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Australia’s workplace reform debate heats up

Debate over workplace reform in Australia has been ongoing, with varying degrees of intensity, for almost 15 years. In this federal election year, however, industrial relations policy has assumed increased significance.

The Australian Council of Trade Unions (ACTU) has run hard on its ‘change the rules’ campaign, highlighting the union movement’s concerns over elements of the current legislative framework.

The Fair Work Act 2009 was the Rudd Labor Government’s answer to John Howard’s 2005 ‘Work Choices’ legislation. Whereas Work Choices implemented an individualised model of labour regulation, reducing the role and influence of unions and the federal industrial tribunal, the Fair Work Act prioritised collective bargaining and brought unions back into play.

For the ACTU, however, employers over the last ten years have found ways around the legislation’s mechanisms compelling union-centred workplace negotiations.

The union movement’s reform aspirations have pushed the Labor Opposition to adopt a fairly bold workplace relations policy. If implemented, some of the key commitments adopted by the ALP will have a major impact on the current approach to workforce management of many businesses. These include:

  • Introducing the principle of ‘same job, same pay’ for employees engaged through labour hire agencies. This could mean, for example, that labour hire staff become entitled to the wages and conditions in an enterprise agreement applying to direct employees at the site where they perform work (instead of the lower employment standards applying under a modern award).
  • Ending the notion of ‘permanent casuals’ by legislating an objective definition of ‘casual’ employee. Employers’ capacity to engage casual staff may therefore be restricted to short-term, ad hoc circumstances.
  • Imposing criminal liability for businesses that engage in deliberate, systemic underpayment of employees (i.e. ‘wage theft’).
  • Allowing industry-level or multi-employer collective bargaining for certain categories of low- paid employees. This would be a major departure from the system of enterprise-based bargaining which has operated in Australia since 1993, especially if industry bargaining is accompanied by the right to take protected industrial action.
  • Halting, or restricting the availability of, certain avenues employers have utilised to circumvent the operation of union-negotiated agreements. This includes, for example, applications to the tribunal to terminate expired agreements based on a public interest test.
  • Increasing parties’ access to arbitration of long-running bargaining disputes. While this is principally intended to assist unions in dealing with employers that resist concluding an enterprise agreement, some employers (e.g. in the public sector) could also benefit from an easier pathway to an arbitrated outcome.
  • Enabling the Fair Work Commission to establish a ‘living wage’ for workers on the minimum wage and lower classification levels in awards. Priority would be given to cost of living factors over economic objectives in the wage-setting process.
  • Abolishing the specialist regulatory body for the building industry, the Australian Building and Construction Commission (ABCC), and the Registered Organisations Commission (ROC), which was established primarily to tackle trade union corruption.

As for the Coalition Government, its policy is mostly restricted to retaining the current legislative and institutional framework – particularly the focus on curbing excessive union power (through the ABCC and ROC).

Although short-lived, the Work Choices experiment has had a lasting impact, quelling the reform appetite of contemporary Coalition politicians. Having paid the electoral price in 2007, they have not since advocated major workplace relations change, to the frustration of many in the business community. Even some modest recommendations of the Productivity Commission in 2015 have gone unimplemented.

Regardless of the election outcome, businesses need to remain alive to the need for a proactive approach to managing staff and (where present) union relationships. The latter will be even more important in the event of an incoming ALP Government, given the recent resurgence of unions in national policy discussion.

There will always be challenges and opportunities in the transition to any new regulatory environment. Informed employers with workplace strategies which align their labour and engagement models with their operational imperatives will still be able to remain ahead of the game.


Authors

TUCK-john-highres_SMALL
John Tuck

Head of Employment and Labour

BURNS_Paul_SMALL
Paul Burns

Partner


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.