Employment and Industrial Relations Reform Under the Albanese Labor Government

With the first parliamentary sitting of the Albanese Labor government scheduled to commence on 26 July 2022, now is the time to revisit some of the anticipated changes on the horizon promised during the Australian Labor Party’s election campaign and consider how they may affect businesses going forward.

The Australian Labor Party (ALP/Albanese Government) has promised a raft of changes to Australia’s workplace relations framework through the ALP’s 2022 Secure Australian Jobs Plan (Plan).

Expected Reform

During the election campaign, the ALP promised, if elected, it would commission a labour market white paper to foster “secure work and higher wages”. To inform the white paper, ALP announced a “job and skills summit” to bring employers and unions together to collaborate on secure work and to ensure enterprise bargaining works effectively. The summit will include approximately 100 invitees from business, unions, civil society groups and “other levels of government” for the summit.

With the summit now expected to be held in September 2022, it is likely that much of the detail and reforms under the Plan will occur after the summit in September.

While the Plan is in broad terms, with limited detail to the specific amendments, there is the potential for significant reform in employment laws and regulations. The key reforms can be broken down into the following categories:

  1. Secure Work Initiatives, including:

    1. re-defining ‘casual employment’ in the FW Act;

    2. regulation of the ‘gig economy’;

    3. limiting the use of fixed term employment agreements; and

    4. “same job same pay” for labour hire employees.

  2. Gender Equality, including:

    1. amending the National Employment Standards (NES) to include an entitlement to 10 days paid family and domestic violence leave for all employees covered by the Fair Work Act 2009 (Cth) (FW Act);

    2. implementation of all 55 recommendations of the Respect@Work Report; and

    3. gender pay equality, including a statutory equal remuneration principle to help guide the Fair Work Commission (FWC).

  3. Minimum entitlement measures, including:

    1. greater penalties for wage theft;

    2. including superannuation as an NES entitlement that can be pursued by employees under the FW Act;

    3. portable entitlement schemes for certain industries; and

    4. abolishing the Registered Organisations Commission (ROC) and the Australian Building and Construction Commission (ABCC).

Ahead of the summit, employers should be aware of the effect of the potential changes put forward under the Plan which have been set out in more detail below.

1. Secure Work Initiatives

A. Re-defining casual employment under the FW Act

In March 2021, the then Morrison Liberal Government amended the FW Act to include, for the first time, a statutory definition of “casual employment” under s15A. This statutory definition effectively provides that the status of a full-time or casual worker is determined solely by the nature of the offer made to the employee and a regular pattern of hours will not of itself indicate a firm advance commitment to continuing work or subsequent contract. An employment agreement or letter of offer that mirrors the wording in s15A will generally leave little scope for an employee to challenge the nature of the engagement.

The Albanese Government has promised to restore the ‘common law’ definition of casual, to mean that employment status will be determined by considering all of the employee’s circumstances (including subsequent conduct of the parties following the offer). For instance, if an employee is on a casual contract, but works 40 hours a week and is expected to come in every week of the year, then under ALP policy, such an employee may be considered full-time and have an entitlement to the same entitlements as a permanent employee, including paid annual leave and redundancy pay.

B. Protection for gig workers

There is momentum building for reform in the characterisation of gig economy workers across Australia. The gig economy generally describes individuals providing services through mobile apps or websites, including rideshare and food delivery apps such as Uber, Didi, Deliveroo or Doordash. Recent FWC decisions and statements from the Fair Work Ombudsman (FWO) have generally determined such workers are independent contractors rather than employees. As independent contractors, workers do not receive any of the minimum employment entitlements, such as the national minimum wage, paid leave, superannuation, and access to the protections available within the unfair dismissal or general protections regimes under the FW Act.

The Albanese Government has expressed its intention to amend the FW Act so that gig-workers will be covered by the FWC with a view to protecting them from exploitation and giving them access to the benefits which have been reserved for employees until now. This could amount to a significant change to the purview of the national workplace relations tribunal, which up until now has been exclusively concerned with disputes between employers and employees (and their representatives). The FWC could have power to make orders for minimum standards for gig workers, which may affect the terms on which some companies engage independent contractors.

C. Limited fixed term employment agreements

The ALP Plan also states that the Albanese Government will limit the use of back-to-back fixed term contracts. The ALP considers such arrangements as another form of insecure work, which creates difficulty for employees to secure a bank loan or mortgage.

Under this Plan, employers who hire staff on fixed-term contracts will be prevented from renewing a fixed-term contract over 24 months or for more than 2 consecutive terms. If this is put in place, employers will need to adjust their fixed term arrangements and the change will also have an impact on rights of employees arising on termination, including entitlement to redundancy pay or notice on termination provided under the FW Act.

D. Labour hire: same work same pay

The ALP has promised to ensure that workers who are employed through labour hire companies are paid at a rate no less than those employed directly. This policy will likely have a significant impact on industries such as mining and construction, in which labour hire is commonly used.

While not referred to in the Plan, based on previous policy statements, there are suggestions the Albanese government will consider regulating the labour hire sector through a national labour hire licensing scheme. Labour hire licensing schemes are already in operation in certain states, such as Queensland and Victoria. Based on the existing schemes, this would require labour hire businesses to obtain a licence on certain conditions and comply with reporting and record-keeping obligations.

2. Gender equality

A. Paid family and domestic Violence Leave

In May 2022, the FWC expressed a provisional view that a ten-day paid family and domestic leave entitlement should be inserted into modern awards. The current NES entitlement is five days’ unpaid family and domestic violence leave.

On 16 June 2022, Employment and Industrial Relations Minister Tony Burke wrote to the Fair Work Commission to advise that it is the Government’s intention to “introduce 10 days paid family and domestic violence leave into the National Employment Standards as soon as possible”. This will ensure that all employees, whether or not they are covered by a modern award, will be able to access this entitlement.

B. Workplace equality

The ALP has promised to combat sex discrimination and has promised to implement all 55 recommendations of the Respect@Work Report, including amending the Sex Discrimination Act 1984 (Cth) so that employers have a positive duty to take reasonable and proportionate measures to eliminate sexual harassment, sex-based discrimination and victimisation in the workplace as far as possible. Employers who do not already have such measures in place will require advice in how to swiftly enact internal change to comply with these new duties. Employers who do not already have policies and procedures in place setting out how sexual harassment will be dealt with in their workplace should consider implementing such policies and seeking advice on how to do so. 

The Respect@Work Report also included recommendations on a practice note/guideline that identifies a best practice approach to deal with the regulation of non-disclosure settlement agreements arising from sexual harassment matters.

If this recommendation is implemented, employers may need to reconsider their approach to the settlement of any sexual harassment related claims in the future.

C. Gender Pay Equality

The ALP has advised it will make gender pay equity an object of the FW Act and put in place a statutory Equal Remuneration Principle to help guide the FWC’s review of equal remuneration and work value cases. It also proposes to set up and fund two expert panels within the FWC, one for Pay Equity and the other for the Care and Community Sector, which will operate in a similar way to the Annual Wage Review Expert Panel. Employers may need to reconsider the remuneration of employees with this change.  

3. Minimum entitlement measures  

A. Wage theft and access to superannuation

The ALP has promised to make wage theft a criminal offence. It has also indicated that it will legislate to give Australian workers the power to pursue their unpaid superannuation, even if it is not in their employment contract. Employers may want to conduct a review into remuneration and wage arrangements with its employees to ensure ongoing compliance in light of it being a focal point of the Albanese Government.

B. Portable entitlements scheme

Straddling both the issue of minimum entitlements and insecure work, the ALP has also advised it will consult with state and territory government to develop portable entitlement schemes for workers in industries where they are commonly required to move from job to job which would normally mean a break in accrued entitlements such as long service leave. Currently, portable long service schemes exist in industries such as cleaning, construction, mining and the social and community services sector in some states (such as Queensland, New South Wales and Victoria). This could affect employer’s accrual of long term employment entitlements if such changes come into effect.

C. Abolishing the ROC and the ABCC

The ALP has promised to abolish the ROC and the ABCC, on the basis that these bodies have “become politicised and discredited”. The abolition of these bodies will likely have a significant impact on participants in the building and construction industry.

Looking forward

We expect to see further details emerging from the ALP in the coming month, with the first sitting of Parliament on 26 July 2022 and National Jobs Summit in September. It remains to be seen how the Senate will respond to this Albanese Government’s reform agenda. This is one of the most ambitious workplace relations platforms of the last decade, so we recommend keeping your finger on the pulse of these developments.

Hamilton Locke’s workplace and employment team are experienced specialists, who have worked with employers across countless industries.

Please do not hesitate to reach out to James Simpson, Partner, on 0407 061 641 or james.simpson@hamiltonlocke.com.au if you require any assistance.