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25 January 2023
Punch cards, penalties and professional employees – The Commission makes changes to Professional Employees Award
January 25, 2023

On the 23 January 2023, a Full Bench of the Fair Work Commission (Commission) issued a Draft Determination to vary the Professional Employees Award 2020 (Award) which will affect employees who work in the engineering, IT, medical research, auditing and science sectors.

What are the key changes?

The Draft Determination sets out details of how the Commission plans to address two issues.

  1. The hours of employment and overtime for employees covered by the Award; and
  2. Clarifying the coverage of the Award.

Hours of employment and overtime

Currently the Award only includes general statements regarding hours of employment and overtime. It requires employers to compensate employees for work outside of their “ordinary hours”, however it is currently silent about how this compensation will be calculated.

The Commission is proposing to vary the Award to include:

  • a specific provision that all hours worked in excess of 38 hours per week for a full-time employee must be paid at the applicable minimal hourly rate (including call backs and work performed on electronic devices or otherwise remotely)
  • a 25% loading on hours worked, Monday to Saturday that are before 6:00am or after 10:00pm
  • a 50% loading on hours worked on Sunday or a public holiday
  • the requirement for employers to keep records of all hours worked by an employee:
    • in excess of 38 hours per week
    • before 6:00am or after 10pm from Monday – Saturday; and
    • on a Sunday or Public Holiday.
  • specific provisions that need to be followed by an employer and employee if an employee wishes to utilise time off in lieu (TOIL), rather than being paid for a particular period of over time.

Importantly, the Draft Determination also includes a provision to exclude the requirement for overtime, TOIL, penalty rates and record keeping where an employee is entitled to an annual salary which exceeds their applicable minimum annual wage (under the Award) by at least 25%. This is an interesting development given the push for “exemption rates” by employers in other modern awards.

Clarifying coverage

There has been much litigation concerning the extent to which the Award covers employees. This has had a particular focus on determining if an employee is eligible to lodge an unfair dismissal claim. The Commission is proposing to amend the Award to clarify the coverage of the Award. In the Draft Determination the Commission proposes to add the following provision:

An employee performing professional engineering duties, professional scientific duties, professional information technology duties or quality auditing must be classified in one of the following classifications provided that the employee is not employed in a wholly or principally managerial position.

This makes it clear that an employee who is wholly or principally employed in a managerial position is not covered by the Award. This proposed amendment is a point of clarification which restates the law as it has been applied by the Commission and is unlikely to have a significant impact on employers. Whether a position is wholly or principally managerial will ultimately turn on the quality of evidence presented by employers.

What does this mean?

The proposed variations to the Award haven’t been enacted yet. The Commission has invited parties to make submissions on the Draft Determination by 4:00pm Friday 10 February 2023. As such, the exact date these changes come into effect will be known after this date.

Before the introduction of the changes to the Award, employers should:

  • take the opportunity to re-evaluate whether employees who work in an engineering, scientist, IT or medical research capacity are correctly classified under the Award;
  • review working arrangements to determine what impact the changes could have on payment and record keeping obligations;
  • consider whether the annual salaries of relevant employees could exempt the new provisions; and
  • put in place a strategy to make the necessary operational and contractual adjustments before the new provisions have an impact.

As always, the team at Kingston Reid will continue to keep you informed on the progression of these changes. We are well placed to support organisations in reviewing current practices and developing strategies for managing the change.

 

Michael Mead
Partner
+61 2 9169 8428
[email protected]
Rosalie Connor
Associate
+61 2 9169 8423
[email protected]
28 October 2022
Secure jobs, better pay – Australia’s workplace relations overhaul
October 28, 2022

The Federal Government introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill) on 27 October 2022.

When introducing the Bill, the Minister for Employment and Workplace Relations, Tony Burke promised the Bill will deliver “…more secure jobs, better pay and a fairer workplace relations system for Australian workers.”

The Minister’s public announcements before introducing the Bill did not fully convey that the Bill could result in the most substantive changes to the Fair Work Act 2009 (Cth) (Act) in a decade.

The Bill has been referred to a Committee, with the report due on 17 November 2022.

Parts 1, 2 and 3 – ROC and ABCC abolished

The Government crossed off two election promises with the Bill abolishing the Registered Organisations Commission and the Australian Building and Construction Commission, returning regulatory oversight to the Fair Work Commission (FWC) and Fair Work Ombudsman (FWO) respectively.

Part 4 – Objects

The Bill introduces two new objects to the Act – promotion of job security and gender equity. The new objects will guide the FWC in performing its functions, and will be matters the FWC takes into account as a part of the modern awards objective in section 134 and the minimum wages objective in section 284.

Part 5 – Equal remuneration

The Bill will change the way that the FWC looks at equal remuneration and work value cases. The FWC’s consideration of work value reasons must be free of assumptions based on gender and include consideration of whether there has been historical gender-based undervaluation of the work under consideration.

The Bill removes the need to find a male comparator and clarifies that sex discrimination is not a necessary prerequisite for the FWC to make an equal remuneration order.

Part 6 – Expert panels

The Bill creates a Pay Equity Expert Panel and a Care and Community Sector Expert Panel within the FWC. The purpose of these new expert panels will be to tackle low pay and conditions in the female dominated care sector to help attract and retain workers. By having these expert panels, it will make it easier for the FWC to order pay increases for workers in low-paid, female dominated industries by putting in place the statutory Equal Remuneration Principle.

Part 7 – Pay Secrecy

It will be a workplace right that employees (and job applicants) are able to disclose (or not disclose) their own remuneration or ask another person about their remuneration. Adverse action may not be taken against an employee (or job applicant) for exercising this workplace right.

The Bill also proposes prohibiting contractual provisions or terms in industrial instruments which prevent employees from discussing their remuneration or terms of their employment that are reasonably necessary to determine remuneration outcomes. This includes quantum and the number of hours the employee works. Existing pay secrecy terms will have no effect. Up to 600 penalty units may be imposed for a serious contravention, or 60 penalty units.

Part 8 – Prohibiting sexual harassment in connection with work

This part introduces the measures and means to combat sexual harassment in the workplace. The major changes to the Act are based on recommendations made by the [email protected] report.

Recommendation 28: The Fair Work system be reviewed to ensure and clarify that sexual harassment, using the definition in the Sex Discrimination Act, is expressly prohibited.

The Bill implements this recommendation by prohibiting sexual harassment in connection with work in the Act, using the definitions in model work health and safety laws. The prohibition applies broadly to protect workers, prospective workers and persons conducting businesses or undertakings.

Principals would, in some circumstances, be vicariously liable for acts of their employees or agents – unless they could prove that they took all reasonable steps to prevent the employee or agent from doing the unlawful acts. At the same time, principals may also be subject to enforcement action for contravening the proposed new positive duty to prevent sexual harassment under the Respect at Work Bill which is currently before Parliament.

The prohibition is supported by a new dispute resolution framework, modelled on the compliance framework in the Act that applies to general protections dismissal disputes. In most cases, the FWC would first deal with a dispute by conciliation or mediation. If the dispute remained unsettled, the parties could proceed to consent arbitration or make an application to the Federal Court.

Recommendation 29: Introduce a ‘stop sexual harassment order’ equivalent to the ‘stop bullying order’ into the Fair Work Act. This should be designed to facilitate the order’s restorative aim.

The Bill introduces this recommendation by allowing the FWC to make stop sexual harassment orders to protect applicants from future sexual harassment. The FWC may also deal with disputes about sexual harassment which relate to past harm caused by sexual harassment.

To avoid duplication and streamline application processes, Part 8 would merge the existing stop sexual harassment order jurisdiction into new Part 3-5A—Prohibiting sexual harassment in connection with work.

The Bill ensures people have access to an appropriate remedy (other than an order requiring payment of a pecuniary amount) but also ensures that they are not entitled to more than one remedy in such cases.

These changes provide flexibility. Applications may be made jointly by one or more aggrieved persons against one or more perpetrators or principals and enable a union to represent an aggrieved person or persons. It inserts anti-double dipping provisions to prevent a person from obtaining multiple remedies in relation to the same conduct. It protects all Australian workers, prospective workers and persons conducting businesses or undertakings. It prevents the concurrent operation of State and Territory anti-discrimination laws and, except in some limited circumstances, occupational health and safety laws (to the extent they deal with sexual harassment).

Part 9 – Anti-discrimination and special measures

The Bill adds three further protected attributes—breastfeeding, gender identity and intersex status—into the anti-discrimination provisions in the Act which aligns the Act with other Commonwealth anti-discrimination legislation.

It amends the Act to confirm that ‘special measures to achieve equality’ are matters pertaining to the employment relationship and therefore matters about which an enterprise agreement may be made. This would also clarify that ‘special measures to achieve equality’ are not discriminatory terms and therefore not unlawful terms in an enterprise agreement.

Part 10 – Fixed-term Contracts

The Bill inserts prohibitions on the use of fixed term contracts where the term extends beyond 2 years or where the contract may be renewed more than once. These restrictions apply to both extensions or renewals of an existing contract as well as consecutive or new contracts, where the work is the same or substantially the same and there is substantial continuity of service.

There are some exemptions to this prohibition including, for example, where:

  • the employee is engaged under the contract to perform only a distinct and identifiable task involving specialised skills
  • the employee is engaged under the contract in relation to a training arrangement (which will include apprenticeships and traineeships)
  • the employee is engaged under the contract to undertake essential work during a peak demand period
  • the employee is engaged under the contract to undertake work during emergency circumstances or during a temporary absence of another employee
  • in the year the contract is entered into the amount of the employee’s earnings under the contract is above the high-income threshold for that year
  • the contract relates to a position for the performance of work that is funded by government funding or other particular types of funding, the funding is payable for a period of more than 2 years, and there are no reasonable prospects that the funding will be renewed after the end of that period
  • the contract relates to a governance position that has a time limit under the governing rules of a corporation or association of persons
  • a modern award that covers the employee includes terms that permit a longer period

A term of a contract that does not comply with these provisions will have no effect but the remainder of the contract will remain valid. This creates an ongoing employment relationship.

Other proposed amendments include prohibitions on terminating or delaying reengaging an employee or changing the nature of the work or tasks or otherwise alter the employment relationship to avoid these obligations.

The FWO will be required to prepare a new information statement that employers must give to fixed-term employees.

The FWC will be given new powers to deal with disputes about these provisions, including by way of arbitration if the parties to the dispute agree.

Penalties for non-compliance may be 600 penalty units for a serious contravention, or 60 penalty units.

Part 11 – Flexible Working Arrangements

While there was some discussion about expanding the categories of employees who could make requests for flexible working arrangements, this has not eventuated (save for a minor change to employees experiencing family and domestic violence – expanded from an employee experiencing violence from ‘a member’ of their family).

The proposed amendments focus on an employer’s response to a request for flexible working arrangements.

In addition to an employer being required to respond within 21 days, being able to refuse a request on reasonable business grounds, and notifying the employee of the reasons for the refusal, the amendments propose that before refusing a request on reasonable business grounds, the employer must:

  • have discussed the request with the employee and genuinely tried to reach agreement with the employee about other changes that may be made to accommodate the employee’s circumstances, and
  • have had regard to the consequences of the refusal for the employee.

When providing written notice of a refusal of a request, the employer must also include details of the reasons for the refusal, including the particular business grounds and how they apply to the request. The refusal must set out other changes that would accommodate the employee’s circumstances the employer would be willing to make or that there will be no changes.

The FWC will have new powers to deal with disputes about these provisions, including by arbitration. The types of orders the Fair Work Commission may make include an order that:

  • the Fair Work Commission agrees with the refusal, or
  • the employer grants the employee’s request or make specified changes to the employee’s working arrangements to accommodate the employee’s circumstances.

Part 12 – Termination of enterprise agreements after nominal expiry date

The Bill changes how applications to terminate agreements after they have passed their nominal expiry date are made, and the grounds they can be made on. Principally, the FWC’s focus shifts from considering the public interest to the interests of employees’ covered by the agreement.

The proposed amendment provides that the FWC must terminate an enterprise agreement, on application, where either:

  • the continued operation of the agreement would be unfair to covered employees;
  • the agreement does not and is not likely to cover any employees; or
  • all of the following circumstances apply:
    • the continued operation of the agreement would pose a significant threat to the viability of a business of the covered employer(s);
    • the termination of the agreement would likely reduce the potential for terminations of employment by way of redundancy, or due to insolvency or bankruptcy; and
    • where the agreement contains termination entitlements, the employer has given a guarantee to the FWC in respect of its compliance with those obligations.

Where an application is made, the FWC must consider the views of the employees, employers, and unions covered by the agreement. If one of those parties opposes the application, the matter is to be dealt with by a Full Bench of the FWC.

The FWC must have regard to whether bargaining has or will commence for a proposed agreement which will cover the same or substantially the same group of employees. The FWC must also consider if the termination would adversely affect the bargaining position of employees to be covered by the proposed agreement.

An employer’s guarantee about termination entitlements will be an undertaking to comply with any post-termination obligations/entitlements which would have applied but for the termination of the agreement. The guarantee remains in effect for a period of 4 years, unless otherwise specified by the employer and approved by the FWC. Compliance with the guarantee will be a civil remedy provision.

Part 13 – Sunsetting of “zombie” agreements etc.

The Bill makes several amendments to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). The net effect of the provisions will be that unless actions are taken to the contrary, all pre-FW Act agreements, in whatever form they exist, will end 12 months from the date the Bill is enacted. These agreements are often referred to as ‘zombie’ agreements.

Employers must give written notice to employees within six months of the Bill being enacted that they are covered by a ‘zombie’ agreement and it will terminate 12 months from the date of the Bill’s enactment, unless an application is made to the contrary. An employer’s obligation to notify employees will be a civil remedy provision.

Employers, employees, and unions may apply to the FWC to extend the sunset date of an agreement by up to 4 years. The FWC must approve the application where certain circumstances are satisfied. For example, where a new enterprise agreement is being bargained for, where employees would be better off overall than if the relevant modern award applied, or if it is reasonable in the circumstances to do so. There is no limit on the number of extensions the FWC can grant, but one of these circumstances must be satisfied on each occasion.

Part 14 – Enterprise agreement approval

The Bill proposes several changes which relate to the FWC’s approval of enterprise agreements. The Government says the amendments will simplify the requirements employers must satisfy before the FWC can approve an enterprise agreement.

The general trend is for the requirements to shift from a prescriptive set of steps employers need to go through, to a singular broad analysis undertaken by the FWC of whether employees have genuinely agreed to the agreement.

To guide this broad analysis, the FWC will be required to publish a ‘Statement of Principles’. The statement will deal with various matters related to genuine agreement including:

  1. informing employees about bargaining;
  2. informing employees of their right to be represented by a bargaining representative;
  3. providing employees with a reasonable opportunity to consider a proposed agreement;
  4. explaining terms of an agreement and their effects;
  5. providing employees with a reasonable opportunity to vote on an agreement in a free and informed manner; and
  6. any other matters the FWC considers relevant.

Importantly, these are guiding principles only. It is not necessary that each are met for the FWC to be satisfied an agreement has been genuinely agreed to.

The Bill preserves the FWC’s ability to disregard minor procedural, and technical errors when determining if an agreement has been genuinely agreed to. This applies to notices of employee representational rights, requesting employees to vote to approve an agreement, and timelines for asking employees to vote to approve an agreement after notices of employee representational rights have been issued.

The Bill will upends the strategy of ‘brownfields agreements’ (i.e. small workforces voting on agreements with wider coverage). Agreements which are not the result of collective bargaining in good faith, including ‘unrepresentative’ and ‘low voter cohort’ will not be ‘genuinely agreed’. Examples given in the Explanatory Memorandum to the Bill are:

  • employees would not have a sufficient interest in the terms of an agreement if no genuine collective bargaining in good faith occurred as part of the agreement-making process
  • employees engaged in one industry, occupation or classification should not be capable of being found to have genuinely agreed to an enterprise agreement intended to cover employees across a substantially wider range of industries, occupations or classifications
  • a small cohort of employees would also not be sufficiently representative where the agreement is intended to ultimately cover a much wider workforce following transfers of employment, possibly within a corporate group.

Part 15 – Initiating bargaining

The Bill creates a way for employee bargaining representatives (e.g. unions) to start the process of bargaining with an employer without the employer’s consent in particular circumstances. This can be done where:

  1. the proposed single-enterprise agreement will replace an earlier single-enterprise agreement;
  2. no more than 5 years has passed since the earlier agreement passed its nominal expiry date; and
  3. the proposed agreement will cover the same, or substantially the same, group of employees as the earlier agreement.

The amendment flows to provisions dealing with bargaining orders, and essentially allows for unions to apply for a bargaining order where they have made a written request to bargain.

Part 16 – The Better Off Overall Test

The Bill delivers a key outcome from the Government’s Jobs + Skills Summit by simplifying the Better Off Overall Test (BOOT). The changes aim to remove unnecessary complexity.

The Bill introduces a provision intended to inform the FWC’s application of the BOOT. There is an express statement that the BOOT should be applied as a global assessment – as opposed to the current excruciating line-by-line approach which has been applied in recent times. The Bill requires the FWC to only have regard to patterns or kinds of work, or types of employment, if they are reasonably foreseeable at the time of the BOOT.

If the FWC forms the view a term of an enterprise agreement does not otherwise meet the BOOT, it is empowered to amend the term, which could include removing it, to satisfy itself that the BOOT is passed. Importantly, it is the FWC, not the employers, employees and unions, that decides on amendments – although the FWC may consider the views of the employers, employees and unions.

The Bill also includes provisions allowing employers, employees, and unions to apply to the FWC for a reconsideration of whether the agreement passes the BOOT. Applications may be made where there has been a change to patterns or kinds of work, or types of employment when compared to the patterns or kinds of work, or types of employment that the FWC considered when first conducting the BOOT to approve the agreement. If the FWC was concerned that the enterprise agreement did not pass the BOOT, the FWC could either accept an undertaking or amend the agreement.

Part 17 – Errors in enterprise agreements

The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (such as a typographical error or obvious omission) on its own initiative or on application by any of the parties covered by the agreement. Where the FWC has approved the wrong version of an agreement, such as an earlier draft, that was erroneously submitted to the FWC by a party for approval, the FWC would have discretion to validate its decision as if the correct version of the enterprise agreement had been submitted for approval. The validation of the correct version of the agreement could occur on the FWC’s own initiative or on application.

Part 18 – Bargaining disputes

The Bill replaces the existing scheme dealing with “serious breach declarations and determinations” with a new scheme dealing with intractable bargaining declarations and determinations.

A bargaining representative to a proposed agreement may apply for a declaration. A declaration is not available to multi-enterprise agreements, unless a supported bargaining authorisation is in operation, or greenfield agreements.

The FWC must be satisfied that:

  • The FWC has dealt with a bargaining dispute, and the applicant for the declaration participated in the process, and
  • There is no reasonable prospect of the party’s reaching agreement, and
  • It is reasonable in all the circumstances (taking into consideration the views of all bargaining representatives).

The FWC may then order a ‘post-declaration negotiation period’ for a defined time. After making a declaration, and after any ‘post-declaration negotiation period’, the Full Bench of the FWC may make an ‘intractable bargaining workplace determination’.

The FWC will determine the resolution of any issues that remain in dispute. That determination will in-effect become the agreement and be binding on the employer and employees.

These changes are said to assist ‘bargaining parties to reach agreement.’ In-fact, the provisions provide for the imposing of agreement on the bargaining parties.

This is a substantial expansion of the Commissions arbitral power to set pay and conditions under agreements.

Part 19 – Industrial action

If the FWC makes a protected action ballot order (PABO), it must also make an order directing all bargaining representatives to attend a mandatory conciliation conference prior to the close of the ballot. If any party fails to attend, subsequent employee claim action or employer response action will not be protected. The voting period specified in the PABO must be at least 14 days to enable time for the conference to occur.

Following the date of declaration of the protected action ballot results, employees will have a 3 months’ period to commence industrial action. This is longer than the current 30 days, and employer response action would need to occur within a 3 months’ period.

If employee claim action relates to a single-interest employer agreement or a supported bargaining agreement, employees must provide 120 hours’ notice of taking industrial action.

The Australian Electoral Commission (AEC) will no longer be the default protected action ballot agent and an alternative agent may be appointed with FWC approval. Where appointed as the protected action ballot agent, the AEC will be able to seek orders for contraventions of civil penalty provisions in relation to the ballot.

Parts 20, 21, 22 and 23 – Multi-employer bargaining

A key feature of the Bill is to create new, very clear paths by which unions are able to force:

  1. multiple employers to negotiate for a multi-employer agreement,
  2. a multi-employer agreement to be imposed on those employers (even absent a vote of employees), and
  3. other employers to be covered by the agreement after it has been made.

This is a very significant change to the structure of bargaining under the Act. It is a clear shift away from bargaining at the enterprise level towards industry level. It also expands, quite remarkably, the circumstances in which agreements will be imposed on employers and employees by the FWC. Under the current Act, the model is mostly based on an employer offering an agreement to be voted on. The Bill would expand the circumstances in which that offer (or voluntariness on the part of the employer) is needed.

Applying for a supported bargaining authorisation

Under the Bill, unions (and other bargaining representatives) may apply to the FWC for a ‘supported bargaining authorisation’. Supported bargaining authorisations are a key feature of the Bill as they:

  1. Initiate negotiating for multi-employer enterprise agreements (termed ‘supported bargaining agreements’); and
  2. Are the first of a series of steps that can ultimately lead to the FWC imposing a multi-employer workplace determination (termed ‘an intractable bargaining workplace determination’).

Once an application has been made, the FWC must grant the application if it is satisfied that it is appropriate for the employers and employees specified in the application to bargain together, having regard to:

  1. The prevailing pay and conditions in the industry or sector;
  2. Whether the employers have clearly identifiable common interests; and
  3. Whether the likely number of bargaining representatives would be consistent with a manageable collective bargaining process.

The FWC must also be satisfied at least some of the employees are represented by the union that has applied to the FWC for the authorisation.

Some points to note here are that:

  1. The consent of employers and employees is not required (i.e. they can be forced to the table);
  2. There is no requirement there be a minimum number of employees seeking to bargain; and
  3. The FWC may order a particular union cannot bring such an application. That said, we have some difficulties with the drafting as the relevant orders (proposed s.178C) seem only to be able to be made during bargaining or after an agreement has been made (which presumably would post-date such an application).

Bargaining for multi-employer agreements

Under the current Act, it is rare for the FWC to make workplace determinations (i.e. for the FWC to impose the terms of an agreement onto those that will be covered by it). The Bill expands the circumstances in which such a determination may be made to include circumstances in which bargaining has become ‘intractable’.

Bargaining representatives may apply for an ‘intractable bargaining declaration’. If the relevant agreement is a proposed multi-employer enterprise agreement, an application may only be made if a supported bargaining authorisation is in operation. The effect of an intractable bargaining declaration is that there is a period in which to try to reach agreement and, absent agreement, a workplace determination must be made by the FWC.

The FWC may make an ‘intractable bargaining declaration’ if:

  1. A s.240 application has been made and the applicant participated in a conference before the Commission;
  2. There is no reasonable prospect of the agreement being reached if the FWC does not make the declaration; and
  3. It is reasonable to make the declaration taking into account the views of the bargaining representatives of the agreement

The effect of a declaration is that ‘intractable bargaining workplace determinations’ may be made under division 4 of Part 2-5 of the Act. In other words, the FWC will make a workplace determination (including for multi-employer agreements).

The declaration/determination must include:

  1. Any terms that were agreed to between the parties;
  2. The terms that the FWC considers deal with the matters that were still at issue;
  3. A nominal expiry date;
  4. A dispute settlement procedure; and
  5. The model consultation and flexibility terms.

Forcing employers onto supported bargaining agreements

The Bill allows unions to make an application to force other employers onto a supported bargaining agreement that has been made (with or without the consent of that employer). Under the Bill, the FWC must grant that application if it satisfied that:

  1. a majority of the employees want to be covered by the agreement; and
  2. it is appropriate for them to be covered.

In determining whether it is appropriate, the FWC must take into account the views of the unions and the employer.

Cooperative workplace agreements

The existing multi-employer bargaining stream will be reframed as cooperative workplace agreements, which remain voluntary for employers to participate in where they are not subject to a supported bargaining authorisation immediately before making the agreement. Parties may not take industrial action  in respect of bargaining for a cooperative workplace agreement and FWC intervention is available with the parties’ consent.

All three new multi-employer bargaining streams require at least some of the employees to be represented by a union. Supported bargaining and single-interest employer authorisations may not be granted and collective workplace agreements may not be approved by the FWC unless this requirement is met. However, the FWC is empowered to make orders excluding persons, such as unions, from participating in bargaining if they have a history of non-compliance with the Act. For example, if they have contravened a civil penalty provision or committed an offence against the Act in the last 18 months.

Part 24 – Enhancing the small claims processes

The Bill proposes a small number of significant amendments to the small claims process under the Act. The key amendment is an increase in the small claims cap from $20,000 to $100,000.  The Bill also clarifies that the cap is exclusive of interest.

Under the Bill, successful claimants may recover court filing fees as costs against the other side. This provision is intended to act as an carve out to section 570 of the FW Act which currently limits cost orders to circumstances where the proceedings are vexatious or the like.

The increase aims at ‘expanding access to the small claims procedure, enabling more claimants to benefit from its simpler, quicker and cheaper approach to dispute resolution’.

The amendment also comes off the back of recent inquiries which suggested claimants with modest claims exceeding $20,000 have abandoned part of their claim to bring it within the small claims cap or alternatively, have bypassed the small claims procedure all together and proceeded to a full court process.

Part 25 – Prohibiting employment advertisements with pay rate that would contravene the Act

The Bill also regulates pay information included in job advertisements.

Specifically, the Bill prohibits an employer from advertising a job at a rate of pay lower than that permitted by the Act, an Award or an Enterprise Agreement. This provision requires an employer to include for example any casual loadings payable if the advertised role was on a casual basis.

The Bill also requires any employer who is advertising a piecework role to specify the rate of pay for the piecework or include a statement that a periodic rate of pay applies in relation to the employment.

Employers will need to actively monitor the compliance with the Act and any industrial instrument for the duration of the advertising. Advertisements will need updating to reflect any changes to rates of pay which occur during the advertising period.

Significantly, this is a civil penalty provision. This means individuals may be liable for a penalty of up to 60 penalty units (and bodies corporate five times that) if they fail to advertise the correct rate of pay and do not have a reasonable excuse.

The clause has been introduced following concerns raised by the Migrants Workers’ Taskforce and the Senate Unlawful Underpayments Inquiry that migrant workers are targeting with jobs advertised at below minimum wage rates, increasing the risk of such workers being underpaid once they start working.

Key Takeaways

This Bill brings significant change.

We await feedback from the inquiry on 17 November. The next sitting of Federal Parliament in the week of 21-24 November will likely be an exciting one.

In the meantime, the Paid Family and Domestic Violence Leave Bill has been passed

And of course, let’s not forget the positive duty to prevent sexual harassment [email protected] Bill with the inquiry reporting back on 3 November.

Watch this space.

Alice DeBoos
Managing Partner
+61 2 9169 8444
[email protected]
Duncan Fletcher
Partner
+61 8 6381 7050
[email protected]
Steven Amendola
Partner
+61 3 9958 9606
[email protected]
Shelley Williams
Partner
+61 7 3071 3110
[email protected]
Christa Lenard
Partner
+61 2 9169 8404
[email protected]
Michael Stutley
Partner
+61 8 6381 7060
[email protected]
Katie Sweatman
Partner
+61 3 9958 9605
[email protected]
Liam Fraser
Partner
+61 7 3071 3113
[email protected]
Lucy Shanahan
Partner
+61 2 9169 8405
[email protected]
Beth Robinson
Partner
+61 8 6381 7064
[email protected]
Brendan Milne
Partner
+61 3 9958 9611
[email protected]
Michael Mead
Partner
+61 2 9169 8428
[email protected]
John Makris
Partner
+61 2 9169 8407
[email protected]
Yoness Blackmore
Executive Counsel Knowledge
+61 2 9169 8419
[email protected]

 

 

 

4 October 2022
Employers obliged to [email protected] as the Government introduces its [email protected] Bill
October 4, 2022

Last week, the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 (Bill) was introduced to Parliament by the Government.

The Bill sets out the long awaited detail on the promises made going into the May election, legislating the 7 remaining recommendations from the [email protected] report not enacted by the former Morrison Government.

What are the key changes?

  • Specific prohibition of hostile workplace environments.
  • A positive duty to take reasonable and proportionate measures to eliminate unlawful sex discrimination, including sex discrimination, sexual and sex-based harassment, hostile work environments and victimisation.
  • Conduct is no longer required to be seriously demeaning to be unlawful harassment on the ground of sex – this reduces the threshold and makes it easier for applicants to make out claims of harassment on the ground of sex.
  • The Australian Human Rights Commission (AHRC) gain powers to enforce the positive duty, including with guidelines, education, inquiries, compliance notices, court orders and enforceable undertakings.
  • The AHRC will be able to conduct inquiries into systemic unlawful discrimination.
  • Unions can more easily commence Federal Court representative actions for at least one person – possibly paving the way for class actions.
  • A neutral costs approach under which each party will bear their own costs in sexual harassment proceedings.
  • “Sex” or related characteristics only need to be “a reason” for the conduct. They do not have to be the ‘only reason’ or the ‘real reason’ and the fact there may be other reasons such as age or race does not prevent the conduct being unlawful.

What is the positive duty?

The positive duty requires an organisation to take reasonable and proportionate measures to eliminate, as far as possible sexual harassment, harassment on the ground of sex, hostile workplace environments or acts of victimisation against persons relating to their complaints, proceedings, assertions or allegations of any of that conduct.

Reasonable and proportional measures will vary, depending on the circumstances of a particular workplace. It depends on the size, nature and circumstances of the business, the available resources (ie, financial or otherwise), the practicality and costs of those measures and other relevant matters.

For example, larger and better resourced organisations will need to implement more extensive measures.

The Explanatory Memorandum says the new positive duty in the Bill aligns with the exemption to vicarious liability under the Sex Discrimination Act 1974 (ie, as is the case in Victoria). This exemption provides that an employer is not liable for the actions of the employees or agents if the employer has taken “all reasonable steps” to prevent their employees from engaging in the conduct.

On this basis, employers should already take preventative action, but we suspect many may not have done this.

At a general level, the positive duty requires organisations to:

  • Identify and understand potential areas of non-compliance (ie, risk assess).
  • Develop a strategy for meeting and maintaining compliance (ie, have a prevention plan).
  • Review and improve compliance as reasonably necessary in the organisation’s particular circumstances.

Specific actions may include:

  • Reviewing and amending discrimination and harassment policies and procedures consistent with the positive duty and other amendments.
  • Communication and consultation with all workplace participants, including with periodic reinforcement. For example, by emails, intranet releases, toolbox talks etc.
  • Overt buy-in from senior management who must “walk the talk” and must model best practice bystander
  • Fair, timely and effective internal complaints procedures which treat all complaints seriously and investigate them promptly. This should be victim centric.
  • High quality training, which educates all workplace participants about their discrimination and harassment policies and procedures, including with case studies and interactive activities to embed understanding. Training must give real life examples of behaviours and how victims or bystanders can best respond.

The AHRC will be able to undertake investigations where it suspects systemic unlawful discrimination. This is unlawful discrimination that affects a class or group of persons and is continuous, repetitive or forms a pattern and the AHRC considers it is appropriate to investigate. This inquiry could be within an individual business or across multiple businesses within a broader industry or sector. Outcomes may simply be a report to the Minister or may be a public report and may include recommendations.

The AHRC may also conduct inquiries if it “reasonably suspects” non-compliance. For example, this may be triggered by information or advice from other agencies or regulators, information from impacted people or media reporting. The AHRC may issue a compliance notice, enforceable by an order from the federal courts. Organisations may enter into enforceable undertakings with the AHRC.

These inquisitory functions will not commence until 12 months after Royal Assent, during which time the AHRC will prepare and publish guidance materials and organisations must take steps to understand their obligations and implement all necessary change.

What is a hostile work environment?

A ‘hostile workplace environment’ is where one person’s conduct results in the workplace environment being offensive, intimidating or humiliating to a second person of a particular sex.

A court looks at the behaviour itself, not what the person intended or how the second person received it. The fact that a person created a hostile environment unwittingly is not a defence.

Circumstances which contribute to this assessment include:

  • The seriousness of the conduct (ie, more relevant for a single incident).
  • Was it continuous or repetitive (ie, more relevant if it is less serious)?
  • Did the person engaging in the conduct (or inaction) have a senior role, influence, or were they in a position of authority (ie, manager, supervisor or business owner)?
  • Are there any relevant circumstances such as the environment or culture of the business (ie, single-sex environment or previous incidents)?

In a hostile work environment, the offending person does not need to direct their conduct at the person making a complaint or even anticipate the person may be impacted by the behaviour.

The offending person only needs to anticipate a person of one sex in general would find the environment hostile.

Universal paid family and domestic violence leave

While not part of the [email protected] Bill, in the same sitting, the Government also introduced a further Bill to amend the Fair Work Act 2009 to replace the current entitlement in the National Employment Standards to five days of unpaid family and domestic violence leave in a 12-month period with an entitlement to ten days of paid leave for full-time, part-time and casual employees.  The Bill also proposes to extend the definition of family and domestic violence to include conduct of a current or former intimate partner of an employee, or a member of an employee’s household.

By providing for paid family and domestic violence leave as part of the National Employment Standards, the amendments will ensure that all employees are entitled to paid family and domestic violence leave irrespective of what industrial instrument they are covered under, or not.

While seemingly uncontroversial on its face, the extension of the paid entitlement to casual leave raises questions about how the entitlement will apply in respect of casual employees, particularly “genuine” casual employees who do not perform regular and systematic hours of work.  The Bill provides that a casual employee will be entitled to be paid the full rate of pay (ie including any shift penalties and loadings) that they would have been paid if they had worked the hours in the period for which the employee was rostered.

In practice, casual employees, particularly those in service industries will often be rostered at relatively short notice to fill a gap in service needs, and questions will accordingly arise around how far in advance a casual employee will be deemed to have been “rostered” to gain an entitlement to paid leave if they are ultimately unable to attend that shift due to family and domestic violence.

What does this mean?

While amendments may be made around the edges, it is very likely that both Bills will pass through both Houses of Parliament and be enacted into law.

The introduction of the positive duty, as its name suggests, will give rise to an obligation for organisations to take positive steps to review and consider the measures that are currently in place to eliminate sexual harassment, sex-based harassment and hostile work environments.  Having an appropriate workplace behaviour policy in place together with periodic training with minimal other control measures is very unlikely to satisfy the positive duty.

Rather, employers will be required to devise a prevention plan which adopts a suite of measures to meaningfully identify and eliminate these inappropriate behaviours.

As always, the team at Kingston Reid are well placed to support organisations in reviewing their existing practices and considering additional measures to cement the right for a safe and respectful workplace for all.

 

Katie Sweatman
Partner
+61 3 9958 9605
[email protected]
Shelley Williams
Partner
+61 7 3071 3110
[email protected]

 

Yoness Blackmore
Executive Counsel – Knowledge
+61 2 9169 8419
[email protected]
Beth Robinson
Partner
+61 8 6381 7064
[email protected]

 

9 September 2022
Kingston Reid’s Jobs Summit Fringe Festival – Wrap Up
September 9, 2022

The Kingston Reid Jobs Summit Fringe Festival provided a unique opportunity for clients and friends of Kingston Reid to gain insights into the issues being debated up the hill at the Commonwealth Government’s Jobs + Skills Summit. Our event brought together a range of opinion leaders with diverse views on the debate over workplace relations reform in Australia.

We were fortunate to have speakers and panellists from across the entire political spectrum from business, Government and unions, along with expert opinions on economics and from those who prosecute, defend and determine rights and responsibilities in the workplace relations system.

  1. It’s the Economy Stupid – Chris Richardson, Rich Insight

Our event was turbo charged from the beginning with a presentation of stark economic reality from renowned economist Chris Richardson. While the title of the presentation called up the famous mantra coined during Bill Clinton’s successful presidential campaign in 1992, perhaps it ought to have been called “It’s Productivity, Stupid”, as the key underlying message was that real wage growth will be doomed unless productivity can be increased.

Mr Richardson:

  • observed that the Jobs + Skills Summit had missed an opportunity by focussing on how to decide who gets a share of the pie rather than making the pie bigger;
  • foretells that the type of reform to workplace relations legislation being floated prior to the Jobs + Skills Summit created a risk that wages will chase prices, inflation will be too high, and real wages will not improve; and
  • busted a myth by showing that international migration to Australia creates jobs; it does not take jobs away.

While the relative lack of focus on productivity at the Jobs + Skills Summit was disappointing, the sensible decision to lift the cap on skilled migration showed that good economic policy can translate to good Government policy through the Jobs + Skills Summit process. He also told us that ideally wages should not rise above 3.5% per annum if we want to avoid increased inflation.

  1. The Union Perspective – Scott Connolly, Assistant National Secretary, ACTU

As a vocal contributor to the Jobs + Skills Summit and a strong advocate for reform, we were pleased to have the benefit of insights from Sally McManus’ Second Lieutenant, Scott Connolly.

The ACTU position is that productivity gains are being made but that they are not being shared with workers. Mr Connolly said:

  • the ACTU believes the labour market should be re-regulated;
  • workers are not benefiting from national income and productivity gains;
  • industrial action is necessary for multi-employer bargaining but with a “measured approach”; and
  • there are significant problems with skills and training infrastructure and that Jobs and Skills Australia should have a bigger role in the development of skills and training.

The Government has been careful not to describe its “immediate actions” from the Jobs + Skills Summit as re-regulation of the labour market, but the reform contemplated involves more, rather than less, regulation. The reaction of business to Government election commitments and statements at the Government Jobs + Skills Summit suggests there is wide support for a greater role for Jobs and Skills Australia.

  1. The Political Perspective – Adam Bandt MP, Australian Greens

In the first of our Political Perspectives, the Greens used the opportunity of Leader Adam Bandt’s speech to announce the party’s proposed industrial relations reforms.

Mr Bandt said that the Greens hold the balance of power and will be taking a “no compromises” approach to the reform proposals being put forward by the Government, threatening to withhold support for any legislation that comes out of the Jobs + Skills Summit unless the Government agrees to their demands.

This strong position flows from a party view that reforms need to take back the power from corporations because real wages are declining, and the power balance needs to be re-shifted.

Mr Bandt announced the Greens position that:

  • the Greens support an overhaul of the bargaining system, and that greater control needs to be given to workers by reviewing hours of work and insecure employment provisions in the Fair Work Act;
  • low paid wages need to be lifted to 60% of the full-time median wage;
  • the Government needs to reduce the cost of essentials (including free child-care) in order to support workforce participation;
  • there needs to be an increase in accessibility to union membership;
  • gig and casual workers should receive sick and holiday pay in addition to the current casual loading; and
  • legislation should be amended to include a presumption that all jobs are permanent unless there are sound demonstrable reasons otherwise.

Mr Bandt raised concerns that the Jobs + Skills Summit is “Half a Hawke” in that the Government has blocked any discussion on tax.

While the Greens position could be seen as posturing aimed at blunting proposed reforms that are contrary to its policy position, it’s no compromise position on issues such as climate policy suggest that an “all or nothing” approach is a definite possibility. Keen observers will note the Greens are actually one vote short of holding the balance of power in the Senate, so a decision by the Greens not to support legislation plays the crossbenchers (and even the Coalition) into the game.

  1. The Union Perspective – Daniel Walton, National Secretary, AWU

While reported comments before the Jobs + Skills Summit about union membership for newly arrived migrants might have suggested we would be hearing some controversial proposals from Daniel Walton, the AWU position is arguably much closer to the business position than that of the ACTU, and certainly that of the Greens.

By focussing on a broader agenda than industrial regulation, the AWU appears to be reaching for the centre ground and consensus with business. While careful to caution there is no “silver bullet”, Mr Walton told us he views the three big issues for the Summit to address are:

  • energy (in the context of the transition from fossil fuels to renewables);
  • industrial relations reform; and
  • skilled migration.

Other policy areas that Mr Walton covered included:

  • addressing the higher cost of living, inflation and productivity and the challenge of increasing real wage growth;
  • a restoration of balance to appointments to the Fair Work Commission;
  • making enterprise bargaining simpler;
  • fixing a “flaw” in current modern award and enterprise agreement consultation obligations, which only trigger once a definite decision to introduce major change has been made; and
  • investment in training.

Many of these matters were found in the statement of “immediate actions” published by the Government after the close of the Jobs + Skills Summit on Friday which suggests that the AWU is close to policy makers.

One area of potential difference is in looking to migration to address skills shortages. The AWU points to the fact of apprenticeship commencement numbers increasing, but apprenticeship completion numbers are diminishing. Flowing from this, Mr Walton said that looking around the world for skills is “short sighted” and that as a nation “we need to restore our own skills”.

Mr Walton observed that employers should see this period as an opportunity for collaboration and consultation with their employees and unions.

  1. Future of Work Panel

Jordan O’Reilly, Co-founder & CEO, Hireup

Luke Webber, Managing Director, Labourpower

Michael Kaine, National Secretary, TWU

Dr Alex Veen, Senior Lecturer, University of Sydney Business School

This panel produced a fascinating discussion on areas of workplace relations regulation and reform in the area of labour hire, independent contractors and the gig economy which are changing at an extremely rapid pace. Our panellists told us that:

  • the definition of “insecure work” is a live question and means different things to different stakeholders;
  • the gig economy creates a different working environment where platforms take a step back and much more control is placed in the hands of consumers and workers about how work is performed;
  • the gig economy is here to stay, and there needs to be appropriate regulation of non-standard work performed within this space;
  • while the majority of gig work is conducted under independent contractor arrangements, there is a space for effective employment frameworks if modern awards are less rigid;
  • there are emerging trends where workers want to choose how, and when, they work and do not want to be bound to one employer on a full time basis;
  • technology and artificial intelligence will continue to change the shape of work, both in terms of the labour required and how that labour is engaged; and
  • since the inclusion of “casual conversion” in legislation, and a wide range of industrial instruments, anecdotal evidence suggests that a tiny proportion of employees (sometimes as low as 2%) are choosing to convert from casual to permanent.

Michael Kaine from the TWU noted that the transport economy attracts some of the most vulnerable workers, but equally has represented independent owner-drivers since the union’s inception, illustrating that the TWU does not have any inherent objection to non-standard work.  That does not mean that we necessarily need to shoe-horn workers into employment relationships or redefine the employment relationship. If we can find a system that permits flexibility with appropriate protections, then we should do it. That system must provide appropriate and fair remuneration (mechanisms for workers to recover costs and get a return on their investment / risk) and other support networks (workers compensation, superannuation, safety requirements, etc). One option is an “owner-driver” type system like in NSW.

Jordan O’Reilly from Hireup, a digital platform connecting people living with a disability with support workers, was concerned that the gig economy could be viewed as a race to the bottom in a two-speed system (regulated employment relationships vs non-regulated independent contractor relationships). Flexibility is key, but the flexibility you need differs from sector to sector so there needs to be sector-specific approaches. We have found employment relationships work well in the disability care sector. However, it is important there is an equal playing field, which requires certainty from Government.

Dr Alex Veen from the University of Sydney Business School shared the findings of his research which found that it is not as simple as just passing on costs to consumers.  Research indicates that platforms are generally dominated by cost-sensitive consumers. Whilst the consumers generally do not understand the terms and conditions that apply to gig workers and when they’re informed about them, they think that they’re unfair, they’re also only prepared to pay an additional $0.85 – $1.25 for the services. It is a delicate balance to find a solution to, and we might benefit from looking at more holistic approaches in other jurisdictions.

Luke Webber from Labourpower observed that the recruitment industry is not seeing a race to the bottom. Businesses cannot attract workers on modern award rates and are having to pay workers more. Flexibility appears to be just as important as stability. Every year casual employees are offered the opportunity to convert to permanent employment, but the majority do not take up the offer, in fact, a number of workers who have converted to permanent employment have subsequently requested to convert back to casual employment.

  1. The Political Perspective – Senator Tony Sheldon, ALP

The Jobs + Skills Summit, and the whitepaper that is proposed to flow from it, was a core part of the ALP’s policy platform entering into the Federal election which saw the party take Government. In gaining an understanding of what would be discussed up on the hill immediately following the Festival, we heard from Senator Tony Sheldon.

Senator Sheldon was able to give some insights into the drivers for Government policy and how discussions at the Summit were likely to unfold. Senator Sheldon told us that the big issues for the Government are:

  • single enterprise bargaining is outdated, and greater access multi-enterprise bargaining is needed;
  • low paid and highly feminised industries should be the focus of multi-enterprise bargaining;
  • the issues are low real wage growth and the need to “plug” loopholes in insecure work such gig, casual and labour hire work; and
  • there is a need to abolish the ABCC as it negatively impacts on productivity.

Senator Sheldon acknowledged that “We are not going to agree on every single thing but that is ok. We are cementing ideas for the future.”  This reference to laying the ground for future reform suggests that the ALP is playing a long game and sees the Jobs + Skills Summit as a starting point for a reform process rather than an event where consensus will immediately be achieved. This was reflected in the “immediate actions” and “further discussions” approach taken by the Government in the Jobs + Skills Summit Outcomes document published after the Summit.

  1. [email protected] – Plaintiff Perspectives – Josh Bornstein, Maurice Blackburn

True to the old adage, keep your friends close and your enemies closer, Josh Bornstein, Head of Employment and Industrial Relations of applicant and union law firm, Maurice Blackburn, provided Fringe Summit attendees with a rare insight into the thinking of a lawyer whose name would otherwise ordinarily be at the bottom of letters of demand.

Mr Bornstein gave us an overview of his experience in acting for plaintiffs in the rapidly changing area of workplace discrimination, bullying and sexual harassment.

  • There are opportunities to understand what the introduction of a positive duty to take all reasonable steps to eliminate sexual harassment in the workplace will be at the Federal level from the Victorian experience. Noting that Victoria’s anti-discrimination legislation has incorporated a positive duty since 2010. This positive duty is likely to incorporate an expectation that employers have prevention plans in place.
  • Discussions about the outlawing of non-disclosure agreements (NDAs) need to carefully balance the rights and needs of victims of sexual harassment, taking into account that many of Mr Bornstein’s clients seek the privacy and confidentiality that an NDA offers. NDAs should be subject to time limits or scope for the victim to otherwise not be constrained from discussing their experiences when they are ready to do so.
  • Mr Bornstein also highlighted that there will be more arrows in the quiver for the prosecution of sexual harassment and related discrimination claims, with the Australian Human Rights Commission to gain powers to make representatives claims, lifting the need for individuals to prosecute their own claims in all cases.
  1. [email protected] Panel

Kate Eastman AM SC

Lindall West, Managing Director, Ombpoint

Kristen Hilton, Former Victorian Equal Opportunity & Human Rights Commissioner

This panel focussed on the potential impact of incoming legislative measures and the practical steps that businesses can take to make workplaces better and minimise harm.

  • Employers need to recognise the power that comes with the positive duty as an important first step in taking leadership to consider all reasonable steps to eliminate sexual harassment in the workplace
  • A “prevention plan” is an important element of satisfying the positive duty. It is not a single policy document. Rather it requires employers to review their businesses and culture.
  • The new concept of sex-based harassment and gender stereotyping goes beyond the concept of sexual harassment and is intended to capture micro-wrongs and long-standing gender-based stereotyping.
  • NDAs can maintain confidentiality and privacy if that is what the impacted person chooses. Blanket bans are not appropriate and remove bargaining power held by women in seeking a settlement of their claims.
  • Speak-up culture is part of protecting victims. Employees raising issues, and employers responding effectively at an early stage, are important elements of this.
  • Services like Ombpoint provide a valuable first line of protection by triaging issues when they first arise, potentially resolving them before unnecessary escalation but also allowing space for important issues to be escalated.
  • Diversity in the workplace is going to be an economic lever and opportunity.

A core message out of the panel was the need to ensure your businesses are ready for the legislative changes including the introduction of a positive duty. Having the engagement of your Boards, managers and employees will be key.

  1. The Political Perspective – Jacquie Lambie, The Jacquie Lambie Network

While not an attendee at the Government’s Jobs + Skills Summit, Senator Lambie spoke to our event and made it clear that any reform arising out of the Jobs + Skills Summit will require her support, or the support of another of her crossbench colleagues. Senator Lambie raised concerns that those making political donations would have the loudest voices when considering the legislative reforms to flow from the Summit, reinforcing her general concerns that reform around the regulation of political donations is sorely needed.

Senator Lambie pointed out:

  • there was a risk that the Government summit would make a lot of noise but not actually solve the real problem of cost of living that was impacting all of the people she represents;
  • the unions do not necessarily speak for all working people, and decisions made out of the Summit are made by people in places like Melbourne for people on their doorstep, not for the people in the communities she represents;
  • we need fewer “roundtables” because they “go round and round and nothing gets done”, we need greater consensus and action on consensus. The Government needs to listen more to community and less to lobbyists and those who pay to be heard;
  • political donations should be prevented and replaced with a system of solely public funding;
  • in north-western Tasmania, the heart has been ripped out of TAFEs which were previously a hub of the community, and the impact on the skills held by members of the community had been devastating.
  1. The Political Perspective – Senator Michaelia Cash, Coalition

When invitations for the Government’s Jobs + Skills Summit started arriving, Opposition leader Peter Dutton was quick to send back the Coalitions “will not be attending” RSVP card.

This did not mean that we were left without the views of the Coalition on industrial relations reform. Shadow Minister for Employment and Workplace Relations, Michaelia Cash, set out the Coalition’s concerns with the agenda being taken by the Government to the Jobs + Skills Summit.

Senator Cash told the Fringe Summit that genuine reform that makes it easier for businesses to find workers would be embraced, and pointed to the reforms that the Coalition had achieved when in Government, including:

  • banning corrupting benefits for unions and establishing the Registered Organisations Commission to restore integrity for members who pay their union dues in good faith;
  • protecting vulnerable workers;
  • re-establishing the Australian Building and Construction Commission;
  • protecting the role of thousands of volunteer fire fighters in Victoria; and
  • abolishing the Road Safety Remuneration Tribunal with the support of small business owners; and
  • passing legislation to clarify the status of casual workers and prevent “double dipping” on entitlements.

Senator Cash highlighted the Coalition’s policy to increase access to work for pensioners (without affecting their pension payments). This became a recommendation that was adopted by the Government at the end of the Jobs + Skills Summit. She also:

  • reaffirmed the coalition’s support of the ABCC and criticism of the Government’s action in defunding the body and stripping the provisions of the Building Code;
  • noted the economic impact of current strike action at Sydney Trains and ports as an indicator of the kind of disruption that would be caused by the industrial relations changes being contemplated by the Government Summit, particularly sector bargaining;
  • reaffirmed the Coalition’s commitment to 6-year maximum nominal terms for greenfields enterprise agreements on major projects; and
  • pointed out that changing the test for casual employment, legislating “same job, same pay” and making labour hire unworkable would have a damaging effect on business, particularly small business.
  1. Fringe Festival Full Bench

Former Deputy President Greg Smith AM

Former Deputy President Geoff Bull

Former Commissioner Danny Cloghan

The proceedings in the first instance reflected a diversity of views on what were the key priorities for the Summit to achieve. A Full Bench of Former Members of the Fair Work Commission was accordingly convened, and points of appeal put to Former Deputy President Greg Smith AM, Former Deputy President Geoff Bull, and Former Commissioner Danny Cloghan for their consideration and determination.

  • In answer to the appeal question of what “productivity” means to the tribunal, Former DP Greg Smith AM observed that the Australian Industrial Relations Commission took an active role in ensuring productivity returns in the settlement of industrial disputes and questioned whether it was appropriate for productivity to be removed as a factor to which the Commission should give active consideration in its decision making outside of the annual minimum wage decision.
  • In answer to the appeal question of whether bargaining is broken, there were split views. Some expressed that it can work well but depends on the attitude of the parties. All considered the current tests applied for approval of agreements required reform and that the Commission should have a greater role in assisting parties to resolve deadlocks.
  • In answer to whether the Commission should be made more accessible by conducting hearings in shopping centres, the Full Bench unanimously dismissed the appeal. We were also relieved that an appeal to include lawyers in Fair Work Commission proceedings was also unanimously upheld.
  1. Where to now?

The Government closed the Jobs + Skills Summit on Friday in Canberra with a statement that it will take “immediate” action to update the Fair Work Act. This is in addition to a list of what it has described as “complementary existing commitments” that it promised to deliver at the election and, in many cases, are already in bills that are before parliament.

It is important to remember that this immediate action starts with business, union and Government consultation and must be passed by the parliament, including an upper house where the Government needs the support of the Coalition or a combination Greens and a crossbencher to get legislation through. We heard from representatives of these three groups, and it suggests that support is anything but guaranteed.

For those who attended the Kingston Reid Jobs Summit Fringe Festival we hope that you found it as informative and thought provoking as we did. For those who did not we hope that we have captured some of the highlights here and would of course be pleased to discuss anything that has piqued your interest further with you.

 

Alice DeBoos
Managing Partner
+61 2 9169 8444
[email protected]
Duncan Fletcher
Partner
+61 8 6381 7050
[email protected]
Steven Amendola
Partner
+61 3 9958 9606
[email protected]
Shelley Williams
Partner
+61 7 3071 3110
[email protected]
Christa Lenard
Partner
+61 2 9169 8404
[email protected]
Michael Stutley
Partner
+61 8 6381 7060
[email protected]
Katie Sweatman
Partner
+61 3 9958 9605
[email protected]
Liam Fraser
Partner
+61 7 3071 3113
[email protected]
Lucy Shanahan
Partner
+61 2 9169 8405
[email protected]
Beth Robinson
Partner
+61 8 6381 7064
[email protected]
Brendan Milne
Partner
+61 3 9958 9611
[email protected]
Michael Mead
Partner
+61 2 9169 8428
[email protected]
6 September 2022
Jobs and Skills Summit – Immediate actions but fuzzy detail
September 6, 2022

The Jobs and Skills Summit closed on Friday in Canberra with the Government saying it is committed to “immediate” action to update the Fair Work Act. This is in addition to a list of what it has described as ‘complementary existing commitments’ that it committed to at the election and, in many cases, are already in bills that are before parliament.  Here are links to previous Insights: [email protected] and gender equality and Post-election Insight.

Before we throw our current copies of the Fair Work Act in the bin, remember that this immediate action starts with business and government consultation and must be passed by the parliament, including an upper house where the government needs the support of the Coalition or a combination Greens and a crossbencher to get it through. Those who attended the Kingston Reid Job Summit Fringe event in Canberra heard from representatives of these three groups and it suggests that support is anything but guaranteed.

The fact that the change will not be instantaneous is important because there is a lack of clear detail in what the government has announced.

The Jobs + Skills Summit Outcomes document published by the Government says that it will update the Fair Work Act to create a “simple, flexible and fair new framework”.

Below we have set out what the government has said, suggested what the government might mean and provide our view on what this could mean for you.


What the government has said:

A new framework that: “Ensures all workers and businesses can negotiate in good faith for agreements that benefit them, including small businesses, women, care and community services sectors, and First Nations people.

What the government might mean:

This is a clue that the “sector bargaining”, referred to by the ACTU during the summit, may not only be drawn along traditional industry or “single interest” employer lines. The inclusion of a reference to “small businesses”, “women” and “First Nations people” suggests that there may be an ability for people in these categories to bargain collectively even if they work in different industries and forms of business. However, it also reflects a reference to the current low paid bargaining stream which exists but is not utilised.

What this could mean for you:

Employers will need clarity on whether these new forms of bargaining will be an opt-in model for them or whether they can be forced to bargain along these new lines.


What the government has said:

A new framework that: “Removes unnecessary complexity for workers and employers, including making the Better Off Overall Test simple, flexible and fair.

What the government might mean:

This suggests that the Government will revise previous proposals to simplify the Better Off Overall Test to focus on an overall comparison of the benefits terms and conditions of employment rather than a line-by-line approach. This should include restrictions on unrealistic and hypothetical comparisons between working arrangements under the proposed enterprise agreement and underlying award. Hopefully, there may also be an ability to focus on the non-monetary needs of the group of employees voting for the agreement and the specific needs of the business they are working in.

What this could mean for you:

If previous feedback from employers is genuinely embraced, this is one of the most promising developments that might come from these reforms. The most important question is whether any relaxation of the Better Off Overall Test will be restricted to union negotiated enterprise agreements, effectively making unions “gate keepers” for the improved system.


What the government has said:

A new framework that: “Gives the Fair Work Commission the capacity to proactively help workers and businesses reach agreements that benefit them, particularly new entrants, and small and medium businesses.

What the government might mean:

This suggests that the Fair Work Commission may be given stronger arbitral powers somewhere between the current bargaining orders (which are about how bargaining is conducted rather than what the enterprise agreement will be) and the making of entire arbitrated agreements when industrial action is terminated to prevent serious damage to the bargaining parties, third parties or the economy.

One possibility is that these new arbitral powers could be used when there are a small number of issues that are preventing an enterprise agreement from being made as a means of avoiding industrial action. The specific reference to “…new entrants, and small and medium businesses.” also suggests that the Fair Work Commission may be given a more proactive role in guiding bargaining where the participants have limited resources or experience in the bargaining process.

What this could mean for you:

Giving the Fair Work Commission further powers to help employers and employees reach agreement is a promising development and potentially fills a gap in the current system. Any arbitral power must be underpinned by a productivity objective and an overriding principle that arbitrated terms must be aimed at simplifying agreements rather than adding to complexity. Employers should be wary of these reforms being used as a trojan horse to restore the broad arbitral powers to resolve any workplace dispute which led to frequent destabilising litigation last century. Instead, the powers need to be tightly focussed on bargaining and the making of enterprise agreements. It will be interesting to see what effect this has on the good faith bargaining provisions.


What the government has said:

A new framework that: “Ensures the process for agreement terminations is fit for purpose and fair, and sunsets so called ‘zombie’ agreements.

What the government might mean:

The paring of two opposing issues (use by employers of agreement terminations as a bargaining tactic and the potential difficulties in terminating zombie agreements) suggests that there will not be a blanket abolition of the power to terminate enterprise agreements. Employers should expect a sunset provision for pre-Fair Work Act enterprise agreements similar to the coalition government’s omnibus bill and further preconditions that must be met before the Fair Work Commission can terminate an enterprise agreement. These pre-conditions are likely to be based around employee welfare and prevention of agreement termination applications as a tactic to gain leverage in enterprise bargaining negotiations with employees.

What this could mean for you:

Any employer intending to terminate an existing enterprise agreement should consider timing very carefully. There is a risk that the changes will be legislated to commence from a policy announcement date rather than the date the legislation commences. It will also be important to understand the impact of Minister Burke’s letter to the Fair Work Commission, which notifies it of the proposed changes, on any decision that it may make to terminate an enterprise agreement.


What the government has said:

Update the Fair Work Act to: “Provide proper support for employer bargaining representatives and union delegates.

What the government might mean:

There is no detail about what this statement will mean in practice. While it could be the provision of additional resources to the Fair Work Commission to facilitate bargaining, it is also possible that it encompasses advisory support. Another possibility is that this will be used as a basis to introduce a mechanism for funding union involvement in bargaining through an employer or employee bargaining fee.

What this could mean for you:

The government has not explained what “proper support” means. In its most extreme form, this change could have a significant impact on employers (and potentially employees) who may be required to pay for it operationally or financially.


What the government has said:

Update the Fair Work Act to: “Provide stronger access to flexible working arrangements and unpaid parental leave so families can share work and caring responsibilities.

What the government might mean:

It is likely that these reforms will be centred around the equalising of parental leave under the Fair Work Act regardless of the gender of parents. There is also potential for changes that make it harder for employers to resist employee requests for flexible working arrangements such as “working from home”.

What this could mean for you:

Regardless of the final form of the changes, it is unavoidable that employers will need to reassess their strategies for managing requests for flexible working arrangements.


What the government has said:

Update the Fair Work Act to: “Provide stronger protections for workers against adverse action, discrimination, and harassment.

What the government might mean:

This is an issue which has not been discussed publicly and was a surprise inclusion to many. The link between “discrimination and harassment” and “adverse action” already exists in a legal sense. It is possible that this suggests a watering down of the current tests applied by the Courts in adverse action cases.. It also suggests that there could be a move to importing concepts of procedural fairness into the general protections framework.

What this could mean for you:

The High Court has carefully balanced the rights of employers, employees and unions in its interpretation of the current adverse action laws so that rights are protected but the business needs of employers are not undermined. Any legislative attempt to change this delicate balance will involve further litigation to determine its impact.


The government has said that the Department of Employment and Workplace Relations will commence detailed consultations with business and unions on these matters in the week commencing 5 September 2022.

The government has also said that “Business, unions and Government committed to work proactively together to:

  • Strengthen tripartism and constructive social dialogue in Australian workplace relations
  • Revitalise a culture of creativity, productivity, good faith negotiation and genuine agreement in Australian workplaces
  • Establish a tripartite National Construction Industry Forum to constructively address issues such as mental health, safety, training, apprentices, productivity, culture, diversity and gender equity in the industry

The use of expression “tripartism” suggests that the Jobs and Skills Summit is likely to be the first of many roundtable discussions convened by government to try to find common ground between business, unions and government. The danger for employers is that unions and government appear to be aligned on many issues but business representatives bring a much more diverse range of views which makes it difficult to develop a united position

Areas for further work

The government has also identified the following areas for further consultation with unions and business.

  • Consider options to support the Fair Work Commission build cooperative workplace relationships.
  • Consider how to best help employer representatives and unions to improve safety, fairness and productivity in workplaces.
  • Amend relevant legislation to give workers the right to challenge unfair contractual terms.
  • Initiate a detailed consultation and research process on the concept of a living wage, reporting back in late 2023.
  • Initiate a detailed consultation and research process considering the impact of workplace relations settings (such as rostering arrangements) on work and care, including childcare.
  • Consider allowing the Fair Work Commission to set fair minimum standards to ensure the Road Transport Industry is safe, sustainable and viable.
  • Ensure workers have reasonable access to representation to address genuine safety and compliance issues at work.
  • Consider possible improvements to Modern Awards and the National Employment Standards.

Consistent with comments made by government representatives at the Kingston Reid Job Summit Fringe, these further areas of reform appear to be aimed at cementing ideas for the future as part of a long-term legislative agenda. Employers should keep a watchful eye as these ideas become more solid policy proposals.

Kingston Reid will continue to keep our clients informed as the process of workplace law reform unfolds.

 

 

Alice DeBoos
Managing Partner
+61 2 9169 8444
[email protected]
Duncan Fletcher
Partner
+61 8 6381 7050
[email protected]
Steven Amendola
Partner
+61 3 9958 9606
[email protected]
Shelley Williams
Partner
+61 7 3071 3110
[email protected]
Christa Lenard
Partner
+61 2 9169 8404
[email protected]
Michael Stutley
Partner
+61 8 6381 7060
[email protected]
Katie Sweatman
Partner
+61 3 9958 9605
[email protected]
Liam Fraser
Partner
+61 7 3071 3113
[email protected]
Lucy Shanahan
Partner
+61 2 9169 8405
[email protected]
Beth Robinson
Partner
+61 8 6381 7064
[email protected]
Brendan Milne
Partner
+61 3 9958 9611
[email protected]
Michael Mead
Partner
+61 2 9169 8428
[email protected]