Christian Porter's Industrial Relations Review is a ruse for delivering the business agenda
4th November, 2019
With the ACTU’s Change the Rules reforms off the table for now, the re-elected Morrison Govt has turned the IR reform agenda upside down.
The business community is lobbying hard to ensure long-held ambitions for workplace regulation changes are implemented. And the Prime Minister is listening.
Since 2013, the Coalition hasn’t shown much appetite for IR reform. Ramping up the regulation of unions, yes – but winding back worker protections, less so. This has been the legacy of Work Choices.
Until now. Emboldened by its election win, the Government has announced a review of the workplace relations system by IR Minister Christian Porter.
There is very little information about how Porter is running the review or its scope.
Normally we would expect to see terms of reference, a call for submissions, perhaps some independent external reviewers.
Instead, we have a drip feed of government discussion papers.
It’s not so much a review, as implementation of a pre-determined business agenda.
Rhetorically, Porter has portrayed the Government’s reform agenda as modest; aimed at promoting jobs, productivity and economic growth; and not ‘radical’, like Work Choices or Change The Rules. He has likened them on the basis that both involved the wholesale replacement of one set of rules with another – which ‘Australians don’t like’!
The following are the key issues that business groups are highlighting, and that the Government has included in the ‘review’.
- The overall level of bargaining activity has considerably declined in recent years, especially in the private sector.
- I’m not convinced the Government really cares about that – given that enterprise agreements are the route to above-award wage increases. But it is interested in specific employer concerns.
- The major business groups want changes to the better off overall test, to overcome the Fair Work Commission’s stricter approach since the Coles Supermarkets decision in 2016 (and resulting delays in agreement approvals). The Government is looking closely at relaxing the current requirement that every employee must be better off overall under a proposed agreement. So in the Coles example, it would be enough that 90% of almost 80,000 employees voted in favour – even though part-timers at a small number of stores were disadvantaged.
- AMMA wants to bring back the Work Choices restrictions on agreement content – to get rid of clauses that limit how employers utilise labour, engagement of casuals/contractors/labour hire, and the rates payable (i.e. ‘site rates’ clauses). This would remove the limited restrictions that enterprise agreements now impose on insecure forms of work.
- AMMA also wants Project enterprise agreements, to provide certainty of employment arrangements and industrial peace for the life of a particular project. The ALP had this as part of its election policy. Porter put out a discussion paper last month which doesn’t tell us a lot. But it’s clear from the Financial Review two weeks ago, that the business agenda is now to have whole-of-life agreements not just for greenfield site projects – but also in their operational phase. Take for example the Woodside Burrup Hub natural gas project (according to the Minister’s office, this will create ‘4000 jobs a year for decades). So could it have an indefinite agreement, with no opportunity to revisit wage rates or take protected action for a new agreement?
- Also, AIGroup wants the project agreement concept applied to all subcontractors on a site – so their separate agreements would also be locked up for the duration of a project.
- With any shift to project enterprise agreements, it will be essential to ensure they actually involve negotiation – unlike the employer greenfields agreements under Work Choices, unilaterally determined by the business.
- Project agreements must also require negotiation with relevant unions, but we see in today’s Financial Review that this too is in AMMA’s sights to take down.
- Business groups want the problems raised by last year’s Federal Court decision in Workpac v Skene
- That is, a clear statutory definition which prevents casuals from gaining access to annual leave (on top of casual loading) where they can show a firm advance commitment to continuing work, under an agreed or fixed pattern of work.
- There’s still the Rossato case before the Federal Court, which will re-visit this and the question of an employer’s ability to offset the casual loading against any leave entitlements a casual is found to be entitled to.
- The Government also has to sort out casual rights of conversion to a permanent position. It had a Bill in the last Parliament to make casual conversion requests part of the National Employment Standards, based on the FWC’s 2017 modern awards decision (i.e. a right to request after 12 months as a casual, which the employer can refuse on reasonable grounds – in comparison, the ACTU wants an automatic conversion right after 6 months). The Government hasn’t reintroduced the Bill yet. I don’t think they’ll be in any hurry.
- This is the area I’m most worried about. The rhetoric from employer groups is alarming.
- AMMA has called for new exemptions from unfair dismissal claims – ‘terminations for serious offences and misconduct’. That would get rid of a large proportion of current claims.
- The Small Business Ombudsman review a few months ago recommended relaxing the Small Business Fair Dismissal Code (making it easier to dismiss for misconduct allegations), and a Small Business Division of the FWC.
- Coalition backbenchers want to exempt small and medium businesses from unfair dismissal laws. So are we looking at a return to the Work Choices blanket exclusion for firms with under 100 employees, or worse?
- And the Minister has indicated that his review will look at whether to give the FWC power to penalise sacked workers who fail to genuinely pursue their unfair dismissal claims, probably through costs orders.
- These proposals amount to a serious attack on the limited protections from arbitrary dismissal offered by the current laws.
Migrant Workers Taskforce implementation
In March, the Government committed to implementing the Fels Taskforce’s recommendations.
The Taskforce recommended criminal liability for cases of deliberate, serious and systemic underpayments and other contraventions of the Fair Work Act.
The wage theft case involving George Calombaris’s Made Establishment restaurants forced the Government to act more quickly on this than we might’ve expected.
Porter has released a discussion paper on the framework for penalties including the options for criminalising workplace law breaches.
- The discussion paper distinguishes between knowingly underpaying, and ‘genuinely unintentional mistakes’ (we hear a lot about mistakes from employers, e.g. because ‘awards are so complex’).
- There’s a category in between which should be caught by a criminal offence: not having the proper systems in place to ensure a ‘genuinely unintentional mistake’ doesn’t occur.
- So it would be an underpayment offence with a form of recklessness as one way of establishing liability – the other being intention. But I don’t think the Government will go for a lower standard than knowingly underpaying. The discussion paper says: ‘any new offence would need to be carefully framed to target only the most serious and culpable underpayment cases – rather than unintentional mistakes or miscalculations’.
- The discussion paper also asks about accessorial liability – whether this should apply not just to franchisors, but also across supply chains and other business models where lead firms influence the employment conditions of workers (although not legally responsible because they are not the direct employer).
- I doubt the Government will move on this (the business lobby against it will be massive). But it is unquestionably needed, e.g. in labour hire. A host company engaging workers through a labour hire provider should be liable for underpayments, where the host knows (or could reasonably be expected to have known) that those breaches would occur – because the commercial rate for the provision of those labour hire services is so low that awards could not be complied with.
- The other major point here is that the Fair Work Ombudsman is not making the most of the regulatory tools at its disposal, which I have discussed in another post (see: https://labourlawdownunder.com.au/?p=760).
So where will the reform process go from here?
We can expect more discussion papers from the Minister soon on unfair dismissal, and enterprise bargaining (Boston Consulting Group is apparently helping with that one!).
The Government has learnt one of the key lessons of Work Choices. It will stagger its reform proposals over this term of Parliament, rather than in one big hit.
Will these various legislative amendments make it through Parliament? The positions of Senator Jackie Lambie and the two Centre Alliance Senators will be critical.
We’ll get a measure of their stance soon when the Ensuring Integrity Bill is voted on (see: https://labourlawdownunder.com.au/?p=755).
Then we will see how far the Government intends to go in moving on from attacking unions, to undermining the employment rights of Australian workers – and delivering for the Coalition’s business friends.