Gazing into the crystal ball: employment and industrial relations in 2022

March 12, 2022

Having come out of the most unpredictable and tumultuous two years of most of our lives, we had hoped that 2022 would bring stability and a return to something like normal. Omicron has changed this, at least for the moment. In addition, the world of employment and industrial relations is rarely stable and 2022 looks likely to bring change that will impact every business. 

So, what can we expect? Gazing into our crystal ball, we think it is likely we will see: 

1. Federal and State legislative change. 

1. Award changes. 

1. Significant decisions. 

Legislative change 

Naturally, the extent of national IR legislative change will hinge on the 2022 Federal Election outcome. A Coalition win is unlikely to result in any substantial changes to the Fair Work Act 2009 (Cth) (Act), although the makeup of the Senate, post-election could encourage the Coalition to take another run at the changes that were proposed early in 2021, in particular in relation to enterprise agreements and compliance and enforcement.  

On the other hand, an ALP win is very likely to result in significant change in a number of matters, including in what the union movement describes as insecure work – casual and on-demand work and independent contracting. By resolution of the Senate in late 2020, the Senate Select Committee on Job Security was appointed to inquire into insecure and precarious employment, including, among other things, how COVID-19 impacted this and the effectiveness of existing laws and regulations in regulating such work. The Committee is not scheduled to present its final report until the last sitting day in February 2022, but has already released interim reports in the following areas: 

1. On-demand platforms such as rideshare and food delivery services. 

1. Publicly funded work, including aged care, disability services, higher education and the Australian Public Service. 

1. Labour hire and contracting. 

The recommendations from those interim reports provide an insight into what could be the focus of an incoming ALP Government, including:

1. A national labour hire licensing scheme. 

1. A requirement for host employers to pay “site rates” to labour hire employees. 

1. Changes related to FIFO/DIDO labour hire in the mining industry, including the imposition of local labour market testing. 

1. The Federal Government to work with unions to identify improvements in right of entry laws to deliver better protections for workers. 

1. Expansion of the definition of employee and employer under the Act to capture new and evolving forms of work. 

1. The Fair Work Commission (FWC) being empowered to resolve disputes and make orders for minimum standards and conditions in relation to all forms of work, including adjudicating disputes in relation to the appropriate status of workers. 

1. Establishing an Australian Government Policy requiring recipients of public funding to preference direct, permanent employment. 

1. Reporting requirements for aged care providers in relation to the engagement type of workers (part time, full time, casual, labour hire etc) and the number of contracted and rostered staff hours. 

In addition to any Federal upheaval to our workplace relations laws, we’re also closely watching the States and Territories. A recent policy report from the John Curtin Research Centre has identified an opportunity for the union movement to press for better worker conditions through action by ALP State Governments in Victoria, Queensland, and Western Australia. The report identifies State Government funded projects and contracts as the avenue for change, with a recommendation that private companies who are awarded these contracts be required to encourage union membership, and that contracts be terminated where the company fails to comply with workplace obligations. 

There are several examples where the Victorian Government has already expanded regulation into the workplace over the last couple of years, including: 

1. Implementing a Fair Jobs Code which imposes strict requirements on companies delivering on Government contracts. 

1. Introducing licensing requirements for labour hire providers. 

1. Introducing industrial manslaughter provisions. 

1. Criminalising wage theft. 

In addition to these, the Victorian Government in mid-2021 commenced consulting with stakeholders in relation to the Secure Work Pilot. The Pilot, while still being largely undefined, is set to involve the following in relation to casual and other “insecure” workers: 

• A two-year program commencing in the first half of 2022. 
• Targeted at specific occupations in identified industries. 
• Industries selected on basis of high rates of casual workers, and are expected to include retail, healthcare and social assistance, and accommodation and food services, among others. 
• Two phases, with different occupations included in each phase. 

• Government-funded paid sick and carer’s leave, up to five days per calendar year.  
• Payments will be made at the national minimum wage. 

If the Pilot is “successful”, employers are expected to then take responsibility for the paid leave following the initial period.  

With the union movement being urged to push reform through State Governments, and that push already seemingly delivering outcomes in Victoria, we can expect more initiatives through the States in 2022. 

Award change 

Even though the modern award system has been in place for over a decade, we anticipate continued changes through 2022. The two major cases currently before the FWC are: 

1. Family and domestic violence leave review 2021. 

1. Work Value Case – aged care industry. 

The family and domestic violence leave review arose via a request from the Australian Council of Trade Unions (ACTU) to the FWC for an urgent review of FDV terms in modern awards. The ACTU seeks to have all modern awards provide access for all employees, including casual employees, to 10 days of paid FDV leave for each 12 months of employment. The leave would be credited in full at the start of each 12-month period and would not accumulate from year to year. 

The matter has been timetabled for the early part of 2022, with hearings scheduled between 28 February and 4 March and final oral submissions on 17 March. With current research and reports being facilitated on the prevalence and impacts of such leave, we can expect a decision on this review towards the middle of the year. 

The Work Value case arises from three applications from various unions to vary the Aged Care Award 2010, the Nurses Award 2020 and the Social, Community, Home Care and Disability Services Industry Award 2010.  A Full Bench of the FWC determined that the matters should be heard jointly and has programmed the matter for hearings during the April to July 2022 period.  

The changes that have been proposed by the various unions include: 

1. amending the Nurses Award 2020 (as it is now) by inserting a new schedule applicable to aged care workers that would operate for a period of four years and would increase rates of pay by 25 per cent; 

1. amending the Aged Care Award 2010 by removing Personal Care Workers from the mainstream of aged care employees in Schedule B, creating a new classification structure for them and increasing their rates of pay by 25 per cent; and 

1. amending the Social, Community, Home Care and Disability Services Industry Award 2010 to increase home aged care employees’ rates of pay by 25 per cent. 

The applications are founded on “Recommendation 84: Increases in award wages” in the final report of the Royal Commission into Aged Care Quality and Safety. We can expect that the outcome of the applications will be driven largely by Federal Government funding. At this point it is unclear precisely what the Government will do in response to these union requests.   

In addition to these cases, we will again see the Minimum Wage Panel (MWP) of the FWC undertake a review of award minimum wages and the national minimum wage, culminating in a decision handed down in June 2022. Based on the generally buoyant view of the economic recovery at the current time, along with the pressure on both political parties to consider the cost of living as part of their election promises, it can be expected that the MWP’s decision is likely to be less constrained than in the past two reviews. Our best guess, assuming there are no unexpected headwinds, is that clients should anticipate an increase in wages of between 3 per cent and 3.5 per cent. 

Major cases 

With two cases currently before the High Court, we can also expect 2022 to bring about either a re-framing or a re-statement of the distinction between employment and independent contracting. Those two cases appear prima facie to be straightforward and at different ends of the spectrum:  

• Construction, Forestry, Maritime, Mining and Energy Union & Anor v. Personnel Contracting Pty Ltd involves a 22-year-old backpacker on a working holiday visa who provided low-skilled labouring services through a labour hire agency.  

• ZG Operations Australia Pty Ltd & Anor v Jamsek & Ors involves several individuals who commenced employment almost 40 years ago as truck drivers and who, a relatively short time later, formed partnerships with their wives, purchased vehicles from their employer and entered contracts to provide delivery services on behalf of that same organisation, purportedly as independent contractors.  

The above cases were heard before the High Court on 31 August and 1 September 2021 respectively and decisions are imminent at the time of writing this article. Given the very different circumstances under consideration, there’s a strong likelihood that the decisions will provide a higher level of clarity for businesses in managing their engagement models, but may cause disruption to organisations where contractor arrangements mimic those under consideration. On my reading of the transcript of the Hearings, in particular in the ZG Operations matter, we could see greater weight being placed on the terms of the contract and a more limited scope for post-contract conduct to impact on the nature of the relationship. 

FCB is continuing to monitor the outcomes and will update clients once the decisions are handed down. 

Other matters of relevance 

We can expect to see more mandatory vaccination decisions in the aftermath of the Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union and another v Mt Arthur Coal Pty Ltd T/A Mt Arthur Coal [2021] FWCFB 6059. While there have been a handful of cases to date which have been unsuccessful in challenging Government-mandated vaccination directives, the law on employer-derived vaccination policies is not as clear, and the first half of 2022 will go a long way to clarifying the position for businesses that have implemented or are looking to implement their own directions. 

FCB will also be closely watching the activities of the Fair Work Ombudsman and their approach to non-compliance. There are several significant cases before the Courts in which the Ombudsman has acted against large employers for underpayments. The approach of relevant Courts to take to issues such as offsetting and averaging of salaries is likely to have broad impacts on employers. 

If you have a question about the information in this article or you’d like to discuss a workplace matter, please get in touch with Nick Tindley.