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Australian Federal Election 2022 – What does an ALP government mean?

23 May 2022 | Insight
Legal Briefings – By Rohan Doyle, Amandi Munasinghe and Megan Buttigieg

Following success in the federal election, the Australian Labor Party is set to drive significant change across employment and industrial relations

The ALP’s success in the federal election on Saturday is likely to lead to significant changes in employment and industrial relations regulation. Some of these changes are imminent, whereas others will develop over time. What is clear is with change comes opportunity, and employers who are able to best plan for and work with these changes will have an advantage over their competitors.

The ALP have made a number of policy announcements over recent months. The below  list identifies the more immediate issues that Australian businesses should be thinking about well ahead of the tabling of any legislation.

Same Job, Same Pay

Preparation for potential ‘same job same pay’ legislation will be the most significant issue for many businesses.

Some general guidance can be taken from the legislation tabled by the ALP on this topic last year, which proposed to introduce an obligation to ensure that workers employed through a labour hire business received no less favourable pay and conditions, compared to those required to be paid to employees of the host performing the same duties and hours.

The operational impact of this legislation is likely to be extensive and require significant work by labour providers and hosts to implement and comply with it.

What should/can businesses do now?

Businesses should consider the following:

  • Which workgroups might be captured by the legislation? This could extend beyond traditional ‘labour hire’ to arrangements whereby different entities within a corporate group share labour, and to service contracting arrangements.
  • What opportunities might be available to legitimately and lawfully limit the application of this legislation, or reduce its impact? For example, this might require changes to existing terms and conditions of employment, including through enterprise bargaining.
  • What processes will need to be established by organisations to comply with the legislation? For instance:
    • What information will organisations need to provide to labour hire businesses and its workers about the applicable pay and conditions? How will this be done?
    • What changes will need to be made to contracting and labour hire agreements?
    • What changes need to be made to recruitment processes, workplace training programs, workplace amenities and collective facilities?
    • What changes will need to be made to accommodate any additional obligations to provide advance notification and consultation to labour hire workers in the event of changes to hours and location of work?
    • What auditing processes will need to be implemented to ensure labour hire businesses are providing the correct pay and conditions to their workers?
    • To what extent are businesses existing contracts and enterprise agreements likely to operate consistently with the above obligations?
  • Would the introduction of these laws impact the feasibility or operational justification for the engagement of labour hire? Might it require changes to labour or operating models?

Terminating legacy WorkChoices agreements

The ALP proposes to terminate all pre-Fair Work Act 2009 (Cth) (Fair Work Act) collective agreements at a particular ‘drop-dead date’. 

What should/can businesses do now?

Organisations should consider whether they still have operative pre-Fair Work Act collective agreements. If so, it would be useful to consider well in advance how the relevant modern award terms might apply instead, or whether it is appropriate to negotiate a replacement enterprise agreement under the Fair Work Act.

Bargaining strategies

Termination of Enterprise Agreements

The ALP proposes to prevent the unilateral termination of Enterprise Agreements (EA) during bargaining where the agreement has reached its nominal expiry date, and the termination reduces employee entitlements.

Start-up enterprise agreements

The ALP proposes changes to the Fair Work Act to ensure that there is closer regulation of the voting group for the approval of an EA. This is to ensure that a small group of employees do not vote on, and set the terms and conditions for, a future larger group of employees.

Bolstered good faith bargaining rules (including on disclosure of information), increased access to the Fair Work Commission and a job security objective for the Fair Work Act

The ALP proposes to promote good faith bargaining by developing appropriate guidelines, including requiring the disclosure of greater information in such processes. The ALP has also made broad announcements that they will expand the arbitral powers of the Fair Work Commission, by ensuring that all parties have the ability to arbitrate disputes where other methods are unsuccessful. In addition, the ALP may introduce a ‘job security’ objective, to require the Fair Work Commission to consider impacts on job security when making decisions.  

What should/can businesses do now?

Termination of Enterprise Agreements

Employers who are commencing bargaining will need to give consideration to how it will approach a potential prohibition on such applications. In particular, this might require a significant shift in bargaining strategy if such an application is being considered to achieve change in existing enterprise agreement terms and conditions that have become unsustainable. How else might organisations secure sufficient leverage to encourage a workforce to wind back particular terms and conditions by agreement?

Start-up enterprise agreements

Any employer considering a ‘start-up’ agreement as part of its industrial strategy for new sites and projects will need to consider the potential impact of the ALP’s proposed laws about representative cohorts. This might impact the timing or coverage of the proposed agreement. 

Bolstered good faith bargaining rules (including on disclosure of information), increased access to the Fair Work Commission and a job security objective for the Fair Work Act

Employers who are commencing bargaining (or who may be delaying bargaining) should give consideration to how these proposed changes might influence bargaining strategy and tactics moving forward.

Insecure work

Limits on use of fixed term contracts and introduction of fixed term conversion rules

The ALP proposes to introduce limits on the number of consecutive fixed term agreements an employer can offer for the same role to an employee. Once the limit (which is likely to be 24 months, or two consecutive contracts) is reached, the employer will likely be required to offer permanent ongoing employment to the employee.

Amending the definition of casual employment

The ALP proposes to amend the definition of casual employee under the Fair Work Act to ensure that the determination of casual employment is based on assessment of the overall circumstances such as duration, ad hoc work and hours of work (rather than the current definition which focuses on the offer of casual employment).

What should/can businesses do now?

Limits on use of fixed term contracts and introduction of fixed term conversion rules

Employers who rely heavily on consecutive fixed term engagements should consider how proposed limits on the number and length of consecutive engagements might impact their labour model, and whether changes might be required. 

Amending the definition of casual employment

Employers who engage casual employees should take steps to review the hours of work and working arrangements with casual employees to determine whether there may be risks of any misclassification when contrasted with permanent employees. It may also be an appropriate time to review whether the business should make any casual conversion offers to employees.

Prevention of sexual harassment and other workplace misconduct

The ALP proposes to introduce the remaining recommendations not yet implemented by the Coalition from the [email protected] Report. Primarily, this includes amendments to the Sex Discrimination Act to introduce a positive duty for employers to "take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation". More broadly, it is possible that an ALP government will seek to bolster whistleblowing laws which could extend to the implementation of a whistleblower rewards scheme.

What should/can businesses do now?

Employers should already be taking steps to ready themselves for the potential introduction of a positive duty to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation in the workplace. In many cases, this will require significant change to existing frameworks.

Businesses should also ensure their existing whistleblowing policies and arrangements are operating to encourage employees to call out workplace misconduct to avoid a ‘rush’ of new allegations following the implementation of any such laws. 

Management reporting systems which involve Board oversight should also be considered if not implemented already.

Wages and cost of living

Increases to wage rates

The ALP has been vocal in their support of raising minimum wages, including for wage increases to be in line with inflation (which is currently 5.1%). The ACTU have also been pushing for significant award rate increases. 

Sham contracting and wage theft

Employers should also be mindful of the ALP’s proposal to potentially:

  • strengthen sham contracting laws which could result in lower thresholds to establish a contravention, and
  • impose higher penalties (including criminal liability in the federal jurisdiction) for wage theft.

What should/can businesses do now?

Increases to wage rates

Employers with employees on the national minimum wage or on minimum award rates should give consideration to the impact that a substantial increase to these rates might have on its operating model, particularly in sectors such as early childhood education, aged care, disability services, and in industries that may be impacted by a re-introduction of a ‘safe rates’ transport industry scheme (eg. road transport).

Sham contracting and wage theft

As ever, it is important to have engagement processes that ensure only true ‘independent contractors’ are engaged as such, and there is no confusion as to which workers are contractors, and which are employees. This may involve: reviewing and updating any independent contractor agreements to ensure they minimise risk; engagement processes to ensure the appropriate labour model is selected for particular roles; and working models to ensure that the actual day to day interactions with the worker are consistent with the contractual terms.

Organisations should also be taking steps to identify, and prevent, underpayment of employees more generally, including potentially throughout the supply chain.

Pay transparency 

The ALP proposes to amend the Fair Work Act to ban secrecy clauses in workplace contracts which prevent employees from openly discussing their pay. 

What should/can businesses do now?

Consideration should be given to how transparency of wages might impact the reputation of the organisation and relationships within it, and what changes might be made in advance of any such laws commencing operation. 

The ALP has also made policy announcements which would have impacts on specific workforces or industries.

Gig economy

For employers in the gig economy, the ALP’s proposal to legislate to extend powers of the Fair Work Commission to make minimum standards for workers in the gig economy will be significant. This will likely include obligations in respect of rates of pay, consultation obligations and minimum safe working standards. Employers of gig economy workers should begin to consider how such changes may affect their operational and labour models moving forward and whether changes might be required.

FIFO industry

The ALP is supportive of industry codes of best practice for FIFO employees in respect of work patterns, accommodation standards and mental health support. They have also proposed to introduce minimum standards across the industry. Employers in the FIFO industry should consider how such proposed changes may impact business structures and cost, including how they might interact with existing obligations under contracts and enterprise agreements.

Changes to the Construction industry

The ALP has stated that it will abolish the Australian Building and Construction Commission and repeal the Building and Construction Industry (Improving Productivity) Act. This change and associated policy changes, would promote collective agreements, and greater union rights and representation for workers in the construction industry. Employers should begin to consider the consequences of these changes – particularly where they are considering bargaining. 

Although the ALP National Platform and announcements made by ALP Ministers in the lead up to the election have provided some guidance to employers about these reforms, the precise details of the legislation that will give life to these policies will emerge over the coming months – and in many cases following consultation with relevant stakeholders including businesses and unions.

Whilst the above list is by no means exhaustive, it will be helpful in deciding where best to direct your businesses’ efforts in planning for IR reform.

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