It became apparent during the 2010 federal election campaign that, whichever side won, we would have a government promising little or no change to the Fair Work legislation.
In the result, the Labor Government was (eventually) returned, with only three substantial new commitments in relation to employment and workplace relations.
One is to replace the existing General Employee Entitlements and Redundancy Scheme (GEERS) with a legislated ‘Fair Entitlements Guarantee’. Besides putting the scheme on a statutory footing, the major change concerns the recovery of any redundancy pay that an insolvent employer cannot afford to provide. Employees will be able to use the new scheme to secure up to four weeks’ pay per year of service, compared to the current cap of just 16 weeks in total.
The second commitment is to increase the employer contributions required under the superannuation guarantee scheme. They are to be phased up from the current minimum of 9% of each employee’s ordinary time earnings, to 12% by 2019–20. The first increase, of 0.25%, is set to take effect from 1 July 2013. It is also proposed from that date to raise the age limit for compulsory contributions from 70 to 75.
A related reform will require both employers and superannuation funds to provide a greater degree of information about contributions, and confer greater enforcement powers on both the Tax Office and the Fair Work Ombudsman, to ensure employers comply with their obligations.
Thirdly, Labor has promised to amend the new Paid Parental Leave Act 2010 to entitle fathers and other partners to two weeks of ‘paid paternity leave’ to help care for a newborn or adopted child. This will be in addition to the 18 weeks’ pay at the national minimum wage, for which primary carers are eligible under the 2010 Act. The paternity leave entitlement, which will be subject to similar eligibility tests as the parental leave pay scheme, is to commence from 1 July 2012.
During the election campaign, the Coalition indicated its agreement to the Fair Entitlements Guarantee. It is less clear whether it would support an increase to superannuation contributions. However the Greens, who will hold the balance of power in the Senate from July 2011, have also advocated an increase to 12%. So unless the reform is blocked by the lower house independents, it seems likely to be introduced during the current term. Employers should certainly be planning on that assumption.
There is rather greater uncertainty over the paid parental leave scheme, which is due to commence on 1 January 2011. Both the Coalition and the Greens have signalled that they will seek to amend the new scheme.
The Coalition wants to require the Family Assistance Office to administer all payments under the legislation, rather than employers having (at least in many cases) to act as ‘paymasters’. The Greens would like to increase the maximum parental leave payment from 18 to 26 weeks (something the Coalition policy also supports), require employers to make superannuation contributions in respect of such payments, and amend the Fair Work Act 2009 to make parental leave a ‘workplace right’ for anyone eligible for the payment.
The intriguing possibility here is that the Coalition and Greens might have the numbers – if they can reach agreement and secure the support of some of the independents – to force through at least some of their changes, against the will of the government.
Also facing an uncertain fate is Labor’s plan to replace the Australian Building and Construction Commission with a new Fair Work Building Industry Inspectorate, with fewer (though still significant) coercive powers than the ABCC.
The government has indicated that it will reintroduce the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2009, which failed to pass the Senate. With the Coalition committed to retaining the existing legislation, and the Greens pressing for more far-reaching reforms, it is hard to see how the government can garner enough support for its proposals. But it remains possible that a compromise may yet be struck.
The other big priority for the Gillard Government, besides continuing to bed down the Fair Work legislation, will be to oversee the implementation of the Intergovernmental Agreement for the harmonisation of occupational health and safety laws.
However, with the Western Australian government still refusing to sign up, and now the New South Wales Government insisting on retaining key elements – including a ‘reverse onus of proof’ and union-initiated prosecutions – that it had previously agreed should be omitted from the model legislation, it is looking less and less likely that business groups will get their wish and see a genuinely national scheme in place by 2012.