In the lead up to and now post-election, the Australian Labor Party (ALP) has flagged several significant changes to Australia's employment, industrial relations and workplace safety landscape. As the ALP has now formed a majority government, we can expect sweeping reform and the implementation of key policy directives.
It will be important for businesses to remain attuned to developments in this space, as many of the ALP's proposals, if implemented, will require substantial updates to workplace policies, procedures and employment contracts.
To varying degrees, the points set out below had been forecast pre-election, whilst some policies (such as an increase to the minimum wage) are already in motion. In summary, we can expect the following:
- Wage increases, including an increase to the minimum wage and award wages;
- 'Reinvigoration' of the bargaining system;
- Changes to the definition of casual employment, with greater focus on the pattern of work (as per the previous common law position, rather than the more recent focus on agreement/contract terms);
- Greater regulation of the gig economy, with the Fair Work Commission (FWC) given power to set minimum standards, and reconsideration of the employee/contractor distinction;
- 'Same job, same pay' legislation, aimed at preventing labour hire companies from paying workers less than others who are directly employed for the same work;
- Strengthening of sham contracting and wage theft prevention;
- Introduction of the 'Portable leave' scheme, to allow workers to carry various types of leave – including annual, sick and long service leave – across jobs in the same industry;
- Adoption of all the recommendations of Respect@Work report regarding sexual harassment at work;
- Measures towards closing the gender pay gap;
- Protecting workers' mental health through specific regulations targeting psychosocial hazards; and
- Workplace safety, workers compensation schemes and industrial
- Greater regulation of industrial and infectious diseases, e.g. COVID-19 and coal workers' pneumoconiosis (black lung), silicosis and similar occupational lung diseases, regulating hazardous chemicals and more;
- Improving OHS/WHS for workers in hazardous industries, e.g. shipping, stevedoring and offshore oil, gas or clean energy production and introducing special OHS/WHS regulations for firefighters;
- Reintroducing safe rates schemes for parties in the transport supply chain;
- Conducting a thorough review of Comcare and the workers compensation system; and
- Prioritising asbestos removal/global bans on usage.
The FWC's Annual Wage Review is an expert panel review of the minimum wages in modern awards and the national minimum wage order.
On Friday 3 June, the ALP made a submission to the FWC's 2021-2022 Annual Wage Review recommending the FWC 'ensures that the real wages of Australia's low-paid workers do not go backwards' having regard to the 5.1% consumer price index (CPI) rise.
In doing so, the ALP noted the cost of living pressures created by rising inflation and falling real wages, and particularly the 'disproportionate' impacts on low-paid workers. For clarity, the submission explicitly states that the ALP 'does not suggest that across-the board, wages should automatically increase in line with inflation.'
Rather, 'ensuring that real wages for low-paid workers do not go backwards in these circumstances will protect the relative living standards for these workers, prevent further financial hardship and avoid adverse distributional outcomes and broader economic and social risks.'
The ALP's submission can be viewed here.
In early May 2022, Mr Albanese promised to convene an 'employment summit' to 'bring employers and unions together to collaborate on secure work and ensure enterprise bargaining works effectively.' This formed part of the ALP's commitment to economic and productivity reforms, as Mr Albanese indicated one of his first acts as Prime Minister would be to convene the summit.
Mr Albanese said an ALP government would lift productivity and return to a 'gain-sharing model'. A focus of the ALP is to 'reinvigorate Australia's enterprise bargaining system and promote productivity'.
The ALP has previously indicated it will look to improve good faith bargaining as part of its proposal to extend the powers of the FWC. It will also seek to prevent the unilateral termination of collective agreements in the event employee entitlements are undermined or reduced. This policy will impact the balance of negotiations.
Changes to casual employment, protections against insecure work and 'employee-like' forms of work will also have clear impacts on enterprise bargaining.
Casual employment, greater regulation of the gig economy and reduction in insecure work
On casual employment
The ALP has announced it will legislate "a fair, objective test to determine when a worker can be classified as casual, so people have clearer pathway to permanent work" which will "restore the common law definition". We can therefore expect that the new government will seek to amend the definition under the Fair Work Act 2009 (Cth) to ensure all the circumstances of employment are considered, such as the hours and pattern of work, duration and consistency, moving away from the previous government's focus on agreement terms.
The ALP has committed to extending the powers of the FWC to include 'employee-like' forms of work. This is a significant change which will allow the FWC to establish minimum standards for new forms of work, such as gig work. The broader focus on 'employee-like' work is an attempt to adopt a flexible approach which expands the definition of employee to ensure transport and food delivery platforms, for example, are not able to evade such protections.
We can expect these changes to include minimum wage rates, working standards (such as increased consideration of safety), consultation obligations and similar entitlements and protections afforded to the broader workforce.
Limits on fixed term contracts
The ALP has proposed limits on consecutive fixed-term contracts, with a cap of 24 months on consecutive contracts for the same role. Employers will be required to offer permanent ongoing employment once the limit is reached, subject to currently unspecified exceptions.
Job security to be an object of the Fair Work Act
This means the FWC will have to consider job security in all its decision-making. The Fair Work Act currently requires the FWC to consider factors such as productivity, economic growth, the importance of work and family balance and fairness at work.
Introduce a Secure Australian Jobs Code
The ALP has committed to introducing a Secure Australian Jobs Code which supports secure employment for Australian workers on government contracts.
This Code, if introduced, will establish guidelines on:
- Fair treatment of workers, including job security;
- Fair and reasonable wages and conditions;
- Ethical and sustainable practices;
- Compliance with the Workplace Gender Equality Act 2012 (Cth); and
- The consideration of local industry workforce capability and capacity, particularly in regional Australia.
Portable entitlement schemes for Australians in insecure work
Although details of any proposed schemes are sparse, the ALP has indicated it will commence a consultation process with various stakeholders including state and territory governments, unions, and industry bodies to develop a practical and effective portable entitlement scheme for workers in insecure work.
On a basic level, this will allow workers who move across different projects, jobs and contracts in the same industry to accumulate entitlements such as annual, sick and long service leave which would otherwise be denied due to the transient nature of their work. We are yet to see how this would work in practice and beyond existing portable long service leave schemes in construction and mining, there is little precedent. At present, it is unclear who would be covered by the scheme and how it would interact with current laws.
The ALP has indicated it will prohibit secrecy clauses in employment contracts, which bar workers from openly discussing pay, by amending Fair Work Act 2009 (Cth).
The ALP has committed to ensuring workers in labour hire arrangements will receive the same pay for the same work as those employed directly. This is an effort to regulate standards in the labour hire industry and ensure that workers who work alongside directly employed permanent full-time workers, doing the same work, on the same hours with the same skills are not paid less by reason of their contract.
Criminalising wage theft
The ALP has proposed to buttress protections for workers by criminalising wage theft. These proposals, if implemented will be enacted in line with wage theft laws already passed by Victoria and Queensland.
Close the gender pay gap
The national gender pay gap is currently 13.8%, calculated by the Workplace Gender Equality Agency.
The ALP has committed to:
- Strengthening the ability and capacity of the FWC to order pay increases for workers in low paid, female dominated industries;
- Legislating so large companies will have to report their gender pay gap publicly;
- Prohibiting pay secrecy clauses and giving employees the right to disclose their pay, if they want to; and
- Taking action to address the gender pay gap in the Australian Public Service.
Adopting recommendations of the Respect@Work report
The ALP proposes to implement all recommendations of the Respect@Work report, which were not previously implemented by the Coalition Government.
Employers should take particular note of the proposed implementation of recommendation 17, which creates a positive duty on employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation in their workplace, supported by inquiry and enforcement powers, under the Sex Discrimination Act 1984 (Cth).
Other recommendations include:
- Prohibiting the creation of an intimidating, hostile, humiliating or offensive environment on the basis of sex;
- Increased power for the Sex Discrimination Commissioner to initiate their own inquiries; and
- To insert a clear prohibition on sexual harassment in the Fair Work Act 2009 (Cth) and a new complaints mechanism which could include compensation to complainants.
We recommend that employers commence reviewing their policies to accommodate the likely implementation of these recommendations, to ensure protection and adequate risk management. A failure to do so will leave businesses exposed to the risk of new claims under prospective laws.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.