Government concession on BOOT should clear way for Crossbenchers to support sensible and modest IR Bill

“The Federal Government’s decision to drop controversial amendments that would have allowed enterprise agreements to be approved without passing the Better Off Overall Test (BOOT) in exceptional circumstances, should clear the way for Crossbench Parliamentarians to support the Government’s IR Bill. The Bill contains a series of modest but important changes to the Fair Work Act,” Innes Willox chief executive of the national employee association Ai Group said today.

The remaining modest and sensible provisions in the Bill would:

  • Define a ‘casual employee’ in order to provide much needed certainty for employers and employees;
  • Protect businesses against ‘double-dipping’ claims by employees who have been engaged and paid as casuals but who unfairly turn around years later and pursue entitlements they have been paid the casual loading in lieu of (e.g. annual leave);
  • Give employers and employees in industries particularly hard-hit by the pandemic more flexibility under awards, including more flexible part-time arrangements;
  • Restore common sense to the enterprise agreement system in order to encourage agreements which boost wages and productivity by:
    • Ensuring that only types of work and roster patterns that are currently being worked or are reasonably foreseeable are taken into account for the purposes of the BOOT, not far-fetched, hypothetical scenarios;
    • Requiring the Fair Work Commission to approve agreements within 21 days, where practicable; and
    • Clarifying and simplifying the agreement-making requirements for employers and employees;
  • Drive investment and jobs by allowing greenfields agreements for major projects to continue for the life of the project, subject to annual wage increases for agreements that continue for more than 4 years and a maximum term of 8 years.

“The only provisions in the Bill that are not modest or sensible are the much higher civil penalties and criminal penalties for underpayments. Ai Group does not support employers who deliberately underpay their employees. However, the higher penalties 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.1 The proposed provisions would operate as a barrier to jobs growth and investment during the recovery from the pandemic.

“The sensible and modest IR changes in the Bill deserve the support of all Parliamentarians. Not surprisingly, the unions have dusted off the same old scare campaign that they always run whenever any balanced and moderate IR changes are proposed. It is important that the community’s interests prevail over vested interests and the Bill is passed without delay,” Mr Willox said.

1. This can be seen in the many corporations that have self-disclosed underpayments to the Fair Work Ombudsman 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”. Since these comments in September 2019, this trend has continued and accelerated, as can be seen from the FWO’s 2019‑20 annual report which states that: “Since July 2019, we have seen a significant increase in the number of large corporate entities self-reporting non-compliance with their workplace obligations.”

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