Looming election and Labor’s IR Policy Platform

Posted by on Feb 25, 2019

With a Federal Election due to be held by May 2019, industrial relations is already shaping up as a key battleground for the major political parties. The Australian Labor Party (Labor) has announced several policies relating to employment and industrial relations in their 2018 draft National Policy Platform. In the event Labor are elected, the changes outlined below are likely to impact most, if not all employers.

National Employment Standards

Labor intends to place universal superannuation within the National Employment Standards (NES) in the Fair Work Act 2009 (Cth) (FW Act), which would allow all employees to attempt to recoup unpaid superannuation from employers through the Fair Work Commission (FWC) or the Federal Court. Currently, employees with unpaid superannuation are limited to making a complaint to the Australian Taxation Office, who may not have the resources to follow up their complaint. More generally, Labor has pledged to end the freeze on superannuation by increasing the superannuation guarantee to 12% as soon as practicable.

In December 2018, the Morrison government added five days of unpaid family and domestic violence leave to the NES, expanding on the entitlement that was provided to award covered employees in August 2018. Labor has argued that five days of unpaid leave is insufficient and remains committed to including 10 days of paid family and domestic violence leave in the NES.

When employers have offices based across different states and territories, workplace obligations that vary between states may be particularly frustrating. Labor has indicated that it will work with State and Territory governments to consider more consistent treatment of public holidays such as Easter Sunday, as well as considering how Christmas Day and Boxing Day should be treated where they fall on weekends.

Additionally, Labor will work with State and Territory governments to achieve a national minimum standard for long service leave to form part of the NES. At this stage, it is unclear if this is intended to wholly replace state long service leave schemes. Alternatively, a minimum standard for long service leave could operate similarly to the NES entitlement to jury service leave by providing a minimum entitlement that would be supplemented by state and territory legislation.

Wages and entitlements

Labor has stated that it is committed to a minimum wage that provides a living wage to maintain or improve the relative living standards of Australia’s lowest paid workers.

If elected, Labor has pledged to reverse the cuts to Sunday and public holiday penalty rates within the first 100 days of a Shorten government. Labor has also pledged to amend the FW Act so awards cannot be varied to cut workers’ take home pay. In practice, this may mean that the FWC could not, when reviewing modern awards, make a decision to reduce penalty rates in future.

Following on from Victoria, South Australia and Queensland’s enactment of laws implementing labour hire licensing requirements, Labor will require all labour hire companies to be licenced to do business in Australia and have a history of complying with employment, tax and OHS laws. Labor will also seek to guarantee that labour hire workers receive the same pay and conditions as directly employed workers performing the same work.

Labor will seek to address pay inequity by requiring companies with more than 1,000 employees to report their gender pay gap and by prohibiting the use of pay secrecy clauses.

Additionally, Labor’s aim is for parents to have access to 26 weeks of paid parental leave, compared to the current paid parental leave scheme that gives employees the weekly national minimum wage for up to 18 weeks. A longer term goal is to allow parents to receive superannuation while taking parental leave through a combination of government and employer contributions, to help boost the retirement funds of employees who have taken parental leave.

Types of employment

A major change to casual employment could be brewing, with Labor looking to stop the use of ‘permanent’ casual employees. This will involve a review of the definition of a casual employee and the possible introduction of an objective statutory test to the FW Act to determine when a worker is truly a casual employee. There is currently no definition of a casual employee in the FW Act. Presently, the power to classify an employee as a casual employee solely rests with employers, regardless of the regularity and the certainty of the engagement and the hours worked.

Currently, the time when this characterisation of employment is most commonly challenged is when someone is dismissed and brings an unfair dismissal application. Casual employees are not eligible to make an unfair dismissal application unless they are employed on a regular and systematic basis with a reasonable expectation of ongoing employment on a regular and systematic basis. A new statutory definition or test for determining if a worker is a casual or a permanent employee may lead to casual employees being reclassified as permanent where they have met certain requirements, regardless of an employer’s view in the matter. This would result in these employees becoming eligible to receive entitlements such as personal and annual leave.

Labor is committed to ensuring that the FW Act provides appropriate coverage and protection for all forms of work. In particular, it seeks to ensure that gig economy platforms and other working arrangements are not used to circumvent industrial standards, or to undermine workers’ rights to collectively organise and access their union.

Bargaining

We have seen employees and unions making applications to the FWC to terminate WorkChoices era agreements that provide pay rates that are lower than award rates. Recently, hospitality giant Merivale’s 2007 EBA was terminated by the FWC. This agreement had a permitted Merivale to lawfully pay 3,000 workers below the award. In response, Labor has promised to provide an effective mechanism for the termination of any remaining WorkChoices agreements which provide for entitlements below the applicable award.

However, Labor will prevent the unilateral terminations of collective agreements if it will lead to a reduction in workers’ entitlements. Currently, any party to an enterprise agreement can apply to terminate the enterprise agreement if it has passed its nominal expiry date, and the FWC must terminate the agreement if it (a) is satisfied that it is not contrary to the public interest to do so, and (b) considers it appropriate to terminate the agreement in all the circumstances.  While threatening to terminate an enterprise agreement has been a tactic used by employers during protracted negotiations with unions and employees, this may no longer be an option if Labor are elected.

Labor will improve access to collective bargaining, including where appropriate through multi-employer collective bargaining, but has stopped short of endorsing industry wide bargaining. It is not clear whether workers covered by multi-employer bargaining would be given the right to strike during negotiations, as Labor has stated that they have not yet come to a resolution on this question.

Miscellaneous

Labor will work cooperatively with employers, unions and the States and Territories to develop a national regulatory framework for Occupational Health and Safety and Workers’ Compensation in the shipping, offshore oil and gas, and stevedoring industries to eliminate regulatory uncertainty and dual jurisdictional involvement.

Labor will extend, where appropriate, responsibility for compliance with workplace laws to corporations that are the economic decision makers, including franchisors and other businesses along the supply chain. These corporations will be held responsible for underpayments that occur along their supply chain unless they can establish that they took all reasonable steps to prevent it from occurring. The requirement for taking ‘all reasonable steps’ is a higher bar than the current legislation (enacted in 2017) which only holds franchisors and holding companies responsible where they knew, or could reasonably be expected to have known, that a contravention by a franchisee entity or subsidiary would occur, unless they took reasonable steps to prevent a contravention.

Labor has promised to abolish two contentious federal government agencies; the Australian Building and Construction Commission (ABCC) and the Registered Organisations Commission (ROC). The ABCC monitors breaches of workplace laws in the building and construction industry, while the ROC oversees governance of unions and some employer bodies.

If Labor were to win the forthcoming election, Bill Shorten has promised to consult widely on key elements of the party’s IR policies immediately after taking power. As such, it is important to note that these policy statements are policy statements only.

For further information about this topic, please contact Sarah Rey or Magda Marciniak or another member of the Justitia team on 03 8621 4500 or info@justitia.com.au