Three months into a Labor administration, what has changed?
Three months in and the new Labor government has already backed an increase to the minimum wage and introduced universal family and domestic violence leave. But what other future employment law changes are on the horizon. What can employers expect and what should they be planning for?
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Already we have seen a more dynamic environment since the Albanese government took over. There is a lot of speculation building around the Jobs Summit being held in Canberra over 1st and 2nd of September when Labor’s plans will become clearer. Wage growth, industrial relations reform, and the skills shortage are all likely to feature on the agenda, with representatives from across the business landscape set to have their say.
One of the themes coming from Labor, as could be expected, is to give the trade union movement a more prominent role, by increasing their ability to be influential in workplaces, says Julian Arndt, Associate Director of Australian Business Lawyers & Advisors and industrial advocate representing peak employer groups in the Fair Work Commission.
As an example, Labor has been quick to target the construction industry and the much-maligned Building Code that was radically amended last month. Moves to abolish the building industry watchdog, the Australian Building and Construction Commission (ABCC) are already in play.
The second broad stroke of employment legislation is likely to be around equity issues, says Arndt. As mentioned, Labor acted quickly on domestic violence by introducing into law universal paid leave for family and domestic violence. A change that, as currently proposed, will give workers, overwhelmingly women - including those on casual contracts, the means to escape violent situations.
“Apart from domestic violence leave, we can expect more policies and bills from Labor aimed at ensuring equity and social justice. A lot of employers will be very much in support of those steps and may already have workplace policies in place,” says Arndt. He thinks there will be a policy shift towards a proactive rather than reactive approach to sexual harassment at work and advises businesses to ensure that their policies and contracts reflect the existence of a positive duty to prevent sexual harassment.
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Resources to assist small and medium-sized firms to understand and meet their legal obligations, to get a framework in place for dealing with cases of sexual harassment are readily available from a variety of organizations including humanrights.gov.au.
Arndt is interested in what else Labor will bring to the table with respect to equity and social justice issues in terms of industrial changes.
“There is always a danger that some employers will be overwhelmed by these kind of proposals and see them as political issues rather than simply employer responsibilities. Whatever the changes to the industrial legislation, they are legal obligations and whether you agree with targets or protections or think these issues should be dealt with in other ways, when the law comes in, you will be required to comply,” says Arndt.
The third category of legislative change that Arndt forsees is around job security and casualisation. Labor will be seeking to create more secure employment for workers, which became an important issue during the pandemic.
“If you’re an employer who engages large numbers of casual employees, contractors or fixed term employees for long periods of time then the tightening of contracts around flexible working could have a big impact,” says Arndt.
Labor stated in their manifesto that they will uphold the principle that if you work the same job, you should get the same pay and promised to legislate to ensure workers employed as contractors do not receive less pay than those paid directly. Labor is also promising to limit the number of fixed term contracts that an employer can offer to two before an employer has to hire someone permanently.
Certainly the approach that has been foreshadowed has the potential to change business models, says Arndt.
“An employer, such as a university that doesn’t know how many students will enroll in any given year or is otherwise dependent on external and temporary funding might have a series of fixed-term contracts. If contracts are limited, however, you have increases in job security on the employee side but decreases in flexibility on the employer side. That goes for restrictions on casuals and on labour hire as well,” says Arndt.
Employers will need to be ready to adapt and prepare for restrictions on flexible forms of work whether that is using casuals, contractors or gig workers and how they can regulate their employees.
In regard to enterprise bargaining, Labor has said it will stop employers from unilaterally terminating agreements without the consent of employees. The Federal government is also very likely to move to automatically terminate ‘zombie’ agreements. These are old, expired agreements that remain preserved in law which allows an employer to pay no less than the minimum base rate to an employee but often without other protections arising from modern awards like penalties and loadings.
More generally, stronger enterprise bargaining has the potential to raise wage growth. In theory, at an organizational level, it brings employers and workers together to thrash out what changes are required to improve productivity. Higher output can result in higher wages without the need to increase prices thereby adding to inflation.
However, at the moment, inflation is rising and we are likely to see higher wage claims and outcomes in enterprise bargaining, regardless of productivity gains, says Arndt. “Increased employee expectations in bargaining at the moment has far more to do with the economy than Labor introducing industrial relations reforms. Whether we see any legislative changes which can shift the dynamics of the current enterprise bargaining system, time will tell.”
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