The recent proposed amendments to the Fair Work Act 2009 (Cth) provide much-needed clarity to many businesses who are already battling the uncertainty of a global pandemic. The new industrial relations reforms will address some key areas of confusion that has emerged, specifically with casuals, part-time employment and compliance.
However, these proposed changes have nonetheless come with intense scrutiny from unions. The Electrical Trades Union and construction chapter of the CFMEU have ramped up the attack on the proposed industrial relations reforms. Unions claim the new changes will leave workers with less pay and worse working conditions.
We have broken down for you the four key changes below.
We discussed the proposed changes to casual employment in our article here. In summary, it is the Government’s attempt to address the confusion as to what constitutes a ‘casual employee’, created by the WorkPac Pty Ltd v Rossato  decision. You may remember this as the ‘double-dipping’ case. It raised concerns that businesses may need to pay entitlements to casual employees on top of their casual loading. The new reforms address this by enabling casual loading to be offset by claims for leave and other entitlements. Furthermore, the industrial relations reforms propose a system for casual employees to be converted into permanent employees. The employee must have worked for the employer for 12 months and has worked a regular pattern of hours on an ongoing basis for the past six months. However, employers can avoid this if there are reasonable grounds not to.
The Fair Work Commission may approve an enterprise agreement even when it doesn’t pass the better off overall test, as long as it is appropriate to do so. The impact of COVID-19 on the enterprise will now be considered when determining whether it is appropriate. The full list of factors to be considered include:
- the views and circumstances of the employees and employer;
- the impact of COVID-19 on an enterprise;
- the extent of employee support for the agreement; and
- whether the approval is in the public interest.
The proposed industrial relations reforms also allow some award covered part-time employees to work additional hours whilst being paid at their ordinary rate, instead of the overtime rate. This nonetheless requires agreement from the employee, as well as the employer.
Compliance and Enforcement
The new reforms also implement criminal charges for employers who dishonestly engage in wage theft in a systematic pattern of underpaying employees. Fines of up to $1.11 million and imprisonment for four years. Furthermore, companies could be fined up to $5.55 million. Individual directors may face disqualification from manging a body corporate under the Corporations Act 2001 (Cth).
What To Do
This will provide much-needed clarification for businesses who are already enduring the uncertainty of a global pandemic. Nonetheless, there are also changes here that will mean your businesses needs to examine its own operations to ensure compliance. Reach out to a member of the Wizards team to ensure that your business is well-placed to navigate these challenges.