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As the Fair Work Act turns 10, its (unexpected) winding-back begins

1st July, 2019

Well, what a difference a couple of months makes.

At the start of May, Australia’s unions were eagerly anticipating the prospect of an incoming Labor Government.

Fast-forward to today – 1 July 2019 – the tenth anniversary of the Fair Work Act coming into effect.

Rather than beginning the process of implementing the ACTU’s ‘change the rules’ agenda, and ironing out some of the limitations that the last decade has exposed in the legislation’s operation, unions have been forced onto the defensive.

We’ve gone from talking about industry-level collective bargaining (a key proposal in the ACTU’s reform program) to re-introduction of the Work Choices-era ‘prohibited content’ rules (as proposed by employer body, the Australian Mines and Metals Association, last week).

Business interests wasted no time following the Coalition’s unexpected election win on 18 May, upping the ante week-by-week on the IR reforms they expect to see implemented.

The list has grown from some initial murmurings by AMMA about moving enterprise agreement approvals from the Fair Work Commission to the Fair Work Ombudsman (AFR, 28 May 2019), and concerns about the Small Business Fair Dismissal Code raised by the Australasian Convenience and Petroleum Marketers Association (The Age, 28 May 2019).

Since then, we’ve had:

  • Australian Industry Group calling for implementation of the Productivity Commission’s 2015 recommendation to make the ‘better off overall test’ (BOOT) apply to classes of employees, rather than every individual employee having to be better off under an agreement (SMH, 3 June 2019). The Australian Chamber of Commerce and Industry also supports reforming the BOOT (Workplace Express, 24 June 2019) as does AMMA.
  • AI Group seeking legislative clarification of the definition of ‘casual employee’, to address last year’s Federal Court ruling in Workpac v Skene which enabled a labour hire casual to claim annual leave entitlements upon termination of employment (SMH, 3 June 2019). This position is also supported by other employer groups.
  • ACCI pleading for relief from unfair dismissal laws which have made it ‘too hard, too expensive, too time-consuming for small business people to deal with situations where they need to terminate an employee’s employment’ (Australian, 25 June 2019).
  • AMMA helpfully sending the Government a wish-list of proposed changes, including ‘life-of-project’ enterprise agreements; a reeling-in of the adverse action provisions; and two major throw-backs to the Work Choices era – wholesale exemptions from unfair dismissal claims (now, it would be ‘terminations for serious offences and misconduct’ that would be excluded), and reintroduction of limits on enterprise agreement clauses that restrict how ‘employers utilise labour or [the] engagement of casuals, contractors or labour hire, and the rates that are payable’ (AMMA letter, 21 June 2019).
  • But rest assured, none of this foreshadows an ideological battle. According to the Council of Small Business Organisations Australia: ‘We are not into ideology. That is where Work Choices failed … The system [just] needs to be easier for the employee and employer to understand.’ (Australian, 25 June 2019)

The Prime Minister announced on 24 June that new Industrial Relations Minister Christian Porter will conduct a review of the federal workplace relations system to identify ‘impediments to shared gains for employers and employees’ (AFR, 24 June 2019).

Porter then provided further details, indicating that there would be a 6-9 month review process leading to legislation implementing proposed improvements that meet the criteria of increasing jobs, wages growth and a stronger economy. The review would cover issues such as the definition of ‘casual’, unfair dismissal (particularly its impact on small business), greenfields agreements and the BOOT (Australian, 25 June 2019).

It looks suspiciously like the employers’ wish-list. Although Porter has claimed he is interested only in ‘sensible, evidence-based incremental reform’ where ‘all parties benefit’ (AFR, 27 June 2019), I wouldn’t count on it.

Porter went on to state that it is ‘wrong … to view IR as a fixed-pie, zero-sum game where you’re constantly engaged in contests or battles where you have to pick some or other side because you conceive if one side benefits the other necessarily must not.’ He wants to pursue reforms that ‘represent mutual gains without individualised losses’.

It’s very hard to see how the Government can achieve those kinds of outcomes, while also placating its friends in the business community. How, for example, would stripping back unfair dismissal protections not result in ‘individualised losses’?

Never mind also that the Coalition hardly wasted a breath on IR reform during the election campaign.

While the Minister’s (unexpected) review takes its course, the Government will press ahead with two bills from the previous Parliament that seek to implement greater controls on unions.

In relation to one of these, the Ensuring Integrity Bill, the Government has been handed a massive free kick by the prominence given to ‘ugly’ union conduct through the John Setka/Victorian CFMEU saga. Whether that will be enough to persuade the Senate cross-benchers to pass the bill remains to be seen.

Finally, the Government has confirmed it will introduce legislation by the end of this year to implement the recommendations of the Migrant Workers Taskforce (see this previous post) – one of the very few pre-election commitments it actually made on IR.

These include criminal penalties for systemic and deliberate underpayments, a national labour hire registration scheme and some kind of extended accessorial liability provisions.

Sounds great, but get ready for a business backlash on these measures as well. I wouldn’t be surprised if we see the Government drag its feet on these reforms, and a ‘lowest common denominator’ approach that delivers minimalist protections for vulnerable workers.

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