Today, the Australian Industry Group (Ai Group) released its submission to the Senate inquiry into the Government's industrial relations reform bill. The submission expresses strong support for most of the provisions in the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 but seeks a number of amendments to improve the operation of particular provisions.
As its name implies, this is an important piece of legislation aimed at removing roadblocks to productivity, jobs growth and higher wages during the recovery from the COVID-19 pandemic.
In summary:
- The casual employment provisions in the Bill are particularly important due to the widespread uncertainties and cost risks that have arisen from the Federal Court's controversial decisions in the WorkPac v Skene1 and WorkPac v Rossato2 cases. The uncertainties and risks are particularly relevant to small businesses. Importantly, the Bill includes:
- An exclusive definition of a 'casual employee', rather than the vague indicia approach adopted by the Federal Court; and
- Protection for employers against 'double-dipping' claims by employees who have been engaged and paid as casuals.
- The modern award provisions in the Bill would deliver some modest but important flexibility for employers and employees in industries heavily impacted by the pandemic.
- The enterprise agreement provisions are designed to address widely recognised problems that have led to the number of current enterprise agreements in Australia reducing from 25,000 a decade ago to less than 10,000 today. The reinvigoration of the enterprise bargaining system will lead to productivity improvements and wages growth at the enterprise level.
- The greenfields agreement provisions of the Bill would enable such agreements to continue for the life of a major project (up to a maximum of eight years). This would assist in driving investment and jobs in the construction and resources industries.
- Ai Group does not support employers who deliberately underpay their employees. However, the much higher civil penalties and the criminal penalties in the Bill are not warranted. Civil penalties for underpayments were increased tenfold in 2017 and the evidence is that these increases have had a positive impact on compliance. This can be seen in the many corporations that have self-disclosed underpayments to the Fair Work Ombudsman (FWO) over the past three years after identifying payroll errors, and back-paying the relevant amounts to employees. As acknowledged in the FWO's 2018-19 annual report, this development suggests that 'compliance and enforcement activities are creating the desired effect'.3 Since these comments, this trend has continued and accelerated, as can be seen from the FWO's 2019/20 annual report:
"Since July 2019, we have seen a significant increase in the number of large corporate entities self-reporting non-compliance with their workplace obligations."
With the sensible and practical amendments that Ai Group has proposed, the submission urges the Senate Committee to recommend that the Bill is passed by Parliament without delay.
Also: Government IR Bill – Time for tired old arguments and scare campaigns to be put aside (Media Release, 5 February)
1 [2018] FCAFC 131.
2 [2020] FCAFC 84. The High Court of Australia is currently hearing an appeal by WorkPac against this decision.
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