What would a Labor Government mean for industrial relations laws?

What would a Labor Government mean for employment & industrial relations laws?

The prospect of a Labor government under Bill Shorten is a very real possibility with the federal election next year, and this could have a number of significant employment and industrial relations implications for employers, writes Tony Wood

Prime Minister Scott Morrison has recently announced that the federal budget will be handed down on 2 April 2019 paving the way for a federal election in May 2019. The re-election of Daniel Andrews in Victoria (where Labor managed to swing several previously safe Liberal seats) and recent polling suggests that an Australian Labor Party victory at the federal level is likely on the cards. This is likely to have a number of implications for Australia’s employment and industrial relations landscape.

As the election looms closer we expect that industrial relations will become an area of increased prominence as third parties such as the Australian Council of Trade Unions push their “change the rules” campaign. The recent campaigning led by the ACTU and its affiliates is likely to put pressure on the ALP to announce further policies relating to employment and industrial relations.

With these developments in mind, we have outlined below the likely industrial relations policies and legislation that the ALP will focus on in the lead up to the election and as part of their first year in office.

1. Reverse the cuts to penalty rates: The ALP has committed to reversing the cuts to Sunday and public holiday penalty rates within its first 100 days in office. As part of these reforms, the ALP will legislate so that penalty rates cannot be reduced by the Fair Work Commission in the future.

2. Crackdown on “dodgy” labour hire: The ALP has proposed introducing a National Labour Hire Licensing Scheme where only businesses with a clean record of complying with employment, tax and OHS laws will be eligible to apply for a licence. The ACTU has been active in campaigning on labour hire issues and has proposed a number of additional policies including making host employers responsible for work-related matters including unfair dismissal rights and underpayments in relation to all workers performing work for them.

3. Change the test for sham contracting: The ALP will change the test for sham contracting so the test becomes – “if a reasonable person would think someone is an employee, then that person must be treated as an employee with subsequent access to workplace rights and entitlements”. The ACTU is also pushing for further industrial relations reforms in this area, proposing to extend the definition of employee as has been done in superannuation legislation.

“Employers should expect an ALP government would seek to legislate to create greater job security for employees”

4. Change the definition of casual employee: The ALP plans to introduce a definition of casual employee to remove the concept of permanent casual employees. This will involve setting an objective test and formulating a definition that will target the “peaks and troughs” created by sessional work. In other words, employers should expect an ALP government would seek to legislate to create greater job security for employees as part of its industrial relations reforms.

5. Close the gender pay gap: The ALP proposes to address the gender pay gap by introducing a number of measures, including:

  • Ensuring that equal remuneration provisions in the FW Act deliver for low paid women;
  • Legislating so that companies with more than 1,000 employees will be required to publically reveal their gender pay gap; and,
  • Amending the FW Act to ban secrecy clauses in employment contracts

6. Industry-wide bargaining: The ALP is considering facilitating bargaining for multi-employer and multi-agency public sector agreements focusing on certain sectors that have low paid workers, such as cleaners and early childhood educators. The ACTU and Greens will also continue to pressure the ALP to accept industry-wide bargaining across all sectors.

7. Termination of Enterprise Agreements: The ALP will legislate to prevent unilateral terminations of Enterprise Agreements (EA) where the EA has reached its nominal expiry date. The ALP also plans to legislate to ensure that it will no longer be possible to specify that an EA signed in one location covers workers in a different location or to have an EA signed by casuals that binds permanent employees.

The ALP have a national conference scheduled for 16–18 December 2018. This conference is critical for setting the ALP priorities around key areas such as industrial relations, and includes a discussion of ‘decent jobs with fair pay and conditions’ on Tuesday 17 December.