Federal Budget 2020-21

Industrial Relations Reforms – What to expect in 2021

The industrial relations reform roundtable discussions convened by the Federal Attorney-General in June to enable “all sides of the debate to lay down their arms and commit to working together during this process to find ways to get our economy moving again and urgently regrow the jobs so many Australians have lost as a result of COVID-19,” concluded in September.

The reform committees focussed on five key areas of the IR system:

  • Award simplification;
  • Enterprise agreement making;
  • Casuals and fixed term employees;
  • Compliance and enforcement; and
  • Greenfields agreements for new enterprises

So what can we expect in terms of industrial relations reform in 2021? The big ticket items are likely to be:

  1. Casual Employment

Disagreements between the Fair Work Commission (FWC) and the High Court on the definition of casual work, stemming from WorkPac Pty Ltd v Rossato [2020] FCAFC 84, will hopefully be resolved in 2021. The Federal Court ruled in May that “casual” workers who worked regular and predictable shifts with a firm and had an advance commitment to work were not casuals despite how they were described in employment contracts and therefore were entitled to be paid annual, sick and carer’s leave.

https://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2020/2020fcafc0084

WorkPac also argued that even if Rossato was really a permanent worker, it could “set off” the casual loading Rossato had been receiving against the leave entitlements. In other words, if he was entitled to the leave entitlements he claimed, he had already been paid for them. WorkPac claimed he would otherwise be “double-dipping”.

The Federal Court, however, ruled that Rossato, despite having a 25 per cent casual loading built into his wage, still had an entitlement to leave that could not be offset through the wage uplift because it did “not have a close correlation” to the leave entitlements.

With no legislated definition of casual employment or limits on its appropriate use, workers and businesses alike are left with ongoing, and wholly unsatisfactory, uncertainty. With casuals currently comprising more than 20% of the Australian workforce the decision has far reaching implications for employers. So a long overdue formal definition of a true casual employee in the Fair Work Act is something we should anticipate next year to prevent so-called “double-dipping” of entitlements.

  1. Enterprise Bargaining Agreements (EBAs)

Employers should expect a review of the ‘better off overall test’ next year. It is accepted that once the FWC started to require the BOOT to apply all potential employees (and not just existing ones) the EBA process has become too long and too complicated, with the BOOT becoming a key sticking point in negotiations.

  1. Compliance with the Fair Work Act

Strong indications that the Morrison government will seek to criminalise underpayment of employees in 2021 where the practice can be shown to have been;

  • Deliberate and/or repeated;
  • Exploitative of vulnerable employees;
  • The result of failing to rectify contraventions;
  • Prior history of contraventions

Key areas of non-compliance with Awards leading to underpayment include:

  • Redundancies and poorly implemented changes in employment conditions during COVID19;
  • Salaries that aren’t enough to compensate for Award conditions;
  • Contracts that don’t have adequate provisions to cover Award conditions; and
  • Salaries that meet conditions, but didn’t have the checks in place to make sure they continued to meet conditions over time
  1. Awards

Key focus likely to be on:

  • Reducing the complexity of Awards; and
  • Providing ongoing flexibility to industries hardest hit by the pandemic, such as retail, tourism and hospitality

If you need legal guidance or advice call us on 08 8231 6100 or email:

http://admin@ezralegal.com.au.

Julian Roffe

Practice Manager

Ezra Legal

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