Major industrial relations changes introduced to Parliament

December 10, 2020
Major industrial relations changes introduced to Parliament

Yesterday, the Federal Government introduced to the House of Representatives the Fair Work Amendment (Supporting Australia’s Economic Recovery) Bill 2020.  The Bill is the culmination of a six-month-long process commenced by the Government to introduce reforms that will accelerate Australia’s recovery from the impact of the COVID-19 pandemic.

If passed, the Bill will vary the Fair Work Act 2009 and other legislation in the following areas:

  1. Casual employment;
  2. Compliance and enforcement;
  3. Enterprise bargaining (including greenfields agreements); and
  4. Award flexibility.

We have set out below the most significant aspects of the proposed changes.

Casual employment

The amendments will:

  • Provide a definition of a casual employee, which places emphasis on what the employer and employee agree to at the commencement of employment rather than the patterns of work once employment commences.
  • Provide for a casual conversion process which requires employers of employees who have been employed for 12 months and have worked a regular pattern of hours for the last six months to either:
    • offer the employee permanent employment; or
    • give notice to the employee as to why they’re not being offered permanent employment.
  • Provide that any casual loading or additional casual rate paid to a casual employee can be offset against any claim made by the employee for permanent employee entitlements.

Compliance and enforcement

The amendments will:

  • Allow criminal penalties to be imposed for dishonest and systematic underpayments;
  • Increase civil penalties for underpayments;
  • Increase penalties for sham contracting; and
  • Allow a court to make an adverse publicity order against non-compliant employers.

 Enterprise bargaining

The amendments will:

  • Require the Fair Work Commission to process enterprise agreement applications within 21 working days. If the Commission can’t meet this timeframe they’re required to notify the parties of this and the reason why they are unable to.
  • Simplify the steps required to be taken for an agreement to be approved.
  • Encourage the Commission to take a practical and balanced approach to agreement making which respects the outcome of bargaining.
  • Direct the Commission to have regard to overall benefits, including non-monetary benefits, when assessing whether an agreement passes the better off overall test (BOOT).
  • Expand the circumstances in which the Commission can approve an agreement that doesn’t pass the BOOT.
  • Extend the maximum length of greenfields agreements to eight years where the agreement covers only construction work on a major project (of $500 million, or between $250 million and $500 million with ministerial approval.

Award flexibility

The amendments will:

  • Apply to identified modern awards, which are predominantly awards in the retail, hospitality and tourism industries.
  • Allow part-time employees working at least 16 hours per week to enter into ongoing agreements to work additional hours without the payment of overtime.
  • Allow employers who one of the awards applies to, the ability to issue directions to employees to perform different duties or work at different locations in certain circumstances.

It is expected that the passage of the Bill will not be completed until late February or early March 2021.

Nick Tindley is a Law Partner at FCB Workplace Law and is Head of Workplace Relations and Advisory at HR Assured. Nick has over fifteen years’ experience in providing industrial relations and employment law advice, with particular expertise in the retail industry.