“There is nothing in the Federal Government’s latest workplace relations proposals that would create a single job, add to job security, drive sustainable wage growth, raise productivity, encourage a person to start a business, encourage an employer to grow their business or would simplify our complex workplace relations system,” Innes Willox, Chief Executive of the national employer association Ai Group, said today.
“The proposals, as further outlined today by Minister Tony Burke at the National Press Club, are the antithesis of what is needed to build a 21st century competitive economy. The government has not made out a sufficient case for change nor outlined how its proposals would benefit our economic prospects.
“Instead, what is being put forward unfortunately represents the wish list of a union movement which by the day has become more irrelevant to the great majority of Australian workplaces.
“By any reasonable assessment, the kinds of changes being considered cannot fairly be characterised as just closing ‘loopholes’.
“The amendments expected to be tabled in Parliament in the coming weeks will potentially implement radical changes to our system. They relate to key issues such as the regulation of industry’s ability to engage casual staff, to access labour hire and to engage contractors.
“The workplace relations changes will add uncertainty and complexity to the employment of millions of casuals, contractors and labour hire workers.
“Unions will be given significantly increased rights to enter workplaces, without notice, where they have little or no membership. They will be potentially given the right to comb through employee records, including those of non-union members. This clearly risks breaching the principles of Freedom of Association which have always underpinned our workplace relations system. It will also interfere in managements ability to manage their business as they see fit.
“The changes do not reflect any serious attempt to address the burning issues of Australia’s persistent productivity problems and the growing economic headwinds. Any assessment of the changes should be based on whether they are a serious plan to address these issues.
“We hope that the proposed legislation will address a raft of major concerns that have been aired by industry in relation to the development of the Bill. Crucially, we also expect that the Government will remain open to continuing to make changes to any proposed reforms once the detail of the Bill is made public. We have been expressing our views to Government in a forthright manner and will have more to say once any proposed legislation is finalised and made public.
“The Government’s first tranche of IR changes rushed through Parliament last year was delivered without proper consideration being given to the concerns of industry and without proper scrutiny by the Parliament. It resulted in deeply flawed change to the system that industry is still struggling with and which will adversely impact our economy in the years ahead. That approach must not be repeated” Mr Willox said.
Key issues of industry concern with proposed IR changes:
Same job same pay proposal
The same job same pay policy - which has been rebranded as closing labour hire loopholes - is an unfair and unjustified attack on labour hire employers as well as the businesses and workers that depend upon the sector.
The union movement has long been hostile towards the labour hire sector, but it must be remembered that these businesses must comply with the same employment laws as all other employers. It is a sector that plays an important role in our economy. Indeed, given the labour market constraints flowing from shortages of both skilled and unskilled labour that are operating as a brake on our economy, it would be bordering on reckless for a government to implement a measure that makes it harder for businesses to secure the labour they need.
While the policy proposal should be rejected by Parliament, it is essential that any measure that is directed at ‘closing labour hire loopholes’, not also disrupt broader commercial arrangements between businesses that encompass the performance of services beyond the mere provision of labour. It should not apply beyond the engagement of traditional labour hire services. Crucially, it must not interfere with widespread outsourcing arrangements routinely and appropriately implemented throughout the economy. The alternative proposed would cause significant disruption to the economy, it would risk the viability of many often small and medium sized businesses that could simply not afford to pay the kind of rates often provided by major employers.
Both labour hire employers and host employers that rely on them will also be anxious to see whether the proposed laws will be saddle them with an unreasonable compliance burden or expose them to costly litigation. There are fundamental unanswered questions about how any new obligations will operate in practice, but the there is an obvious risk that they will result in a level of nightmarish complexity that renders the use of labour hire unviable.
The foreshadowed changes to casual employment are a solution looking for a problem.
Casual employees working regular hours already have legal rights to request to convert to permanent employment and an employer is only permitted to refuse on reasonable grounds.
Casual employees have never had stronger rights to access permanent employment than they do now as a result of new ‘casual conversion’ rights inserted into the National Employment Standards in recent years. Provisions which largely reflect an approach to such matters that was determined to be fair by the Fair Work Commission in a major Test Case in only 2017.
Further, it is beyond contest that we have not had any rise in the use of casual employment in Australia. Its use has been relatively stable for decades.
The big risk is that any changes will create so much uncertainty and risk for employers that they will be forced to curtail their use of casual employees or refrain from offering them regular work going forward. Nobody wants that – apart from the union movement.
Of course, restricting casual employment will hurt many younger workers who rely on it and who often value the flexibility as well as the benefits a casual loading provides. However, it must also be appreciated that many older workers also value access to casual employment and won’t welcome such opportunities being curtailed.
We are heartened by recent assurances from Minister Burke that changes won’t expose employers to back pay but we are understandably keen to see how this is implemented in any Bill ultimately put before Parliament. The devil is all too often in the detail.
Proposed Regulation of employee like work arrangements
The Government is committed to empowering the Fair Work Commission to set terms and conditions for ‘employee like workers’. It is expected that this will encompass the regulation of the ‘gig sector’, as it is commonly conceived, but has the potential to also encompass the regulation of the engagement of contractors in a raft of other sectors.
Any change must not put at risk the viability of contracting arrangements that are often genuinely valued by workers.
Importantly, any regulation must not disturb contracting arrangements currently in place across a range of industries that are operating without controversy. For example, there has been no compelling case advanced for disturbing arrangements in areas such as the building and construction sector or in the context of contractors providing consulting services in professional or white-collar sectors. It will be important to assess whether the Bill includes concrete measures to avoid adverse impacts on these kinds of workers or those that engage them.
Potential Regulation of Road Transport Industry
The Government has also foreshadowed potential regulation of the Road Transport Industry, a sector that is already one of the most heavily regulated in Australia.
Further regulation of the Road Transport Industry is not a matter that the Government canvassed before the election and, while strongly advocated for by the TWU, it is not a proposal that has broad industry support.
Any proposed regulation in this area needs to be carefully weighted and meticulously worked through with all areas of the industry, and the sectors that rely on it, if we are to avoid repeating mistakes of previous failed experiments regarding the development of discrete regulation of industrial conditions in this sector. That certainly hasn’t happened yet.
Many in the Road Transport industry still recall the nightmare that was unleashed by the ‘Road Safety Remuneration Tribunal’. This body was established under a previous Labor Government and caused uproar when it ordered that unsustainable minimum rates of pay needed to be paid to contractors in parts of the Road Transport Industry.
The Tribunal was a body comprised of members of Fair Work Commission along with other members who were appointed because of their experience or expertise in the Road Transport Industry. It was empowered to set terms and conditions for workers in the Road Transport industry, including for both contractors and employees. It only issued its controversial minimum rates order after years of deliberations and detailed engagement with industry. Nonetheless, and despite deafening warnings from industry, it set minimum rates for various contract drivers that had the entirely predictable outcome of pricing vast numbers of them out of work overnight. Their livelihoods looked set to be destroyed. It was a disaster that was only negated by the Tribunal being urgently abolished following widespread protests, including a truck blockade in Canberra.
The mistakes of the past must not be repeated.
Tony Melville – 0419 190 347