Employment and industrial relations were big talking points in the recent federal election campaign, with discussions focussing on wage stagnation, secure employment, women’s employment, reforming bargaining, and the need to simplify modern awards.
The Australian Labor Party (ALP) signalled its intentions with the Secure Australian Jobs Plan, which it claims “will deliver more secure jobs, better pay, and a fairer industrial relations system”.
Now the new Albanese Labor government has been sworn in, what changes to employment and employment relations can employers and business owners expect?
Here’s a quick drill-down on the potential changes and what they could mean, so you can start preparing.
Wages
First cab off the rank is wages. Labor talked a lot about low wages and slow rates of wage growth during the election campaign. The Albanese government wasted no time in making a submission to the Fair Work Commission’s (FWC) annual wage review advocating “for an immediate wage increase for Australia’s low-paid workers” to ensure their real wages “do not go backwards”.
The FWC has released its review decision and from 1 July 2022, the national minimum wage will increase to $21.38 an hour (up $1.05 from its $20.33 base). That's a 5.2% increase, which is on par with our current 5.1% rate of inflation (March 2022 figures).
Minimum award wages only increase by 4.6%, however, for full-time employees earning above $869.60 a week (based on a 38-hour week) or a $40 minimum increase for those earning below $869.60 a week.
Beyond lifting wages, the Labor government has proposed introducing criminal penalties for "wage theft" (already illegal in some states and territories) and ensuring there is a system that allows workers to quickly and easily recover any underpayments.
Secure employment
Job security has become a significant concern for many Australians and the Labor government has promised to “enshrine secure work as an objective of the Fair Work Act”, which would require the FWC to include job security at the core of its decision-making.
Specific measures the new government proposes to improve job security include limiting casual and fixed-term employment to jobs that are genuinely temporary or irregular (fixed-term contracts will have a cap of 24 months), amending the definition of "casual employment" in the Fair Work Act to make it easier for casual employees to become permanent, ensuring labour-hire workers are paid the same as those employed directly by a business, and empowering the FWC to set minimum wages and conditions for “employee-like” forms of work, e.g. ‘gig workers’ at Uber or Deliveroo.
It has also indicated it will consider a portable leave entitlement scheme for people in insecure work, which would allow certain workers to transfer their leave entitlements when they move from job to job within an industry.
Businesses that regularly use independent contractors, or other "employee-like" workers, should keep a close eye on these proposed changes and ensure the nature of any employment relationship matches the day-to-day reality in the workplace.
Find out more about the difference between contractors and employees.
Women’s employment
Labor has promised to close the gender pay gap and increase pay for women workers, particularly in caring jobs, by:
- Strengthening the ability and capacity of the FWC to order pay increases for workers in low paid, female-dominated industries.
- Legislating so companies with more than 250 employees will have to publicly report their gender pay gap.
- Prohibiting pay secrecy clauses and giving employees the right to disclose their pay, if they want to.
The new government has also promised to implement all 55 recommendations of the Respect@Work: Sexual Harassment National Inquiry Report, including amending the Sex Discrimination Act to introduce a duty for employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation, as far as possible.
Additionally, they will make 10 days paid family and domestic violence leave a National Employment Standard (NES).
Enterprise bargaining
Enterprise bargaining is the process of negotiation between an employer, employees, and their bargaining representatives to create an enterprise agreement that sets minimum terms and conditions of employment. These must meet the ‘better off overall’ (or BOOT) test, meaning that employees have better terms and conditions than the applicable modern award, and they must be registered with the Fair Work Commission.
Enterprise agreements were seen as an important way to drive wage growth but, in reality, the complexity of the process has hampered it, as employers tend to resort to the award.
There have been discussions between the Australian Council of Trade Unions and small business representatives about simplifying the enterprise bargaining process and making the award system less onerous for small businesses. The new Labor government has indicated it supports these initiatives as well as broadening the FWC’s powers to arbitrate disputes during enterprise bargaining, preventing the termination of an enterprise agreement that has passed its nominal expiry date, and improving access to collective bargaining, potentially through multi-employer bargaining.
Other issues to be aware of
Some other employment areas where the ALP has earmarked changes are:
- Legislating to include a right to superannuation within the NES so workers are entitled to pursue any unpaid superannuation.
- Abolishing the Australian Building and Construction Commission and the Registered Organisations Commission (ROC), so building and construction workers “have the same rights as other workers”.
- Reestablishing a federal trucking industry body to set minimum pay standards and safe working conditions for owner-drivers.
- Climate action initiatives that could affect businesses.
