The Federal Government has received final submissions for a raft of proposed industrial relations reforms it hopes to introduce to parliament later in the year.  So, what do we know about the possible changes and how could they affect employers?

Five key areas of change

Information released by the Department of Employment and Workplace Relations (DEWR) lists 11 topics where legislative changes may occur.  The following are the five most significant proposed industrial relations reforms:

1. Entitlements of casual employees
2. “Same job, same pay” provisions
3. Changes to “gig work” provisions via introducing “employee-like work” provisions
4. Criminalising “wage theft”
5. Allowing workers to challenge “unfair” work contract provisions

The possible scope of these five areas is summarised below.

1. Entitlements of casual employees

It appears that the definition of “casual” employee, a hotly-debated issue due to tribunal decisions and amendments to the Fair Work Act 2009, will again be reviewed. The intention seems to be to place greater emphasis on what actually happens on the job after agreeing to an initial arrangement.

If there are changes to the definition of casual employment, their implications for issues including rights of conversion from casual to permanent employment and the methods of resolving disputes, will also be reviewed.

2. “Same job, same pay” provisions

This is basically an attempt to equalise pay and entitlements between labour hire workers and directly engaged employees. The use of labour hire workers for genuine purposes will be preserved, but any changes will aim to ensure they receive the same pay as employees doing similar work. Definitions of “same job” and ‘same pay” will be required, as will provisions to prevent avoiding obligations and to resolve disputes, preferably within the Fair Work Commission.

3. Changes to “gig work” provisions via introducing “employee-like work” provisions

The aim here is to give the Fair Work Commission powers to set minimum standards in “employee-like” types of work, in particular jobs in the “gig economy”.  Again, this has been a hot topic for litigation and disputes in recent years with the law struggling to keep up with new work arrangements, many of which have been attempts to avoid regulation.

A key aim is that all workers should have access to minimum rights and protections regardless of whether they are characterised as an employee or an independent contractor, including access to freedom of association and dispute resolution.

Minimum standards need to reflect workers’ independence and flexible working arrangements, including which work tasks to accept or refuse, which businesses they can contract with, when and where they do the work and how they do it.

4. Criminalising “wage theft”

There is an intention to make underpayment of wages a criminal offence, where there are deliberate or systematic underpayments.  “Honest mistakes” (e.g. due to ignorance of award provisions) will be subject to lesser penalties, but not treated as a criminal offence.  There may be a provision for employer self-reporting.

Penalties for non-compliance and for using “sham contract” arrangements are likely to increase. The Government has suggested that some businesses have calculated the risks and cost of being caught are less than the savings achieved via underpayment.

5. Allowing workers to challenge “unfair” work contract provisions

This area overlaps with the “gig work” provisions. It is likely that “unfair” provisions will be able to be challenged in the Fair Work Commission, which may have the power to vary or set aside them. This would be an alternative (or replacement) for using the Independent Contractors Act 2006 or Australian consumer legislation.

It is likely that employees currently excluded from remedies for unfair dismissal will have access to these provisions.

Other proposed changes

Other topics the Government has sought submissions include the following:

• Strengthening laws that cover discrimination, adverse action and harassment
• A single framework for regulating labour hire, to replace all the state systems
• Allowing the Fair Work Commission to set minimum standards for the road transport industry
• Changes to the small business redundancy exemption when businesses are wound up
• Changes to enterprise bargaining provisions to remove current loopholes

What these changes mean for employers

Exactly how these changes will affect employers won’t be known until the legislation is introduced into Parliament, or the Government releases more specific information about what it will contain. However, the following general conclusions can be drawn at this stage. Employers will need to:

• Audit and monitor their casual employee arrangements. The arrangement will need to remain genuinely “casual” after the employee commences, or otherwise be revised. Employers also need to plan ahead for when any “casual conversion” entitlements come into effect.
• Review the need for and use of labour hire arrangements. If they are used for other than temporary reasons, check that there is “equal pay for equal work” between labour hire workers and the scenario of using your own employees for the same work. Also check whether your industry/occupation is actually covered by the new provisions (it is possible that only currently “troublesome” ones will be). Care will be needed, given that current widespread labour shortages will continue to make labour hire a tempting (and often necessary) option.
• If you have workers in “gig economy” roles, be aware that they may become subject to minimum entitlements and similar “equal pay for equal work” provisions to the above, and ensure their employment remains compliant.
• The chances of being caught and punished for underpaying employees (even unintentionally) will increase, as will the punishment.
• The Fair Work Commission will end up with wider powers, to enable it to resolve a greater range of employment-related disputes.

If you love detail and would like to learn more about these proposed industrial relations reforms, visit the Department of Workplace and Industrial Relations website here.