Is your business and its workforce ready for Australia’s proposed new Labor laws?
Read on to understand the real impact of the ALP’s proposed industrial relations reforms on your business and our guide on how to best position your business post 18 May 2019 and remain productive and profitable.
Given the imminent risk, uncertainty and unpredictability surrounding the ALP’s proposed industrial relations platform, it is critical that employers take immediate action to prepare a comprehensive workforce contingency plan in readiness for significant changes to labour costs, productivity and profitability.
Federal Labor has proposed a number of reforms which are designed to reintroduce many of the inflexible and unproductive features of Australia’s industrial relations framework of the 1970s and 1980s, including compulsory arbitration and union led industry bargaining.
We have developed a checklist below to identify the impact of each major proposal on your business:
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OUR WORKFORCE CONTINGENCY CHECKLIST:
- Labor intends to outlaw arrangements such as transfer of business, corporate restructuring, phoenixing, labour hire, in-sourcing or out-sourcing arrangements, use of partnerships, unrepresentative agreements (e.g currently lawful agreements that fall outside the reach of the One Key and Aldi decisions) and independent contracting that are permitted under the current legislative framework.
- Labor is seeking to introduce a national labour scheme which will require that all labour hire employees receive the same terms and conditions of employment as direct employees.
- Labor has promised to capture those people working within the ‘gig economy’ such as Uber and Air Tasker as employees for the purposes of the Fair Work Act and modern awards.
- Labor proposes to impose tougher penalties in relation to legitimate contractor arrangements, which will be deemed to be a sham under the proposed laws.
- The impact of the proposed reforms on your labour cost could be catastrophic to your business’ viability. The ability to quickly source talent via on demand labour hire to staff projects will hasten.
- Employers must evaluate and cost their current labour arrangements. Businesses will need to plan for and implement actionable strategies with measured outcomes to prevent sudden restructuring requirements.
- If Labor successfully implements laws prohibiting the use of flexible and market responsive labour models, businesses may be forced to radically change their workforce arrangements and operational models to survive.
- Labor intends to provide unions with the ability to press claims upon multiple employers across an industry or a sector of an industry.
- We expect that these changes will significantly increase the complexity in compliance requirements and associated costs for employers.
- The imposition of pre-union-negotiated rates of pay and conditions on businesses will drive down competitiveness and prevent your business from delivering enterprise specific productivity benefits.
- We expect that Enterprise Agreements that are currently in place, prior to any legislation being passed, will be able to continue to operate.
- If your existing Enterprise Agreement is due to expire or you are currently in the midst of bargaining, the proposed changes will impose even greater bureaucratic thresholds and procedural requirements for employers to overcome and force union representation onto your workplace.
- Labor is committing to providing ‘equal access’ to arbitration for ‘intractable’ enterprise bargaining disputes after conciliation and mediation have failed.
- Currently, the Fair Work Commission may only arbitrate enterprise bargaining disputes in very limited circumstances. An appropriately worded dispute resolution clause in an enterprise agreement may only permit arbitration where both the employer and employee agree to this course of action.
- If you are in the process of negotiating an enterprise agreement, any IR strategy involving the termination of an expired agreement prior to legislative changes needs to be carefully reconsidered and weighed up.
- Labor are seeking to amend the Fair Work Act to implement a new threshold test or prohibit the Fair Work Commission from terminating an enterprise agreement.
- This reform will lock in terms of enterprise agreements until such time as they are replaced with a new enterprise agreement.
- Labor are also looking at terminating any existing WorkChoices agreements that are continuing to operate
- Currently, the Fair Work Commission has the ability to terminate enterprise agreements on the application of employers. This strategy has been utilised to break an impasse in protracted negotiations.
- The proposed reforms will impose greater access for unions to legally protected industrial action and compulsory arbitration.
- Your business can mitigate the risk of such disruption by developing an industrial action contingency plan.
- The Labor platform is proposing to make the following changes to employment entitlements:
- minimum national standards for long service leave;
- Fair Work Commission can arbitrate decisions made regarding flexible work arrangement requests;
- Fair Work Commission will take equal remuneration considerations into account when approving an enterprise agreement and reviewing modern awards; and
- remuneration in modern awards will not be reduced (e.g. no change to penalty rates will be allowed).
- These reforms will have a likely impact on increasing your business’ labour and compliance cost and impeding the flexibility in how you roster your employees.
- For example, given the potential for compulsory arbitration by the FWC if you do not agree, for legitimate business reasons, to flexible arrangements, your reasoning under this reform will be tested and ruled upon by the Commission.
YOUR IR LEGAL EXPERTS
S Billing & Associates provides a strategic and practical approach to employment and industrial relations matters and works directly with clients to achieve the best possible outcomes while mitigating risks that impact on the operations of the business.
All the lawyers at S Billing & Associates have years of specialist employment and industrial relations experience having worked directly for companies and employer associations.
Our seasoned practitioners have all participated in enterprise agreement negotiations and have provided strategic advice which has limited both the financial and reputational costs to a whole range of companies and industries.
Simon Billing is recognised as a leading IR expert. He has 34 years of experience in industrial relations across a range of industries. After spending 5 years as an industrial officer for the BLF (the forerunner to the CFMMEU), then for 7 years held a series of senior industrial relations positions within the WA public sector, followed by 9 years in a range of senior roles within the mining and resources sector employer body AMMA, before spending the last 13 years in specialist legal practice, continuing to work with many of Australia’s major companies in developing and executing industrial relations strategy and representing these companies in complex litigation in the Fair Work Commission, Federal Circuit Court and Federal Court of Australia.
Serena Billing has more than 20 years of relevant IR and employment experience including 13 years of post-admission legal experience in WA, VIC and NSW. Having worked in senior operational IR and human resources roles in the public and private sectors in WA and NSW, Serena brings a depth of practical experience to her role as a lawyer. Serena has represented employers in major IR litigation cases before the Fair Work Commission, Federal Circuit Court and Federal Court including a number of complex arbitrations, bargaining disputes and contentious enterprise agreement approvals.
© S Billing & Associates Pty Ltd. The contents of this publication are for reference purposes only and based on the ALP’s National Platform 2019. They do not constitute legal advice and should not be relied upon, as such. Please contact S Billing & Associates for legal advice that takes into account your specific circumstances before taking any action based on this publication.