Kimberly Jones in our Employment law team explains that on Wednesday, 9 December 2020, after discussions with various stakeholders and titbits of information about the bill being released earlier in the week, the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (FW Bill) was introduced to Parliament.
The FW Bill is to amend the Fair Work Act 2009 (Cth) (FW Act) to assist Australia’s economic recovery from the COVID-19 pandemic. The government’s proposed amendments to the FW Act are said to provide more clarity and certainty to employers and employees about their rights and responsibilities, while promoting flexibility in employment relationships, and a more streamlined and usable industrial relations system.
As this is the last week of Parliament for 2020, we expect to see much debate on the provisions of the FW Bill in 2021.
The proposed changes are vast, and we will continue to provide updates on the reforms from time to time. However, in this article, we focus on 3 of the major changes that are likely to impact our clients, being those relating to casual employment, ‘flex up’ provisions for part-time employees taking on additional hours, and compliance and enforcement provisions.
Casual employment has been an issue that we have discussed with many clients in 2020, mostly on the back of the decision in WorkPac Pty Ltd v Rossato  FCAFC 84 (Rossato). Our article earlier this year discussed casual employment and the Rossato decision.
Essentially, there has been a lot of confusion over what exactly constitutes a ‘casual’ employee, and concerns about the consequences of wrongly classifying an employee as ‘casual’, including potential payments for unpaid entitlements on top of any casual loading (known as ‘double-dipping’).
The government has been under pressure to address these issues and seeks to do so through the FW Bill by:
- Defining the meaning of a ‘casual employee’ in the FW Act, which focuses on the start of the employment relationship;
- Setting out a procedure for conversion of casual employment to full-time or part-time employment (already included in modern award provisions);
- Allowing the Fair Work Commission to deal with disputes about casual conversion (on a limited basis);
- Requiring casual employees to be provided with a Casual Employment Information Statement; and
- Enabling casual loading amounts to be offset against claims for leave and other entitlements (to prevent ‘double-dipping’).
These amendments are meant to give employers confidence and flexibility to create jobs and encourage rehiring of casuals who lost their jobs during the pandemic.
In focusing the definition of casual employment on the initial agreement between the parties, rather than the actual circumstances of employment at the time, this is a substantial change from the current common law position.
The FW Bill enables some award covered part-time employees to agree with their employers to work additional hours outside of their ordinary hours of work at ordinary time rates instead of overtime rates.
Compliance and enforcement
The FW Bill introduces a new criminal offence for underpayment where there have been dishonest and systematic wage underpayments.
The maximum penalty will be $1.11 million and four years imprisonment for individuals and up to $5.5 million for a body corporate. If an individual director is convicted under this offence, they may face disqualification from managing a body corporate under the Corporations Act 2001 (Cth).
There is also an increase in the value and scope of civil penalties for non-compliance with the FW Act, and a simplified approach to deal with small claims.
Other major changes
The FW Bill proposes major changes to the current federal industrial relations system, and we have touched on just a few of these above.
Other proposed changes include those relating to:
- enterprise bargaining, including streamlined negotiation and approval processes;
- Greenfields Agreements;
- additional flexibility for employers to respond to the ongoing effects of COVID-19; and
- a revised Better Off Overall Test (BOOT).
Despite consultation with stakeholders before the introduction of the FW Bill, some of the changes have been criticised for not adequately balancing the interests of both employers and employees to improve the current industrial relation system.
It is also arguable that there have been some opportunities missed in drafting the FW Bill, including properly addressing the complexity of the current modern award system, and resolving issues brought about by the gig economy.
In any event, employers must become familiar with the proposed changes and assess how these may affect their business in 2021 and beyond.
As with any major legislative change, the FW Bill provides an opportunity for businesses to review their current employment practices and forward plan to address any concerns or changes required.
HOW HHG LEGAL GROUP CAN ASSIST
If you have any queries or concerns about your current employment practices, including those relating to the FW Bill, we can provide you with advice and assistance to guide you through these issues. Please contact us via email or call us on 1800 609 945 to make an appointment.