Workplace Relations Proposed Reforms – What You Need to Know

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11 Dec, 2020

The Federal Government has introduced two new bills to amend the Fair Work Act 2009 (Cth),

  • Fair Work Amendment (Ten Days Paid Domestic and Family Violence Leave) Bill 2020 [No. 2] (Cth) and
  • Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (Cth)

These Bills have not yet passed into law, and have been referred to the Education and Employment Legislation Committee for inquiry and report by 12 March 2021.  

The Ten Days Paid Domestic and Family Violence Leave Bill was introduced on 7 December and proposed enhanced national entitlements under the National Employment Standards to:

  • provide ten days of paid domestic and family violence leave in a 12-month period;
  • provide for employees to access paid domestic and family violence at their base pay rate for usual hours of work in the period the leave was taken;
  • enable an employee and employer to agree additional paid, or unpaid leave can be taken in addition to the 10 days paid domestic and family violence leave; and
  • clarify and expand the reasons for which a person can take paid domestic and family violence leave to make sure people can take practical and necessary steps to protect their immediate and future safety;
  • tighten the confidentiality provisions to remove any uncertainty about the handling of personal employee information in the workplace.

Further, the improved entitlements are designed to be available to employees of all types, including casual employees, and is available in full at the beginning of each 12-month period of the employee’s employment, and does not accumulate year to year. The entitlement will be pro-rated for part-time or casual employees.

The Supporting Australia’s Jobs and Economic Recovery Bill was introduced on 9 December and is much more far-reaching. It is designed to create significant reform to Australia’s workplace relations system.

The explanatory notes state that this Bill is designed to:

  • define the term “casual employment” to give certainty to businesses and employees about casual employment;
  • give regular casual employees a statutory pathway to convert to full or part-time employment by including a casual conversion entitlement in the National Employment Standards (NES) of the Fair Work Act;
  • give part-time employees under specific industries the option to work additional hours at their ordinary rates of pay by agreement with their employer;
  • give employers the power to direct employees to work in locations or to do other duties they are skilled and safe to perform outside from their regular duties or place of work under the JobKeeper Scheme until March 2023;
  • streamline and improve the enterprise agreement making and approval process to encourage participation in collective bargaining;
  • ensure industrial instruments do not transfer where an employee transfers between associated entities at the employee’s initiative;
  • provide greater certainty for investors, employers and employees by allowing the nominal life of greenfields agreements made in relation to the construction of a major project to be extended;
  • strengthen the Fair Work Act compliance and enforcement framework to address wage underpayments, ensure businesses have the confidence to hire and ensure employees receive their correct entitlements; and
  • introduce measures to support more efficient Fair Work Commission (FWC) processes.

Casual Employment

Whether someone is a true casual is one of the most hotly contested areas of workplace relations.

Under the proposed changes, the Act will define a casual employee as:  

“A person is a casual employee of an employer if:

  1. an offer of employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
  2. the person accepts the offer of that basis; and
  3. the person is an employee as a result of that acceptance”.

The proposed changes also will require all casuals to be provided with a Casual Employee Information Statement prepared by the Fair Work Ombudsman.

Another change relates to long term casuals (casuals who have been employed for more than 12 months) who have worked a regular pattern of hours and suggests that they must be offered conversion to a part-time or full-time role.

Employers will be able to not make a conversion offer on reasonable grounds including:

  • that the employee’s position will cease to exist in the next 12 months;
  • that the hours the employee is required to work will significantly reduce in the next 12 months;
  • if there will be a significant change in the days or hours the person will be required to work and the employee is not available to work those hours;
  • if it will require a significant adjustment to the employees hours of work for the role to be considered full time or part-time;
  • making the offer will not comply with a recruitment or selection process required by or under Commonwealth or State or Territory law.

Casual employees who decline an initial offer of conversion will have the right to request permanent employment for every six months they remain eligible.

Vacancy Advertising

A new penalty will be added to prohibit an employer from advertising employment the outlines a pay rate less than the national minimum wage.

Enterprise Bargaining

The Bill provides for more streamlined enterprise bargaining agreements. The most contentious of the changes relate to the Better Off Overall Test (BOOT test).

If passed, the FWC may have regard to the overall benefits (including non-monetary benefits) an award covered employee would receive under the agreement when compared to the relevant modern award; and must give significant weight to views of the employer(s), employees, and/or their bargaining representatives regarding whether the agreement passes the BOOT.

In limited circumstances, the FWC will be permitted to approve agreements that may not pass the BOOT after considering factors such as the views and circumstances of the employer(s) and employees, the impact of COVID-19, and whether approval is in the public interest.

Underpayments & Compliance

It will become a criminal offence to deliberately and systematically underpay one or more employees.

Penalties will include imprisonment for 4 years and a $1.11million fine for individuals or $5.5million fine for a body corporate.

For more minor wage underpayments or contraventions, fines have increased by 50% to $19,980 for an individual and $99,900 for body corporates and small businesses.

For serious underpayments and contraventions, fines have been raised to $133,200 for an individual and $666,600 for body corporates and small businesses.

Fines and penalties for sham contracting  (where you get the person to hold an ABN and pay them as a contractor and not an employee when they really are an employee) have increased by 50%.

Overall

These reforms are highly contentious, so we can expect to see much debate in the coming months. There will likely be amendments to the proposals as part of this debate.

Small business employers need to keep an eye on developments during 2021 to ensure that their systems and processes are adjusted to reflect the changes when the changes are finally enacted.

Ingrid: Lead Author, Australian Employee Manual

HR Author and Lecturer with over 25 years' experience in human resources and workplace relations in Australia. Lead Author of Instant HR Policies & Procedures, NDIS Direct Employment HR Manual, and Employee Performance Reviews: Tips, Templates and Tactics.

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