New Industrial Relations Legal guidelines – What it means for you – Employment and HR
The new labor law – what it means for you
23 December 2020
To print this article, all you need to do is register or log in to Mondaq.com.
Fair Work Bill 2020 – What it means to you
The Morrison government approved the Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) 2020 (invoice) in the Bundestag on December 9, 2020. Employers’ organizations have welcomed the amendments to the draft law as a first step towards revitalizing industrial relations. Unions have ridiculed the law as the worst assault on workers’ rights in Work Choices. We take a look at the main changes proposed by the bill.
- When passed, the bill will add a definition of “casual worker” to the Fair Work Act 2009 (Cth), the assessment being based on whether the job offer includes a firm pre-commitment to continue and permanent employment according to an agreed pattern of work.
- The bill also addresses what is known as “double dipping” for misrepresented casual workers who receive a salary but are later entitled to paid vacation and other employment benefits that casual workers are not normally granted.
- There will be a new obligation for employers to offer a casual employee conversion to permanent employment, and employers will need to provide a casual work statement in addition to the fair work disclosure statement when a casual employee takes up employment.
- The bill includes a new requirement for the Fair Work Commission (FWC), Approve company agreements within 21 working days or publish reasons that prevent this.
- The draft law removes the requirement for the FWC to take into account scenarios for work patterns that are not reasonably foreseeable by the employer when assessing the overall test of better-off working conditions (BOOTS).
- The FWC will be required to give “significant weight” to the views of the employer, the employees and the appointed negotiating representatives with regard to the existence of the works agreement of the BOOT.
- The bill will also simplify the prescriptive requirements for a “real agreement” with the FWC.
- Employers have 28 days (previously 14 days) from the day on which the employer is ready to negotiate or initiates negotiations in order to inform the employees of the employee representation rights.
- The bill will also restrict the intervention of non-bargaining agents to challenge applications for approval. This proposed change is intended to reduce the likelihood that the approval phase of the agreement will be held up by unions who have not been appointed as negotiators who oppose the approval request. In the coal industry in particular, there have been many occasions over the past five years where the CFMMEU has refused to approve a works agreement despite not being appointed as a collective bargaining agent by any relevant worker.
- The bill will allow franchisee employers to join their franchise network’s corporate agreements without the consent of the entire workforce.
- The bill prevents the FWC from filing a request to terminate a corporate agreement before 90 days from the nominal expiration date.
- Most controversial, the bill gives the FWC limited discretion to approve a corporate agreement that the BOOT does not pass due to the effects of COVID-19 and is not contrary to the public interest. The maximum nominal term of these agreements is two years. The FWC will only have this COVID-19-related discretion for two years.
- Finally, the draft law will dissolve all pre-contractual fair work agreements that were concluded before the fair work law came into force from July 1, 2022 – so-called “zombie agreements”. This will have the significant impact of removing contract coverage for many employees and bringing their minimum terms back to modern pay until a new agreement is approved, which in some cases can place significant financial burdens on companies.
- The bill will extend the nominal expiration date for large-scale greenfield agreements (ie, greenfield agreements for projects with a total investment of at least $ 500 million) by up to eight years. For contracts with a term of more than four years, the contract must include a term for annual salary increases. This is to avoid the need to negotiate during the project and prevent industrial action from being suspended during the project.
- The bill provides that employers can make agreements with part-time workers about additional working hours without having to pay overtime. Overtime would still have to be paid if these additional hours were worked outside of regular working hours in the respective bonus or above the maximum regular working hours for a full-time employee according to the bonus. The intent is clearly to make part-time work as part of a person’s normal working hours more attractive than casual work. This proposed change applies to a number of identified modern awards, including the general retail, fast food, hospitality (general) and restaurant industry awards.
- There will be new rules that will allow employers to give flexible work instructions, as employers could with the JobKeeper wage subsidy, which ends after two years. The employer must have a reasonable belief that the directive will help revitalize the business for the directive to be valid.
Compliance and Enforcement
- The bill will introduce a number of new penalties and, in some cases, increase the fines. For large business penalties for compensation-based violations, an increased maximum amount of the fine is set in the amount of the multiple value of the service as opposed to a fixed amount of money.
- The FWC becomes responsible for the arbitration of minor claims (which are currently being dealt with by the Federal Court of Justice).
- The bill also introduces a new offense for dishonestly engaging in an underpayment system.
Fair Work Commission
- The bill will give the FWC new powers to dismiss claims and issue orders to prevent certain applicants from making unsubstantiated claims in the future.
- There will also be some minor procedural changes to streamline appointments in the FWC.
We will provide an in-depth analysis of the proposed changes for the new year in webinars and further updates.
The bill is unlikely to get through the Senate without changes. The Senate’s Legislative Committee on Education and Employment is examining the draft law, the report of which is due to be submitted by March 12, 2021.
We will continue to monitor the progress of the bill through the committee and will keep you informed of further developments.
The content of this article is intended to provide general guidance on the subject. Expert advice should be sought regarding your specific circumstances.
POPULAR ARTICLES ON: Employment and Human Resources from Australia