As 2018 draws to a close, we take a look at some of the top employment issues to keep on your radar, going into 2019.

Criminalisation of wage theft in Victoria

Underpayment has been particularly topical in the last few years, with a number of recent well publicised cases of underpayment, such as George Calombaris’ group of restaurants and Domino’s pizza.

Underpayment of wages is not a criminal offence in Australia, even where the underpayment is serious and systematic.

Prior to the Victorian election, the Labor party pledged that if re-elected, it would criminalise wage theft where employers “deliberately withhold wages, superannuation or other employee entitlements, falsify employment records, or fail to keep employment records[1]. Under the proposed laws, employers who engage in this deliberate conduct will face fines of up to $190,284 for individuals, $951,420 for companies, and up to 10 years in jail for individuals.[2]

The Labor Government has assigned $22 million to a new Wage Inspectorate. Under the proposed laws, the Wage Inspectorate will be responsible for investigating and prosecuting underpayment of wages.[3]

Some commentators have argued that it may be difficult to criminalise wage theft at a state level, particularly as there are potential constitutional barriers which may prevent the proposed laws coming into operation. Whether the legislation passes and the scope of the laws will be an issue to watch in 2019.

Queensland, South Australian and Victorian labour hire laws

2018 saw Victoria follow Queensland and South Australia, when the Victorian Parliament passed the Labour Hire Licensing Act 2018 (Vic) (LHL Act).

Although certain administrative provisions of the LHL Act are currently in force, the licensing system is not yet in force in Victoria. Compliance obligations for labour hire providers, or those that use the services of labour hire providers, are expected to begin in early 2019. However, there will be a transition period of 6 months from the commencement of these obligations, in which organisations will have time to prepare themselves and apply for a licence.[4]

Meanwhile, the South Australian Government has since introduced a Bill to repeal that State’s labour hire licensing laws.

For employers outside Queensland and Victoria, it should be remembered that the legislation has certain extra-territorial reach. Therefore, caution should be exercised when employers place staff with a third party or utilise the services of individuals through third parties. Further, the definition of “labour hire”/ “labour hire services” under the legislation is broad and may encompass entities that are not what would ordinarily be considered to be businesses within the labour hire industry. Penalties may apply where the provisions are breached.

“Double dipping” for casual employees

In the recent decision of WorkPac Pty Ltd v Skene[5], the Full Court of the Federal Court found that a casual employee working regular hours on a fixed roster for an extended period of time may be entitled to accrue annual leave under certain circumstances.

Business groups have criticised this position as potentially allowing casual employees to “double dip”, by receiving both a casual loading and certain leave entitlements.

The NSW Business Chamber has since made an application to the Fair Work Commission to introduce a new category of worker into a number of modern awards. The proposed category is called “perma-flexi” employment, and would entitle the relevant employees to accrue paid leave entitlements such as annual and sick leave and receive a reduced casual loading of 10%.[6]

There has also been a further case, WorkPac v Rossato, in which the Federal Government has sought to intervene.

Industrial Relations Minister Kelly O’Dwyer is also seeking to introduce a regulation preventing employers from having to pay leave entitlements on top of a casual loading.[7]

Modern slavery legislation

The Bill seeks to combat modern slavery by introducing mandatory reporting requirements for large businesses, in respect of risks of modern slavery within their business, including throughout the supply chain.

Under the new law, businesses based in Australia or carrying out business in Australia, that have an annual consolidated revenue of at least $100 million, are required to prepare a “modern slavery statement”.[8] If a business does not meet the $100 million threshold, it can still voluntarily produce a “modern slavery statement”.[9]

“Modern slavery statements” must, among other things:[10]

  • identify the reporting entity;
  • describe the structure, operations and supply chain of the entity;
  • describe the risks of modern slavery practices within the entity’s operations;
  • describe actions taken to assess and address the risks; and
  • describe the effectiveness of these actions and the process of consultation.

The modern slavery statements are to be made available on the internet for the public to access, free of charge.[11]

The ACTU has criticised the Bill because there is no independent commissioner and no penalties for entities that do not report when they are required to do so.[12] It has been reported that a Government spokesperson has said that the “primary driver for compliance will be investor pressure and reputational costs and benefits.”[13] This may also see employers who do not meet the $100 million threshold voluntarily producing modern slavery statements.

This legislation follows on from the Modern Slavery Act 2018 (NSW) which was recently passed by the New South Wales parliament.

Potential statutory amendments to prevent further casualisation

A report by the House of Representatives Standing Committee on Industry, Innovation, Science and Resources (Committee) has been released, with a focus on boosting regional communities where mining and resource industries are based.

The report, entitled “Keep it in the regions: Mining and resources industry support for businesses in regional economies” (Report), considers submissions made by interested parties and evidence put forward at public hearings conducted across Australia.[14] In the Report, the Committee has proposed 21 recommendations to support regional centres impacted by mining and resources industries.

The Committee was made up of two National, four Liberal and four Labor MPs and was chaired by Barnaby Joyce.[15]

The Report calls for a review of the use of casualised workforces, and in particular, the use of labour hire, with the Committee expressing concern over the increased casualisation of mining workforces.[16] The Committee recommends the Federal Government conduct a review into the use of casualised workforces and labour hire companies in the mining sector, with a view to amend the Fair Work Act 2009 (Cth) (FW Act) to prohibit employers from replacing full-time employees with “permanent casual” and other types of casual employees.[17]

In response to the Report, the ACTU has said these FW Act changes will also require a definition for a “casual” worker to be inserted into the FW Act, to close any “loopholes” and to protect employees’ basic rights.[18]

It is now for the Federal Government to consider the recommendations made by the Committee.