The new Shorten Labor Government: Get ready for workplace reform

The new ALP government’s pre-election platform had a substantial focus on industrial relations and employment issues, as set out in its ‘Fair Go For Workers’ policy which was promoted as “standing up for workers”. Should the government be able to obtain the support of minority parties in the Senate to pass its legislation, Australian employers and employees may see the most substantive changes in this space since the Rudd Labor government’s introduction of the Fair Work Act 2009.

The Australian Council of Trade Unions (ACTU) and unions will be pressing hard for significant changes to the current legislative regime, consistent with their well organised Change the Rules campaign, with a focus on increased job security, higher wages, changes to enterprise bargaining and the abolition of the Australian Building and Construction Commission (ABCC).

We set out below some of the major workplace changes the new Labor government has promised to introduce, while noting the finer details are yet to be revealed and the time frame for implementing any changes will be subject to a variety of factors.

Restore penalty rates, set a ‘living wage’ and improve pay equity for women

Wages growth has been a cornerstone of Labor’s election platform and we expect this to be a priority for the new government.

• Pre-election, the Labor Party made clear its opposition to recent cuts to penalty rates in Modern Awards, resulting in lower wages for employees in the retail, hospitality and fast-food industries. Labor pledged to reverse these cuts within its first 100 days of office, but how it will do so is not immediately clear. Labor’s election platform is that it will Labor will legislate to reverse the penalty rate cuts in the first 100 days of forming government.
• Labor has promised to amend the Fair Work Act 2009 (FW Act) to empower the FWC to set a ‘living wage’ for the lowest paid workers. Currently, the FWC determines minimum wages under all Modern Awards and for award-free employees by reference to a safety net that takes into account specific wage objectives. Labor has stated the current criteria for the FWC’s setting of the minimum wage are not sufficient and that new objectives, which include ensuring a decent standard of living, must be introduced. While Labor did not detail its proposed objectives, the ACTU has actively campaigned for a minimum wage set at 60% of the median wage.
• Labor’s stated objective is for pay equity including female wage levels. This will be achieved through a range of measures including obligatory and transparent reporting by organisations on their gender pay gaps, changes to the FWC’s powers, banning pay secrecy clauses and introducing a ‘Pay Equity Panel’.

Enhance job security with more restrictions on casual, contracting and labour hire arrangements

The decline of full time, permanent employment and the rise of casual, contracting and labour hire alternatives have been a key target of the ACTU and Labor for some time. The Labor Government is committed to introducing changes to provide a ‘fairer playing field’ including by:

• amending the FW Act to clarify who is a ‘true’ casual employee – while not everyone may agree with the definition, it would at least provide some certainty going forward, but it will inevitably curtail the use of long term casual employees which employers like to use because of the flexibility they provide;
• amending the FW Act to make it easier for employees to challenge their employer’s refusal to allow them to covert from casual to permanent employment;
• establishing a national labour hire licensing scheme to regulate the industry and ensure minimum legal standards are met;
• implementing a ‘same job, same pay’ policy which would prevent labour hire workers being used to undercut the terms and conditions of direct employees who perform the same work.

Prioritise local jobs

Labor’s promise of “local projects, local jobs” is likely to result in changes to current arrangements for overseas workers including more stringent criteria for employers to satisfy before seeking workers from overseas and changes to visa requirements including increased fees. To this end, Labor:

• intends to introduce procurement guidelines and policies which emphasise the use of local resources and firms; and
• will seek to establish an independent Australian Skills Authority to determine whether there is a genuine skills need for certain occupations or industries. Only upon that being determined by the Authority would employers be able to seek overseas workers with the necessary skills.

Reform enterprise bargaining framework

One of the priorities for the ALP government will be to change the ground rules for enterprise bargaining by:

• preventing the unilateral termination of enterprise agreements which have passed their expiry date if it would lead to a reduction in workers’ entitlements – thus, employers looking to unwind unsustainable agreements negotiated in better times may lose this option;
• ending the practice of ‘sham’ agreements that are made with a handful of employees but apply to a far larger and wider group of employees who played no part in the bargaining process;
• making it easier for parties to access arbitration of long-running bargaining disputes by the FWC;
• making it easier for parties to engage in industry-wide bargaining, which could see employers being forced to bargain with their competitors in what Labor has called ‘multi-enterprise collective bargaining’. While it has been suggested this would be confined to low-paid sectors and the public sector, it could have far broader application. The ACTU maintains restrictions on industry-wide bargaining has led to wage stagnation and changing the rules for all industries would result in more secure, fairly paid work.

Abolish the ABCC and Registered Organisations Commission (ROC)

The Labor Party has long promised to abolish the ABCC and the ROC, much to the consternation of employers in the building and construction industries which fear a return to union-led lawlessness should this occur. This will likely be a key priority of the Labor Government although it remains to be seen whether this proposal will have the support of the Senate.

The likely Minister for Workplace Relations, Brendan O’Connor, has claimed the Coalition Government used the ABCC and ROC to attack political opponents in a way that was “no different from how tin-pot dictatorships operate”. There have been around $15M+ in penalties over the last decade imposed by the courts for breaches of industrial laws.

Wage theft

The Labor Government will establish a new jurisdiction to sit alongside the Fair Work Commission to deal with unpaid wage claims of up to $100,000. The claims are to be resolved in a day.

The proposed new jurisdiction would be able to mediate claims, as well as make and enforce orders for repayment of wages.

Australian Public Service

The Labor government has also committed to reform in the APS with a pay equity audit to be conducted across departments and agencies within the first 12 months of government and reintroducing pay equity as a principle in APS bargaining. This is also supported with a commitment to 1200 more APS jobs.

Workplace safety and workers’ compensation

Workplace health and safety has been in the limelight for both Federal and State governments, with various reviews having been completed into the harmonised WHS laws, operating in most jurisdictions.

Labor has indicated support for the introduction of the offence of industrial manslaughter and would like to see this offence enacted in all jurisdictions within its first year of government. Currently, only the ACT and Queensland have industrial manslaughter laws while the Victorian government has promised to introduce such laws in the near future.

Labor has also indicted it will focus on several specific safety issues, including:

• working with employers, unions and State and Territory governments to develop a national regulatory framework for WHS and workers’ compensation in the shipping, offshore oil and gas and stevedoring industries to eliminate regulatory uncertainty and problems arising from dual jurisdictional involvement;
• supporting a world-wide ban on the mining, manufacture and use of asbestos and ensuring ongoing protection and support is provided to victims of asbestos-related diseases and their families;
• ensuring Commonwealth Departments, Agencies and entities promote a culture of safety at work by working with workers and their representatives to create appropriate structures for raising and resolving safety issues.

Climate change action and more jobs

Labor’s promise to tackle climate change includes introducing targets to reduce pollution by 45% on 2005 levels by 2030 and reach net zero pollution by 2050. Its climate change policy is linked with investment in, and support of, renewable energy and transport options which it says will lead to increased job opportunities. For example, Labor has said its proposed investment in renewable energy and batteries will see the creation of over 70,000 new jobs.

Other proposed climate change initiatives which Labor says will create more jobs include:

• building and upgrading Australia’s energy transmission and distribution systems;
• creating ‘Solar Schools’ to act as Virtual Power Plants (VPPs) that create energy which can be used and also placed back into the grids when the schools are not operational;
• introducing household battery systems; and
• delivering a $1Billion National Hydrogen Plan to support clean hydrogen development.

Watch this space

As and when we know more details about the new Labor government’s workplace relations reform agenda, including the likely timing, we will keep you informed. Our Employment & Labour teams can also assist you with any queries you may have. Without doubt, we are in for a shake-up which will present challenges for employers across all sectors.