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New workplace law attacks long-held protections for employees

The underlying premise of the bill is simple, but wrong: that the pandemic has delivered such a shock to the Australian economy, the only way out is to remove workplace rules seen as limiting managerial decision-making.

The original bill would have allowed businesses to get enterprise agreements approved by the Fair Work Commission that cut award wages and conditions, based on an ill-defined link to the pandemic’s impact on the enterprise. This involved suspending the “better off overall test” that normally applies to safeguard employees against agreements that remove award conditions without adequate compensation. Even though the government dropped this proposal on Tuesday, the bill still includes provisions that will weaken the better off overall test.

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Currently, the test requires an assessment of a proposed agreement (its benefits and detriments for employees) against the underlying award. The test is designed to ensure workers are better off overall than they would be under the award. The bill would require the commission (in making that assessment) to give more weight to the outcome of the employee vote on an agreement – regardless of the disadvantage it might cause to certain groups (such as casuals or part-timers).

Further, the bill will water down the minimal protections in place to ensure employees are fully informed about a proposed workplace agreement before they vote on it. It will reduce commission scrutiny of agreements through a 21-day time limit for approvals.

The bill also extends the availability of special powers given to employers to vary an employee’s work location or duties, initially granted as part of the JobKeeper wage subsidy scheme. Instead, any employer covered by one of 12 awards will be able to use these flexibilities.

So, for example, a hospitality, fast-food or retail business could direct employees to perform different tasks or work at another site at their whim (without having to demonstrate any loss of turnover, as was required under the JobKeeper-related provisions).

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These same employers will be able to reach “agreement” with part-time employees on the working of additional hours, but without having to pay applicable overtime rates.

In 2018 and again last year, the Federal Court up-ended what has become a common practice of many employers: engaging casual employees for long periods of time, so they are almost permanent but without the rights of permanent staff. The court, in the Skene and Rossato cases, said where this has gone on long enough, the employee becomes entitled to annual leave, sick leave and other entitlements as well as the casual loading (usually around 25 per cent on top of the hourly pay rate).

Business groups have demanded an end to this unjustified “double-dipping”. On another view, the Federal Court’s decision has shut down business misuse of casual engagement.

In part, the bill adopts the Federal Court’s definition of a casual – someone who does not have a firm commitment from their employer to ongoing work, according to an agreed pattern of work. The bill adds other elements to the proposed casual definition, including how the work is described in the employment contract – thus preserving the power of employers to designate an employee as casual.

The bill also freezes the assessment of employment status (casual or not) as at the time the employment begins. A court could have no regard to how the employment evolves or changes over time.

All of this would return us to the position that prevailed before the Federal Court stepped in.
Employers would have maximum power to engage and keep an employee as a casual, no matter
how regular their shifts become or for how many years they are employed.

The bill purports to require an employer to offer a regular casual employee the option of conversion
to part-time or full-time after 12 months. However, employers can decide not to make the offer on
wide and ambiguous “reasonable grounds”, and there is no effective dispute resolution process
if the employer decides against conversion.

The bill would retrospectively prevent employees who might be able to establish rights following the court rulings from gaining any compensation. A long-term casual claiming unpaid leave or other entitlements would have casual loading payments offset against such claims.

The bill does also mean federal action on the widespread incidence of underpayment of wages. It would increase monetary penalties, and introduce criminal liability for intentionally dishonest non-compliance by employers. At the same time, it could override more robust wage theft legislation in Victoria and Queensland.

The bill is silent on some other important workplace regulation issues: like how to counter the gig economy’s contractor model, with the deaths of five food delivery drivers in the final months of 2020.

All up, the Coalition’s bill will remove long-standing employee protections under the guise of “saving jobs”, and without businesses having to make the case that COVID-19 has hit them particularly badly.

Anthony Forsyth is Professor of Workplace Law at RMIT University. You can read his blog here.

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