BIG ‘IR’ change in 2021. Here’s what you need to know.

No-one can argue that COVID-19 hasn’t dramatically changed the working landscape for many businesses… sometimes not for the better!

However, one of the positive things to come from the pandemic was agreement that a much-needed shakeup of Australian Industrial Relations (IR) laws was needed to make it easier for businesses of any size to navigate a complex awards system.

So it was great to hear that on 9 December 2020, the Australian Government introduced its Industrial Relations Reforms – Supporting Australia’s Jobs and Economic Recovery package and introduced the Fair Work Act (Supporting Australia’s Jobs and Economic Recovery) Bill into the Australian Parliament.

Some (not all) of the important changes proposed are summarised here *:

Part time overtime – but not everyone.

  • Part-time employees covered by the 12 awards in the accommodation, food and retail sectors can agree to work additional hours on their usual rate of pay (up to 38 ordinary hours per week).
  • The employer and employee must make and record this agreement – showing the part-time employee works at least 16 regular hours (but less than 38 hours) in total a week and their shifts are at least three hours long.
  • Watch this space as this provision may eventually be extended to other Modern Awards (Rob has been arguing for this for years)!

Fair Work Ombudsman (FWO)

  • Funding for the FWO will include $22.3m to investigate and rectify non-compliance by large corporations and $12.9m to create a new, free employer advisory service.
  • Small business employers will be able to access free advice from the FWO with the guarantee they will not be prosecuted if they correctly follow advice that later proves to be incorrect.

Easier Short Term Pay Deals

  • Updated: 18-12-20- The government may back down on many of the ‘short term pay deal’ provisions following…seek advice!
  • The bill proposes to allow employers two years to apply for pay deals that do not meet the “better off overall test”, which stipulates deals must improve on minimum conditions in the award.
  • This might signal a rise in interest in establishing Enterprise Agreements, however use caution when balancing the benefits of this versus the need.
  • NB: larger sized businesses will have to negotiate with unions on enterprise agreements if they want similar simplified rules.

Casual ‘double dipping

  • The bill defines “casual employment” more broadly. An employee is casual if they receive a loading of up to 25% on their base pay and the employer and employees’ intention at the start of the job is for the role to be casual.

But wait there is more! These changes can also be applied retrospectively to all casuals.

  • The bill states that if a casual employee is misclassified and a court finds they are owed entitlements due under permanent work – the casual loading already paid is set-off against the employer’s liability.
  • NB: check your contracts or payslips to see if you’ve made it clear there was a casual loading being applied to a casuals rate of pay. If not, seek advice before relying on this new change.

Bigger penalties for wage theft

  • The bill now criminalises serious wage theft (e.g. where an employer dishonestly engages in a deliberate and systematic pattern of underpaying one or more employees). The penalties can include prison terms and up to $1.1m for an individual or up to $5.6m for a corporation.
  • Civil penalties for breaches of workplace laws will also be increased and big businesses will be subject to penalties based on two times the benefit obtained, or up to three times for serious breaches.

Changes are expected to come into full force early 2021 and Quantum HR will keep you updated as these happen.

In the meantime, if you’re interested to read more about the changes, why not visit the Attorney-Generals webpage below and read what Mr. Porter (The Minister for Industrial Relations) has to say directly!

*this article is written for employers under the Fair Work (National) system. Changes covering employers under the Western Australian Legislation will be made in 2021 and updates announced at that time.

Thanks for reading and if you still have questions after reading this article, reach out to one of the team at Quantum HR and we’ll happily provide some further thoughts or two to consider.