Wednesday, 9 December 2020
Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020; Second Reading
That this bill be now read a second time.
COVID-19 has caused a health crisis in Australia that has triggered an economic crisis. At the height of the pandemic, 1.3 million people lost their jobs or were stood down on zero hours. The government is committed to putting Australia on the road to economic recovery and prosperity.
Australians have shown tremendous spirit and resilience during these testing times. But we are at a critical point in our recovery. As we navigate our way out of this COVID-19 induced economic crisis, it will be our ability to solve complex problems, working in partnership, that will drive us forward, create jobs and get Australians back to work. There is no room for policy stalemates.
That is why the government brought together unions, employer groups and experts through the industrial relations working group process—with one simple goal, that being to create jobs.
I am very pleased today to be introducing the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill to help Australia's recovery from COVID-19 by supporting productivity, jobs and economic growth. These reforms address known problems in the industrial relations system and will be crucial to securing Australia's economic recovery and safeguarding the workplace for future generations.
This bill is not ideologically based; rather, it is founded on a series of practical, incremental solutions to key issues that are known barriers to creating jobs.
They are balanced and pragmatic and seek to create a fair and efficient industrial relations framework for all Australians. I'll turn to the various schedules in the bill in turn.
Casuals and fixed terms
The first is with respect to casuals and fixed term employees. It is clear that the current state of the law in relation to casual employment has caused widespread mistakes and confusion for employers and employees, which, with the associated consequences and costs, gives rise to the genuine need for legislation to adjust the rights, claims and obligations of these employers and employees.
The statutory definition introduced in this bill incorporates key aspects of the common law as expressed in recent court decisions such as Skene and Rossato, particularly the absence of a firm advance commitment to ongoing work defining casual work. This ensures casual jobs are genuinely casual. The nature of the employment, whether casual or ongoing, will be determined at the outset, as opposed to relying on periodic assessments of the relationship as it develops over time. This will provide much-needed certainty to business, who currently have a significant potential liability hanging over their heads and are being disincentivised to hire new employees.
The bill also introduces a new entitlement to be included under the National Employment Standards, or NES, for eligible regular casual employees to convert to full-time or part-time employment—if they choose to do so. The new NES entitlement introduces a positive obligation on employers to offer conversion. As a NES entitlement, it will form part of the statutory safety net that cannot be traded away.
Clearly employees should be characterised appropriately and receive the entitlements reflecting that characterisation at law. However, the absence of a clear and certain statutory definition has led to the potential for employers to have to pay for the same entitlements twice. In order to address this, the bill introduces a statutory offset mechanism so that employers will not have to pay twice for the same entitlements.
Without this suite of casuals amendments, costly and time-intensive court processes would be needed to determine the appropriate rights and obligations of employees and employers in every individual case, imposing significant burdens. Together, these measures relating to casual employment form a package of reforms to address those issues.
Award s implification
With respect to award simplification, it is the case presently that award complexity is a significant issue for many businesses, especially small businesses. Time that businesses spend navigating the overly complex awards system—and its often convoluted processes—is time that businesses don't spend growing or creating jobs. It is critical that in the industries hit hard by COVID-19, namely the hospitality and retail industries, the government works to make it as simple as possible for business to regrow jobs.
Combined with non-legislative measures, including investment in regulatory technology solutions and award variations to be determined by the Fair Work Commission, this bill adapts specific elements of our successful COVID-19 JobKeeper flexibilities for employers and employees covered by 12 identified awards in distressed industries for a further two years. These flexibilities, which have already helped to save thousands of jobs during the pandemic, will allow employers and employees to continue to work together regarding their duties and work location to navigate the challenges of working in a post-COVID world.
Importantly, the bill also legislates increased access to part-time flexibility across the same 12 awards, allowing part-time employers and employees to work together so an employee can take on additional hours when it suits them. This vital flexibility—a genuine two-way flexibility—will be subject to strong safeguards and is expected to ensure more employees have more opportunity to work more hours in a permanent form of employment.
With regard to agreement-making, if there is one aspect of the current industrial relations system for which the problems are most acute it is the enterprise bargaining system.
Recent trends show that enterprise bargaining has experienced a significant decline since 2010—there are fewer employees covered by enterprise agreements and few new enterprise agreements being made. Over the last 10 years, the number of current enterprise agreements between employers and employees has been steadily declining: from 25,150 at 31 December 2010 to 10,711 at 30 June 2020, a fall of 57½ per cent.
According to the Australian Bureau of Statistics, this has translated to the proportion of employees being covered by enterprise agreements decreasing from its historical peak of 43 ½ per cent in 2010 to 37.9 per cent in 2018, with a corresponding increase in the direct reliance on modern awards.
This bill aims to increase the number of Australians covered by enterprise agreements—and the productivity and wage benefits they can entail—by making agreement-making and approval processes easier and faster for employers and employees, while ensuring a better balance between flexibility and fairness.
The bill will reduce the level of prescription currently imposed by the Fair Work Act and provide greater flexibility as to the methods by which employees may be provided with a fair and reasonable opportunity to consider whether to approve an enterprise agreement prior to the vote. The Fair Work Commission will be required to listen to the views of the bargaining parties in the approval process, and the intervention by other persons before the Fair Work Commission will be limited.
The bill also places greater emphasis on the importance of cooperative working relationships and places stricter requirements on the Fair Work Commission to listen to the views of the employer and employees on the Better Off Overall Test (BOOT). In applying the BOOT the Fair Work Commission will be required to consider the patterns or kinds of work that employees currently perform or could reasonably be foreseen to perform. To provide greater flexibility for businesses and employees in the COVID recovery period amendments will also permit, in limited circumstances, the Fair Work Commission to approve an agreement which may not otherwise pass the BOOT but they must take into account the views and circumstances of the employees, employers and employer organisations covered by the agreement and the impact of COVID-19 on the business and the extent of employee support for the agreement and whether approval is in the public interest. This is a time-limited measure, building on existing exemptions intended to support Australian jobs and businesses impacted by the pandemic. Greenfields agreements
The construction of major projects in Australia contributes significantly to jobs and economic growth around Australia. The risk of agreements nominally expiring during construction of a major project has contributed to uncertainty, including over unexpected delays and protracted negotiations. This uncertainty can impact investment and job creation, both of which will be key in coming years as part of our economic recovery.
The bill will double the maximum nominal expiry date for greenfields agreements made in relation to the construction of major projects, from four years to up to eight years. The bill requires longer-term greenfields agreements to include annual wage increases for employees over the nominal life of the agreement.
This will support Australia's economic recovery by attracting investment and driving job growth.
Compliance and e nforcement
When it comes to compliance and enforcement, the amendments in the bill are designed to do three things: help businesses comply with the law, enable employees to recover any underpayments faster where they do occur, and ensure that the maximum penalties for noncompliance are proportionate and a meaningful deterrence from the full spectrum of wrongdoing.
The government is committed to supporting businesses, including small businesses, understand their workplace obligations, improve compliance and identify and resolve any issues early.
That is why, as part of our industrial relations reform package, we are providing $12.9 million to establish an Employer Advisory Service in the Fair Work Ombudsman, commencing from 1 July 2021, that will offer employers authoritative, written advice tailored to their individual circumstances. The service will provide small businesses with greater certainty about how to apply award and agreement provisions, reducing the likelihood of wage underpayments occurring in the first place.
Additionally, the bill will require the Fair Work Ombudsman and the Australian Building and Construction Commission to publish information about when they will commence and defer commencing litigation for underpayment matters. This will give employers certainty and the confidence to proactively identify, self-disclose and rectify underpayments quickly.
The bill will allow more underpaid employees to get repaid faster. With the confidence to rely on public policies issued by the regulators, which specify when they will commence and defer litigation for underpayments breaches, businesses will be encouraged to self-identify and self-report underpayment breaches. The bill will also make it easier and faster for employees to recover unpaid wages by increasing the small claims cap from $20,000 to $50,000; courts will also be able to refer small claims matters to the Fair Work Commission for conciliation; and parties can consent to arbitration by the Fair Work Commission if conciliation is unsuccessful.
To respond to exploitation and better deter noncompliance, the bill introduces a new criminal offence for dishonestly engaging in systematic wage underpayments, and increases the value and scope of civil penalties and orders that can be imposed for noncompliance. Courts will be able to impose adverse publicity orders on businesses that underpay, and directors convicted of the criminal offence will be disqualified.
The bill also provides further protection to employees by prohibiting businesses publishing job advertisements with pay rates below the minimum wage, and increases the penalty for sham contracting used by employers to avoid paying full entitlements.
These amendments will help businesses comply with the law, promote fair competition by ensuring that businesses who are non-compliant do not gain unfair advantage, and protect employees from exploitation.
Improvements to Fair Work Commission processes
The bill also includes amendments that will enable the Fair Work Commission to deal with certain matters more efficiently and expeditiously than is currently permitted under the act.
The bill will give the commission appropriate powers to be able to deal with vexatious applications more effectively, modelled on the Administrative Appeals Tribunal's powers to deal with vexatious applications.
The bill will also confer greater discretion on the commission to decide to deal with an appeal 'on the papers' when it considers a hearing to be unnecessary.
These amendments support the Fair Work Act's requirement that the commission perform its functions and exercise its powers in a manner that is fair, just, quick, informal, open, transparent and avoids unnecessary technicalities.
COVID has challenged many aspects of Australian life and this bill delivers on the government's commitment to put Australia on the road to economic recovery. This bill removes barriers that stifle the job growth of today and limits the job creation of tomorrow—if we want Australians to have access to the prosperous jobs they aspire to we must remove these barriers today. That is what this bill does. I commend the bill to the House.