The Morrison Government is preparing to introduce its long-awaited Industrial Relations Omnibus Bill into Federal Parliament tomorrow (Wednesday 9 December), seeking to legislate a range of amendments to the Fair Work Act 2009 discussed amongst employer and union representatives in tripartite working groups earlier this year.
The Omnibus Bill will contain five groups of industrial relations (IR) reforms aligned to each of the working groups convened between June and September by the Attorney-General and Minister for Industrial Relations, Christian Porter (pictured), in response to the COVID-19 economic recession.
Areas the bill will address include:
- A range of technical and process issues with enterprise agreement making.
- Longer duration for greenfields agreements used in the construction of major resources, energy and infrastructure projects.
- Legislating a new, clear definition of casual employment in the FW Act, while protecting employers from ‘double dipping’ back-pay claims through an offsetting mechanism.
- Some simplification of industrial awards applicable to small business sectors.
- A new penalties regime for wage underpayments, including criminalising the most serious cases.
AREEA was heavily involved in the IR working groups that informed development of the Omnibus Bill.
The Group had a direct representative role in discussions on enterprise agreement making and greenfields agreements, and was further involved in discussions on casual employment through its association membership of the nation’s largest business network, the Australian Chamber of Commerce and Industry, of which AREEA’s CEO Steve Knott AM is a Board Director.
AREEA understands the government is seeking to have the bill examined by a parliamentary committee over the summer break, and pass through both houses early next year in order to take effect at around the time the JobKeeper wage subsidy scheme is scheduled to end (28 March 2021).
A summary of key changes of interest to AREEA’s members is provided below, including a number of announcements already made.
Enterprise agreement making
The government has not yet made any formal announcements related to the IR Omnibus Bill’s amendments to the enterprise agreement making framework.
Nonetheless, it has been widely reported that the Fair Work Commission will be provided with a new statutory time limit – likely to be 21 days – in which it must either approve an enterprise agreement application or provide reasons why it was not able to do so in that time.
To facilitate this faster agreement making and approvals benchmark, a number of process changes and flexibilities are expected to be included in the bill, such as not requiring the Better-Off-Overall-Test (BOOT) to consider hypothetical scenarios, relaxed rules about explaining the terms of an agreement, a simplified notice of employee representational rights, and more limited ability for third parties to appeal agreements late in the process.
With its members having a strong interest in this area, AREEA will provide a detailed breakdown on the specific changes when the bill is made public.
‘Project Life’ Greenfields Agreements
Last week the government confirmed that ‘Project Life Greenfields Agreements’ would form a key component of the IR Omnibus Bill.
This reform refers to extending the maximum duration of greenfields agreements, currently four years, to up to eight years when used in the construction phase of a major resources, energy and/or infrastructure project.
As a result the bill would effectively fix a key challenge for major project investors when considering allocating capital to Australian projects – the inability to secure industrial relations certainty for the whole length of the project construction phase.
Welcoming the announcement, AREEA CEO Steve Knott said this anomaly has been a “massive disincentive” to investment in the past.
“Investors would often scratch their heads as to why greenfields agreements had a maximum duration of four years when applied to projects that take an average of six years to build. It makes no sense and is a very real barrier to securing final investment decision,” Mr Knott said.
“This simple but important change will significantly boost Australia’s ability to secure new major project investment in the ultra-competitive post-COVID global marketplace.”
AREEA notes the Federal Department of Industry’s Office of the Chief Economist last week released its Resources and Energy Major Projects Report, strongly indicating that investment in Australia’s resources projects has entered a new growth cycle.
The Chief Economist reported the number of resources and energy major development projects increased by 19 per cent to 335 projects, and the value of projects in the investment pipeline increased by 4 per cent to $334 billion.
Casual employment
The Attorney-General has also confirmed the IR Omnibus Bill will address a number of issues relating to casual employment.
Firstly, the bill will seek to legislative a new, clear definition of casual employment in the FW Act, following a number of cases where the characteristics and definition of casual employment have been the centre of dispute.
Among other expected changes, an employer will have to offer full or permanent part-time work after a year if the employee has been working a regular pattern of hours for the past six months. The employee can decline the offer but request a change each six months afterwards, so long as they remain eligible.
Further, the Omnibus Bill is widely expected to deal with ‘double dipping’ claims – being back-pay claims from former employees who received casual loading in their payrates but later seek to be awarded entitlements associated with permanent employment such as annual leave and redundancy pay.
Minister Porter said the change made sense because ‘‘everyone knows that paying twice for the same benefits does not pass the fairness test and would cripple many businesses’’.
It follows resources and energy employers last week welcoming the High Court of Australia granting special leave for Workpac to appeal the Rossato decision, a landmark test case on whether casual employees can ‘double dip’ on employment entitlements.
Compliance & Enforcement measures
In a final announcement on 7 December, the government announced the Omnibus Bill will include tougher penalties for underpayments of wages and, for the first time, a criminal penalty regime for the most serious cases.
The offence would apply in circumstances where a national system employer dishonestly engages in a deliberate and systematic pattern of underpaying one or more of their employees, with a new offence carrying a maximum penalty of 5,000 penalty units ($1,110,000 fine) or imprisonment for up to 4 years (or both) for individuals, and 25,000 penalty units ($5,550,000) for a body corporate.
Individuals convicted of the criminal offence would also be automatically disqualified from managing corporations for a period of five years under the Corporations Act 2001, and the criminal offence will not apply to one-off underpayments, inadvertent mistakes or miscalculations.
Civil penalties would also be strengthened to improve compliance with a greater focus on compliance by increasing civil penalties for individuals and corporations.
Next steps
Shortly after the IR Omnibus Bill is introduced into parliament, AREEA will issue a member circular breaking down its most important components for resources and energy employers.
In coming months AREEA will also be executing a comprehensive advocacy plan to give changes important to our members the best chance of passing through the senate and into law.
Members will be encouraged to get involved with AREEA’s advocacy activities to assist with the bill’s successful passage.
Fixing enterprise bargaining, ‘project life’ greenfields agreements, and restoring certainty to casual employment, are three key policy priorities outlined in AREEA’s Pathway to Productivity campaign launched in 2019. You can read the business case for these important IR amendments here.
For more information on the government’s Industrial Relations Omnibus Bill, any other matters relevant to pending industrial relations changes, or AREEA’s advocacy campaign, contact our policy team at [email protected].
