INCOMING TRANCHE OF IR REFORMS (PART 1)

Consultations have been ongoing with relevant parties on the second tranche of industrial relations reforms, which are likely to be introduced in Parliament sometime next month. As such, businesses should prepare themselves for the changes that could potentially affect them as a result of the incoming legislation.

Please note that the following discussion points are based on current information provided by the Department of Employment and Workplace Relations (“the DEWR”) here and will likely differ from the wording in the actual legislation that may be introduced in September.

A. PROPOSED CHANGES

The following proposed changes have been distilled and presented below in order of relevance for the electrical contracting industry:

1. Changes affecting Labour Hire Workers
   1. Same Job, Same Pay

The general principle behind “Same Job, Same Pay” is for labour hire workers to be paid at least the same as directly engaged employees doing the same work. This may be a concern for employers who have labour hire workers who perform similar work to employees as this change could result in increased labour costs.

The DEWR is considering calculating ‘same pay’ in accordance with the term ‘full rate of pay’ in the Fair Work Act 2009 (Cth), which would include incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates, and any other separately identifiable amounts.

This could potentially be an issue if employers already have an enterprise agreement (“an EA”) in place because this change may require employers to pay labour hire workers pay rates or entitlements contained in an EA, even if the labour hire workers are outside the scope of the EA.

• National Labour Hire Regulation

A national labour hire regulation scheme has been proposed to cover labour hire workers across all states. The details of the form or structure of the scheme has not been clearly explained but it is understood that the objectives of the scheme are as follows:

• Provide a level playing field for business and promote accountability and transparency;
• Protect labour hire workers from exploitation by providers and in supply chains;
• Promote greater compliance with relevant laws and drive behavioural change;
• Reduce red tape and confusion for labour hire providers (“LHPs”) operating across multiple jurisdictions.

Notwithstanding the above, employers should be aware that there may be incoming changes which may impact how labour hire workers are regulated. This is crucial especially as limited information has been provided on how this new scheme interacts with current applicable state labour hire regulations.

• Criminalising Wage Theft

One of the biggest changes arising from the new tranche of changes to IR is the criminalisation of wage theft. Wage underpayment is intended to be introduced as a criminal offence, which will pose more serious consequences for employers who are found to have underpaid their employees.

Although the DEWR has clarified that criminal penalties should not apply to employers who make an honest mistake and take steps to amend the mistake, it is unclear at this stage if the criminal offence only covers deliberate underpayments or if it will also cover negligent or careless mishandling.

It is important to note that poor record-keeping may also be considered as part of the measures to criminalise wage theft, which means that an employer who currently have poor record-keeping practices may be captured by this offence, especially if there is the potential of an underpayment.

Employers should therefore start taking steps to ensure that their record-keeping practices are in order and to consider carefully if there may be any potential for wage underpayments at this stage.

• Increased Scope of Fair Work Jurisdiction

Workers who are not employees (such as gig economy workers) are currently (for the most part) not covered by the Fair Work jurisdiction and so may not be protected from unfair dismissals nor will they be covered by standards set by the Fair Work Commission, such as Modern Awards and EAs.

However, one of the incoming proposed changes is to expand the Fair Work jurisdiction to cover ‘employee-like’ forms of work, such as gig economy workers. Some of the options currently considered are allowing the Fair Work Commission (“the FWC”) to set standards for these employees, as it does for employees covered by Modern Awards as well as allowing workers the ability to challenge unfair contractual terms by potentially allowing disputes to be resolved by the FWC.

Employers who are currently working with workers who may not fall within the traditional meaning of an ‘employee’ should keep abreast of these potential changes.

SUMMARY

The proposed changes, if successfully passed reflecting the above, may impact on industrial and workplace relations matters going forward, which in turn will impact businesses. Business Solutions Hub will continuously monitor developments and update employers as necessary.

Now is the time to start considering your policies, procedures, employment contracts and future EAs which will need to incorporate the above changes, when they are implemented.

Get in touch with the team at info@businesssolutionshub.com.au to discuss your operational requirements, current procedures and workplace documentation in place, and a risk mitigation assessment going forward.