It is worth noting that under the original timetable of the Hon Tony Burke MP for the Closing Loopholes Bill, it would have been passed as law this week.
Instead, in the face of Senate scrutiny, the Bill was pushed into Committee for examination until February 2024. In the time since, fundamental problems with the Bill have been identified (as have been extensively covered in this blog and media commentary).
This week, the Australian Government tabled proposed amendments aimed at a tidy up. But key amendments fail to resolve the issues they purport to address. And others introduce new significant measures not contemplated by the initial Bill. We explain below.
The tidy up is ineffective
For example, let’s look at the changes in relation to two of the hottest issues:
- “Regular” casuals: The Bill proposed wholesale amendments to the casual employment test (see our blog here) imposing a complicated multi-factorial test that had the potential to disrupt casual employees from working regular days. After a long negotiation with the AHA, the Government claimed it had reached agreement, such that casuals with regular patterns of work could remain casual. The proposed amendment to achieve this is: regular pattern will not “automatically” mean they are not casuals but does not mean that they are casuals. What does that mean?
- “Service-based” contractors: The labour hire provisions of the Bill introduced a new regime for determining when contractors (as opposed to employees) could be required to be paid the same rates as employees who perform like work. The test was inexplicably broad and immediately acknowledged by practically everyone, including Minister Burke, as going too far and risking capturing all sorts of service providers (see our blog here). The proposed amendment here makes things better, but remain obscure. On the one hand, it says that the Fair Work Commission (FWC) must not make orders where a work arrangement relates to the provision of service rather than the provision of labour, but on the other hand, it requires the FWC to have regard to a range of factors, not about the services being provided, but rather the “employment-like” arrangements in which work is performed. So, the test is aimed at an objective skewed by the lens through which it is assessed. Why is there not consideration of the services being performed?
These are just two examples of the problems that have received most significant attention since the Bill was first tabled. Both these amendments are designed to achieve a simple outcome but fail to do so, leaving contestable issues and uncertainty. One could be forgiven for thinking that this is deliberate, as simple drafting of both measures would not be hard to achieve. A more detailed review of the legislation and the amendments reveals a longer list, which we will cover in future posts.
Bargaining determinations: all one way
The amendments include further significant changes to the bargaining regime introduced only last year.
Most concerning is the proposed amendment to the arbitration rules after the FWC determines that bargaining is intractable. A new provision will mean that that any term determined by the FWC must not be “less favourable” to each employee covered by the agreement and any union than the terms of any current enterprise agreement.
So there’s no give and take here – it’s all one way. Employees and the union must not go backwards from their position under any prior agreements. This is an extraordinary measure that fundamentally alters the dynamics of bargaining.
Intractable disputes are almost invariably about difficult issues. Employers commonly want to achieve changes to existing terms and conditions as part of any new deal. The objects of the Fair Work Act 2009 require a fair and flexible framework for collective agreement making to deliver productivity. How unfair that an employer, particularly one trapped by conditions in an outdated enterprise agreement, should ever be able to achieve any such reforms.
The effect of this provision is that militant unions can hold out in bargaining to prevent any such changes (all the while taking protected industrial action). And do so without any risk that an unreasonable position on their part could be rectified by the FWC (even where the FWC considered that it was otherwise fair and appropriate to make changes to existing terms of enterprise agreements). The reform would drive ambit claims and disincentivise any reasons for unions or employees to make concessions. There would now be no risk of them being imposed. The result for the employer: stuck with restrictions in current agreements with no mechanism to address them and where bargaining becomes about managing downside risk and cost.
Who is not listening to the umpire’s decision now? But why bother when it is so much easier to rig the game from the start so the umpire cannot decide against you. More to follow on this change and its impact.