Duncan Fletcher: IR changes a blast from past
The politics is clever.
The optimistically titled: Working Future: The Australian Government’s White Paper on Jobs and Opportunities has been released less than two weeks after the Government sent a collective shiver down the spine of the business community with the introduction of its ambitious third wave of changes to workplace relations laws.
Business remains worried that the changes will reduce productivity, increase disputation, and make the burden of compliance even heavier.
The message is that we should all be excited about “jobs and opportunities” and getting closer to a zero-unemployment rate and not worrying about the things the Government is doing to toughen the rules of employment and make the jobs “safe, secure and free of harassment”. The problem is that the third wave changes look a lot more like the heavily regulated and unionised private sector of the late 20th century than the exciting 21st-century workplace of the White Paper where anything is possible.
Those of us old enough to have been around workplace relations since the end of the last century might be feeling a sense of history repeating itself.
In 1996, the newly elected Howard government acted on its election promise to introduce changes to Australia’s Federal system of workplace relations. The goal was to get business on track after a punishing recession in the early 1990s. Amendments were negotiated in the Senate, the reforms worked well and helped set the scene for a record run of productivity improvement and the gradual movement of the majority of Australian employers from the State to the Federal workplace relations system.
In 2004, a re-elected Howard government got a Senate majority for first time and introduced WorkChoices in 2006. This second wave of changes was not popular with the public and unions developed the Your Rights at Work campaign which was one of the factors contributing to Howard’s defeat in 2007.
Fast forward to now and we are seeing a similar chain of events.
In 2022, the newly elected Albanese Government acted on its election policy to “get wages moving” amid rising cost of living pressures.
A jobs summit was held, and amendments were negotiated in the Senate to kick start enterprise bargaining and enhance the safety net. Early signs are that wage growth is increasing but not yet impacting inflation. For now.
Buoyed by the lack of resistance to the first wave of changes, the Albanese Government introduced the Closing Loopholes Bill which even has a similarly Orwellian sounding name to WorkChoices.
This Bill looks just as radical as WorkChoices but from the other end of the pendulum.
It seems to be driven by unions wanting to advance an agenda which is hostile to business, aimed at increasing declining membership and seeking to overturn, or work around, losses that have been suffered in court such as the decisions of the High Court on casuals and independent contractors. The blunt instrument of legislation is being used to set a model for employment where a full-time or part-time job, covered by a union negotiated agreement and enforced by union delegates is the norm and other types of employment are not viable.
Having a single, rigid structure for engagement works with the cover of extremely low unemployment but it is casual and fixed-term employment, direct agreements with employees and non-employment models of work which help us to innovate the way we work and get us closer to zero unemployment. While it is important to protect workers who want a particular type of engagement, this should not be at the expense of those who want something different.
For example, the Closing Loopholes Bill makes casual employment an increasingly impossible option for engaging workers. This is despite the evidence suggesting that very few employees are choosing to convert from casual to full-time or part-time employment.
Unions will also be able to force companies to change pay across contractors in a business to achieve pay parity, regardless of productivity. The starting point will be that a pay parity order is likely unless a company can convince the Fair Work Commission not to make it. There will also be new powers for the FWC to set conditions for gig workers which will have flow on impacts for the industries they support.
What is most surprising about the Bill is the scope for disputation and the burden employers will need to carry to put forward their version of events or be faced with the consequences of the allegations of an aggrieved employee or union. While the Bill may close some loopholes, it has also opened a compliance minefield.
There is a new set of workplace rights for union delegates to be given time off to attend paid training and rights to conduct union business in their workplaces. This is a new mandatory term in enterprise agreements and awards with enormous reach into businesses that do not have union members.
The wage theft provisions will criminalise and severely punish (up to $7.8 million per contravention) those who do not meet the increased compliance burden. The onus will be placed on employers to litigate and explain honest mistakes or face big fines or even criminal sanction.
It took the Howard government 10 years to get to its WorkChoices moment. Perhaps it is the increasing speed of the political cycle that has resulted in the Albanese Government getting there in 10 months. The optimism of the white paper does little to paper over the concerns that the proposed third wave of changes has created for business.
The Coalition seems to have rediscovered its willingness to argue for good policy on workplace relations and is making the Senate crossbench aware of the economic implications. Their task is to hold the Government to account where the admirable economic aspiration of the White Paper is undermined by legislation that could push Australia a long way from zero unemployment. Back to the 1990s but not in a good way.
Duncan Fletcher is a partner at workplace law firm Kingston Reid.
Source: News
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