What’s coming up in 2021
Towards the end of 2020, you will no doubt have seen media coverage on the Federal Government’s proposed changes to the Fair Work Act 2009 (the Act). The Federal Government introduced the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 into the Federal Parliament promising to bring substantial reform to the Fair Work Act.
The Government is proposing a range of amendments to the Act which it says will assist Australia’s recovery from the economic crisis caused by the COVID-19 pandemic by supporting productivity, jobs and economic growth.
The Australian union movement is strongly opposed to some of the proposals which it says will allow employers to make enterprise agreements that cut workers’ wages and conditions. The Federal Opposition has also signalled it holds similar concerns and “won’t be voting for legislation that cuts workers’ pay”.
The Government’s proposals are only that for the time being, and the lack of support from unions and the Opposition means that there is some way to go before any of the proposals become law. Additionally, the Bill has been referred to a Senate inquiry that is due to report in mid-March.
We have summarised below some of the proposals which might impact CCER members and will keep you informed on how these matters evolve as the legislation makes its way through Parliament during 2021.
New provisions around casual employees are aimed at addressing the uncertainty that has arisen via recent Federal Court decisions which found that employees engaged as casuals and paid a casual loading can be entitled to paid annual leave.
The Government is proposing to define casual employment in the Act with the focus being on the terms of the initial engagement. The casual status would apply even if over time the employee ends up working regular hours. Additionally, if it is found that an employee has been incorrectly engaged as a casual, backpay owing for paid leave could be offset by any casual loading paid to them.
Additional administrative requirements would apply to employers in relation to casual employees. A new Casual Employment Information Statement will need to be provided to staff and the Act will require all employers to offer certain casual employees the opportunity to convert to full time or part-time employment. Many awards and enterprise agreements already contain similar conversion provisions so in practice this may not constitute additional obligations for many employers.
The Government is aiming to boost the number of employees covered by enterprise agreements by simplifying the agreement making and approval process.
The Fair Work Commission will be required to listen to the views of the bargaining parties in the approval process and intervention of other persons will be limited. In applying the better off overall test (BOOT) the Commission will only be required to consider the patterns or kinds of work currently performed or reasonably foreseeable. The existing approach which requires any hypothetical working pattern to pass the BOOT will no longer apply. Additionally, the Commission will be able to consider non-monetary benefits when determining whether employees would be better off overall under an agreement.
One of the most contentious proposals is to extend, for a two-year period, the Fair Work Commission’s power to approve an enterprise agreement that does not pass the BOOT. In doing so, the Commission would need to have regard to the views of employees and employers, the impact of COVID-19, the extent of employee support and whether approval is in the public interest.
Changes are proposed for 12 specific Awards in industries distressed due to COVID-19 eg hospitality and retail. The proposal continues the JobKeeper flexibilities allowing an employer to direct changes to work duties and location, for another two years. The same Awards will also be covered by provisions in the Act allowing employers and some part-time employees to agree to increase their hours on a short-term basis and for those extra hours to be paid at ordinary rates rather than as overtime.
Underpayments and Endorsement
The Government proposes a number of amendments to assist businesses to comply with workplace laws and protect employees from exploitation.
A new criminal offence for dishonest and systematic wage underpayments is included in the amendments. Employers will face criminal charges if they knowingly and recklessly underpay their staff. The new offence carries a maximum penalty of four years’ jail and fines of up to $1.11M for individuals and $5.55M for companies. The offence would not apply to one-off underpayments, inadvertent mistakes, or miscalculations.
The Government is proposing to establish an Employer Advisory Service which will offer employers written advice in relation to their individual circumstances.
The cap on small claims is increased from $20,000 to $50,000 to allow employees greater access to the less formal underpayment recovery processes.
Stay tuned for further updates on these changes!