Our team sets out the major issues in industrial relations, and how the competing parties plan to tackle them if they win power.
Although industrial relations (IR) reform has not been front and centre in the policy offerings put forward by the Australian Labor Party (ALP) or Coalition this federal election, there have been some developments on the campaign trail in the lead-up to the vote which have reignited debate on a number of workplace issues.
Compared to the ALP’s extensive IR agenda in the 2019 election which was boldly declared to be a "referendum on wages" by former Opposition Leader Bill Shorten, Labor’s workplace platform this time around is somewhat more subdued, but still proposes a number of significant changes that will shake-up the IR landscape if elected. Labor’s proposed reforms include various proposals to amend the Fair Work Act 2009 (FW Act), with a particular focus on job security, implementing measures to prevent the exploitation of casuals and other forms of insecure work and gender pay equity.
A re-elected Coalition government will result in less changes to the workplace status quo, with much of the Government’s policy messaging proffering the creation of new jobs and continuing to strengthen the economy. However, in the lead-up to the election, there have been a number of standalone IR policy commitments, including the criminalisation of wage theft and extending the maximum term for major project greenfields agreements. The Coalition has also confirmed that it will revive a number of reforms that were contained in the Government’s now shelved Omnibus Bill, which unsuccessfully sought a number of changes to streamline enterprise bargaining and provide for greater flexibility in certain modern awards.
As election day looms, we have broken down some of the key IR themes and policy promises made by the major parties and key independents before the nation votes to decide who will form government on May 21.
Casual employment and insecure work
Measures to achieve and promote job security are central to the ALP’s IR platform and, if elected, is where the workplace landscape will see the most sweeping changes.
Casual employees and gig workers
The ALP has said that it will amend the definition of "casual employment" by legislating an objective test to determine whether a worker will be classified as a casual employee. These amendments would seek to restore the common law position that was in place prior to the Coalition’s recent changes to the FW Act and the High Court’s decision in Workpac v Rossato, and with a view to provide casual employees with a clearer pathway to permanent employment based on their ongoing employment relationship, as opposed to the terms and conditions agreed at the commencement of the employment relationship.
The ALP has also proposed expanding the powers of the Fair Work Commission (FWC) to enable the FWC to make orders for minimum standards for new forms of work, such as gig work and to determine what rights and obligations may or may not apply.
Enshrining "job security" in the Fair Work Act
The ALP has committed to enshrine secure work as an objective of the FW Act, which would require the FWC to expressly consider job security in all of its decision makings. At this stage, no details have been provided as to how the concept would be defined or be applied in practice, including how it would interact with other FW Act considerations or the exercise of managerial prerogative by employers.
The ALP has promised to introduce "same-job, same-pay" legislation which would ensure workers employed by labour hire firms receive the same pay and conditions as workers who are employed directly. Labor are also yet to clarify how this policy would work in practice, including if "same pay" means the same salary or matching of various other entitlements that may be afforded to employees (including under enterprise agreements).
The ALP has also proposed the establishment of a national labour hire licensing scheme, which would be similar to those currently in operation in certain states and territories which require all labour hire providers to obtain and maintain a licence in accordance with certain conditions (including reporting obligations, compliance with workplace laws).
The ALP has promised to consult with state and territory governments, unions and industry regarding the possible development of portable entitlement schemes for annual leave, sick leave and long service leave for particular industries.
It is proposed that any national scheme would mirror current state and territory frameworks that are in place in the construction, mining and cleaning sectors.
Limiting rolling maximum-term contracts
The ALP would limit the number of consecutive fixed term contracts an employer can offer for the same role, with an overall cap of 24 months, following which an employer would be required to offer the worker a permanent position for the role.
The primary IR commitment made by the Coalition is that, if re-elected, the Government would seek to revive a number of its shelved Omnibus Bill reforms that were proposed in its first draft of the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (Cth), introduced to Parliament in early 2021.
The Bill proposed a raft of changes, however following ALP and crossbench opposition it was passed in a reduced form which enabled the Coalition’s amendment to the statutory definition of casual employment.
It is currently unclear what reforms will be pursed if the Coalition wins the May 21 election, however IR Minister Michaelia Cash has emphatically stated the proposed changes to the better off overall test (BOOT) will not be made. Appearing before the Western Australia’s Chamber of Minerals and Energy, Prime Minister Scott Morrison also committed to the extension of the maximum term for greenfields agreements for major project works for $500 million and above from four to six years (down from eight years proposed in the original Omnibus package), with guaranteed annual pay increases for the life of the agreement.
Other Omnibus reforms that the Coalition may seek to revive include:
- various proposals to streamline enterprise agreement bargaining and approval processes (detailed further under our discussion of enterprise bargaining reforms):
- providing for more flexible arrangements under modern awards, including by amending certain awards to enable employers and part-time employees to agree to the employee working additional hours of work at their ordinary rate of pay; and
- criminalising wage theft and increasing civil penalties for non-compliance with the FW Act.
Both the ALP and Greens have promised to oppose the Omnibus reforms, with Shadow IR Minister Tony Burke stating that the Bill was rejected by Parliament because it sought to cut the pay, conditions and job security of workers.
As noted above, the Coalition has restated its commitment to the Omnibus Bill reforms. A significant part of the Bill was comprised of proposals seeking to streamline enterprise bargaining and approval processes, including by:
- limiting the ability for external parties to intervene and be heard on bargaining matters;
- implementing a 21-day approval process for agreements;
- enabling the FWC to more easily vary enterprise agreement decisions to correct minor errors;
- providing that certain agreements made before the FW Act commenced operation would automatically cease; and
- enabling franchisees to opt-in to a single enterprise agreement covering a larger group of employers operating under the same franchise.
The ALP has made clear that it remains opposed to the Omnibus reforms and the Coalition’s proposed changes to enterprise bargaining procedures. However, on 6 May, Opposition Leader Anthony Albanese promised that if Labor wins the election, it will convene an "employment summit", the purpose being to "bring employers and unions together to collaborate on secure work and to ensure enterprise bargaining works effectively".
The ALP has also indicated its support for the following enterprise bargaining policies:
- giving the FWC broader powers to arbitrate disputes arising in the course of enterprise bargaining;
- preventing the unilateral termination of collective agreements if employee entitlements will be reduced; and
- improving access to collective bargaining, potentially through multi-employer bargaining.
Both the Coalition and ALP are committed to legislate to make wage theft a criminal offence.
The proposal formed part of the Coalition’s original suite of Omnibus Bill reforms that the Government has committed to re-pursuing, while the ALP has stated that it will consult with unions, states and territories and employer groups to ensure federal wage theft laws will not override existing state and territory laws in operation.
Gender pay equity
The ALP has stated it will lead a national push to help close the gender pay gap and increase pay for women workers – particularly in caring jobs – by:
- strengthening the ability and capacity of the FWC to order pay increases for workers in low paid, female dominated industries;
- fully implementing all 55 recommendations of the [email protected]: Sexual Harassment National Inquiry Report 2020 ([email protected] Report) and legislating for 10 days’ paid family and domestic violence leave as a National Employment Standard (NES);
- legislating so companies with more than 250 employees will have to report their gender pay gap publicly;
- prohibiting pay secrecy clauses and giving employees the right to disclose their pay if they choose to; and
- taking action to address the gender pay gap in the APS.
While on the campaign trail, Labor also announced it would make gender equity an object of the FW Act and establish two expert panels, one on pay equity and another for the care and community sector “to help improve pay and conditions for women in those sectors”. It is proposed that the pay equity panel will hear equal remuneration cases and the care and community sector panel will handle award cases relating to its area of expertise.
In its Plan to Support Australian Women, the Coalition has generally restated its commitment to repairing and rebuilding women’s workforce participation and further closing the gender pay gap, with former Minister for Women and Jobs and IR Kelly O’Dwyer stating that the current Government has the record for bringing the pay gap down to its lowest level.
The Greens’ Economic Security for Women policy initiative also commits to implementing the following measures to close the gender pay gap by:
- increasing minimum wages and supporting stronger equal remuneration provisions in the Fair Work Act (including by increasing award wages in female dominated sectors by 0.5% above CPI each year for the next 10 years to reduce the current national gender pay gap – which currently sits at 13.8% - to below 10%);
- paying super on parental leave;
- boosting superannuation for low-income workers with caring responsibilities and doubling low-income super offsets;
- reversing the Coalition’s Stage 3 tax cuts;
- extending penalties for employers who fail to close their gender pay gap;
- legislating to remove "pay gag" clauses on contracts in the public sector; and
- requiring large businesses to include gender pay gap data in annual reports.
To the extent that the Greens hold the balance of power after the election, their policy positions may become of greater importance.
[email protected] report
The implementation of the outstanding [email protected] recommendations has been the subject of continuing public debate and scrutiny since the Report was published and has remained a topic of conversation in the lead-up to the election.
The [email protected] Report made 55 recommendations, including 13 recommendations to amend the Sex Discrimination Act 1984 (Cth) (SD Act).
The current Government has implemented 43 of the Report’s recommendations, however 7 of the proposed legislative changes remain outstanding, including the recommendation that the SD Act be amended to introduce a positive duty for all employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation. While the Government is currently consulting on these outstanding recommendations, it has not committed to their implementation.
In contrast, both the ALP and the Greens have committed to implementing all of the [email protected] Report’s recommendations. The Report has also been a focus for a number of prominent independent candidates, with Kylea Tink, Claire Ferres Miles, Despi O’Connor, Dr Sophie Scamps and Kim Rubinstein all endorsing the implementation of all 55 recommendations.
No matter who succeeds at the polls, the [email protected] Report will remain an important public issue, with a number of high-profile advocates campaigning for its full implementation and as businesses are increasingly focused on environmental, social and governance (ESG) issues and responsibilities.
Union regulation and penalties
In the wake of the recent High Court decision in the Australian Building and Construction Commission v Pattison, if re-elected the Coalition has promised to double the maximum penalties for serious, deliberate and repeated breaches of the law. The Government has also proposed to increase the funding and investigative powers of the Fair Work Ombudsman.
Consistent with its 2019 election platform, the ALP is again promising to abolish the Registered Organisations Commission and Australian Building and Construction Commission.
The ALP has committed to enshrine superannuation in the NES, meaning that workers would be able to pursue employers directly for unpaid super. Labor has also proposed that a target would be imposed on the ATO to improve the recovery rate for unpaid superannuation.
The Government’s Financial Services Minister has confirmed that the Coalition does not support the proposal, noting that there are already multiple mechanisms for the recovery of unpaid superannuation.
As announced in the 2022 Federal Budget, the Coalition has committed to enhance the Government Paid Parental Leave Scheme so that both working parents can share up to 20 weeks’ Government funded flexible leave. Both parents will be eligible to access both the Scheme and any paid leave form their employer for the combined 20 weeks, with single parents having access to an additional two weeks of leave.
The Coalition is also introducing a household income eligibility test, in addition to the existing primary carer income test, and extended the work test rules to increase eligibility to participate in the Scheme.
The ALP’s 2021 National Platform confirmed Labor’s goal to provide for 26 weeks of paid parental leave at full-pay with superannuation. However, on 6 May the Opposition Leader confirmed that Labor would no longer adopt super on paid parental leave as an election policy and will instead examine the issue further if the ALP is in government.
The Greens have also committed to establishing a 26-week paid parental leave package to be shared between parents.
Watch this space
In the countdown to the election, we will continue to update any new IR policy proposals and announcements for you here.