Another federal election campaign is almost upon us, with expectation for a 14 May poll date building. For industrial relations practitioners, this often means that it is time to brace for impact. IR is almost always a hot topic in politics, with each major party having different views on how workplaces and employment relationships should be regulated. Law reform is almost always on the agenda in the lead up to an election.
Anyone listening to the Leader of the Opposition’s address at the National Press Club on 25 January would be forgiven for thinking that this time IR reform is not going to be a key focus for the ALP should it form government following the election. Apart from a few references to “more secure jobs” and “better wages and conditions”, IR policy barely received a mention.
However, it would be wrong to think that an ALP federal government would not pursue significant IR reform, if elected.
Our team at Herbert Smith Freehills has been tracking press releases, policy statements and public comments by the ALP (and the ACTU) over the last few years. If you follow through this material, it is reasonably clear that IR reform will feature prominently in the ALP’s law reform agenda. There is already quite a bit of detail to help us understand what “more secure jobs” and “better wages and conditions” might mean under an ALP federal government.
In this article, we will attempt to summarise what we see as being the key areas of proposed law reform in the event that the ALP wins government later this year.
Areas of Reform
Improving job security has long been an objective of the ALP and the union movement generally. This time the issue could attract more political relevance. Expect to hear the issue of ‘insecure’ work tied in together with the lessons of the pandemic. It has been widely reported that casualised workforces helped the virus spread as too many workers had no access leave entitlements. By drawing this connection, the objective of discouraging non-permanent working arrangements may receive broader public appeal than it has in the past.
In pursuit of this goal of ‘more secure jobs’ some likely proposed reforms will be:
- introducing a nationalised labour hire regime;
- amending the meaning of ‘casual employee’ under the Fair Work Act 2009;
- including ‘job security’ as an object of the Fair Work Act 2009 to give it greater prominence in interpretation disputes;
- extending the powers of the Fair Work Commission to better regulate workers in the ‘gig economy’;
- introducing statutory limits on the number of consecutive fixed-term contracts; and
- using government procurement powers to incentivise bidders who utilise permanent employment labour models.
In short, the use of casual and short-term employment will likely become more restricted, and the use of indirect labour will, in some cases, become more costly and administrative burdensome.
Better wages and conditions
Promising better pay for workers is a common (and popular) political message. Whilst this election may not be described as a “referendum on wages”, as it was last time, we can still expect to hear a lot about addressing wage stagnation and enabling pay rises for workers.
To this end, the ALP will pursue policies such as:
- creating portable entitlement schemes for benefits like annual leave, sick leave and long service leave for Australians who are engaged in ‘insecure’ work;
- ‘same job, same pay’ legislation, along the lines as the Fair Work Amendment (Same Job, Same Pay) Bill 2021 that the ALP proposed last year, which will require labour hire businesses to provide their employees will pay and conditions which are no less favourable than those enjoyed by the direct employees of the host;
- introducing reporting requirements for businesses to report on employee salary data, including any gender pay gap;
- establishing a Pay Equity Unit within the Fair Work Commission and reforming the equal remuneration provisions in the Fair Work Act 2009 with a view to giving the Commission greater power to address gender pay inequality; and
- prohibiting clauses in employment contracts which prevent employees from disclosing their pay information to others (including to their colleagues).
In addition to the above, we also expect that the ALP will also pursue policies aimed at:
- reforming anti-discrimination laws, particularly to capture the recommendations of the Respect@Work Report that the Coalition Government has not adopted;
- criminalising ‘wage theft’ at a national level and increasing the penalties for employers (and accessories) for not complying with certain workplace laws;
- consolidating whistleblowing measures, including by introducing a National Anti-Corruption Commission;
- amending the enterprise bargaining regime to make certain kinds of enterprise agreements harder for employers to make and terminate; and
- expanding the rights of unions, including in relation to rights to enter workplaces and by providing for paid union training leave
On any view, these reforms would be significant for Australian businesses.
Whatever one thinks of the merits of any of the above policies, it is unavoidable that employers will need to further invest in their labour models, systems of compliance and workplace relations strategies regardless of who takes up residence in the Lodge in 2022 and beyond.
Launch of Federal Election Campaign
To help you stay up-to-date on these (and many more) potential reforms, the team at Herbert Smith Freehills will publish a series of insight pieces, podcasts and more examining the practical impacts for businesses of both parties’ policies. These resources will remain available on HSF’s Australian Federal Election Hub.
We hope our hub can assist in presenting a clear and independent view of the practical impact of the proposed changes. We will continue to update the hub as the new reforms are proposed in the lead up to the election.