the actual underpayment is on the low end of the scale).

The goal is reasonably clear; start to stack up smaller contraventions so that, if a large-scale underpayment arises, there is a history of contraventions on the books to justify imposing large penalties on employers.

With this in mind, early 2025 is a good time to ensure your organisation’s systems and processes are working well together, noting also that unions are able to exercise right of entry rights to investigate suspected pay contraventions, in addition to the broader rights workplace delegates already have in place.

Regulated Labour Hire Arrangement Order
In contrast to the much more restrained uptake of multi-employer bargaining, the Regulated Labour Hire Arrangement Order (RLHAO) framework has been rapidly embraced, with well over 40 applications having already been made. These primarily relate to the black coal sector in New South Wales, with further applications relating to warehousing, retail and aviation and meatworks.

While several orders have already been made (and decisions published), none of these concluded cases involved any significant challenge to the respective application. Accordingly, the occasion has not arisen for extensive guidance to be provided about the operation of the statutory scheme.

The first major test of the provisions will occur early this year with a Full Bench hearing listed for 20 to 31 January 2025, in relation to several BHP entities. That said, while this case is expected to involve detailed examination of the distinction between labour hire and service provision, there is less focus upon questions about whether it is “fair and reasonable” to make an order. We will continue to see much development in this space over the next 12 months.

Of course, even apart from the present uncertainty around when an order might be made, various other aspects of the RLHAO scheme are equally complex and perhaps uncertain, and it may be some time before these “downstream” issues are tested. For example, how will the FWC resolve disputes around the calculation of the “protected rate of pay”, and what precisely is the breadth of its capacity to make orders about these matters? How exactly will the exceptions operate and particularly those concerning short-term arrangements? How will the (on its face, incredibly broad) anti-avoidance scheme be interpreted by the courts?

[1] Qube Ports Pty Ltd T/A Qube Ports v Construction, Forestry and Maritime Employees Union [2024] FWCFB 370.
[2] The Association of Professional Engineers Scientists and Managers Australia.
[3] 3. Association of Professional Engineers, Scientists and Managers, Australia v Great Southern Energy Pty Ltd T/A Delta Coal, Whitehaven Coal Mining Ltd, Peabody Energy Australia  Coal Pty Ltd, Ulan Coal Mines Ltd [2024] FWCFB 253.
[4] We note that the legislation and associated legislative instrument through which the administration was achieved are the subject of a challenge in the High Court.