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Home > News > The Industrial Relations Omnibus Bill and the potential impacts on working Australians

The Industrial Relations Omnibus Bill and the potential impacts on working Australians

2021-01-28

In early December 2020, the Federal Liberal Government introduced a Bill containing a suite of amendments to the  Fair Work Act 2009 (Cth)  that seek to significantly undercut workers' rights. 

The bill is called the  Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020.  The so-called "reforms" do nothing to support workers or job growth, instead the Bill imposes changed that - if made law - will: 

  • Undermine wage growth by permitting the passage of unfair enterprise agreements and removing overtime entitlements for part-time workers; 
  • Attack the rights of casual workers and increase the rate of insecure work; and 
  • Undermine bargaining on major construction projects 

What are the specifics of the "reforms" relevant to me and why are they bad? 

1. Creating insecure work through casualisation 

The Bill creates a definition of a casual employee. A person will be considered a casual if: 

  • An offer of employment is made; 
  • The offer of employment does  not  contain a firm advanced commitment to continuing and indefinite work according to an agreed pattern; and 
  • The person accepts that offer on that basis and is an employee as a result of that acceptance 

These changes seek to alter the outcome of the landmark case of  Workpac v Rossato [20202] FCAFC 84  in which the Full Bench of the Federal Court held that Mr Rossato (who worked in the mining industry) was "other than a casual employee" even though his contract of employment described him as a casual employee. 

This meant that he was entitled to be back paid annual leave, paid personal leave, and public holiday loadings in accordance with the  Fair Work Act 2009 (Cth)  because - in reality - he was not treated as a casual employee. 

Casual employees usually have irregular work patterns, breaks in continuity, and the ability to accept and reject work. Whereas, Mr Rossato was required to have a firm advanced commitment to continuing indefinite work according to an agreed pattern. The employer, in this case, had all the commercial benefits of a permanent employee while avoiding paying for the costs associated with that benefit. 

The Court also held that employers cannot offset (or reduce) their liability for unpaid entitlements by setting off an underpayment involving a casual against the 25% casual loading paid to casual workers. The inability to "offset" underpayments discourages employers from treating casuals like full-time employees without paying for the benefits. The Bill is seeking to change the law and permits employers to "offset" any underpayments against the 25% casual loading paid to casual workers. 

Finally, this new definition of casual employee focuses on the offer of employment and the acceptance of that offer. It does not pay mind to what occurs in reality. It is designed to overturn the  Workpac v Rossato  decision. It allows employers to take advantage of people who have no choice but to accept the job presented to them. Ultimately, it permits employers to sign workers up as casuals, treat them like full-time staff members without providing job security or paying leave entitlements such as annual leave and personal leave. 

2. Changes to the Better Off Overall Test (BOOT) 

When the  Fair Work Commission  approves an Enterprise Agreement, they need to compare the enterprise agreement to the relevant modern award and make sure that the Enterprise Agreement is better off overall for all employees and prospective employees. 

This test ensures that when workers collectively bargain, they are able to build their entitlements over time and seeks to prevent employers from changing rostering practices to undercut entitlements after an agreement is approved. 

The Bill proposes to allow the Fair Work Commission to completely disregard the BOOT tests when approving agreements for employers hit by COVID-19 and means that Enterprise Agreements that leave workers worse off than the relevant Industry Award, could be approved. 

3. Stripping of overtime rates 

The Bill introduces part-time flexibility provisions to Awards covering workers in the retail, food, and accommodation industries. 

The "flexibility provisions" permit employers to not pay overtime rates when a part-time employee works additional hours, so long as: 

  • The employee works at least 16 hours per week; 
  • The employee works overtime on an "ad hoc basis" 
  • The shift length is at least three hours 
  • The employee works less than 38 hours per week; and 
  • The employer and the employees agree 

This change is the thin end of the wedge. While the Bill says that such arrangements will be available for two years, there is no guarantee that the Government will not seek to extend them to other Awards and industries and make the change permanent. 

4. Wage theft light 

The Bill also contains a wage theft offence which is nothing more than a red herring. The offence is not supported by compliance and enforcement measures, does not encourage employers to engage in due diligence, targets only "systematic offenders" and fails to provide an effective mechanism for holding executives to account. 

It is a blatant attempt to override the much more comprehensive reforms legislated by the Victorian Government that: 

  • Establishes a wage inspectorate to investigate and prosecute offences 
  • Makes it an offence to falsify or fail to keep employee entitlement records 
  • Contain a comprehensive corporate liability model to ensure executives of organisations, that do not engage in due diligence, are held accountable; and 
  • Is not confined to "systematic offenders". 

This Bill undermines the rights that were fought hard and won by unions. 

If you have any questions about your enterprise agreement, your rights and entitlements as a casual worker or think you are being underpaid you can always reach out to your delegate or organiser at HACSU. 

About the author 

Laura Blandthorn is a lawyer and practices in Industrial and Employment Law, based out of Slater and Gordon's Melbourne office. Having previously been an advocate at the Young Workers Centre at Trades Hall, Laura is passionate about helping people get the justice and support they need and deserve. 

About Slater and Gordon 

Slater and Gordon have proudly served and partnered with HACSU and its members for many years, working together to advocate a better deal for its members. As a HACSU member, we provide discounted legal services and benefits in the following areas: 

  • Industrial and Employment law 
  • Workers Compensation 
  • Motor Vehicle Accident Claims 
  • Asbestos Claims 
  • Superannuation and Disability Claims 
  • Medical Law 
  • Public and Product Liability 

We also offer exclusive services to HACSU members in the following areas: 

  • Wills (including Free Standard Wills for members and their spouse/ partner) 
  • Family Law 
  • Criminal Law 

To access these services*, contact the HACSU Assist team today on 1300 651 931. HACSU Assist will then arrange a priority referral to Slater and Gordon to ensure your access to a range of exclusive benefits and discounted legal fees. 

*Conditions apply. See www.slatergordon.com.au for details.

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