Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020

Bills Digest No. 53, 2020–21
PDF version [1133KB]

Kaushik Ramesh and Jaan Murphy
Law and Bills Digest Section
16 March 2021

Contents

The Bills Digest at a glance
Purpose of the Bill
Structure of the Bill
Commencement details
Background
Committee consideration
Policy position of non-government parties/independents
Position of major interest groups
Financial implications
Statement of Compatibility with Human Rights
Key issues and provisions
Schedule 1 - Casual employment reforms
Schedule 2 – Modern Award reforms
Schedule 3 - Enterprise agreements reforms
Schedule 4 - Greenfields agreement reforms for major projects
Schedule 5: Compliance and enforcement measures
Schedule 5: changes to small claim dispute resolution processes
Schedule 5: criminalising certain forms of wage theft
Schedule 6 – Fair Work Commission amendments
Appendix A

Date introduced: 9 December 2020
House: House of Representatives
Portfolio: Industrial Relations
Commencement: The majority of the Bill’s substantial amendments commence on the day after Royal Assent. Further detail is set out on page 7 of this Bills Digest.

Links: The links to the Bill, its Explanatory Memorandum and second reading speech can be found on the Bill’s home page, or through the Australian Parliament website.

When Bills have been passed and have received Royal Assent, they become Acts, which can be found at the Federal Register of Legislation website.

All hyperlinks in this Bills Digest are correct as at March 2021.

The Bills Digest at a glance

What the Bill does

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Bill) amends the Fair Work Act 2009 (Fair Work Act or the Act) with the aim of improving the operation and usability of Australia’s national industrial relations system. The Bill has been introduced in the context of, and is intended to respond to, Australia’s ongoing economic recovery in the wake of the COVID-19 pandemic.

The Bill’s proposed reforms primarily relate to casual employment, flexibility under modern awards for industries impacted by COVID-19, the making and approval of enterprise bargaining agreements, greenfield agreements for major projects and compliance and enforcement (including responding to wage theft). The Bill’s amendments can be grouped as follows:

Schedule 1 makes amendments to insert a definition of casual employment, provide for a casual conversion process and to address issues around ‘double dipping’ with respect to casual loading
Schedule 2 makes amendments providing that employers covered by identified modern awards can offer additional hours to part-time employees and issue flexible work directions to employees
Schedule 3 makes amendments to the current requirements around enterprise agreements including in relation to the operation of the Better Off Overall Test (BOOT) and agreement approval processes
Schedule 4 make amendments to allow eight year greenfields agreement for major projects
Schedule 5 makes amendments in relation to compliance and enforcement including by introducing new penalties and criminalising certain forms of wage theft
Schedule 6 makes amendments in relation to when the FWC can dismiss applications and vary or revoke its own decisions.
Schedule 7 provides for relevant application, saving and transitional provisions with respect to other parts of the Bill.

Committee

The Bill was referred to the Senate Education and Employment Legislation Committee for inquiry and report by 12 March 2020. The Committee recommended the Bill be passed. Dissenting reports from the Australian Labor Party Senators and Australian Greens Senators opposed the Bill.

Position of non-Government parties/independents

The Bill is politically controversial. The Australian Labor Party and the Greens oppose the Bill. Centre Alliance supports some aspects of the Bill, but not others. Pauline Hanson’s One Nation does not support the casual employment reforms that the Bill proposes.

Stakeholder views

The Bill has had a polarised reception from major interest groups and stakeholders. On the whole, stakeholders on the employer side of the debate broadly supported those amendments relating to casual employees, additional hours agreements and flexible work directions, enterprise agreement requirements (including amendments to the operation of the BOOT), greenfields agreements and the FWC’s ability to deal with applications.

Employee interest groups broadly opposed the above amendments, but did indicate broad support for those amendments relating to wage theft and compliance and enforcement.

Purpose of the Bill

casual employment
flexibility under modern awards for industries impacted by COVID-19
the making and approval of enterprise bargaining agreements
greenfield agreements and major projects and
compliance and enforcement (including in relation to wage theft).

Structure of the Bill

The Bill contains seven Schedules. These Schedules primarily make the following amendments:

Schedule 1 makes amendments to insert a definition of casual employment, provide for a casual conversion process and to address issues around ‘double dipping’ with respect to casual loading
Schedule 2 makes amendments providing that employers covered by identified modern awards can offer additional hours to part-time employees to be paid at ordinary rates of pay, and issue flexible work directions to employees
Schedule 3 makes amendments to the current requirements around enterprise agreements, in particular:
- Parts 2-4 make amendments to pre-approval and voting requirements in the enterprise agreement bargaining process
- Part 5 makes amendments to the Better Off Overall Test (BOOT)
- Part 6 provides for new National Employment Standards interaction terms to be inserted into agreements
- Part 7 provides for the variation of single enterprise agreements to cover eligible franchisee employers and employees
- Part 8 changes requirements as to when an application to terminate an agreement can be made
- Part 9 limits who has standing to appear before the Fair Work Commission (FWC) with respect to enterprise agreement matters
- Part 10 sets a time limit for the approval or variation of agreements by the FWC
- Part 11 makes amendments that provide that the FWC must perform its functions and exercise its powers in a way that recognises the outcome of bargaining at enterprise level
- Part 12 makes amendments in relation to how a transfer of business affects employees
- Part 13 provides for the cessation of so-called legacy agreements
Schedule 4 make amendments to allow eight year greenfields agreement for major projects
Schedule 5 makes amendments in relation to compliance and enforcement including by introducing new penalties and criminalising certain forms of wage theft
Schedule 6 makes amendments in relation to when the FWC can dismiss applications and vary or revoke its own decisions and
Schedule 7 provides for relevant application, saving and transitional provisions with respect to other parts of the Bill.

Commencement details

The majority of the amendments in the Bill commence on the day after Royal Assent. The exemptions to this are as follows:

the amendments that will repeal the proposed flexible direction provisions (Part 3 of Schedule 2) commence two years from the day after Royal Assent
amendments to the small claims procedures (Division 1 of Part 2 of Schedule 5) commence six months after Royal Assent
amendments that are contingent on the commencement of the Federal Circuit and Family Court of Australia Act 2021 (Division 2 of Part 2 of Schedule 5) commence at the later of six months after Royal Assent or the commencement of the Federal Circuit and Family Court of Australia Act 2021
amendments relating to prohibiting advertising employment at less than the minimum wage (Part 3 of Schedule 5) commence six months after Royal Assent
amendments relating to the functions of the Fair Work Ombudsman and the Australian Building and Construction Commissioner (Part 6 of Schedule 5) commence six months after Royal Assent
transitional amendments relating to advertising employment at less than the minimum wage and ongoing small claims proceedings (items 2 and 3 of Schedule 7) commence six months after Royal Assent.[2]

Background

Brief history of IR

Prior to 2005, ‘Australian employers and workers were covered by a patchwork of federal, State or Territory laws or instruments’.[3] The Workplace Relations Amendment (Work Choices) Act 2005, also known as the WorkChoices reforms, represented the first attempt to bring the majority of the industrial relations landscape under Commonwealth legislation. The then Coalition Government intended to use the WorkChoices reforms to move towards a national system where employers would only have to comply with one set of laws, instead of several.[4] To do this, the Government primarily relied on the Parliament’s corporations power under the Constitution. This approach was upheld in the 2006 Work Choices case.[5]

In 2007, the Labor Party won government partially on the back of an election campaign of reversing the WorkChoices reforms.[6] The Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 was a piece of transitional legislation introduced by the Rudd Government as a precursor to the introduction of the Fair Work Act. While key aspects of the WorkChoices reforms were removed, the concept of a national industrial relations system remained.

The Fair Work Act subsequently replaced the previous industrial relations framework under the Workplace Relations Act and is the basis of the current industrial relations system, or ‘national system’, in Australia. One key aspect of the national system framework is the National Employment Standards (NES) – these are the ten minimum standards and entitlements that apply to ‘national system employees’.[7] The NES include minimum entitlements, for example in relation to maximum weekly work hours, leave and redundancy pay.[8]

While most Australian employees are covered by the national workplace relations system, there remain certain categories of employees that are covered by state laws, such as certain public sector and local government workers.[9] It should be noted that employees and employers that fall outside the national workplace relations system will not be affected by the reforms in the Bill.

While there have been several amendments to the Fair Work Act, there have been only two wholesale and major reviews of the framework. In its 2012 evaluation of the Fair Work legislation (the Fair Work Act and the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008), Towards more productive and equitable workplaces, the Review Panel made 53 proposals for reform. The Review Panel however noted that the laws were working well and the system of enterprise bargaining that underpins the NES and modern awards was delivering fairness to employers and employees.[10]

The Productivity Commission similarly conducted a review into the workplace relations system in 2015.[11] The Inquiry report produced a long list of recommendations, however again noted that Australia’s industrial relations system was not ‘systemically dysfunctional’ and only required ‘repair’ in certain respects, not replacement.[12]

Some of the recommendations in these reviews have been actioned, whereas others have not.[13] The Government contends that some of the amendments in the Bill are aimed at addressing concerns put forward by these two comprehensive reviews.[14] For the most part however, the amendments in the Bill are not made in response to the recommendations in these reviews.

Context of Bill

The Bill’s introduction comes in the wake of the broader response to the COVID-19 pandemic and the Government’s desire to address the ‘economic crisis’ that the pandemic has caused.[15] The proposed reforms to Australia’s industrial relations system as part of the Government’s wider response to COVID-19 were flagged relatively early in the pandemic year. In a speech to the National Press Club on 26 May 2020, the Prime Minister noted:

Our industrial relations system has settled into a complacency of unions seeking marginal benefits and employers closing down risks, often by simply not employing anyone.

The system has lost sight of its purpose - to get the workplace settings right, so the enterprise, the business can succeed, so everybody can fairly benefit from their efforts and their contributions.

…

The extent of the damage wrought by Covid-19 on the Australian economy, and the enormity of the challenge we now face to get Australians back into jobs, means the policy priorities for recovery will be different to those in place before this crisis.

We now have a shared opportunity to fix systemic problems and to realise gains as a matter of urgency to get more people back into work.[16] (Emphasis added)

During this address, the Prime Minister announced that the Minister for Industrial Relations would lead and chair five working groups to formulate a practical reform agenda for the industrial relations system.[17]

The five working groups and their membership were as follows:

Group 1 – Casuals

Employer organisations: Australian Chamber of Commerce and Industry (ACCI), Ai Group, Council of Small Business Associations of Australia (COSBOA), Australian Retailers Association (ARA), Australian Higher Education Industrial Association.

Unions: Australian Council of Trade Unions (ACTU), National Tertiary Education Union (NTEU), Australian Nursing and Midwifery Federation (ANMF), United Workers Union (UWU), Health Services Union (HSU).

Group 2 – Award Simplification

Employer organisations: ACCI, Ai Group, COSBOA, Australian Hotels Association (AHA), National Retail Association (NRA).

Unions: ACTU (2 reps), UWU, Australian Workers Union (AWU), Shop Distributive and Allied Employees Association (SDA).

Group 3 – Enterprise Agreement Making

Employer organisations: ACCI, Ai Group, AMMA Australian Resources and Energy Group, Business Council of Australia (BCA), Master Builders Australia (MBA).

Unions: ACTU, SDA, Community and Public Sector Union (CPSU), Transport Workers Union (TWU), Electrical Trades Union (ETU).

Group 4 – Compliance and Enforcement

Employer organisations: ACCI, Ai Group, National Farmers Federation (NFF), COSBOA, AHA.

Unions: ACTU (2 reps), Finance Sector Union (FSU), Australian Services Union (ASU), Independent Education Union (IEU).

Group 5 – Greenfields Agreements

Employer organisations: ACCI, AMMA, Minerals Council of Australia (MCA), Australian Constructors Association (ACA), MBA.

Unions: ACTU, Construction Forestry Mining Maritime and Energy Union (CFMMEU), AWU, Australian Manufacturing Workers Union (AMWU), ETU.[18]

The five working groups reflect the subject matter of the five substantive reform related schedules in the Bill.

Even though the context for the current Bill is the response to the COVID-19 pandemic, it should be noted that the proposal for reform to industrial relations under this Government predates the pandemic. In 2019, the Attorney-General and Minister for Industrial Relations launched a review of the industrial relations system, particularly in relation to casual employment related reforms.[19] Similarly, the Government consulted on wage theft reforms in 2019.[20] Both of these subject matters are addressed by the Bill.

Not wholesale reforms

As noted above, the most recent comprehensive reviews of the Australian industrial relations framework have pointed out that while there are opportunities for reform, the system as a whole is broadly operating well. Perhaps because of this, and because of the politically fraught nature of pursuing substantive industrial relations reforms, the Government is not pursuing wholesale reforms in this Bill. The Minister for Industrial Relations argues that the reforms are:

… founded on a series of practical, incremental solutions to key issues that are known barriers to creating jobs.[21]

The Minister has also noted that the amendments are aimed at what the Government considers to be a middle ground:

So the ideological IR brigade will write that it's, you know, just tinkering around the edges and it's too modest. Some people will describe it as radical. It's clearly neither of those two things. It's very consequential change, but it's clearly not revolutionary change to the system. It's incremental consequential change that can possibly - in fact we think hopefully - have a passage through Parliament, create jobs by removing barriers to job growth.[22]

The industrial relations debate

Any more than minor reform to the industrial relations framework in Australia is politically controversial and often causes a clash of ideological views. Professor Andrew Stewart notes the following around the purpose of employment laws which may be useful to consider in the context of the current Bill:

The view that employment regulation needs to avoid imposing undue burdens on businesses or hampering attempts to lift productivity and competitiveness has been widely accepted …

Nonetheless, a clear divide has opened up. On one side are those who continue to espouse the need for protective regulation of one sort or another. They reject the idea that labour is a commodity, and consider ‘decent’ working conditions as a fundamental human right. On the other are business and political groups … who believe that radical reforms are necessary to promote greater ‘freedom’ and ‘choice’.[23]

This difference in opinion on the purpose of regulating the industrial relations framework reflects the views of various stakeholders as discussed in this Digest.

Committee consideration

Senate Education and Employment Legislation Committee

The Bill was referred to the Senate Education and Employment Legislation Committee for inquiry and report by 12 March 2020. Details of the inquiry are at the inquiry homepage.

The majority Committee report recommended that the Bill be passed – arguing that the Bill will address barriers to job creation, wages and economic growth in the context of the COVID-19 pandemic.[24] The Committee noted that it was encouraged by the broad support for the Bill ‘from those stakeholders who will be responsible for decisions around whether to hire workers and pay higher wages in coming months and years, and their confirmation that the measures in the bill will assist in delivering these outcomes’.[25]

The Labor Senators produced a dissenting report recommending that the Bill be rejected in its current form, arguing that the Bill does not meet a ‘holistic public interest test’.[26] The Labor Senators argued that the Bill ‘panders’ to big business and will only benefit a small set of stakeholders in the Australian economy.[27]

The Australian Green Senators also produced a dissenting report opposing the Bill on the basis that it will entrench insecure work, reduce wages and increase the power of employers.[28] The Australian Greens Senators recommended the Senate instead pass the Australian Greens Bills: the Fair Work Amendment (Tackling Job Insecurity) Bill 2018 and the Fair Work Amendment (Making Australia More Equal) Bill 2018.[29]

Senate Standing Committee for the Scrutiny of Bills

The Senate Standing Committee for the Scrutiny of Bills (Scrutiny of Bill Committee) noted that the Bill provided for some significant matters in delegated legislation. The Committee requested the Minister’s detailed advice on why it was necessary and appropriate for delegated legislation to be used for:

the prescription of the model NES interaction term (Part 6 of Schedule 3 of the Bill)
the prescription of matters relating to the content or form of, and manner of providing to employees, a Casual Employment Information Statement (item 5 of Schedule 1 of the Bill) and
other purposes for which additional agreed hours are to be treated as ordinary hours of work (proposed paragraph 168Q(4)(e) as inserted by item 5 of Schedule 2 of the Bill).[30]

The Scrutiny of Bills Committee also drew proposed subsection 23B(5) of the Act, as inserted by Schedule 4 of the Bill to the attention of Senators and left it to the Senate to consider the appropriateness of this provision.[31] This provision allows the Minister to declare major projects in a non-disallowable instrument (the provision is discussed further in the key issues and provisions section below, under the Schedule 4 subheading).

The Scrutiny of Bills Committee also requested the Minister’s justification for amendments removing the requirement for the consent of parties to conduct an appeal or review by the FWC without a hearing (amendments made by item 3 of Schedule 6 of the Bill).[32] The Committee further requested advice from the Minister around the necessity for retrospective application in relation to the casual employee amendments (proposed clauses 45 and 46 of Schedule 1 to the Act, as inserted by item 1 of Schedule 7) – the Committee has asked for advice on the extent to which the retrospective effect may have an adverse impact on individuals.[33] All of these provisions are also discussed in the ‘Key issues and provisions’ section of this Digest.

Policy position of non-government parties/independents

The Australian Labor Party (ALP) strongly opposes the Bill. The ALP’s initial criticism of the Bill focused on its amendments relating to a new exemption to the BOOT, arguing that the amendments to the test would lead to wages for certain employees being lowered.[34] As discussed below in this Digest, the Government subsequently decided to remove these controversial amendments. The ALP however has made clear that even with the removal of the amendments to the BOOT, it will not support the Bill.[35] The ALP’s concerns include the following:

the Bill’s amendments in relation to casual employees will actually entrench casualisation
the additional hours agreement provisions are not voluntary in a ‘real world’ sense as the hours would just go to someone who does agree to them
flexibility direction provisions in relation to certain awards represent a removal of protections for workers
the enterprise agreement amendments represent a ‘permanent cut to rights’
the amendments relating to greenfields agreements that would lock in an agreement for eight years would have negative impact on wages, conditions and workforce rights
the wage theft provisions weaken existing laws in Victoria and Queensland
on the whole the Bill ‘attacks job security and attacks pay’.[36]

The Australian Greens (the Greens) strongly oppose the Bill. The Greens leader, Adam Bandt, argues in his second reading speech that the measures in the Bill would increase insecure work:

… because … this bill does three key things. The first is that it lets employers call you casual even if you're not, and there's nothing you can do about it. The second is that it spells the beginning of the end of full-time work contracts, because it introduces into the system a new form of contract where the employer can employ you part time and then put your hours up or down as the employer wants. And the third thing it does that the government doesn't tell you about is take an already difficult process of bargaining for better wages and conditions and tilt it even further in the employer's favour, making it harder for you to ask in your workplace for what you're entitled to.[37]

Mr Bandt also proposed amendments in the House of Representatives aimed at tackling job insecurity.[38]

Pauline Hanson’s One Nation (PHON) has argued that the Bill does not represent ‘genuine reform’ and is aimed at ‘big business’ and the ‘IR Club’ rather than small to medium employers.[39] PHON’s Industrial Relations spokesperson, Senator Malcom Roberts, noted that the Bill’s casual employee related provisions in particular have the effect of “trashing the ‘long term flexible but predictable’ casual employment arrangements that suited many small business employers and employees”.[40] Senator Roberts has argued that the Bill will hurt business and affect pay and working conditions – he has called for substantial amendments to the Bill.[41]

Independent MP Zali Steggall flagged some issues with the Bill, but noted that these issues were not outweighed by its benefits, especially by benefiting small businesses through making the industrial relations system more streamlined and efficient.[42] Ms Steggall therefore gave her support to the Bill but asked the Government to look at further changes proposed by the Law Council of Australia and the Business Council of Australia.[43] Conversely, independent MP Helen Haines opposed the Bill, noting that she did not think it was ‘unsalvageable’, but felt there was more work on the Bill to be done.[44] Bob Katter of Katter’s Australian Party voted against the Bill in the House of Representatives.[45]

Rebekha Sharkie, of the Centre Alliance, noted in relation to the Bill: ‘there appear to be elements that have merit and some that I believe must be addressed and/or rejected outright’.[46] Ms Sharkie supported the proposed definition of casual employee and some of the compliance and enforcement provisions in the Bill. Ms Sharkie however did not support the additional hours agreement provisions, noting that while these agreements require consent, that does not recognise ‘the power imbalance between workers and employers. The government's defence that any additional hours must be by agreement I just don't believe is correct’.[47] Ms Sharkie urged the Government to ‘pull apart’ the Bill in the House of Representatives given its many ‘fair and reasonable’ elements, noting that she could not support the Bill if this did not occur. She has also urged the Government ‘to go back to the table, sit down with unions and sit down with employer groups’ in relation to the Bill.[48]

Position of major interest groups

The Bill has had a polarised reception from major interest groups and stakeholders. This polarisation largely reflects the traditional split between peak bodies and groups that represent employer and industry interests against those groups who represent employee interests. As such, few parts of the Bill have received wholesale support from across this spectrum.

On the whole, stakeholders on the employer side of the debate broadly supported those amendments relating to casual employees (Schedule 1 of the Bill), enabling additional hours agreements and flexible work directions under identified modern awards (Schedule 2), changes relating to enterprise agreement requirements (including amendments to the operation of the BOOT – Schedule 3 of the Bill), amendments relating to greenfields agreements (Schedule 4) and amendments relating to the FWC’s ability to deal with applications (Schedule 6). Conversely, reflecting the polarisation in the industrial relations debate, employee interest groups broadly opposed these amendments.

The amendments in Schedule 5 relating to wage theft and compliance and enforcement had general support from employee interest groups, however did not have this support from employer interest groups.

The Senate Education and Employment Legislation Committee received 132 submissions in response to the inquiry to the Bill, perhaps indicating the high level of interest in the Bill as one of the more significant industrial relations reform proposals in recent years.[49]

Comments by certain significant stakeholders on specific proposed sections of the Bill are noted in the relevant Key Issues and Provisions sections below. This Digest attempts to provide a balance by providing views from both employer representative and employee representative sides of the spectrum on the Bill’s various amendments. For the most part this Digest has taken the Australian Council of Trade Unions (ACTU) submission as generally reflective of the employee representative side of the debate – this is because the ACTU is the peak body for Australian unions; multiple employee representative groups endorsed the ACTU’s submission in their own submission.[50] Where possible, this Digest has also discussed other views on the Bill from think tanks and academics.

Financial implications

The Government advises that the measures in the Bill are estimated to have a minor financial impact and will be reported once costings have been finalised.[51]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[52]

Parliamentary Joint Committee on Human Rights

The Parliamentary Joint Committee on Human Rights (PJCHR) reported on the Bill in its second report of 2021.[53] The PJCHR sought the Minister’s advice on some specific amendments in the Bill. In particular, the PJCHR:

sought further advice from the Minister on a range of matters in order to assess whether the proposed additional hours agreements are compatible with the rights to work, just and favourable conditions of work and equality and non-discrimination (including whether the measure will have a disproportionate impact on women)[54]
sought further advice from the Minister on a range of matters in order to determine whether the flexible work directions proposal is proportionate in relation to human rights[55]
sought further advice from the Minister on a range of matter to assess whether the greenfield agreements amendments are compatible with human rights[56]
sought further advice from the Minister on a range of matters to assess whether the amendments in Schedule 6 would be compatible with the right to a fair hearing.[57]

As of the time of writing this Digest, the Minister’s response to these matters had not been published.[58]

Key issues and provisions

Schedule 1 - Casual employment reforms

Background on how casual employment is defined

Modern awards, enterprise agreements and employers usually define casual employment as employment where the employee is paid and engaged as a casual employee. The FWC has noted that as a matter of practice:

… most modern awards permit persons to be employed as casuals on the basis that they are engaged and paid as such – that is, casual employment for award purposes is usually no more than a method of payment selected by the employer and accepted by the employee at the point of engagement … the evidence of the practical position is overwhelmingly that persons engaged on a casual basis are not afforded the NES entitlements we have referred to [that is, paid annual leave, paid personal/carer’s leave, paid compassionate leave, payment for public holidays not worked, notice of termination of employment or payment in lieu thereof, and redundancy pay], and are paid an award casual loading in lieu of these entitlements.[59] (Emphasis added)

The Attorney-General’s Department (AGD) also notes that historically, general industrial practice has aligned with this description of casual employees in most modern awards – namely being employees that are engaged as casuals and paid a casual loading.[60]

The categorisation of an employee is important as it determines what sort of statutory entitlements are available (and not available) to them, in particular in relation to the NES.

Currently, there is no legislative definition of a ‘casual employee’ or a ‘casual worker’. However, there is a long standing definition of casual employment at common law. A long line of cases, going back to at least 1936,[61] has considered the question of how casual employment should be defined. Terms such as ‘casual worker’ are not precise terms, but rather ‘colloquial expressions’[62] – in effect this means that the true legal relationship between the parties needs to be determined on a case by case basis. A number of criteria can be considered, including whether the employment consists of irregular work patterns, discontinuity, uncertainty, intermittency of work and unpredictability.[63] For example, whether or not employees have consistent start and finish times may affect whether or not they are considered casual employees.[64]

In short, the common law definition of casual employment is employment where there is the absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work, as determined by the actual conduct of the parties.[65] Despite definitions in the modern award, simply being engaged as a casual does not mean that a person is a casual employee under the common law.

Two recent court cases in particular – Workpac v Skene (Skene) and Workpac v Rossato (Rossato) have brought the common law approach to casual employment to the fore. The amendments in Schedule 1 of the Bill can be seen in part as a direct response to these two decisions.

The Workpac v Skene case (Skene)

WorkPac operated a labour hire business which employed Mr Skene as a dump-truck operator on a fly-in fly-out basis. Mr Skene was provided with a "Notice of Offer of Casual Employment" and executed a document titled "Casual or Fixed Term Employee Terms and Conditions of Employment". He was firstly employed at Anglo Coal. Subsequently, he was placed at Rio Tinto's Clermont mine, where his hours were 12.5 hours per shift, seven days on, seven days off. He was provided with a 12-month roster in advance and worked in accordance with his roster.[66]

Mr Skene claimed that he was a permanent full time employee and sought his entitlements under the NES. WorkPac on the other hand argued that Mr Skene was a casual employee and so these entitlements were not available to him.[67]

In a Full Federal Court decision, a decision of the lower court was upheld that Mr Skene was in fact a permanent employee, despite being engaged as a casual employee. Amongst the factors considered by the primary judge were the regularity, predictability, certainty and continuity of the pattern of Mr Skene’s work – this reasoning was upheld by the Full Federal Court.[68]

In Skene, the Federal Court held that definitions of employment in modern awards cannot override the common law definition of casual employment. This is because:

It ought to be presumed that where Parliament is prepared to cede control over a significant definition used in the National Employment Standards to the FWC or to industrial parties making enterprise agreements, it would do so expressly. That is particularly so given the consequences which that course is likely to entail. Delegating to the FWC and to the makers of enterprise agreements the power to define who is a casual employee for the purposes of the National Employment Standards would likely result in a substantial differentiation in the accessibility of those Standards to some employees as opposed to others, despite the fact that the true nature of the employments of all is the same. Alternatively, it may result in the access of the same employees varying over time, as new enterprise agreements are made, despite the fact that the true nature of those employments has not altered.[69]

As noted in the case summary above, the Skene case found that an employee who was characterised as a casual worker was in fact not a casual worker under the common law and so could access certain entitlements under the Fair Work Act. Specifically, Mr Skene was found to be entitled to annual leave as provided for by the NES, despite the fact that he had been engaged as a casual worker.

In May 2020, the Rossato case upheld the reasoning in the Skene case, in finding that the Court should look to the substance over the form of an employment relationship when determining access to statutory entitlements – the Court held that this is best achieved by assessing the facts as they stand at the time (as opposed to the written contract entered into at the outset of the relationship).[70] The decision is currently being challenged in the High Court.[71]

The Workpac v Rossato case (Rossato)

Mr Rossato, a production employee in the open cut black coal mining industry, was engaged by Workpac as a casual employee over a three-and-a-half-year period – he was employed continuously under six separate contracts of employment over this period.[72]

Following the Skene decision, Mr Rossato claimed that he was in fact not a casual employee (despite WorkPac’s treatment of him as such), and made claims for his outstanding entitlements.[73]

The Full Court of the Federal Court, relying on the reasoning in Skene, found that Mr Rossato was not a casual employee (for the purpose of the Fair Work Act and the relevant enterprise agreement). The Court found that the parties had agreed on employment of indefinite duration which was stable, regular and predictable such that the postulated firm advance commitment was evident in each of his six contracts.[74]

On 26 November 2020, the High Court granted special leave to appeal the Federal Court decision with the Minister for Industrial Relations also intervening in the case.[75] At the time of writing this Digest, the appeal has not yet been heard.

Both cases reinforced the idea that casual employment was based on the lack of a firm advance commitment to continuing and indefinite work according to an agreed pattern of work, as determined by the actual conduct of the parties.[76] These cases triggered significant commentary and concern from some stakeholders (largely representing the views of employer interests).[77]

Proposed definition – casual employee

In the context of the above court decisions, the Bill introduces a definition of casual employee into the Fair Work Act for the first time. Proposed section 15A of the Act (at item 2 of Schedule 1 to the Bill) stipulates that a person is a casual employee of an employer where:

there is an offer of employment made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work
the person accepts the offer on that basis and
the person is an employee as a result of that acceptance.

The definition contains one of the key features that the courts have determined defines casual employment – namely the absence of a firm advance commitment to continuing and indefinite work. However, the definition departs from the common law in that it prioritises the form of the employment relationship over its substance.

In determining whether there is no such firm advance commitment, only the following criteria can be considered:

whether the employer can elect to offer work and whether the person can elect to accept or reject work
whether the person will work only as required
whether the employment is described as casual employment and
whether the person will be entitled to a casual loading or a specific rate of pay for casual employees under the terms of the offer or a fair work instrument.[78]

The first two criteria align closely with how no firm advance commitment may be found at common law.[79] The last criteria however explicitly goes against the findings in Skene and Rossato as those two cases found that a person was a casual employee, even where they may have received a loading rate.

In addition, the third criteria again privileges the employment contract and the nature of engagement in relation to the employee over any substantive analysis of the employment relationship. This is reinforced by proposed subsections 15A(3) and 15A(4) that provide for the avoidance of doubt:

a regular pattern of hours does not of itself indicate a firm advance commitment to continuing and indefinite work according to an agreed pattern of work and
the question of whether a person is a casual employee of an employer is to be assessed on the basis of the offer of employment and the acceptance of that offer, not on the basis of any subsequent conduct of either party.

Proposed subsection 15A(3) in particular overturns the current approach at common law where an agreed pattern of ordinary hours of work is central in determining whether casual employment does not exist.[80]

These amendments are aimed at providing certainty to employers by ensuring that an employee’s status is determined at the point of engagement rather than an assessment of the employment relationship over time.[81] The AGD notes the common law approach to defining casual employment means that an employee’s legal status can shift over time, leading to the requirement to pay certain NES entitlements at a certain point.[82]

This means that employees and employers have to continuously evaluate their relationship to understand their relevant entitlements and obligations.[83] The AGD argues that the proposed definition of casual employment would lead to significant regulatory cost savings for employers who would no longer have to assess the nature of an employment relationship on an ongoing basis.[84]

This proposed statutory definition of casual employment will extend to offers of employment made before the commencement of the provision.[85] However the amended definition will not apply to employees who have been the subject of a binding court order made before commencement in relation to their employment status.[86] This means that the decision with respect to the employee in the Skene case for example cannot be overturned. While the Rossato decision is being appealed to the High Court, the High Court would need to consider the legality of what would otherwise have been a binding decision of the Federal Court – any addition of a legislated definition of casual employment in the interim would likely also not affect this case.

Background to casual conversion

Following its decision to reverse the WorkChoices reforms, the then Labor Government introduced the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 as a transitional piece of legislation ahead of the introduction of the Fair Work Act. Part 10A of the Workplace Relations Act, as amended by this transitional legislation, required the Australian Industrial Relations Commission (AIRC) (a precursor to the FWC) to ‘modernise’ industrial awards – with the aim of making them simple to understand and easy to apply.[87]

As part of this award modernisation process, the AIRC indicated that provisions for casual conversion would be maintained in awards where they had become an ‘industry standard’ (such as in manufacturing).[88]

In July 2017, the FWC decided to include a model casual conversion clause in 85 modern awards that did not already provide for conversion.[89] These award variations took effect on 1 October 2018.[90] The model casual conversion clause provides that a casual employee who has worked a regular pattern of hours in the previous 12 months can request to have their employment converted to full time or part time.[91] The request can only be refused by the employer on reasonable grounds, including the following:

it would require a significant adjustment to the casual employee’s hours of work in order for the employee to be engaged as a full-time or part-time employee
it is known or reasonably foreseeable that the regular casual employee’s position will cease to exist within the next 12 months
it is known or reasonably foreseeable that the hours of work which the regular casual employee is required to perform will be significantly reduced in the next 12 months
it is known or reasonably foreseeable that there will be a significant change in the days and/or times at which the employee’s hours of work are required to be performed in the next 12 months which cannot be accommodated within the days and/or hours during which the employee is available to work.[92]

Casual conversion under the Bill

Item 3 of Schedule 1 inserts proposed Division 4A into Part 2-2 of the Fair Work Act, which provides a legislated process for offers and requests for conversion for casual employees.

Proposed subsection 66B(1) provides that an employer must make a casual conversion offer where:

the employee has been employed for a period of 12 months and
during at least the last six months of that period, the employee has worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part-time employee.

The process differs from the model casual conversion clause in two key ways. Firstly, the process centres on the employer making the offer for conversion, as opposed to an employee making a request. Secondly, the proposed amendment shortens the period of service required to show a regular pattern of work.

The AGD argues that the amendments strengthen the ability to access casual conversion and that by eliminating barriers to conversion for employees, conversion to ongoing employment will likely increase.[93] The requirement for an employer offer for conversion responds to concerns that workers may be reluctant to make a request due to perceived negative consequences.[94] In addition, while many awards already have casual conversion clauses, the proposed process will also extend to those employees covered by awards and enterprise agreements with no such clause as well as to award/agreement free employees.[95]

A casual conversion offer is not required where there are reasonable grounds not to make the offer. This includes where it is known or foreseeable:

the employee’s position will cease to exist within 12 months
the hours of work which the employee is required to perform will be significantly reduced in that period
there will be a significant change in the days or times of work (or both) which cannot be accommodated within the days or times the employee is available to work or
making the offer would not comply with a recruitment or selection process required by or under a law of the Commonwealth or a state or a territory.[96]

These grounds are similar to those found in the model conversion clause, with the addition of the criteria around public sector employment laws. The Explanatory Memorandum notes that this provision is for the avoidance of doubt to ensure that offers for casual conversion are not required where they would be inconsistent with statutory obligations relating to public sector recruitment.[97]

The Bill’s amendments also require the Fair Work Ombudsman to prepare and publish a Casual Employment Information Statement that includes information on the meaning of casual employee and the operation of the casual conversion provisions.[98] An employer must give this statement to employees who are engaged as casual employees at the start of their employment.[99] The regulations can prescribe matters that should be in the statement or the way in which the statement should be given to employees.[100]

Residual right to request casual conversion

The Bill provides casual employees with the right to make a request for casual conversion where they have been employed for at least 12 months and have worked a regular pattern of hours during the previous six months on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time or part-time employee.[101] This request can be made provided that, in the six months prior to the employee’s request:

an employer offer has not already been made and rejected
the employer has not notified the employee that a conversion offer would not be made on reasonable grounds or
the employer has not already rejected a conversion request.[102]

The employer must give the employee a written response within 21 days of receiving the request for casual conversion, stating whether the request is granted or refused.[103] It is not clear however if there are any consequences if an employer does not respond within this timeframe.

The employer must not refuse this request unless the employee has been consulted with and there are reasonable grounds to reject the request. These grounds reflect those set out above in relation to where an offer of casual conversion is not required.[104]

Dispute resolution

Proposed section 66M provides a process for resolution of disputes between an employer and an employee in relation to the casual conversion provisions. In the first instance, the parties must attempt to resolve the dispute at the workplace level through discussion between the parties.[105] If these discussions fail, then a party can refer the dispute to the FWC, which is required to deal with the dispute by any method it considers appropriate, including by mediation, conciliation, making a recommendation or expressing an opinion.[106] The dispute can also be dealt with by arbitration with the parties’ consent.[107] This requirement for consent to arbitration has been a point of criticism from the ALP, who have stated that this may mean that if conversion is refused an employee’s only remedy may be to take the matter to the Federal Court.[108]

The proposed dispute resolution provisions however do not apply where a procedure is provided for under an employee’s contract, written agreement or the fair work instrument under which they are covered.[109] The dispute resolution provisions in the Bill appear to be consistent with procedures set out in modern awards. The Hospitality Industry (General) Award 2020 and the Fast Food Industry Award 2010 for example both provide that disputes should first be resolved through workplace discussion if possible, and failing this the dispute can be referred to the FWC to be dealt with (including by consent arbitration).[110] Both of these awards would likely cover a large number of casual workers.[111]

Casual loading amounts and ‘double dipping’

Background to casual loading

In the first part of the 20th century, it became standard practice for awards to impose a ‘loading’ on the wage rate for casuals in order to deter employers from engaging too many casual workers.[112] The casual loading rate has since been standardised at 25% under the modern award system.[113] The FWC’s National Minimum Wage Order, made under section 285 of the Fair Work Act, provides for a casual loading for employees not covered by an award or an agreement – this rate is similarly set at 25%.[114]

The payment of casual loading rates was an issue in both the Skene and Rossato cases. In Skene, one of WorkPac’s arguments against the employee’s (Mr Skene) argument that he was a permanent full-time employee was in relation to ‘double dipping’. Workpac essentially argued that as casual employees are paid loading rates under the relevant award to compensate for the NES entitlements that are not available to them, if the general law meaning of ‘casual employee’ is used then ‘double dipping’ can occur where employees engaged as casual are still held to be entitled to NES entitlements.[115] WorkPac argued that this was unlikely to have been the intention of the legislature.[116]

The Court noted in Skene that it was not clear whether Mr Skene had been paid a casual loading at all.[117] In any case, the Court noted that the payment of casual loading alone does not provide a basis for excluding employees from the NES.[118] The Court noted however that if Mr Skene was paid a loading in lieu of his annual leave entitlements, it could be said that he was paid twice for the same entitlement.[119]

In response to the Skene decision, the Government introduced the Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Offset Regulations) which formalised the ability for employers to offset any loadings paid in lieu of NES entitlements to employees who were engaged as casuals but who were in fact non-casual employees. It has been noted that the Offset Regulations do ‘little more than capture the current common law position’ as the decision in Skene ‘contemplated that an employer may make a claim to offset a casual loading in an appropriate case’.[120]

In the Rossato case, WorkPac sought to claim back casual loading amounts paid to its employee Mr Rossato on the basis of the common law right to ‘set off’ as well as on the basis of the Offsetting Regulations. In relation to the WorkPac’s reliance on the Offsetting Regulations, the Court found that the Offsetting Regulations apply where an employee is making a claim to be paid an amount ‘in lieu of’ an NES entitlement.[121] The Court found that Mr Rossato was in fact not making claims for amounts ‘in lieu of’ NES entitlements, but instead was seeking payment of the entitlements themselves.[122] The Court found therefore that the Regulations could not apply to allow offsetting to occur in this case.[123]

WorkPac’s common law argument to set off the casual loading amounts also failed, with the Court noting that there was no close relationship between the payments made to Mr Rossato and his leave entitlements.[124]

Amendments to casual loading

The Rossato decision led to a negative reaction from employer groups, and in particular highlighted that loading given to employees needs to clearly identify the entitlements that are being set off. Similarly, the case highlighted the limitation of the Offsetting Regulations in providing the ability for employers to offset loading paid to employees who they had engaged as casuals.[125] The Minister for Industrial Relations reportedly noted the following in the wake of that decision:

Given the potential for this decision to further weaken the economy at a time when so many Australians have lost their jobs, it may also be necessary to consider legislative options.[126]

Item 6 inserts proposed section 545A into the Fair Work Act to address these concerns around ‘double dipping’. Proposed section 545A applies where:

an employee is engaged as a casual employee and is paid an identifiable loading amount to compensate for not receiving relevant entitlements during their employment period[127] and
is subsequently found not to be a casual employee during the employment period and makes a claim for their entitlements.

In these circumstances a court, when making orders in relation to the claim, must reduce any amount payable by the employer to the person for the relevant entitlements by the loading amount, however the amount payable must not be below zero.[128]

Proposed subsection 545A(3) further provides that the claim amount can also be reduced by an amount equal to a proportion of the loading amount if the court considers it appropriate, having regard only to:

the terms of the fair work instrument/ contract which specifies the entitlements that are being compensated by the loading amount and the proportion of the loading that can be attributed to these entitlements. If a proportion is not specified, the Court can consider what would be an appropriate proportion of the loading attributable to the relevant entitlements that are outlined or
if there are no such terms, all of the relevant entitlements and the proportion of the loading amount that is considered appropriate to attribute to these entitlements.

In effect, proposed subsection 545A(3) appears aimed at employers who provide a ‘single rate’ of loading, such as was the case in Rossato. As highlighted above, in the Rossato case the Court could not find a sufficient link to the loadings paid and the entitlements claimed – the amendments however allow the Courts to consider the appropriate proportion of the loading that should be attributed to the entitlements claimed.

The amendments in the Bill are drafted in similar language to the Offsetting Regulations, and so may have similar limitations in preventing ‘double dipping’ in light of the Rossato decision.[129] However, it should be noted that proposed section 545A does not apply where an employee is seeking payment ‘in lieu’ of their entitlements as non-casual employees, but instead applies where an employee is simply seeking payment for their entitlements. The removal of the phrase ‘in lieu’ which seemed central to the decision in Rossato could arguably create a different outcome.

Transitional arrangements and application provisions

Schedule 7 of the Bill provides for application and transitional provisions for the Bill as a whole. Of particular note are the transitional arrangements provided for the casual employee reforms in Schedule 1. Some of the key aspects of these provisions are as follows:

Proposed clause 45 of Schedule 1 to the Act, at item 1 of Schedule 7 to the Bill provides that employers, employees or employee organisations can apply for the FWC to make a determination to vary an enterprise agreement made before commencement of the reforms to resolve any uncertainty regarding the interaction of the agreement with the proposed definition of casual employee and proposed casual conversion process
Proposed clause 46 of Schedule 1 to the Act, at item 1 of Schedule 7 provides:
- existing employees that would have met the proposed statutory definition of casual employment when engaged (or when given an offer of employment) will be considered casual employees both at the commencement of the Bill and retrospectively (this does not apply to employees who were the subject of a binding court decision or converted their status prior to commencement)
- employees that are retrospectively deemed casual employees, who could have otherwise made a claim for accrued entitlements, will not be able to do so
Proposed clause 47 of Schedule 1 to the Act, at item 1 of Schedule 7 provides a six month transitional period where employers musts assess existing casual employees against conversion eligibility criteria (this includes employees designated as ‘casual’ but who may not meet the proposed statutory definition) and offer conversion, unless reasonable not to do so
Proposed clause 48 of Schedule 1 to the Act, at item 1 of Schedule 7 requires the FWC, within a six month period after commencement, to review modern awards in force at commencement that make provision for casual employment, and vary their terms which are inconsistent with the proposed amendments.

The Government argues that retrospectivity with respect to some of the transitional amendments is important as the reforms :

… will address the issue of widespread reliance by employers and employees on a mistaken belief about the nature of the parties’ casual employment relationships. Without these amendments, significant costly and time-intensive court processes would be needed to determine the appropriate rights and obligations of employers and employees in these situations, imposing significant burdens on both employers and employees.[130]

The Law Council argues however that while the retrospective application of these amendments will create greater certainty for employers, it will have the effect of altering the status of current employees (including those entitled to leave) and will remove the rights of employees who have matters before the court, but where a binding decision has not yet been made.[131] The Law Council also points to the general principle against the enactment of retrospective laws in opposing these amendments.[132]

Stakeholder views

The National Retail Association was supportive of the amendments relating to casual employment, noting the Bill provides certainty by giving paramountcy to the intention of the contracting parties.[133] The Association is of the view however that the Bill should follow the general awards process for conversion where a request is made by an employee for casual conversion (as opposed to an offer made by an employer).[134] The Restaurant and Catering Industry Association strongly supports the casual conversion provisions, noting that it has long relied on large numbers of casual employees across its workforce.[135] The Minerals Council of Australia is supportive of the Bill’s casual employee reforms.[136] Similarly, the Council of Small Business Organisations Australia supports the amendments and notes the proposed definition provides certainty to employers.[137]

The Chamber of Commerce and Industry WA is broadly supportive of the casual employee amendments but wants the casual conversion provisions to be simplified to reduce unnecessary administrative burden on employers.[138] The Chamber also wants the reasonable grounds for refusal of conversion to be based on probable rather than definitive outcomes (for example the criteria to be satisfied should be whether the employee’s position is likely to cease in 12 months, rather than whether it will cease).[139]

The Australian Chamber of Commerce and Industry is supportive of the amendments but recommended some legislative ‘improvements’.[140] Australian Industry Group also broadly supports the amendments in Schedule 1 but recommends some amendments to improve the operation of the provisions and reduce their regulatory burden on business.[141]

Business SA is supportive of the proposed definition of casual employment and the provisions that address ‘double dipping’, although it would like the wording of the latter changed to ensure it covers past employees.[142] Business SA however does not support the Bill’s casual conversion provisions, noting the low uptake of conversion for award covered employees – Business SA’s own survey results indicate that for two-thirds of employers only one third or less of staff accepted conversion, while for nearly half of employers this rate was less than 10% of employees.[143]

The Western Australian Government noted that in the Western Australian Department of Mines, Industry Regulation and Safety’s experience, many casual employees are made offers of employment orally or in any case not in clearly defined terms that reflect the proposed definition of casual employee. The WA Government argues that this means that even with the insertion of the statutory definition of casual employee, there may be significant confusion among employers and employees about their employment relationship and corresponding entitlements.[144]

The Western Australian Government submission further noted several issues with the proposed definition including that employers who fail to meet the prescriptive terms of the definition may have offered permanent employment by default (even if they intended to offer casual employment) and that the definition fails to meet the need for an employer/employee relationship to be flexible and evolve.[145]

The ACTU supports a statutory definition of casual employment but does not support the Bill’s proposal – the ACTU argues that the way the definition limits the enquiry as to whether a firm advance commitment exists ‘strips away the rights of workers who are historically and currently mislabelled as casual employees’ and allows for employers to engage workers as casual through the careful drafting of employment contracts (where these employees may have otherwise been considered permanent).[146]

The ACTU is also supportive of casual conversion provisions in legislation, but is not supportive of the Bill’s specific proposal in this regard.[147] The ACTU argues that the qualifying period for conversion (12 months) is too long and the ability for an employer to refuse a request for conversion is too broad.[148] The ACTU also notes that the fact that the FWC can only exercise its arbitral powers on agreement of the parties is another limitation of the scheme as employers ‘may simply avoid their compliance obligations by declining to allow the independent umpire to make a binding determination.’[149]

Schedule 2 – Modern Award reforms

Background to modern awards

Historically, tribunals at the federal and state level set minimum conditions for Australian workers in awards – these awards operate with the force of legislation and govern the terms on which specified workers can be employed.[150] As noted above in this Digest, an award modernisation process took place to coincide with the introduction of the industrial relations scheme provided for by the Fair Work Act. On commencement of the Fair Work Act, 122 modern awards replaced more than 1,500 awards reviewed by the AIRC.[151] This award modernisation process is ongoing.[152]

Modern awards generally provide the minimum terms and conditions around a range of workplace conditions including leave entitlements, overtime and shift work and the ordinary hours of work for employees in particular industries or occupations.[153] Modern awards are governed by Part 2-3 of the Fair Work Act. The modern awards objective provides that the FWC must ensure that modern awards (together with the NES) provide a fair and relevant minimum safety net of terms and conditions taking into account various factors including the relative living standards and the needs of the low paid and the need to promote social inclusion thorough increased workforce participation.[154]

Impact of the COVID-19 pandemic on certain industries

The Bill introduces amendments to award provisions in the context of the COVID-19 pandemic and is aimed at assisting industries negatively impacted by the pandemic.[155] The industries most affected by employment loss in Australia between February and August 2020 were accommodation and food services (down 18.2%), arts and recreation services (down 17.9%), other services (down 11.3%), administrative and support services (down 11.1%) and information, media and telecommunications and transport and, postal and warehousing (both down 8.2%).[156] The retail trade sector had an employment loss of 5.1% during this period (a loss of around 64,000 jobs).[157]

More details around some of the sectors that suffered job loss between February 2020 and August 2020 is provided in the below table:

Table 1: Change in employment by industry, February to August 2020

Industry	February 2020 (‘000)	August 2020 (‘000)	Change in employment – February-August 2020 (‘000/%)
Accommodation and Food services	929.8	760.7	-169.1 (-18.2%)
Arts and recreation services	251.9	206.7	-45.2 (-17.9%)
Other services	493.2	437.6	-55.6 (-11.3%)
Administrative and support services	450.2	400.2	-50.0 (-11.1%)
Information media and telecommunications	211.7	194.2	-17.4 (-8.2%)
Transport, postal and warehousing	667.1	612.5	-54.6 (-8.2%)
Manufacturing	909.6	843.9	-65.7 (-7.2%)
Retail trade	1 261.1	1 196.7	-64.4 (-5.1%)

Excerpted from: G Gilfillan, COVID-19: Labour market impacts on key demographic groups, industries and regions, Research paper series, 2020–21, Parliamentary Library, Canberra, 2020, p. 18.

The COVID-19 pandemic gave rise to certain industries needing to rapidly change their operating arrangements – due to both changed business conditions and restrictions on trading itself.[158] The FWC made a range of temporary award variations in response to applications seeking greater flexibility in awards as a result of the pandemic.[159] By way of just one example, the FWC varied the Clerks – Private Sector Award 2010 to, amongst other things, broaden the span of permitted ordinary hours (given employees working from home) and allow employers to require employees to take annual leave with one week’s notice in the event of a close down.[160]

In a letter on 9 December 2020, the Minister for Industrial Relations identified four key awards as being in distressed industry sectors and requested the FWC consider creating greater flexibility in these awards.[161] These awards are the:

General Retail Industry Award 2020
Hospitality Industry (General) Award 2020
Restaurant Industry Award 2020
Registered and Licenced Clubs Award 2010.[162]

The FWC is currently in the process of considering the inclusion of loaded rates and exemption rates clauses in these awards as well as potentially simplifying the classification structures.[163] This process is ongoing and is taking place independently of the Government’s proposed legislative reforms under the Bill. However it highlights the broader debate around the adequacy of awards in specific sectors in light of the COVID-19 pandemic.

Proposed amendments – Additional hours agreement

Item 5 of Schedule 2 inserts proposed Division 9 at the end of Part 2-3 of the Fair Work Act, providing for a new category of additional hours agreement to be made between employees and employers. An additional hours agreement allows employees, on agreement between both parties, to work hours that are additional to those set out in the employee’s modern award.[164] The agreement can only be made where the employee is part-time and works at least 16 hours a week (whether in actual terms or averaged over a roster cycle).[165]

The additional hours agreement must identify the additional agreed hours to be worked on one or more days and must be entered into before the first period of additional hours.[166] The period of additional hours must be a continuous period of three hours or be part of a three hour period (for example an additional hour directly after a two hour shift).[167] A break provided for by the relevant modern award does not break up the period of additional hours, and the employee is entitled to take breaks provided for in the relevant award.[168] The agreement can be terminated by the employee or the employer on giving written notice of at least seven days before termination, or at any time if both parties agree.[169]

The additional hours agreement provisions (with the exception of the provisions stipulating what is and is not an identified modern award) are taken to be terms of an identified modern award (these are discussed further below).[170] However agreements will have no effect to the extent that it contradicts terms of a modern award that:

limit the maximum number of consecutive days that the employee has to work
require the employee not work on a day
provide that certain terms cannot be varied or voided by an agreement/arrangement between the employer and employee.[171]

Additional hours agreement only restricted to certain industries

The proposed additional hours agreement amendments only apply to part-time employees who are engaged under certain identified modern awards. The proposed flexible work direction powers (discussed further below) also only apply to identified modern awards. These awards are the:

Business Equipment Award 2020
Commercial Sales Award 2020
Fast Food Industry Award 2010
General Retail Industry Award 2020
Hospitality Industry (General) Award 2020
Meat Industry Award 2020
Nursery Award 2020
Pharmacy Industry Award 2020
Restaurant Industry Award 2020
Registered and Licensed Clubs Award 2010
Seafood Processing Award 2020
Vehicle Repair, Services and Retail Award 2020.[172]

As discussed above, certain industries have been disproportionately and negatively impacted by the ongoing pandemic. The Government’s reforms in Schedule 2 are aimed at two sectors in particular – the accommodation/food services sector and the retail trade sector.[173]

The awards inserted into the Bill have been chosen on the basis that these awards have been ‘mapped’ to these industries by the FWC. In 2012, the FWC undertook an exercise to map the nineteen most award reliant industries with their corresponding awards.[174] This was done on the basis of the Australian and New Zealand Standard Industrial Classification (ANZSIC) for the relevant industry.[175]

On 30 March 2020, a FWC information note set out nine awards that were mapped to the retail industry and four awards mapped to the accommodation and food services industry.[176] These are the awards listed in the Bill (accounting for date changes in the award), noting that the Hospitality Industry (General Award) 2010 is mapped to both industries.

The Government’s choice of the accommodation/food services sector and the retail sector as the focus of this policy is due to them being ‘distressed sectors’ in the wake of the pandemic and their high proportion of small business employers and award reliance.[177] However as noted above, while the accommodation/food service sector has been significantly affected by the pandemic in terms of job losses, the retail sector has not fared as badly in comparison to some other negatively impacted sectors. The arts and recreation services sector for example suffered a much higher percentage of job loss between February and August 2020 (see above table).

Award reliance refers to employees being paid exactly the award rate and no more than this rate.[178] Again, while the retail trade sector does have a very high degree of award reliance, there are certain sectors that have a higher degree of award reliance - for example the administrative and support services sector and the healthcare and social assistance sector.[179]

It may be that different metrics were used to designate the distressed industries that are the target of the reforms – for example significant stakeholder concerns or broader impact to business turnover and profits. The National Retail Association notes for example that while there was a boom in clothing and footwear retailing after the first lockdown, in real terms the turnover for this particular subsector was significantly lower than pre-pandemic.[180]

Nevertheless, there were concerns from some stakeholders around the fact that certain industries were not captured by the reforms in Schedule 2.

Business South Australia notes for example that several industries that have been significantly affected by the pandemic have not been included in the list of designated awards. Business South Australia recommended several awards to be included in the Bill including awards covering employees in the dry cleaning and laundry industry, the fitness industry, the funeral industry and the disability services industry.[181]

Business South Australia noted that the entertainment, conference and live performance industries were some of the worst impacted industries in South Australia.[182] The National Retail Association also recommended the inclusion of the Amusement, Events and Recreation Award 2020 as part of the list of the list of identified modern awards in the Bill.[183]

The Australian Chamber of Commerce and Industry (ACCI) similarly notes that the list of identified modern awards does not represent ‘the current state of play when it comes to which industries and occupations are in distress as a result of COVID-19 and government restrictions to limit transmission’.[184] ACCI supports the inclusion of more awards in the Bill – especially in relation to the tourism and arts and recreation sectors.[185]

The Centre for Future Work questioned the need for the amendments to be focused on the retail trade sector. The Centre noted that while the sector suffered employment losses during the initial lockdowns, employment in the sector has bounced back so that as at November 2020, there were more employees working in that sector as compared to before the pandemic.[186]

Identified modern award can be prescribed by regulation

The Bill also allows regulations to prescribe a modern award as an identified modern award. Similarly the regulations can prescribe that a modern award is not an identified modern award.[187] This is quite a broad power and may potentially allow the reforms in Schedule 2 to be targeted at sectors not necessarily impacted by the COVID-19 pandemic. Being legislative instruments, awards prescribed in this way would be subject to the normal provisions of the Legislation Act 2003 in relation to parliamentary tabling and disallowance.

Potential impact on employees

One of the issues of concern in relation to the proposed additional hours agreements is how these additional hours are paid. The additional hours provided for by the agreement are paid without overtime.[188] Overtime is still payable where:

the additional hours lead to the employee working outside a span of hours that triggers overtime payment[189]
where the additional hours together with other hours worked exceed the maximum hours provided for in the award that can be worked in a day without overtime[190]
where the employee works more than 38 hours per week (averaged across a roster cycle if provided for by an award or in actual terms).[191]

The Explanatory Memorandum gives the example of the General Retail Industry Award 2020 which provides that an employee must be paid overtime for hours worked outside the span of 7am to 9pm and the Fast Food Industry Award 2010 which provides overtime payment to employees who work more than 11 hours in a day.[192]

The lack of overtime (as a general rule) for these additional hours has generated concerns from some groups who argue that part-time employees will be disadvantaged by not being able to access overtime rates and may have their take home pay cut.[193]

The reforms to the award system are aimed at addressing the attraction of employing casual workers at the expense of providing part-time workers with additional hours, given the perceived uncertainty and complexity of engaging these employees for additional hours under the award system.[194] In effect, the reforms may make it cost effective to engage part-time employees over casual workers by engaging them at lower overtime-free rates.[195]

The Bill however requires the additional hours worked under agreement (except those where overtime is payable) to be treated as ‘ordinary hours of work’ for the purposes of paying penalty rates, certain leave entitlements and superannuation and other purposes as prescribed by regulations.[196] Arguably this provision may still not make it cost-effective for employers to provide additional hours to part-time employees, and so may not disincentivise further moves towards engaging casual workers.

One key protection provided for employees in the Bill is that entering into, or not entering into an additional hours agreement will form part of the Fair Work Act’s general protections.[197] Similarly, terminating or not terminating an additional hours agreement is a protected workplace right.[198] A person cannot take adverse action against another person (such as dismissing them or changing their job to their disadvantage) for exercising or not exercising a workplace right.[199] This means that for example an employee who turns down an offer of an additional hours agreement cannot be treated differently by their employer.

It has been noted that the proposed introduction of an additional hours agreement represents a significant shift in the industrial relations system – while requirements under the Fair Work Act generally apply to all national system employees, the proposed reforms in Schedule 2 of the Bill only apply to a select few industries.[200] It has been argued that this approach may lead to other industry-specific industrial relations change that would ‘avoid the FWC’s detailed evidence-based approach’.[201]

Flexible work directions

Part 2 of Schedule 2 of the Bill provides employers the ability to give flexible work directions. Essentially, employers can give flexible work directions with respect to the duties of the employee (provided they are safe, the employee is licensed/qualified for the work and the duties are within the scope of the employer’s operations) and with respect to the location of the employee’s work (provided the location is safe and is reasonable to travel to from the employee’s home).[202] The flexible work directions have a minimum rate of pay guarantee, so that an employee who does work under a direction is not paid a lower rate.[203]

While the amendments require consultation with employees before issuing a flexible work direction, the amendments do not provide scope for an employee to refuse such a direction.[204] Flexible work directions are only valid for two years from the commencement of the proposed reforms.[205]

The proposed flexible directions provision only apply to those engaged under one of the identified modern awards listed above and prevail to the extent of any inconsistency in a modern award.[206] In effect, these amendments are aimed at allowing industries negatively impacted by the COVID-19 pandemic to respond ‘flexibly’ to their circumstances.

The Bill requires that a flexible work direction cannot be ‘unreasonable in all of the circumstances’.[207] Little guidance however is given in the Bill itself as to what sort of directions could be considered reasonable or unreasonable (beyond a note stating that a direction may be unreasonable depending on the impact on an employee’s caring duties). Given ‘unreasonable’ is a broad term, there may be uncertainty for both industry and employees as to what kind of directions would be considered acceptable.

Flexible work directions must however be a ‘necessary part of a reasonable strategy to assist in the revival of an employer’s enterprise’.[208] Little other detail is provided on the face of the legislation itself, however the term ‘revival’ likely means that only businesses that have suffered some level of hardship could make use of the proposed directions. While the Bill has been introduced in the context of the COVID-19 pandemic and supporting Australia’s economic recovery in the face of the pandemic, the provisions around the use of flexible directions do not appear to be limited to revival required due to the pandemic itself. In other words, a business that suffered economic hardship for reasons other than the pandemic may still be able to use flexible work directions under the proposed reforms.

The requirements around flexible directions are taken to be terms of the identified modern awards.[209] While the amendments relate to award covered employees, the proposed flexible work direction requirements may also indirectly impact employees covered by enterprise agreements. When deciding to approve an enterprise agreement, the Fair Work Commission must be satisfied that each award covered employee would be ‘better off overall’ under the proposed agreement – this is known as the BOOT.[210] Any future agreement would necessarily need to consider the flexible work direction requirements as part of this process.

It is not clear whether an agreement with no flexible work direction requirements (for example) would be considered more or less beneficial than the relevant award under the BOOT. However, the amendments will effectively change the benchmark for agreements – in other words an agreement that provides for flexible work directions may pass the BOOT test in the future where it may not have in the past.[211]

The flexible direction amendments reflect an extension of the JobKeeper flexibilities which have allowed employers entitled to JobKeeper payments to issue flexible work directions to their employees.[212] The provisions that allow that scheme will be repealed on 29 March 2021.[213]

Stakeholder views

The Restaurant and Catering Industry Association was supportive of the additional hours agreement provisions, noting that it would allow businesses to flexibly increase part-time employee hours without needing to pay overtime rates. The Association noted that while it does not support regularly increasing hours to avoid paying overtime, employers currently often choose employing casuals rather than providing additional hours to part-time employees to save wage costs.[214]

Business South Australia was supportive of the amendments in Schedule 2 and noted that flexible work directions are an ‘important step’ in supporting a return to work in the wake of the pandemic and will assist in job retention.[215] The Western Australian Chamber of Commerce was broadly supportive of the amendments but also saw a missed opportunity to consider the greater impact that awards have on flexibility across all industries.[216]

ACCI supports the need for additional hours agreements, noting that this would incentivise the hiring of part-time workers over casuals. ACCI cites the inclusion of part-time flexibility provisions in the Hospitality Industry (General) Award 2020 which it notes increased the percentage of employees engaged as part-time workers in the accommodation and food services industry as a share of overall employment.[217] ACCI however did not support the form of the provisions themselves, noting the lack of flexibility and the difficulty of predicting what additional hours will need to be worked at the point of entering the agreement.[218]

Australian Industry Group was broadly supportive of the additional hours agreement provisions and was supportive of the flexible work directions provisions. With respect to the flexible work directions provisions, Australian Industry Group noted that they are ‘a necessary flexibility that would assist employers to navigate the circumstances of the pandemic and to maximise employment, for the next two years’.[219]

The submission from a group of labour law academics highlights a few issues with the provisions in Schedule 2. The submission notes for example that the lack of a requirement for a written record of an agreement (unless requested) may lead to disputes. The submission also notes that there is a risk that the provisions will create an incentive for employers to cut a part-time worker’s guaranteed hours with the knowledge that they can request additional hours without an overtime penalty.[220] With respect to flexible work directions, the submission notes that directions with respect to work location are already permitted under the common law (and so do not require the ‘complex statutory mechanism’ in the Bill) and states that the consultation mechanism provision does not provide sufficient guidance to employers and employees.[221]

The ACTU was not supportive of the additional hours agreements amendments, noting that it would ‘create enormous pressure’ on part-time employees to accept additional hours without overtime pay.[222] The ACTU further noted the flexible direction provisions go beyond the JobKeeper scheme in that they may be used by employers not necessarily impacted by COVID-19.[223] The ACTU also stated that there is no ability to have disputes about directions decided by an industrial umpire.[224] The Queensland Government was not supportive of the amendments in Schedule 2, arguing that ‘the introduction of simplified additional hours' agreements combined with the 'flexible work directions' to override award provisions will provide employers with stronger powers to alter individual working arrangements without scrutiny’.[225]

Schedule 3 - Enterprise agreements reforms

Object of enterprise agreements

An enterprise agreement is an agreement made between national system employers and their employees which sets out the terms and conditions of employment (including wages) for a period of up to four years.[226] Part 2-4 of the Fair Work Act governs the requirements around the making and approval of enterprise agreements. The legislated objects of the enterprise agreement requirements at section 171 of the Fair Work Act include:

… to provide a simple, flexible and fair framework that enables collective bargaining in good faith, particularly at the enterprise level, for enterprise agreements that deliver productivity benefits …

The Bill repeals the current objects provision and replaces it with a new one. While mostly retaining the current objects, item 1 of Schedule 3 of the Bill provides for some changes. Proposed subparagraphs 171(b)(i)–(iii) provide that the object of the enterprise agreement framework also includes the enabling of collective bargaining in good faith for agreements that:

deliver productivity benefits and
enable business and employment growth and
reflect the needs and priorities of employers and employees.

In addition, proposed paragraph 171(a) adds the new term ‘balanced’ to the current objects of providing a ‘simple flexible and fair framework’ for enterprise bargaining.

These added objects, while not having substantive operation in and of themselves, may affect the way the FWC applies the provisions of the Fair Work Act and how it approaches the approval of agreements. They can also be seen in the context of the Bill as a whole as a way of addressing employment and business viability issues in the wake of the COVID-19 pandemic.

The FWC notes that the enterprise agreement process is strict and that it cannot approve an agreement that does not meet legislated requirements.[227] The FWC provides the following summary of the current (prior to the Bill) enterprise agreement making process.

Figure 1: stage in bargaining process

Excerpted from: FWC, Benchbook: Enterprise agreements, FWC, Canberra, 9 April 2019, p. 63.

Amendments to enterprise agreements process

Under the Fair Work Act, an employer that will be covered by a proposed enterprise agreement must take all reasonable steps to provide each employee who will be covered by the agreement a notice of their right to be represented by a bargaining representative.[228] Currently, this notice must be given no later than 14 days after the notification time for the agreement[229] – the amendments in Part 2 of Schedule 3 extend this period to 28 days.[230]

The Fair Work Act also provides for certain pre-approval requirements with respect to enterprise agreements – such as the requirement to give employees a copy of the agreement.[231] Part 3 of Schedule 3 of the Bill makes amendments to these requirements. The amendments provide for less prescriptive pre-approval steps than what is currently in place with respect to communicating the terms of the agreement to employees.

The amendments remove the legislated requirement to provide copies of or access to the written agreement and material incorporated into the agreement and the requirement to provide information around the time/place and method for voting. These requirements are replaced by provisions that stipulate that the ‘employer must take reasonable steps to ensure that employees are given a fair and reasonable opportunity to decide whether or not to approve an agreement’.[232] The more prescriptive requirements in relation to provision of information are retained as elements which, when complied with, mean that reasonable steps have been taken for the purposes of the legislation. These prescriptive requirements are, however, not necessarily required to be followed.[233]

The FWC will also no longer need to be satisfied that the current prescriptive steps have been complied with in order to be satisfied that an agreement has been ‘genuinely agreed’ to by the employees covered – instead where the reasonable steps have been taken this criteria will have been satisfied.[234]

Part 4 of Schedule 3 makes amendments in relation to the voting requirements for enterprise agreements. Of particular note, the amendments will mean that casual employees can only vote on agreements if they have performed work in the seven day period ending immediately before the day the voting process starts.[235] Currently , whether or not casual workers can vote, appears to turn on whether they can be considered ‘employees employed at the time’.[236] The amendments however would mean that casual employees who are ‘employed at the time’ by a business may still not be able to vote on an agreement depending on the nature of their particular roster.

Stakeholder views

The National Retail Association is supportive of the changes to pre-approval and voting requirements and argues that the amendments do not erode existing protections.[237] The Chamber of Commerce and Industry WA notes that the notice of employee representational rights has been an area of significant frustration for both employees and employers due to its complex requirements.[238] The Chamber welcomes the extension of the timeframe for issuing the notice to 28 days, however argues that greater reform is possible.[239] The Chamber also sees the amendments to the pre-approval and voting process as allaying some existing frustration, but would like to see greater precision in the amendments to reflect what it sees as the Government’s intentions.[240]

The Australian Industry Group supports these amendments to the enterprise agreement-making process. The Australian Industry Group notes that many enterprise agreements have been rejected by the FWC due to inadvertent non-compliance with ‘overly technical’ notice of employee representation rights requirements and other pre-approval requirements.[241] The Australian Industry Group also supports the amendments to the voting process, noting that ‘determining which casuals are entitled to vote on an enterprise agreement has become a ‘minefield’…given that many employers have casuals on their books who work infrequently’.[242]

The labour law academics’ submission sees no issues with the amendment to the notice of employee representational rights and sees the amendments to voting requirements as a ‘workable solution’ to problems identified with respect to the law’s treatment of when a casual employee is entitled to vote on an agreement.[243] The submission however did point out some issues with the proposed amendments to pre-approval requirements for enterprise agreements, claiming that they weaken the role of the FWC in ensuring that informed consent has been given by employees.[244] The submission further argues that removal of prescriptive pre-approval steps has the effect of ‘abrogating any uniform legislative process for the creation of enterprise agreements’.[245]

The ACTU sees the amendment to the notice of employee representational rights period as unnecessary and as disadvantaging employees by making it easier for employers to finalise the contents of agreements before employees have been notified of their right to representation.[246] The ACTU believes that the current pre-approval requirements are fair and sees the amendments as substantially weakening protections for workers ‘who will have varying capacities to find and understand the information they need in order to give informed consent to an agreement’.[247] The ACTU notes that the amendments to voting requirements may lead to acceptable outcomes in some sectors but may disenfranchise seasonal workers.[248] The ACTU also notes that employers could deliberately not roster casual workers during a voting period in order to secure positive enterprise agreement ballots.[249]

The Better Off Overall Test

The predecessor to the current Better Off Overall Test (BOOT) was the no-disadvantage test under the Workplace Relations Act 1996 – this test had a similar policy rationale but involved a more global on-balance assessment when determining whether to approve a collective agreement.[250] The no-disadvantage test was repealed by the WorkChoices reforms but subsequently reintroduced in the Rudd Government’s transitional industrial relations framework under the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008.[251] The BOOT was introduced into the industrial relations regulatory framework for the first time under the Fair Work Act.

The BOOT requires that the FWC is satisfied that award covered employees and prospective award covered employees would be better off overall under a prospective enterprise agreement than under the relevant modern award.[252] An agreement needs to generally pass the BOOT test in order to be approved by the FWC.[253] The FWC can only approve an enterprise agreement that does not pass the BOOT test where the FWC is satisfied that because of exceptional circumstances, the approval of the agreement would not be contrary to the public interest.[254]

In effect the BOOT test requires the FWC to identify and consider all the agreement terms which are both more beneficial and less beneficial than the award and make an overall decision whether an employee would be better off under the agreement.[255] The BOOT however does not require the FWC consider each employee’s individual circumstances – in the absence of contrary evidence the FWC can assume an employee would be better off based on whether the ‘class of employees’ to which they belong to would be better off.[256] The FWC treats the phrase ‘class of employees’ as a group covered by the enterprise agreement who share common characteristics that allows the BOOT to collectively apply to them – for example, employees in the same classification, grade or job level with the same work patterns.[257]

Part 5 of Schedule 3 of the Bill makes proposed amendments to the operation of the BOOT. The Bill as introduced also included amendments in Part 5 aimed at providing new criteria for when a non-BOOT compliant agreement could be approved. This was a controversial aspect of the Bill and was subsequently removed by the Government due to a lack of support from the crossbench. These specific provisions are discussed in Appendix A to this Digest.

Proposed amendments - Relevant and irrelevant matters in relation to the BOOT

Item 25 inserts proposed subsection 193(8) that sets out some relevant and irrelevant matters that the FWC can have regard to when determining whether an enterprise agreement has passed the BOOT.

Firstly, the amendments stipulate that the FWC can only have regard to patterns or kinds of work or types of employment for the purposes of the BOOT if:

the work/employment is engaged in by award covered employees for the agreement or
the work/employment is reasonably foreseeable (by the employer) to be engaged in by award covered or prospective award covered employees.[258]

In effect, this means that the FWC can only consider actual employment rather than hypothetical situations when applying the BOOT. The Government notes that currently, the FWC can consider hypothetical scenarios when applying the BOOT and provides the example where Officeworks was required to make undertakings with respect to service of alcohol, despite not being related to the employer’s core business.[259]

It should be noted however that while the amendments retain the ability for the FWC to consider, for example, rosters that are reasonably foreseeable to be worked – the amendments point to what is reasonably foreseeable by the employer. It is unclear to what extent this means that changes in shift patterns foreseeable by employees or other parties could inform the application of the BOOT if these patterns were not actually worked at the time of approval for the new agreement. It has been noted by some union organisations that this ‘introduces an unfair subjective element’ to what could be considered an otherwise objective BOOT test.[260]

The amendments stipulate that the FWC can also consider the overall benefits that an employee would receive under the agreement as compared to the award – this includes non-monetary benefits.[261]

The current approach to the BOOT does not exclude the ability to consider non-monetary benefits. It has been noted by the FWC that ‘the application of the BOOT is a matter that involves the exercise of discretion, and it involves a degree of subjectivity or value judgement’ and the consideration of non-monetary benefits to employees has been upheld.[262] The amendments however appear aimed at addressing what it perceives as the FWC increasingly taking a ‘forensic’ and overly technical approach to the BOOT test.[263]

Finally, the amendments require that the FWC must give ‘significant weight’ to the views of the relevant employees, employers and bargaining representative as to whether the agreement passes the BOOT.[264] The amendments appear to address concerns from the Government that the FWC’s approach to the BOOT means that even where agreements have broad support from employees, employers and unions, there have been instances where agreement approval has been drawn out or agreements have been rejected.[265] The fact that the FWC is required to give significant weight to these views suggest that the views will be given greater weight in determining whether an agreement passes the BOOT over a more objective application of the test. The amendments are not worded in such a way as to necessarily displace the BOOT – an agreement would still need to pass the BOOT principles. However, should an objective assessment of the test contradict an assessment from employers/employees and bargaining representatives, then it is likely that the latter’s assessment would prevail.

Response to recent cases
The amendments can be seen in part as a response to two recent industrial relations cases.

The Hart case

Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited (Hart) related to a proposed enterprise agreement for Coles employees.[266] 36,016 of the 77,507 employees to be covered by the agreement participated in the voting process – the majority of participating employees (32,966 employees) voted in favour of the agreement.[267] The relevant unions also supported the agreement (with the Australasian Meat Industry Employees Union noting its support was contingent on the agreement meeting the BOOT).[268] The agreement was approved in the first instance by the FWC, subject to some undertakings.[269]

Mr Hart, a trolley operator for Coles, appealed the approval of the agreement alongside the Australasian Meat Industry Employees Union on the basis that the agreement did not pass the BOOT.[270] The agreement provided for a higher hourly rate than the award rate, but lower penalty rates for evenings, weekends and public holidays.[271] Mr Hart provided his own rosters as well as the rosters of seven other employees who were disadvantaged by the proposed agreement due to their hours.[272]

The Full Bench of the FWC held that the agreement did not pass the BOOT, noting that for employees who worked at times that attracted lower penalty rates, the monetary loss compared to the award was potentially significant.[273]

The Hart decision was considered a landmark one and highlighted the importance of all classes of employees being better off under an agreement, even if the majority of employees approve the agreement.[274] The decision forced Coles to revert to an earlier 2011 agreement. A Coles night fill employee, Penny Vickers, sought to challenge this earlier agreement on the basis of the interpretation of the BOOT in the Hart case, arguing that she was worse off under the agreement based on her particular hours. While the challenge was withdrawn, commentary at the time suggested that Ms Vickers’ challenge could lead to the ‘possible collapse of enterprise bargaining agreements’ on the basis of ‘a single employee’s complaint’.[275] Business Council of Australia research has indicated a drop in enterprise agreement making following the decision.[276]

The Loaded rates agreements case

In 2018, the Full Bench of the FWC delivered a decision in relation to five applications for the approval of enterprise agreements with ‘loaded’ (or higher) rates of pay, ‘intended to incorporate, in part or whole, penalty rates and other monetary benefits for which separate provision is made in the applicable modern awards’.[277] The decision made particular mention of Hart given that decision also had the question of ‘loaded rates’ at its centre.

The FWC clarified several principles in this case around the application of the BOOT, including that every existing and prospective award covered employee needs to be better off under the agreement, the need to examine various patterns of work, and noting that the assumption should be that non-monetary entitlements do not have the same value for all employees.[278] The FWC noted in particular that if an agreement provided for a particular pattern of hours to be worked, then that would need to be considered even if the employer asserts that it does not use those hours for its rosters.[279]

The decision gave rise to concerns that the FWC’s approach to the BOOT was becoming overly mathematical and theoretical – thereby causing uncertainty for enterprise bargaining.[280]

The proposed amendments could in theory lead to a different outcome in the above cases. In particular the requirement for the FWC to give ‘substantial weight’ to employer/employee agreement may point to the agreement in the Hart case requiring approval, given the majority of employees voted for it. In situations similar to the Loaded agreements case, only those patterns of work reasonably foreseeable by the employer could be considered.

Both cases involved a consideration of non-monetary benefits and entitlements. In the Hart case for example, the Shop Distributive and Allied Employees Association argued that employees valued leave and working time control as reflected in the agreement – the FWC however was of the opinion that the level of income was also critical.[281] While the proposed amendments do draw attention to the possibility of the FWC considering non-monetary benefits as part of the consideration of overall benefits, this is arguably no different than the current approach (and so may not necessarily change the FWC’s decision in this regard).

Stakeholder views

The Australian Chamber of Commerce and Industry (ACCI) is supportive of the amendments. The ACCI argues that the proposed reasonable foreseeability test with regard to the patterns or kinds of work represents a ‘practical, balanced and reliable solution’ to impractical approaches.[282] The ACCI argues that the legislated inclusion of non-monetary benefits in what may be considered when applying the BOOT does not replace financial assessment or calculation and ‘is about listening to employees and what they value and pursue through bargaining’.[283] With respect to the proposed requirement to give significant weight to employer/employee agreement, ACCI notes that ‘this seems to be about according greater weight and significance to what those who will actually work under a proposed agreement value and prioritise’.[284]

The Western Australian Chamber of Commerce and Industry is broadly supportive of the amendments to the BOOT, noting that the BOOT’s current application ‘has stifled innovation and flexibility within enterprise agreements and is a significant disincentive to bargaining’.[285] The Chamber noted for example that the amendment requiring the FWC to consider patterns of work reasonably foreseeable by the employer is sensible as employers are best placed to make this assessment.[286]

The Minerals Council of Australia noted that accelerating approval processes supported by a majority of employees and the amendments around the BOOT would mean ‘more consistent approval times for similar agreements, more certainty for employers and faster creation of jobs and wage increases in exchange for productivity gains’.[287]

Australian Industry Group (AIG) generally supports these amendments (noting that the group also recommended an additional amendment to improve the provision’s operation). AIG believes that the BOOT in its current form is ‘unworkable’ and see the amendments as an ‘extremely important provision that is aimed at ensuring that the FWC adopts a more practical approach, whilst ensuring fairness to all parties.’[288] It views the amendments as ‘restoring’ the approach taken by the FWC when applying the No Disadvantage Test under previous frameworks and its approach in applying the BOOT up to a few years ago.[289] The National Retail Association is also supportive of the amendments to give ‘significant weight’ to the views of the parties to be covered by the proposed agreement. The National Retail Association argues that currently, the FWC stands in the shoes of employees to be covered by an agreement and makes a number of assumptions, ‘rather than acknowledging that employees will generally only vote to approve an enterprise agreement that operates in their own interest’.[290]

The ACTU notes that the consideration of overall benefits ‘is broadly consistent with what the FWC is already required to do’.[291] The ACTU considers however that the ‘reasonably foreseeable by employer’ test with respect to patterns of work introduces an unfair subjective element to the BOOT.[292] The ACTU also notes that it is unclear how the requirement to place ‘substantial weight’ on the views of employers and employees will interact with the overall requirements of the BOOT, and notes that this could be quite difficult in practice.[293]

Proposed amendment - NES interaction terms

The Fair Work Act requires that enterprise agreements must not exclude the entitlements provided by the NES.[294] Before approving an enterprise agreement, the FWC must be satisfied that the agreement does not contravene this requirement.[295] The FWC can accept written undertakings from employers in order to address deficiencies in an agreement (such as terms that exclude NES requirements) which require the employer to comply with that undertaking as if it was a term of the agreement.[296]

The FWC noted in its 2019 Enterprise Agreement benchbook that ‘the increasing proportion of enterprise agreements requiring undertakings to address deficiencies is impacting on the time it is taking the Commission to finalise applications for approval of agreements’.[297] The FWC therefore recommended enterprise agreements include terms providing that the NES would prevail in the event of any inconsistency with the agreement.[298]

The amendments in Part 6 of Schedule 3 effectively legislate the requirement to have such a term in an agreement, thereby making it mandatory. An enterprise agreement must include a model NES interaction term as prescribed by the Regulations – if the agreement does not explicitly include the term, it will be read into the agreement.[299]

The Bill provides that the term must explain the provisions of the Fair Work Act that deal with the interaction between the NES and enterprise agreements.[300] However, there is some uncertainty as to the exact form of the model term as this will be provided for in subordinate legislation. The actual term, when published, will likely be closely considered by employers. The Government’s proposed term will be subject to the normal provisions of the Legislation Act 2003 in relation to parliamentary tabling and disallowance.

Single enterprise agreements

Currently the Fair Work Act allows two or more employers that have a close connection to one another to bargain for a single enterprise agreement that will cover both sets of employees at the relevant businesses. To do so, the employers must apply to the FWC for a single interest employer authorisation.[301] Relevantly to the measures proposed by the Bill, currently section 249 provides that the FWC must make a single interest employer authorisation where it is satisfied:

the employers that will be covered by the agreement have agreed to bargain together
no person coerced, or threatened to coerce, any of the employers to agree to bargain together and
the employers are franchisees of the same franchisor or related bodies corporate of the same franchisor (or any combination of these).

Currently the Fair Work Act allows the single interest employer authorisation (but not any enterprise agreements arising from bargaining conducted under the authorisation) to be varied to add or remove an employer.[302]

Proposed amendments

The amendments in Part 7 of Schedule 3 of the Bill will enable franchisees to opt-in to a current single-enterprise agreement that covers a larger group of employers that operate under the franchise previously agreed to under a single interest employer authorisation.[303] To be eligible to do so the franchisee must:

carry on similar business activities as the other employers that are single interest employers under the same franchise and are:
- franchisees of the same franchisor
- related bodies corporate of the same franchisor
- or any combination of the above[304] and
request relevant employees vote to approve the proposed application and a majority of the relevant employees who vote approve the application.[305]

Where the above is satisfied, and unless the FWC is satisfied there are serious public interest grounds for not varying the agreement, then the FWC must vary the agreement to cover the eligible franchisee employer and employees specified in the application if satisfied:

the agreement has not passed its nominal expiry date
no person coerced, or threatened to coerce, the eligible franchisee employer to request the affected employees to approve the application
the eligible franchisee employer gave affected employees a fair and reasonable opportunity to decide whether they wanted to approve the application
the application was agreed to by the employees who voted and
there are no other reasonable grounds for believing that the affected employees have not agreed to the variation.[306]

Other related changes

Proposed subsections 58(4) and 278(1A) provide that if an earlier enterprise agreement or workplace determination applies to an employee and another agreement is varied under the process above to cover the employee in relation to that employment, the varied agreement displaces the earlier agreement or workplace determination (which can never apply again).[307]

Stakeholder views

The Franchise Council of Australia is supportive of these amendments, noting that they ‘allow for a practical and sensible process for employees of a new franchise to be asked whether they agree to be covered by an enterprise agreement without requiring voting processes at all other franchise operations currently covered by that agreement’.[308] The Council however believes that these amendments alone do not address the ‘difficulty and complexity’ of the bargaining and approval processes – the Council therefore supports these amendments alongside the other amendments to enterprise bargaining proposed by the Bill.[309]

Terminating agreements after nominal expiry date

The Fair Work Act allows an employer, employee or employee organisation covered by an enterprise agreement to apply to terminate the enterprise agreement if the agreement has passed its nominal expiry date (NED).[310] Currently the Act provides that following such an application the FWC must terminate an enterprise agreement if:

it is satisfied that it is not contrary to the public interest to do so
it considers that it is appropriate to terminate the agreement taking into account all the circumstances including:
- the views of the employees, each employer, and each employee organisation (if any), covered by the agreement and
- the circumstances of those employees, employers and organisations including the likely effect that the termination will have on each of them.[311]

Case for reform

While agreements are tested by the FWC against the relevant award, in practice any existing enterprise agreement is the relevant ‘baseline’ against which a new agreement will be negotiated. As noted in the RIS, the act of applying for termination of an enterprise agreement (even if the termination is not approved) may:

disturb efforts to genuinely engage in enterprise bargaining
create an incentive for employees to make a new agreement as soon as possible, rather than engage in protracted bargaining or industrial action and
place disproportionate industrial pressure on employees in the initial phase of bargaining.[312]

The RIS further notes that where an employer threatens to apply to terminate an existing agreement that has passed its NED, or where such an application is made and approved by the FWC, this may result in the new agreement including ‘less favourable wage and condition outcomes for employees’.[313]

The RIS notes that in 2019–20 the FWC received 432 applications to unilaterally terminate an enterprise agreement which had passed its NED, of which:

the majority—290—were approved and
employer initiated applications made up the bulk of all applications, submitting 365 applications, with 264-employer initiated applications being approved by the FWC.[314]

Whilst the RIS notes that the above data does not show if employers are making termination applications during the course of enterprise bargaining, or the reasons given for termination, unions consider this to often be a bargaining tactic used by employers to force employees to agree to terms and conditions they would not otherwise agree to. This is because they may be faced with reverting to the relevant modern award/s under which they would be worse off. However, the RIS notes that there is ‘no clear evidence’ of the proportion of employers choosing to do so as a negotiation tactic.[315]

Further, case law on termination of an agreement that has passed its NED is mixed, with the FWC having held:

there is nothing ‘inherently inconsistent’ between terminating an agreement that has passed its NED and the continuation of bargaining for a new agreement[316] and
termination may disturb parties’ current bargaining positions and, therefore may justify a refusal to terminate an agreement during bargaining as termination would change the dynamics of bargaining such as to cause unfairness to certain employees.[317]

Proposed amendments

Item 53 in Part 8 of Schedule 3 of the Bill will amend section 225 to provide that an application to terminate an agreement under this section cannot be made until at least three months after the agreement’s nominal expiry date.

As such, this can be viewed as an employee-protective measure designed to facilitate genuine good-faith bargaining and to reduce the power of employers to engage in the conduct discussed above as a bargaining tactic early in the process for negotiating a new agreement. As noted by the RIS, the measure would:

… balance employer and employee bargaining power during the 3 month period after an agreement nominally expires [and] will ensure employers engage more cooperatively with employees and their representatives in replacing an agreement past its nominal expiry date, as well as promoting better workplace relations and reinforcing ‘fairness’ within the system.[318]

Stakeholder views

The Community and Public Sector Union (CPSU) expressed the view that ‘one of the significant flaws’ of the enterprise agreement bargaining system ‘arises from FWC decisions that have allowed employers [to] terminate enterprise agreements during bargaining’. The CPSU argues that this ‘allows employers to coerce employees to accept substandard deals’. The CPSU concluded that proposed section 225 ‘does not address the fundamental issue and will have little impact in practice’.[319]

The ACTU considers that the amendments are an improvement on the current position but do not adequately address concerns around termination provisions being used to give employers an unfair advantage during negotiations.[320]

The ACCI does not support the amendments and argues that the provisions will see ‘inapplicable, misleading or damaging’ agreements continue instead of being terminated in a timely manner.[321] Similarly, the Australian Industry Group opposes the amendments, arguing that ‘only a tiny proportion of applications to terminate enterprise agreements are contested’.[322]

The labour law academics’ submission argues that the provisions could have the opposite effect to what is intended, namely that the proposed changes could strengthen the position of employers instead of ‘recalibrating bargaining power’.[323] The submission argues that employers would be able to threaten a deadline on negotiations (three months post expiry date) with the threat of termination still on the table.[324]

Standing in enterprise agreement approval matters

The FWC has held that under the Act, automatic standing to appear before the FWC in matters relating to the approval of an enterprise agreement is restricted (depending on the type of enterprise agreement) but generally extends to the employer(s), employees, bargaining representatives and relevant employee organisations who were bargaining representatives.[325]

Importantly, standing to appear before the FWC in enterprise agreement approval matters is not currently automatically extended to the Minister or the Minister of a state or territory who is responsible for workplace relations matters. Rather, sections 597 and 597A provides that a Minister will only be entitled to make submissions where the matter is before a Full Bench and it is in the public interest for the relevant Minister to make a submission.[326]

However, when considering an application to approve an enterprise agreement the Act allows the FWC to inform itself in any manner it considers appropriate, including hearing submissions from persons not involved in bargaining.[327] As such, the current position under the Act is that generally only bargaining representatives will have automatic standing to make submissions in enterprise agreement approval matters and a Minister or other third parties will only be entitled to make submissions in limited circumstances, at the discretion of the FWC.[328]

Case for reform

The Government argues there are ‘acute’ problems with the enterprise bargaining process under the Act, and points to a significant decline in enterprise bargaining over the last 10 years.[329] As such, the Government argues that it is necessary to make:

… agreement-making and approval processes easier and faster for employers and employees, while ensuring a better balance between flexibility and fairness.[330]

As such, the measures in Part 9 of Schedule 3 of the Bill are:

… aimed at avoiding unnecessary delays in the agreement approval process by ensuring that, for the most part, only those parties involved in bargaining can be heard.[331] (Emphasis added).

Proposed amendments on how the FWC may inform itself

The Bill aims to limit intervention by parties not involved in negotiating an enterprise agreement in the approval process for the enterprise agreement. To achieve this, the Bill aims to ensure that the FWC will:

… be required to listen to the views of the bargaining parties in the approval process, and the intervention by other persons before the Fair Work Commission will be limited.[332] (Emphasis added)

Under proposed section 254AA the FWC will be allowed to consider information from a party not involved in bargaining for the enterprise agreement if it is satisfied that there are exceptional circumstances that justify it doing so.[333] The RIS notes that this would:

… rectify unnecessary delays in the approval process caused by intervention from parties which were not party to the bargaining for the agreement.[334] (Emphasis added)

Proposed section 254AA is largely consistent with the preferred option set out in the RIS – with one notable exception discussed below. That is, it will provide that in relation to approval of an enterprise agreement the FWC must only inform itself on the basis of publicly available information or the submissions, evidence or other information provided by parties to the negotiation.

Automatic standing granted to the Minister and certain State and Territory Ministers

Proposed subparagraph 254AA(2)(c)(vii) provides that the Minister, or a Minister of a state or territory who has responsibility for workplace relations matters is automatically entitled to provide submissions, evidence and other information in relation to an enterprise agreement without any requirement that exceptional circumstances exist.

Given that the aim of the proposed amendment is to:

restrict who can be heard by the FWC on agreement approval applications
allow non-bargaining representatives to be heard in exceptional circumstances and
achieve the goals of rectifying ‘unnecessary delays in the approval process’ caused by intervention from parties not involved in bargaining for the agreement[335]

it is not immediately apparent why the Bill grants the Minister and a Minister of a state or territory who has responsibility for workplace relations matters automatic standing to appear in such matters, rather than being heard upon application in exceptional circumstances, or, as is currently the case, when the FWC determines that it is either appropriate to do so (under section 590 of the Act) of where it is in the public interest to do so (under sections 597, 597A or 605A). The proposed amendments appear to expand the circumstances in which Ministers can be involved in enterprise agreement approval hearings.

It is also not immediately apparent how Ministerial intervention is consistent with proposed section 254B (at item 59 of Schedule 3), which requires the FWC, when exercising its powers in relation to enterprise agreements, to ‘recognise the outcome of bargaining at the enterprise level’. Given this requirement, it is difficult to know when Ministerial intervention would be necessary or desirable in most instances where an agreement has been made between an employer and its employees.

Stakeholder views

The Australian Industry Group supports these provisions, as it considers that they are important amendments that would prevent parties without a legitimate interest in an enterprise agreement from frustrating and delaying the approval of agreements.[336] The ACTU on the other hand argues that the amendments would prevent submissions from workers’ representatives and unions (including unions whose members would be covered by the proposed agreement, but who were not bargaining parties), thereby undermining the safety net that workers have.[337]

Time limits for determining applications

Currently under the Act the FWC is required to ensure that applications for approval of an enterprise agreement are ‘dealt with without delay’.[338]

As discussed above, the Bill aims to make ‘agreement-making and approval processes easier and faster for employers and employees’.[339] Part 10 of Schedule 3, when combined with the other reforms is aimed at addressing ‘lengthy delays in the approval process’.[340]

Case for reform

The RIS notes that in 2019–20, the median time to determine all agreement applications was 33 days, and 17 days for agreements without undertakings. The RIS notes:

A faster approval process would also benefit SMEs and businesses who are new to enterprise bargaining, and are often dissuaded from engaging in bargaining because of the cost impact and uncertainty of approval delays on the business. While enterprise bargaining is less common among SMEs, the benefit of getting new agreements approved and implemented faster, increasing operational certainty and giving them and their employees faster access to flexibility and wages is considerable.[341]

Whilst a 14 working day time-limit was considered, the RIS notes:

Requiring the FWC to determine applications in a shorter timeframe than 17 days may not be achievable, given this is a median timeframe and only relates to relatively simple approval processes.[342]

Proposed amendments

Proposed section 255AA provides that the FWC must, as far as practicable, determine an application to approve or vary an enterprise agreement within 21 working days after the application is made.

However, if the FWC is unable to determine an application within the time-limit, it must give written notice as soon as practicable setting out why it was unable to determine the application during the time-limit (including because of any exceptional circumstances) to:

the employers covered by the agreement
the relevant employee organisations (that is, those organisations covered or those that gave notice seeking to be covered by the agreement, depending on the agreement type) and
the applicant.[343]

Such notices must be published on the FWC website or by other means that the FWC considers appropriate.[344] The RIS notes that the requirement that the FWC notify bargaining parties if it cannot approve and determine the application within 21 working days:

… mitigates the risk that it rushes its approval assessment, while simultaneously addressing stakeholder concerns around uncertainty brought by protracted approval processes.[345]

Stakeholder views

The CPSU notes its support for the 21 working day time-limit to determine applications to approve an enterprise agreement, but argues:

‘it is important that any efforts to reduce approval timelines do not come at the expense of any of the checks and balances that are in place to protect workers in that process’ and
the new requirement ‘must be accompanied by additional funding and resourcing to the FWC to manage its workload’.[346]

The ACTU argues that the proposed amendments are flawed as they could lead to agreements being rushed through without proper scrutiny or to forced rejections by the FWC.[347]

The Business Council of Australia is supportive of the amendments and lists this ‘fast-tracked’ approval process as one of the benefits of the Bill, arguing that this along with other amendments will lead to a simpler and quicker enterprise agreement bargaining process.[348]

Transfer of business

Currently under the Act where a transfer of business occurs the old employer’s enterprise agreement or other relevant industrial instrument continues to cover a transferring employee and their new employer in relation to transferring work, regardless of how the employee came to be employed by the new employer. The only way continued instrument coverage does not occur is if there is an order to that effect from the FWC.[349]

Case for reform

The RIS argues that reforms are needed to:

simplify and improve an employer’s ability to operate flexibly across associated entities and
provide more certainty around fixed labour costs and facilitate redeployment of labour.[350]

Proposed amendments – transfer of business

Proposed subsection 311(1A) in Part 12 of Schedule 3 of the Bill operates so that where:

an employee becomes employed with an associated entity (as defined in the Corporations Act 2001) of their former employer and
the employee sought that employment on their own initiative before ending their employment with the old employer then
the employee will be covered by the relevant industrial instrument (if any) that covers the type of work performed by the employee for the new employer, rather than being covered by the instrument that applied to their work with their former employer.

Further, as proposed subsection 311(1A) provides there is not a transfer of business in the circumstances noted above, this has the effect of placing such transfers outside the transfer of business rules in Part 2-8 of the Act. This results in removing the need for an employer to secure orders from the FWC when an employee voluntarily seeks a transfer to an associated entity.

The RIS argues that as this only applies to voluntary transfers of staff it is ‘unlikely to negatively affect employees’.[351]

Stakeholder views

The CPSU expressed concern about proposed subsection 311(1A) arguing:

… this change weakens the protections for employees and is open to exploitation by employers who may put pressure on an employee to either ‘voluntarily’ transfer to an associated entity without their enterprise agreement or face being made redundant.[352]

The Australian Workers Union (AWU) expressed similar concerns arguing:

In many transfer scenarios involving associated entities, an employee may be informed that work will move from one entity to another – hence the employee’s options will be being made redundant or seeking employment with the new employer. In this situation, the transfer has not truly arisen at the employee’s initiative at all, the restructuring decision has been unilaterally made by the employer, the employee is simply deciding whether to have a job or not.[353]

Employer stakeholders, such as ACCI and the Master Grocers of Australia, were supportive of the reforms.[354]

Cessation of so-called ‘legacy’ agreements

Currently there are a range of agreements made prior to the commencement of the Act that can remain in force, despite their NED having passed including:

agreements that entered into force under the Workplace Relations Act prior to the Work Choices reforms
preserved State agreements originally made under State law and applicable to a federal system employer as at 27 March 2006 and
a few agreements made prior to 1997 under the Industrial Relations Act 1988.[355]

In addition to the above, some agreements made prior to the commencement of the Act and during the Fair Work Act ‘bridging period’ (between 1 July 2009 to 31 December 2009, before the commencement of the BOOT and modern awards) may also be in effect, despite their NED also having passed.[356]

Any legacy agreement that was in operation when the Act commenced on 1 July 2009 is subject to the transitional rules contained in Schedule 3 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (TPCA). Importantly, in the case of collective agreements, they apply not only to the original parties, but also to new employees who fall within their scope.[357] In addition, old agreements are subject to the same instrument interaction rules that applied immediately before the commencement of the FW Act.[358]

Case for reform

The above legacy agreements can operate in such ways as to undercut modern employment terms and conditions, for example by providing:

lower penalty rates and allowance than the relevant modern award
different spans of hours than the relevant modern award
different rates of pay for classes of employee.[359]

The RIS notes that the department estimates that around 300,000–450,000 employees are currently covered by agreements made prior to the Act commencing that have expired, and have not been replaced or terminated, and which may still be operational. This may represent between 2.7 per cent and 4.1 per cent of all employees.[360] Further the RIS notes:

This is a significant number of employees who may be currently receiving penalty rates and allowances lower then currently provided for in the relevant modern award (the Fair Work Act guarantees employees must receive the relevant base rate of pay). This also has potentially serious consequences for market competition, if there are employers that are able to undercut market rates of labour by maintaining lesser rates in legacy agreements.[361]

The RIS argues that any negative impacts to employers from the proposed changes ‘is outweighed by the benefits to employees and the broader economy of terminating legacy enterprise agreements’.[362]

Proposed amendments in relation to legacy agreements

Collectively the items in Part 13 of Schedule 3 of the Bill provide for the sunsetting (termination) of various legacy instruments and agreements on 1 July 2022, and provide that these agreements can never again cover any employees or employers. The effect of this is that either:

employers and employees covered by these instruments can make new enterprise agreements by 1 July 2022 or
if no new enterprise agreement is agreed, the relevant modern award would apply.

Stakeholder views

The AWU, whilst supporting the changes, notes ‘it is unclear why these instruments can continue operating until 1 July 2022’ and argues:

… the array of amendments in the Bill that will benefit employers commence operating the day after Royal Assent but this provision, which will likely lead to improved conditions for employees, will not commence operating until 1 July 2022. The situation is manifestly unjust. Employers generally have greater financial resources at their disposal than employees, yet employers are given 18 months to prepare for changes whereas employees have to deal with them immediately.[363]

The Western Australian Government expressed similar concerns about the termination timeframe, noting:

The age of transitional instruments can be upward of 10 or more years. The parties to such instruments have therefore had ample time in which to negotiate replacement agreements. The age of these agreements means their provisions are increasingly outdated and could not, if negotiated today, be registered under the FW Act due to inconsistencies with modern award conditions. This perpetuates unfairness in the treatment of employees working within the same industry.

Lastly, the continued existence of transitional instruments for a further 18 months has commercial implications and undermines the notion of a level playing field where national system businesses are able to compete equally. It is submitted that a shorter time be included in the Bill for the automatic termination of these agreements.[364]

In that regard it is worth noting that enterprise agreements can often take a substantial length of time to negotiate, and the Act does not prevent employers and employees covered by legacy agreements commencing negotiations for a new enterprise agreement if they choose to.

The National Road Transport Association, whilst supportive of the measure argues:

There should be a concerted education campaign for employers so that they are able to bargain for a new agreement ahead of the 1 July 2022 date. That education campaign could, as suggested earlier in another context, be undertaken through the FWO’s offices.[365]

Schedule 4 - Greenfields agreement reforms for major projects

The Fair Work Act makes provision for enterprise agreements between genuinely new enterprises (such as a new business or project) made at a time where there is not yet any person employed by the enterprise. In these cases, agreement can instead be made with the relevant union – these are known as greenfields agreements.[366] Agreements can also be approved without union agreement on application to the FWC by the employer at the end of a six month negotiation period.[367] These agreements have a nominal expiry date of four years, the same as other enterprise agreements.[368]

The amendments in Schedule 4 of the Bill allow the FWC to approve greenfields agreements with a nominal expiry date of up to eight years for ‘major projects’.[369] Major projects are projects:

which have a capital expenditure of at least $500 million or
which have a capital expenditure of at least $250 million and are designated by the Minister by non-disallowable legislative instrument.[370]

When deciding whether to declare a project as a major project, the Minister must consider:

the project’s national significance
the project’s regional significance
whether the project is expected to contribute to job creation and
any other matter the Minister thinks relevant.[371]

The FWC cannot approve a greenfields agreement for a major project with an expiry date of greater than four years unless it is satisfied the agreement has a term that provides for at least an annual increase of the base rate of pay for each employee.[372]

The Government notes that the current four year limit for greenfields agreements means that agreements can expire part way through the construction of a major project – thereby causing uncertainty to investors due to lengthy enterprise agreement negotiations and potential industrial action.[373] The Government argues that the amendments ‘will increase the attractiveness of Australia as a destination for major project investment, particularly for major resources and construction projects’.[374] The Government quotes Deloitte Access Economics’ Investment Monitor report in noting that there are 191 projects with a cost of at least $500 million and a further 133 projects with a value of at least $250 million in the pipeline – representing potential investment in the Australian economy.[375]

Stakeholder views

The Western Australian Chamber of Commerce Industry is supportive of the amendments in Schedule 4. The Chamber notes that one of the challenges in attracting investments for major resources projects is the inability for terms and conditions of employment to be negotiated for the life of a major project and the risk of industrial action occurring mid-project.[376] The Chamber notes that that this risk has been realised in several major LNG projects in Western Australia and Queensland, which have been subject to applications for protected industrial action during mid-project enterprise agreement negotiations.[377]

The Australian Resources & Energy Group AMMA (AMMA) is similarly supportive of the amendments and argues that they would deliver increased confidence to major project investors and significantly increase the prospect of new projects receiving final approval. This would occur due to the amendments providing greater certainty around labour costs, providing protection from industrial action and providing commodity customers with greater certainty.[378] AMMA further argues that the major project workforces are amongst the least vulnerable and highest earning employees in the country – meaning that extended agreements would not pose a risk for employees’ entitlements to fall below award minimums.[379]

The ACTU argues that the threshold for what is considered a major project is ‘extremely low’ and would be met by small projects, such as the construction of buildings in the Sydney or Melbourne CBD.[380] The ACTU also draws attention to the ability of employers to seek approval for greenfields agreements without union agreement after six months, thereby locking employees into eight year agreement without their or their union’s approval.[381]

The Maritime Union of Australia (MUA) and the Construction and General Division of the Construction Forestry, Maritime, Mining and Energy Union (CFMMEU) argue that the proposal will exacerbate existing mental health issues that pervade fly-in, fly-out and drive-in, drive-out work by removing the opportunity of workers on longer-term projects from trying to improve their working conditions and to address any serious concerns.[382] The MUA and CFMMEU note that the right to bargain collectively and to strike are fundamental rights enshrined in international law and are often the only way workers can assert their interests against their employers.[383] The MUA and CFMMEU further state that greenfields agreements are already anomalous in that they are made without worker approval.[384] The MUA and CFMMEU argue that this means that any amendments to greenfields agreement provisions should be considered carefully.[385]

The Queensland Government has expressed concern around the broad discretion for the Minister to declare what is considered to be a major project and argues that this has the potential to significantly restrict workers’ rights to engage in enterprise bargaining with their employer.[386]

Schedule 5: Compliance and enforcement measures

Parts 1, and 3 to 6 of Schedule 5 contain various amendments related to enforcement and compliance.

Increasing civil penalties for certain contraventions of the Act

Currently breaches of various obligations under the Act attract a range of civil penalties. For example, a failure to correctly pay the rates specified in the award that applies to the employee will attract a civil penalty.[387]

Whilst not explored in detail, these penalties generally range from up to 60 penalty units ($13,320) for normal contraventions through to 600 penalty units ($133,200) for serious contraventions by an individual, and five times those amounts for a body corporate.[388] A contravention of a civil remedy provision is a serious contravention if the person knowingly contravened the provision and the contravention was part of a systematic pattern of conduct relating to one or more other persons.[389] A body corporate knowingly contravenes a civil remedy provision if the body corporate expressly, tacitly or impliedly authorised the contravention.[390]

Proposed amendments

The Bill will increase the civil penalties for non-serious contraventions related to:

remuneration of employees
sham contracting and
non-compliance with compliance notices.

In addition to the above, the Bill will also:

introduce a new penalty for remuneration-related contraventions by bodies corporate based on a multiple of the ‘value of the benefit’ of the contravention
introduce a new civil contravention that prohibits employers publishing (or causing to be published) job advertisements with pay rates specified at less than the relevant national minimum wage.

Breaches related to employee remuneration

The Bill will introduce the new concept of a remuneration-related contravention.[391] Essentially a remuneration-related contravention is a contravention of the Act or industrial instrument related to non-payment, late payment or underpayment of wages and entitlements, unreasonable deductions from amounts owed to employees and placing unreasonable requirements on employees to spend or pay amounts paid or payable to the employee.

Increases to existing penalties

Items 2 to 5 of Schedule 5 increase the maximum penalties for remuneration-related contraventions by 50%, but also introduce an alternative mechanism by which to calculate the penalty for such contraventions. The calculations are based on a multiple of the value of the benefit the employer obtained from the contravention (discussed below). As a result of those increases the maximum penalty for non-serious remuneration-related contraventions will be:

in the case of individuals: 90 penalty units ($19,980)
in the case of body corporates that are small businesses: 450 penalty units ($99,900)
in the case of body corporates that are medium or large businesses, the greater value of:
- 450 penalty units ($99,900) or
- two times the value of the benefit obtained by the employer as a result of the contravention(s).[392]

In the case of serious remuneration-related contraventions, the Bill increases the existing penalties applicable to body corporates (but not individuals) by providing the maximum penalty is the greater of:

the existing penalty of 3,000 penalty units ($666,000) or
three times the value of the benefit obtained by the employer as a result of the serious contravention(s).[393]

Using the value of the benefit obtained as basis for penalties

As noted above, the Bill will introduce an alternative basis for calculating penalties for remuneration-related contraventions, namely the value of the benefit that the employer obtained as a result of the contravention. This is defined in proposed subsection 546A(1) as:

… the amount of remuneration that employees of the body corporate would have received, retained or been entitled to if the contravention had not occurred.

This approach of calculating penalties by reference to the value of the benefit obtained by a contravention is broadly consistent with other existing regulatory regimes.[394]

Issue: calculating value of the benefit obtained

Employment law experts have noted that determining the value of the benefits obtained by an employer as a result of a remuneration-related contravention can be difficult where:

employment records are missing or
legal or factual issues are in dispute (such as the relevant classification level or hours worked by the relevant employee).[395]

As discussed later in this digest, the above factors may also impact the effectiveness of the proposed criminal ‘wage theft’ offences.

Issue: who penalties are paid to

Currently under the Act the Fair Work Ombudsman, employees and employee organisations all have standing to initiate proceedings related to contraventions of the Act and to seek both a penalty and compensation for the contravention.[396] This includes contraventions in relation to remuneration. Subsection 546(3) provides that if a court imposes a pecuniary penalty for contravention of a civil penalty provision it may order that the penalty (or part of the penalty) be paid to the Commonwealth, a particular organisation or a particular person.

As noted in one submission, providing courts with this discretion is:

… intended to encourage persons and organisations, such as trade unions, community legal centres and private practitioners, to ‘police the relevant legislation’.[397]

Further, as noted in a recent judgment:

Public resources allocated to police the FWA [the Act] are limited. The financial ability of an individual worker to police a perceived contravention of the FWA [the Act] is also in most cases limited. Workers, collectively, via a trade union, are thereby better equipped to do this. The policing by trade unions of compliance with industrial laws is a longstanding, legitimate role of trade unions. This does not just serve the interests of the particular workers concerned, or the trade union. It serves the national interest.[398]

Proposed subsection 546(3A) provides that any penalty based on the new ‘value of the benefit’ method outlined above may only be payable to the Commonwealth. The Explanatory Memorandum contains no rationale as to why this is the case.

Stakeholder views

Trade unions, whilst generally supportive of the increased penalties, expressed concern at the inclusion of the limitation on who penalties for remuneration-related contraventions can be paid to under proposed subsection 546(3A). Employment law academics expressed similar concerns.[399] For example, the ACTU suggests:

The Commonwealth has a very poor record of prosecution and enforcement through the responsible authority, the Fair Work Ombudsman… The effect of this new provision excluding payment of the penalty to other person or organisation further limits the capacity of anyone other than the Commonwealth to properly resource compliance efforts. Permitting the person or organisation who brings the proceedings to retain the penalty allows for the expense of the legal proceedings to be recovered from the amount awarded by way of penalty rather than intruding into the compensation provided for the underpayment itself. The sound policy rationale for such an approach does not evaporate by reason of there being a new method of calculating maximum penalties. The current position should be retained.[400]

Employer and industry groups generally oppose the changes discussed above.[401] For example, the Australian Industry Group suggests:

As currently drafted, many of the provisions in Schedule 5 of the Bill are highly punitive and would operate as a barrier to jobs growth and investment during the recovery from the pandemic… the framing of civil penalties based on a ‘benefit obtained’ approach is inappropriate for underpayment contraventions, many of which are the result of genuine payroll errors. Under competition law, where a company has obtained a commercial benefit from unfair and unlawful competition, it is logical to impose a penalty that is based on the extent of the benefit obtained because the company will not be typically required to compensate those impacted. However, this is not a logical approach with wage underpayments because the employer will have to back-pay the employees and therefore will not typically receive any benefits from the underpayments.[402]

Increases to other penalties and new penalties related to job advertisements

As noted above, the Bill will increase the civil penalties related to sham contracting, non-compliance with compliance notices and introduce new civil penalties for advertising employment below the relevant minimum wage. The table below sets out the increases and proposed new penalties to give context to the discussion that follows.

Table 2 : increases to civil penalties and new civil penalties

Type of contravention	Existing ordinary civil penalty		Proposed ordinary civil penalty
Type of contravention	Individual	Body corporate	Individual	Body corporate
Sham contracting-related contravention	60 penalty units[403]	300 penalty units[404]	90 penalty units[405]	450 penalty units[406]
Non-compliance with a compliance notice	30 penalty units[407]	150 penalty units[408]	45 penalty units[409]	225 penalty units[410]

Source: as per footnotes in table.

Increases to penalties for sham contracting

Engaging independent contractors instead of employees is a method some employers use to seek to increase flexibility in managing their workforce, and to shift various risk from them to the independent contractor/employee. As noted in one decision:

… sham contracting occurs where an employer disguises an employment relationship as an independent contracting relationship. The vice of this conduct is that it unfairly deprives workers of the benefits of employment and undermines the effective operation of the system established by the Fair Work Act 2009 (Cth) (the FW Act) and other industrial legislation. Additionally, it arguably distorts competition to the disadvantage of employers who honour their statutory obligations. It constitutes an offence under the FW Act.[411] (emphasis added)

The Act prohibits naming what is in fact an employment relationship as a principal/contractor relationship. The Act does this by prohibiting:

‘sham arrangements’ and
related conduct (such as dismissing an employee who performs particular work for the employer in order to engage them as an ‘independent contractor’ performing the same or substantially the same, work)

in its general protections provisions.[412]

Items 36 to 39 of Schedule 5 of the Bill have the effect of applying the increased penalties for sham contracting arrangements as noted in the table above.

Stakeholder views

Trade unions support the increase to the penalties applicable for sham contracting, but suggested that the ‘not reckless’ defence be abolished as recommended in a number of reviews and inquiry reports in recent years.[413] Labour law academics likewise recommended:

the ‘not reckless’ defence be abolished and replaced with a ‘reasonableness’ test and
that as sham contracting arrangements are ‘often knowing and systematic by their very nature’ they should attract the penalties which attach to serious contraventions.[414]

Australian Industry Group opposed these amendments, given its general position that the increase in penalties provided for in the Bill is not justified at this time.[415]

Increases to penalties for breaches of compliance notices

Under section 716 of the Act, where a Fair Work Inspector (Inspector) reasonably believes a person has contravened certain provisions they can give a notice requiring the person remedy the effect of those contraventions (for example when not paying correct award rates of pay to employees).

A failure to comply with the compliance notice attracts a civil penalty, as set out in the table above. Items 33 to 35 of Schedule 5 increase the penalties for non-compliance with a compliance notice by 50% and make related amendments.

New penalties for advertising employment below relevant minimum wage

The FWC publishes the national minimum wage annually in the national minimum wage order (NMWO).[416]

Proposed section 536AA will prohibit employers from advertising, or causing to be advertised, a job with the employer specifying a rate of pay less than the relevant national minimum wage. The penalties for doing so are 60 penalty units for an individual and 300 penalty units for a body corporate.[417]

However, proposed subsection 536AA(2) permits a base rate of pay that is below the national minimum wage to be advertised by an employer if it is the base rate of pay the employer is legally required to pay. The Explanatory Memorandum notes that this could occur where the lawful rate under a modern award is lower than the minimum wage.[418]

Item 26 inserts proposed paragraph 557(2)(oa) to ensure that two or more contraventions of the advertising prohibition in proposed section 536AA are treated as a single contravention (and therefore penalised once) where they are:

committed by the same person and
arise out of a course of conduct by that person.

The Explanatory Memorandum notes that this could apply where an employer arranges for the same non-compliant employment advertisement to be published on two websites.[419]

Stakeholder views

Whilst trade unions are generally supportive of the measure, the ACTU expressed disappointment that only the FWO will have standing to bring proceedings with respect to advertisements that specify a rate of pay less than the relevant national minimum wage, arguing:

The practical effect of this limitation is that it will reduce the likelihood of employers who do contravene the provision ever being detected and facing sanction.[420]

Some legal academics note that the Migrant Workers’ Taskforce recommended that advertising rates of pay that breach the Act (not just the relevant national minimum wage) should be banned, that is, extending the prohibition to job advertisements that publish pay rates below the relevant base rates of pay in an award or enterprise agreement.[421]

Some employer groups expressed opposition to the measure, with the ACCI arguing ‘there is no basis to regulate job advertising through the Fair Work Act’.[422]

Schedule 5: changes to small claim dispute resolution processes

Part 2 of Schedule 5 will amend the Act to:

expand access to the small claims procedure by raising the jurisdictional limit for small claims from $20,000 to $50,000
enable successful claimants to recover filing fees and
enable the Federal Circuit Court and magistrates courts to refer small claims matters to the FWC for conciliation and, if conciliation is unsuccessful, arbitration with consent of the parties.

Pages 67 to 71 of the Explanatory Memorandum provide additional details regarding these amendments.

Stakeholder views

Whilst most stakeholders expressed at least some support for the above reforms, some concerns and comments regarding the proposed changes included:

the capacity of the FWC to resolve claims would be further enhanced if the FWC could arbitrate the claims without the permission of the parties as ‘recalcitrant employers who are refusing to pay wages due are unlikely to be affected by a system that obligates them to attend a conciliation but does not contain the power to require them to pay’[423]
as underpayment issues ‘tend to arise in the context of an unfair dismissal or general protections claim’ it may be sensible ‘for such matters to be heard together, and for the FWC to be authorised to deal with all of these matters via conciliation and, if needed, consent arbitration’[424]
the FWC ‘is deprived of its power to give an opinion or recommendation to the parties, which is particularly significant given that the parties will likely be unrepresented and inexperienced’[425]
appeal rights from arbitration should be limited[426]
arbitration should remain only available with the consent of both parties, and be subject to both appeal and judicial review[427]
the Bill should ensure that the Federal Circuit Court has the power to review arbitration decisions under proposed section 548D on questions of law.[428]

Schedule 5: criminalising certain forms of wage theft

Whilst definitions differ, the term ‘wage theft’ in general can be said to refer to both the underpayment of wages as well as the non-payment of wages (both intentional and non-intentional). The Queensland Parliament Education, Employment and Small Business Committee’s inquiry into the cost of wage theft in Queensland, defined wage theft as:

The underpayment or non-payment of wages or entitlements to a worker by an employer, encapsulating any of a range of activities that deny workers their legal entitlements.[429]

Various inquiries and reports at the state and Commonwealth level have examined wage theft in recent years including:

Senate Education and Employment References Committee, ‘Chapter 6: wage theft’, Corporate Avoidance of the Fair Work Act, 6 September 2017
Senate Standing Committee on Economics, Superbad – Wage Theft and Non-compliance of the Superannuation Guarantee, 2 May 2017
Senate Education and Employment References Committee, Wage Theft? What Wage Theft?!: The Exploitation of General and Specialist Cleaners Working in Retail Chains for Contracting or Subcontracting Cleaning Companies, November 2018
Queensland Education, Employment, and Small Business Committee, A Fair Day’s Pay for a Fair Day’s Work? Exposing the True Cost of Wage Theft in Queensland, Report, 9, November 2018
A Fels AO and D Cousins AM, ‘Report of the Migrants Workers’ Taskforce’, Australian Government, March 2019 and
T Beech, Inquiry into Wage Theft in Western Australia, June 2019.

Whilst this digest does not examine the above reports, they highlight the contemporary and ongoing concerns regarding wage theft.

Application of existing criminal laws to wage theft cases and recent reforms

Most states and territories have criminal legislation that could be applied to cases of deliberate underpayment or non-payment of wages. These offences are usually part of the family of offences related to fraud, dishonestly obtaining a financial benefit or obtaining a financial advantage by deceit.[430]

Whilst the general criminal law in the states and territories has been successfully applied in relation to what is colloquially termed wage theft, such cases appear to be uncommon.[431] This, and on-going concern about the prevalence of wage theft in Australia has prompted some states to pass specific criminal laws dealing with wage theft, including:

Victoria: Wage Theft Act 2020 and
Queensland: Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020.

In addition to the above, Western Australia introduced a Bill aimed in part at tackling wage theft by using civil penalty provisions and enhanced regulatory powers.[432] The drafting of the Bill’s wage theft offence differs from both the Queensland and Victorian laws, as examined below.

Wage theft amendments in the Bill

Part 7 of Schedule 5 seeks to criminalise wage theft. Proposed subsection 324B(1) (at item 46 of Schedule 5) provides that an employer commits an offence if the employer dishonestly engages in a systematic pattern of underpaying one or more employees.

Meaning of dishonest and potential defences

The Bill defines dishonest as:

dishonest according to the standards of ordinary people and
known by the defendant to be dishonest according to the standards of ordinary people.[433]

In relation to the definition of dishonest that underpins the offence, the Explanatory Memorandum notes:

If conduct is not intentional (including if it is accidental, inadvertent or otherwise a genuine mistake), it cannot be dishonest by this standard. A defendant is not dishonest if they genuinely believed they paid relevant amounts in full (or that there was no underpayment), even if this belief is unreasonable or unfounded. Nevertheless, the reasonableness of the defendant’s claim will be a factor in determining whether they actually held such a belief. New subsection 324B(4) makes clear that whether or not a defendant has been dishonest is ultimately a matter for the trier of fact (that is, judge or jury).[434]

The Human Rights Compatibility Statement notes:

The fault element for the offence is dishonesty, which necessarily involves intention to engage in (or knowledge of) wrongdoing.[435] (emphasis added)

Potential defence based on ‘genuine belief’

As a result of the definition of dishonest discussed above the Bill would appear to allow ‘genuine belief’ to operate as a defence, even in circumstances where such belief was unreasonable. In contrast to the Bill, the Victorian Wage Theft Act does not require the defendant to know that their behaviour is dishonest by the standards of ordinary people—it only requires that the behaviour is dishonest according to the standards of a reasonable person. Under the Victorian legislation a defence exists where an:

… employer proves that, before the alleged offence, the employer had exercised due diligence to pay or attribute the employee entitlements to the employee.[436]

In contrast to both the Bill and the Victorian Wage Theft Act, the Queensland reform was to the definition of stealing in the Criminal Code Act 1899. Whilst not explored in detail in this Digest, the definition of stealing used in the Queensland legislation and how intent is defined for the purposes of the offence would appear to prevent a ‘genuine’ (but unreasonable) belief defence of the type possible under the Bill, whilst still allowing for a defence of mistake of fact to operate.[437]

In summary, both the Queensland and Victorian wage theft reforms allow for defences based on either due diligence or a reasonable mistake of fact, whereas the offence proposed by the Bill allows for a broader defence of ‘genuine belief’ with no additional requirement that the genuine belief leading to the offence was reasonable.

Requirement that there is a systematic pattern of underpayment

The Bill will only criminalise conduct that amounts to a systematic pattern of underpaying one or more employees. Proposed subsection 324B(5) provides that in determining whether the employer engaged in a systematic pattern of underpaying one or more employees a court may have regard to:

the number of underpayments
the period over which the underpayments occurred
the number of employees affected by the underpayments
the employer’s response, or failure to respond, to any complaints made about the underpayments and
whether the employer failed to comply with a requirement in relation to keeping employee records and providing payslips to employees.

That is, as noted in the Explanatory Memorandum, the offence will not capture ‘inadvertent or one-off conduct’.[438] In contrast both the Victorian and Queensland wage-theft laws do not impose a ‘systematic pattern’ requirement – that is, they can apply to a single instance of under or non-payment of wages, or to a number of such instances that do not amount a ‘systematic’ pattern.

Applicable penalty

The table below sets out the penalty imposed for the wage theft offence under the Bill in comparison to those in Victoria and Queensland.

Table 3: comparison of custodial penalties for wage theft offences

Legislation	Maximum custodial penalty for individuals
Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020[439]	Imprisonment for 4 years
Wage Theft Act 2020 (Vic)[440]	10 years imprisonment
Criminal Code Act 1899 (Qld)[441]	10 years imprisonment

Source: as per footnotes in table.

Key issue: Bill will override existing state wage-theft laws

Section 26 of the Fair Work Act provides that the Act applies to the exclusion of all state or territory industrial laws, so far as they would apply in relation to a national system employee or a national system employer as defined in the Act.

Proposed paragraphs 26(2)(da) and (db) along with item 44 operate to exclude state or territory laws that criminalise underpayment or record-keeping failures by national system employers in relation to their employees, but not general criminal laws of theft or fraud.

That is, the Bill will effectively override the operation of the recently enacted Victorian laws, and potentially the Queensland laws,[442] discussed above, in relation to national system employers and employees.[443]

Key issue: related conduct not criminalised

The Bill criminalises wage theft, but not other associated conduct such as incorrect record keeping, failing to provide payslips, providing fraudulent payslips, ‘cash-back’ schemes and others. Instead, the Act applies civil penalties to those forms of misconduct. In contrast the Victorian Wage Theft Act does criminalise record-keeping failures commonly associated with wage theft.[444]

However, as noted above the Bill will not only override state and territory laws that specifically criminalise wage theft, but also those that specifically criminalise record-keeping failures commonly associated with wage theft.

Key issue: proving systematic pattern exists

In relation to the application of the proposed criminal offence for underpayment or non-payment of wages where:

employment records are missing or
legal or factual issues are in dispute (such as the relevant classification level or hours worked by the relevant employee)

it may be difficult to prove the existence of a systemic pattern of underpayment or non-payment of wages. As such the non-existence of important records related to employment may, as a practical matter, impact on the effectiveness of the proposed criminal ‘wage theft’ offences in such cases. Further, as failure to keep such records is not criminalised (as is the case in the Victorian legislation) there may be an incentive for dishonest employers to intentionally fail to keep records with a view to obscuring what has occurred and thereby making criminal prosecution against them more difficult.

Stakeholder views

Whilst some employer and industry groups opposed the introduction of a wage theft offence,[445] others expressed in-principle support for such a measure and suggested improvements to the drafting of the offence in the Bill.[446]

Trade unions were generally supportive of the inclusion of a wage theft offence in the Act, but expressed a preference for:

state and territory laws to be able to operate alongside the proposed Commonwealth offence and
the offences to have a different fault element, including potentially strict liability offences in some circumstances.[447]

The Law Council of Australia expressed concern about the drafting of the amendments to section 26 of the Act, noting it was not entirely clear if the current drafting would exclude the operation of the Queensland laws referred to above, as appears to be the intention from the explanatory materials.[448] Employment law academics expressed concern that the ‘limited scope’ of the offence proposed by the Bill, and its potential overlap with existing civil penalties may ‘reduce the regulatory value of this offence provision’ and further noted:

Research on the deterrence effects of criminal sanctions suggests that it is enforcement – not enactment – which is essential to delivering deterrence and curbing non-compliance.[449]

Schedule 6 – Fair Work Commission amendments

Proposed amendments – dismissing applications

The Fair Work Act provides for various applications to be made to the FWC, for example applications for unfair dismissal, for bullying stop orders, in relation to general protection disputes, for single enterprise agreements and to deal with disputes under awards and agreements.[450]

Currently under the Fair Work Act, the FWC can dismiss an application if:

the application is not made in accordance with this Act
the application is frivolous or vexatious or
the application has no reasonable prospects of success.[451]

The amendments in Schedule 6 replace existing section 587 with proposed section 587. Proposed section 587 retains the existing criteria where the FWC may dismiss an application but also extends the grounds where the FWC can dismiss an application to include where the application is misconceived or lacking in substance or is otherwise an abuse of process of the FWC.[452] The Government notes that this amendment aligns the FWC’s powers to deal with unreasonable applications with the powers found under the Administrative Appeals Tribunal Act 1975.[453]

Schedule 6 also inserts proposed section 587A into the Fair Work Act, which allows the FWC to order a person whose application has been dismissed under proposed section 587 to be prevented from lodging subsequent applications of a kind specified in an order, without the permission of the FWC.

Proposed amendments - varying and revoking FWC decisions

As a general rule, the FWC is able to vary or revoke a decision that it has made under the Act, whether on its own initiative or on application by an affected person or a person prescribed by the regulations.[454] Currently, the FWC however cannot revoke or vary decisions which deal with enterprise agreements or workplace determinations.[455]

Item 2 of Schedule 6 removes the exemptions in relation to enterprise agreement and workplace determination decisions – meaning that these decisions can be subject to variation or revocation by the FWC. This may allow the FWC to, for example, rectify a decision where the wrong version of an enterprise agreement has been approved.[456]

Proposed amendments - Process for appealing or reviewing decisions

The Act allows an appeal or review of certain decisions (including decisions made by the FWC itself) to be reviewed by the FWC without holding a hearing.[457] This can only occur where the FWC believes that the appeal or review can be adequately determined without oral submissions and where the parties who would have made submissions have consented.[458]

Item 3 of Schedule 6 repeals current paragraph 607(1)(b) and replaces it with proposed paragraph 607(1)(b) which removes the need for consent from parties for no hearing to be held – instead the FWC only has to take into account the views of those parties in determining whether it is appropriate for no hearing to be held.

Stakeholder views

The FWC itself is supportive of these amendments, noting:

At present, the Commission does not have an effective mechanism to deal with vexatious litigants. While the Commission can dismiss an application that is frivolous, vexatious or has no reasonable prospects of success, broader grounds for dismissing an application are available to the AAT and to the courts, and even if a matter can be dismissed on these grounds, the Commission cannot prevent the applicant making further applications relating to the same underlying dispute or against the same party.

The Bill’s new ss.587 and 587A would provide the Commission with more effective means of dealing with vexatious litigants, so as to avoid the costs to individuals and businesses that would otherwise be drawn into their litigation and the waste of public resources.[459]

The Law Council notes that while the amendments broaden the grounds on which the FWC can dismiss an application, they are still tests with high thresholds – the Law Council suggests that more discretion could be given to the FWC through wording such as not ‘in the public interest’ being added to the amendments.[460]

The ACCI notes that on balance it supports the amendments in Schedule 6, however recommended that the General Manager of the FWC be required to report on the impact of the amendments to section 587 so as to understand what sort of applications are being dismissed and in what circumstances.[461] The Australian Industry Group did not have any concerns with the amendments, and argued that the existing provisions of the Fair Work Act at sections 577 and 578 mean that parties would still need to be afforded natural justice and procedural fairness by the FWC, even with the amendments.[462]

The ACTU believes that the amendments in proposed section 587 (that replaces the existing section) ‘are of little significance’, arguing that the additional grounds would only be useful should there be applications under the current framework that are misconceived or lacking in substance but still have reasonable grounds of success.[463]

The ACTU however strongly opposes the insertion of proposed section 587A, arguing that this provision presents a ‘real and substantive impairment’ to the right to a fair trial.[464] Similarly, the ACTU notes the amendments at Item 3 represent a ‘significant diminution of rights’ in relation to having a hearing.[465] The ACTU also argues that the repeals of paragraphs 603(3)(b) and (c) are problematic in that they may ‘disenfranchise workers’, especially in conjunction with other amendments in the Bill:

The proposed amendments to section 603 appear intended to permit FWC to vary or revoke decisions that currently would require permission to appeal and a successful appeal to overturn. That the decisions identified are those which relate to enterprise agreements and workplace determinations suggest, having regard to the amendments set out in Part 5 of Schedule 3 and elsewhere, that the effect of revised section 603 may be (and may be intended to be) to disenfranchise workers in relation to the terms and conditions of their employment.[466]

Some stakeholders and political parties have made accusations around ‘stacking’ of the FWC with members from either employee or employer backgrounds by ‘unfriendly governments’.[467] Such allegations can be seen from ‘both sides’ of the industrial relations landscape.[468] The Australian Financial Review reported in February 2020 that the FWC is made up of 23 Coalition appointees and 19 Labor appointees, but also noted that Coalition appointees do not make up a majority of full bench members.[469]

In the context of these claims and concerns around the possible partisan nature of the FWC, it should be noted that the amendments in Schedule 6 (as well as in the Bill generally) broaden the general discretion of the FWC.

Appendix A

Amendments to when a non-BOOT compliant agreement can be approved (subsequently removed from the Bill)

The below section discusses amendments in the Bill as introduced relating to when a non-BOOT compliant agreement can be approved. On 16 February 2021, following meetings between the Minister and the crossbench, the Government circulated proposed amendments removing these amendments from the Bill.[470] The below section has been included for the sake of comprehensiveness and context, but effectively no longer constitutes part of the Government’s reforms.

The Fair Work Act currently provides the FWC can approve an otherwise compliant agreement that does not pass the BOOT test where it is satisfied that the approval of the agreement would not be contrary to the public interest because of exceptional circumstances.[471] The FWC considers the test to be applied here ‘is not whether the agreement is in the broader public interest but whether the agreement, because of exceptional circumstances, is not contrary to the public interest, which is a lower test’.[472] The test therefore centres on an assessment of whether exceptional circumstances exist that allows the approval of a non-BOOT compliant agreement. The concept of exceptional circumstances was summarised by the Full Bench of the FWC as follows:

In summary, the expression ‘exceptional circumstances’ has its ordinary meaning and requires consideration of all the circumstances. To be exceptional, circumstances must be out of the ordinary course, or unusual, or special, or uncommon but need not be unique, or unprecedented, or very rare. Circumstances will not be exceptional if they are regularly, or routinely, or normally encountered. Exceptional circumstances can include a single exceptional matter, a combination of exceptional factors or a combination of ordinary factors which, although individually of no particular significance, when taken together are seen as exceptional. It is not correct to construe ‘exceptional circumstances’ as being only some unexpected occurrence, although frequently it will be. Nor is it correct to construe the plural ‘circumstances’ as if it were only a singular occurrence, even though it can be a one off situation. The ordinary and natural meaning of ‘exceptional circumstances’ includes a combination of factors which, when viewed together, may reasonably be seen as producing a situation which is out of the ordinary course, unusual, special or uncommon.[473] (Emphasis added)

Under the Bill’s amendments, the above test at section 189 is retained. The Bill as introduced however created a new and separate test that could be applied where the FWC considers the approval of a non-BOOT compliant agreement. A nominal expiry date of a maximum of two years was to apply to these agreements, as is currently the case for enterprise agreements that do not pass the BOOT but are approved because, due to exceptional circumstances, the FWC is satisfied that their approval is not contrary to the public interest.[474]

Item 19 of Schedule 3 to the Bill as introduced inserted proposed subsection 189(1A). This provision had stipulated that the FWC could approve an otherwise compliant agreement that does not pass the BOOT if the FWC is satisfied that it is appropriate to do so taking into account all the circumstances, and that because of these circumstances, the approval would not be contrary to the public interest. These provisions were to sunset two years from commencement.[475]

The Bill listed the following as what these circumstances included:

the views of the employees, and of the employer or employers, covered by the agreement and of the bargaining representatives for the agreement
the circumstances of employees, employers and employee organisations that have given the FWC a notice that they want to be covered by the agreement, including the likely effect that approving or not approving the agreement would have on each of them
the impact of COVID-19 on the relevant enterprise and
the extent of employee support for the agreement as expressed in the employee vote.[476]

The above circumstances are in effect a subset of all circumstances that the FWC must take into account – as they are explicitly mentioned the FWC would have needed to consider these listed factors at the very least when considering the approval of a non-BOOT compliant agreement.

The proposed test for the FWC to approve non-BOOT compliant agreements had an arguably lower threshold than the existing test. This is because the new test removed any reference to ‘exceptional circumstances’ and allowed the FWC to grant approval if ‘appropriate’ to do so. As noted above, exceptional circumstances are a combination of factors which produce a situation which is out of the ordinary course, unusual, special or uncommon.

It is unclear on the basis of the proposed amendments alone whether in practice they might have allowed the FWC to approve non-BOOT agreements in situations that would not have passed the ‘exceptional circumstances ‘ threshold. In general the original provisions had a lack of clarity as to how the new non-BOOT approval process could apply in practice, and indeed whether it would have operated differently from the existing ‘exceptional circumstances’ test (arguably the impact of COVID-19, for example, could be seen as exceptional circumstances under the current test). The listed circumstances in the proposed amendments were not weighted and were not overly detailed, for example it was not clear what degree of impact of COVID-19 on a business would have been required to allow the FWC to approve an agreement that does not pass the BOOT test on this basis.

The uncertainty around these provisions and their potential impact on employees should they have been hypothetically applied with a much lower threshold, had made them the most controversial part of this Bill amongst certain stakeholders. The ACTU for example, strongly opposed the amendments to the BOOT, noting the uneven power dynamic between workers and employers and that the BOOT is one part of the industrial relations system that prevents this power advantage being exercised to the detriment of workers.[477] The ACTU argued that ‘the test under the new public interest limb is far too broad and easy to meet’. The ACTU argued that the amendments allowed employers who do not genuinely need to offer below minimum employment conditions to recover from COVID-19 to make opportunistic agreements that undercut the safety net on the basis of any kind of 'impact' of COVID-19 on the business’.[478]

Following discussion with the crossbench, the Government decided to remove this aspect of the reforms and circulated proposed amendments repealing the relevant provisions.[479] The Minister for Industrial Relations reportedly noted:

While we continue to believe this was a sensible and proportionate proposal in light of the current challenges our economy is facing, we also understand that this measure had the potential to distract from other elements of the package which will help employers and employees recover from the economic impacts of the pandemic …[480]

[1]. Explanatory Memorandum, Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, p. i.

[2]. Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Bill), clause 2.

[3]. A Stewart, Stewart’s guide to employment law, 6th edn, Federation Press, Sydney, 2018, p. 29.

[4]. Ibid., p. 30.

[5]. New South Wale v Commonwealth (2006) 229 CLR 1, [2006] HCA 52.

[6]. S O’Neill and I Kuruppu, Workplace Relations reforms, Background note, Parliamentary Library, Canberra, 6 December 2007.

[7]. Fair Work Act 2009 (FW Act), Part 2-2 of Chapter 2.

[8]. Fair Work Ombudsman (FWO), ‘National Employment Standards’, FWO website, n.d.

[9]. See: Fair Work Commission, ‘Coverage’, FWC website, updated 6 January 2017.

[10]. R McCallum, M Moore and J Edwards, Towards more productive and equitable workplaces: an evaluation of the Fair Work legislation, (Fair Work Act Review), Department of Education, Employment and Workplace Relations, Canberra, 2012, p. 3.

[11]. Productivity Commission (PC), Public inquiry into the Workplace relations framework, PC website, n.d. (The final report was released on 21 December 2015).

[12]. PC, Workplace relations framework, Inquiry report, 76, PC, Canberra, 30 November 2015, p. 4.

[13]. The Fair Work Amendment Act 2015, for example, responded to some outstanding recommendations from the 2012 review (for more information see: MA Neilsen, Fair Work Amendment Bill 2014, Bills digest, 52, 2013-14, Parliamentary Library, Canberra, 20 March 2014). An example of a recommendation from the same 2012 review which has not been implemented is the formulation of a national long service leave standard.

[14]. See, for example, the citing of both reviews as highlighting issues with the Better Off Overall Test and how the test discourages agreement making – Regulatory Impact Statement (RIS), Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, p. xlviii. The RIS is at pages vi–c of the Explanatory Memorandum to the Bill.

[15]. C Porter, ‘Second reading speech: Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020’, House of Representatives, Debates, 9 December 2020, p. 11015.

[16]. S Morrison (Prime Minister), Address to the National Press Club, Canberra, speech, 26 May 2020.

[17]. Ibid.

[18]. C Porter (Attorney-General and Minister for Industrial Relations), Memberships of IR working groups announced, media release, 11 June 2020, p. 2.

[19]. D McCauley, ‘Christian Porter launches review of industrial relations system’, The Sydney Morning Herald, 27 June 2019.

[20]. C Porter (Attorney-General and Minister for Industrial Relations), Submissions invited on wage theft criminalisation, media release, 19 September 2019.

[21]. Porter, ‘Second reading speech’, op. cit., p. 11015.

[22]. C Porter (Attorney-General and Minister for Industrial Relations), Doorstop interview: casual employment and IR omnibus Bill, transcript, 7 December 2020, p. 7.

[23]. Stewart, Stewart’s guide to employment law, op. cit., p. 2.

[24]. Senate Education and Employment Legislation Committee, Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 [Provisions], Senate, Canberra, March 2021, p. 98.

[25]. Ibid., p. 96.

[26]. Ibid., pp. 118-119

[27]. Ibid., p. 119.

[28]. Ibid., pp. 123-124

[29]. Ibid., p. 124.

[30]. Senate Standing Committee for the Scrutiny of Bills, Scrutiny digest, 2, 2021, 3 February 2021, p. 2.

[31]. Ibid., p. 3.

[32]. Ibid., p. 4.

[33]. Ibid., p. 8.

[34]. A Albanese (Leader of the Australian Labor Party) and T Burke (Shadow Minister for Industrial Relations), Morrison’s Australia Day pay cut for workers, joint media release, 26 January 2021.

[35]. T Burke, ‘Second reading speech: Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020’, House of Representatives, Debates, (proof), 17 February 2021, pp. 24–28.

[36]. Ibid.

[37]. A Bandt, ‘Second reading speech: Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020’, House of Representatives, Debates, (proof), 17 February 2021, p. 23.

[38]. Non-Government proposed amendments to the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (Adam Bandt).

[39]. Workplace Express, ‘Bill ‘trashes’ casual regime for small business: One Nation’, Senator Malcolm Roberts website, 11 February 2021.

[40]. Ibid.

[41]. Ibid.

[42]. Z Steggall, ‘Second reading speech: Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020’, House of Representatives, Debates, (proof), 23 February 2021, p. 51.

[43]. Ibid.

[44]. H Haines, ‘Second reading speech: Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020’, House of Representatives, Debates, (proof), 23 February 2021, p. 52.

[45]. Australia, House of Representatives, ‘Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020’, Votes and proceedings, 102, 23 February 2021, p. 1677.

[46]. R Sharkie, ‘Second reading speech: Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020’, House of Representatives, Debates, (proof), 23 February 2021, p. 107.

[47]. Ibid.

[48]. Ibid., p. 108.

[49]. Senate Education and Employment Legislation Committee, Submissions, Inquiry into the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020.

[50]. Ibid. See, for example: Australian Workers’ Union (AWU), [Submission no. 6], 5 February 2021, p. 3; United Workers Union, [Submission no. 13], n.d., p. 2; Australian Manufacturing Workers’ Union, [Submission no. 18], 5 February 2021, p. [1]; National Tertiary Education Union, [Submission no. 26], n.d., p. [1]; Queensland Council of Unions, [Submission no. 29], February 2021, p. 1; Electrical Trades Union of Australia, [Submission no. 31]. 5 February 2021, p. [2]; Unions NSW, [Submission no. 43], 5 February 2021, p. 2; Transport Workers‘ Union, [Submission no. 87], n.d., p. 1. All submissions footnoted in this Digest are submissions to the Senate Education and Employment Legislation Committee, Inquiry into the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 unless otherwise stated.

[51]. Explanatory Memorandum, op. cit., p. v.

[52]. The Statement of Compatibility with Human Rights can be found at page ci of the Explanatory Memorandum to the Bill.

[53]. Parliamentary Joint Committee on Human Rights, Human rights scrutiny report, 2, 2021, 24 February 2021, pp. 19–50.

[54]. Ibid., pp. 29–30

[55]. Ibid., pp. 34–35.

[56]. Ibid., pp. 47–48.

[57]. Ibid., pp. 49–50.

[58]. Parliamentary Joint Committee on Human Rights, Ministerial responses, Australian Parliament website.

[59]. 4 yearly review of modern awards – Casual employment and Part-time employment (2017) 269 IR 125, [2017] FWCFB 3541, [362].

[60]. RIS, op. cit., p. vii.

[61]. Doyle v Sydney Steel Co Ltd (1936) 56 CLR 545, [1936] HCA 66.

[62]. Ibid.

[63]. See WorkPac Pty Ltd v Skene (2018) 264 FCR 536, [2018] FCAFC 131, [173].

[64]. Ibid., [75].

[65]. Ibid., [172].

[66]. Summary of facts in this case excerpted from: Jones Day Lawyers, 'Monthly Update—Australian Labour and Employment', Jones Day Lawyers website, August 2018. See also paragraphs 18–30 of WorkPac Pty Ltd v Skene (2018) 264 FCR 536, [2018] FCAFC 131.

[67]. WorkPac Pty Ltd v Skene, op. cit., at [9] to [10].

[68]. Ibid., [184].

[69]. Ibid., [123].

[70]. WorkPac Pty Ltd v Rossato (2020) 378 ALR 585, [2020] FCAFC 84, at [58].

[71]. High Court of Australia (HCA), Case B73/2020: WorkPac Pty Ltd v. Rossato & Ors, HCA website.

[72]. Ibid., [18] and [20].

[73]. Ibid., [3].

[74]. Ibid., summary preceding reasons for judgment.

[75]. WorkPac Pty Ltd v Rossato and Ors [2020] HCATrans 200; WorkPac Pty Ltd v Rossato and Ors, ‘Second respondent’s submissions’, filed 12 February 2021, B73/2020.

[76]. WorkPac Pty Ltd v Rossato, op. cit., at [31].

[77]. See, for example: CIE Legal, ‘Nothing casual about the response to the Workpac v Skene decision’, CIE Legal website, 22 November 2018; A Dearden, J Luker and S Bladen, ‘Rossato decision confirms Skene: casuals may not truly be casuals at all’, Hall and Wilcox website, 22 May 2020; R Thevathasan, ‘"I'm only after a casual relationship" says the employer. "Yeah, yeah whatever" says the court’, Clayton Utz website, 16 March 2017; J Wells and S Woolf, ‘Permanent confusion about casuals’, King and Wood Mallesons website, 21 May 2020.

[78]. Fair Work Act 2009 (FW Act), proposed subsection 15A(2).

[79]. WorkPac Pty Ltd v Rossato, op. cit., at [72–73].

[80]. Ibid., at [35].

[81]. RIS, op. cit., p. xxiv.

[82]. Ibid., p. vii.

[83]. Ibid., p. viii.

[84]. Ibid., p. xviii

[85]. Proposed subclause 46(1) of Schedule 1 to the Act, at item 1 of Schedule 7 to the Bill.

[86]. Proposed paragraph 46(2)(a) of Schedule 1 to the Act, at item 1 of Schedule 7 to the Bill.

[87]. Workplace Relations Act 1996, section 576A (as inserted by item 9 of Schedule 2 of the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008).

[88]. Request from Minister for Employment and Workplace Relations - 28 March 2008 - Award Modernisation (2008) 177 IR 364, [2008] AIRCFB 1000, [51]; see also: Stewart, Stewart’s guide to employment law, op. cit., p. 72.

[89]. 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541, [369].

[90]. 4 yearly review of modern awards - Part-time employment and Casual employment [2018] FWCFB 4695.

[91]. 4 yearly review of modern awards – Casual employment and Part-time employment [2017] FWCFB 3541, [381].

[92]. Ibid.

[93]. RIS, op. cit., pp. xii and xxv.

[94]. Ibid., p. ix.

[95]. Ibid., pp. viii–ix.

[96]. Proposed section 66C.

[97]. Explanatory Memorandum, op. cit., p. 10.

[98]. Proposed section 125A (item 5 of Schedule 1).

[99]. Proposed section 125B (item 5 of Schedule 1).

[100]. Proposed subsection 125A(4).

[101]. Proposed subsection 66F(1) (item 3 of Schedule 1).

[102]. Proposed paragraph 66F(1)(c).

[103]. Proposed section 66G (item 3 of Schedule 1).

[104]. Proposed subsection 66H(2) (item 3 of Schedule 1) .

[105]. Proposed subsection 66M(3) (item 3 of Schedule 1).

[106]. Proposed paragraph 66M(5)(a); subsection 595(2).

[107]. Proposed paragraph 66M(5)(b).

[108]. T Burke, ‘Questions without notice: Workplace relations’, House of Representatives, Debates, (proof), 17 February 2021, p. 58.

[109]. Proposed subsection 66M(2).

[110]. Hospitality Industry (General) Award 2020, clause 40; Fast Food Industry Award 2010, clause 9.

[111]. See discussion around which sectors have a high degree of casualisation in G Gilfillan, COVID-19: Impacts on casual workers in Australia—a statistical snapshot, Research paper series, 2019–20, Parliamentary Library, Canberra, 8 May 2020.

[112]. Stewart, Stewart’s guide to employment law, op. cit., p. 69.

[113]. Ibid.

[114]. Fair Work Commission (FWC), Annual Wage Review 2019–20; clause 5.1.

[115]. WorkPac Pty Ltd v Skene (2018) 264 FCR 536, [2018] FCAFC 131, [76].

[116]. Ibid.

[117]. Ibid., [147].

[118]. Ibid.

[119]. Ibid.

[120]. T Sebbens and J Mills, ‘Status and entitlements of casual workers’, FWD: Thinking, Ashurst, January 2019, p. 3; Explanatory Statement, Fair Work Amendment (Casual Loading Offset) Regulations 2018.

[121]. WorkPac Pty Ltd v Rossato (2020) 378 ALR 585, [2020] FCAFC 84, [943].

[122]. Ibid., [944].

[123]. Ibid., [946].

[124]. See discussion in T Capelin and A Howell, ‘WorkPac v Rossato – Apparently double-dipping is fine’, Piper Alderman website, 25 May 2020.

[125]. See, for example I Curlewis and M Jensen, ‘A casual shock to employers - the Rossato decision’, Lavan website, 12 June 2020.

[126]. P Karp, ‘Employer groups call for reform after court finds casual’ The Guardian (online), 21 May 2020.

[127]. Relevant entitlements are defined as an entitlement under the NES, a fair work instrument (such as an enterprise agreement or award) or a contract of employment to any of the following: paid annual leave, paid personal/carer’s leave, paid compassionate leave, payment for absence on a public holiday, payment in lieu of notice of termination and redundancy pay (see proposed subsection 545A(4)).

[128]. Proposed subsection 545A(2).

[129]. See for example: R Rosedale and A Gray, ‘The new IR laws: ‘incremental change’ or a lost opportunity?, King and Wood Mallesons website, 9 December 2020.

[130]. Explanatory Memorandum, op. cit., p. 92.

[131]. Law Council of Australia (LCA), [Submission no. 57], 5 February 2021, p. 9.

[132]. Ibid.

[133]. National Retail Association (NRA), [Submission no. 11], 5 February 2021, p. [5].

[134]. Ibid., p. [6].

[135]. Restaurant and Catering Industry Association (RCIA), [Submission no. 21], 5 February 2021, p. [2].

[136]. Minerals Council of Australia (MCA), [Submission no. 27], 5 February 2021, p. [5].

[137]. Council of Small Business Organisations Australia (COSBOA), [Submission no. 14], n.d., p. [1].

[138]. Chamber of Commerce and Industry WA (CCI WA), [Submission no. 28], 5 February 2021, p. 4.

[139]. Ibid., p. 7.

[140]. Australian Chamber of Commerce and Industry (ACCI), [Submission no. 76], 5 February 2021, p. 12

[141]. Australian Industry Group (AIG), [Submission no. 70], February 2021, p. 20.

[142]. Business SA, [Submission no. 22], February 2021, pp. 3–4.

[143]. Ibid., p. 4.

[144]. Western Australian Government, [Submission no. 2], February 2021, p. 2.

[145]. Ibid., pp. 5–6.

[146]. Australian Council of Trade Unions (ACTU), [Submission no. 16], 5 February 2021, p. 14.

[147]. Ibid., p. 19.

[148]. Ibid., p. 20.

[149]. Ibid., pp. 20–21.

[150]. A Stewart, Stewart’s guide to employment law, op. cit., p. 120.

[151]. FWC, ‘Award modernisation’, FWC website, last updated 30 April 2018.

[152]. Ibid.

[153]. FWC, ‘Modern awards’, FWC website, last updated 23 December 2020.

[154]. FW Act, subsection 134(1).

[155]. C Porter, ‘Second reading speech’, op. cit., p. 11015

[156]. G Gilfillan, COVID-19: Labour market impacts on key demographic groups, industries and regions, Research paper series, 2020–21, Parliamentary Library, Canberra, 2020, p. 17.

[157]. Ibid., p. 18. Other services include a broad range of personal services including for example hair and beauty services, death care services and promotion of religious events (see: Australian Bureau of Statistics and Statistics New Zealand, Australian and New Zealand Standard Industrial Classification 2006, ABS cat no. 1292.0, 2016, p. 361).

[158]. RIS, op. cit., p. xxxxi.

[159]. For a list of these awards, see: FWC, ‘COVID-19 and awards’, FWC website, last updated 6 January 2021.

[160]. Application to vary the Clerks – Private Sector Award 2010, [2020] FWCFB 1690; Norton Rose Fulbright Australia, ‘Australia: COVID-19: Modern award variations’, mondaq website, 1 June 2020.

[161]. C Porter (Attorney-General and Minister for Industrial Relations), Letter to the Hon Justice Iain Ross, President of Fair Work Commission, 9 December 2020.

[162]. Ibid; FWC, ‘Award flexibility – Hospitality and retail sectors’, FWC website, last updated 9 March 2021.

[163]. FWC, ‘Award flexibility – Hospitality and retail sectors’, FWC website, last updated 9 March 2021.

[164]. Proposed section 168M of the Act at item 5 of Schedule 2 to the Bill.

[165]. Ibid.

[166]. Proposed subsection 168N(1) of the Act at item 5 of Schedule 2 to the Bill.

[167]. Proposed subsection 168P(1) of the Act at item 5 of Schedule 2 to the Bill.

[168]. Proposed subsections 168P(2) and 168Q(1).

[169]. Proposed section 168R of the Act at item 5 of Schedule 2 to the Bill .

[170]. Proposed section 168S of the Act at item 5 of Schedule 2 to the Bill.

[171]. Proposed subsection 168P(3).

[172]. Proposed subsection 168M(3).

[173]. RIS, op. cit., p. xxx.

[174]. FWC, ‘Information note – modern awards and industries’, FWC, [Canberra], 30 March 2020, p. 2.

[175]. Ibid.

[176]. FWC, ‘Information note – modern awards and industries’, FWC, [Canberra], 30 March 2020.

[177]. RIS, op. cit., pp. xxx–xxxxi.

[178]. FWC, ‘Information note – modern awards and industries’, FWC, [Canberra], 30 March 2020, p. 1.

[179]. Ibid.

[180]. NRA, ‘Submission’, op. cit., p. [4].

[181]. Business SA, ‘Submission’, op. cit., p. 6.

[182]. Ibid.

[183]. NRA, ‘Submission’, op. cit., p. [7].

[184]. ACCI, ‘Submission’, op. cit., pp. 39–40.

[185]. Ibid.

[186]. Centre for Future Work, [Submission no. 15], p. 12

[187]. Proposed paragraph 168M(3)(m) and proposed subsection 168M(4).

[188]. Proposed subsection 168Q(2) of the Act at item 5 of Schedule 2 to the Bill.

[189]. Proposed paragraph 168Q(3)(a).

[190]. Proposed subparagraph 168(3)(b)(i).

[191]. Proposed subparagraphs 168(3)(b)(i)–(ii).

[192]. Explanatory Memorandum, op. cit., p. 30.

[193]. See for example: J McCabe (CEO of Professionals Australia), ‘A message from the CEO: Commonwealth Government’s IR reforms’, Professionals Australia website, 11 December 2020.

[194]. RIS, op. cit., p. xxx.

[195]. See also: D Peetz, ‘Chance for genuine industrial relations reform thrown under the omnibus’, The Conversation (online edition), 13 December 2020.

[196]. Proposed subsection 168Q(4).

[197]. Proposed paragraph 168T(a).

[198]. Proposed paragraph 168T(b).

[199]. FW Act, section 340; FWC, General protections (unlawful actions), FWC website, last updated 23 November 2020.

[200]. T Lange, M Caile, A Stewart, ‘Substantial IR reform on the agenda for 2021 – if the Senate agrees’, Piper Alderman website, 9 December 2020.

[201]. Ibid.

[202]. Proposed sections 789GZG and 789GZH of the Act at item 8 of Schedule 2 to the Bill.

[203]. Proposed section 789GZN of the Act at item 8 of Schedule 2 to the Bill.

[204]. Proposed section 789GZL of the Act at item 8 of Schedule 2 to the Bill.

[205]. Proposed subsection 789GZI(3) of the Act at item 8 of Schedule 2 to the Bill.

[206]. Proposed section 789GZF of the Act at item 8 of Schedule 2 to the Bill.

[207]. Proposed section 789GZJ of the Act at item 8 of Schedule 2 to the Bill.

[208]. Proposed section 789GZK of the Act at item 8 of Schedule 2 to the Bill.

[209]. Proposed section 789GZO of the Act at item 8 of Schedule 2 to the Bill.

[210]. FWC, Benchbook: Enterprise agreements, FWC, Canberra, 9 April 2019, p. 42.

[211]. Dr David Peetz discusses this issue with respect to penalty rates, see: D Peetz, 'The impact of the penalty rates decision on Australian and Victorian workers in retail and hospitality industries', Submission to the Department of Economic Development, Jobs Transport and Resources Commissioned Research Report, [Submission no. 22], May 2017 at pages 31–32.

[212]. FW Act, Part 6-4C; Fair Work Ombudsman (FWO), ‘Extension of JobKeeper provisions in the Fair Work Act’, FWO website, updated 12 October 2020.

[213]. Explanatory Memorandum, Coronavirus Economic Response Package (Jobkeeper Payments) Amendment Bill 2020, p. 19.

[214]. RCIA, ‘Submission’, op. cit., p. [3].

[215]. Business SA, ‘Submission’, op. cit., p. 8.

[216]. CCI WA, ‘Submission’, op. cit., p. 8.

[217]. ACCI, ‘Submission’, op. cit., p. 41.

[218]. Ibid., p. 42.

[219]. AIG, ‘Submission’, op. cit., p. 29.

[220]. A Stewart, S McCrystal, J.R. Munton, T Hardy and A Orifici, [Submission no. 56], 5 February 2021, pp. 20–21.

[221]. Ibid., p. 23.

[222]. ACTU, ‘Submission’, op. cit., p. 23.

[223]. Ibid., p. 27.

[224]. Ibid.

[225]. Queensland Government, [Submission no. 20], January 2021, p. 9.

[226]. See: FWC, ‘Benchbook: enterprise agreements’, op. cit., Part 3.

[227]. Ibid., Part 5.

[228]. FW Act, section 173.

[229]. FW Act, subsection 173(3). The notification time for a proposed enterprise agreement is the time when: the employer agrees to bargain, or initiates bargaining, for the agreement; a majority support determination in relation to the agreement comes into operation; a scope order in relation to the agreement comes into operation; or a low‑paid authorisation in relation to the agreement that specifies the employer comes into operation (see subsection 173(2) of the FW Act).

[230]. Item 2 of Schedule 3 to the Bill.

[231]. FW Act, section 180.

[232]. Proposed subsection 180(2) of the Act at item 8 of Schedule 3 to the Bill.

[233]. Proposed subsection 180(3).

[234]. Proposed subparagraph 188(1)(a)(i) of the Act at item 11 of Schedule 3 to the Bill.

[235]. Proposed paragraph 181(1)(b) of the Act at item 14 of Schedule 3 to the Bill; subsection 180(4) as amended by item 9 of Schedule 3.

[236]. National Tertiary Education Industry Union v Swinburne University of Technology (2015) 232 FCR 246, [2015] FCAFC 98 (17 July 2015). The Court held in this case that sessional academics who were engaged during the previous academic year should be included as employees unless the employer had a reasonable basis to believe that they would not be employed in the ensuing academic year (paragraph 33).

[237]. NRA, ‘Submission’, op. cit., p. [9].

[238]. CCI WA, ‘Submission’, op. cit., p. 16.

[239]. Ibid., pp. 16–17.

[240]. Ibid., p. 17.

[241]. AIG, op. cit., pp. 43–44.

[242]. Ibid., p. 44.

[243]. A Stewart and others, ‘Submission’, op. cit., pp. 28 and 31.

[244]. Ibid., pp. 29–30.

[245]. Ibid.

[246]. ACTU, ‘Submission’, op. cit., p. 32.

[247]. Ibid.

[248]. Ibid., p. 38.

[249]. Ibid.

[250]. See Part VIE of the Workplace Relations Act 1996 as at 20 January 1997.

[251]. Stewart, Stewart’s guide to employment law, op. cit., pp. 31-32.

[252]. FW Act, subsection 193(1).

[253]. Ibid., paragraph 186(2)(d).

[254]. Ibid., subsection 189(2).

[255]. FWC, Benchbook: Enterprise agreements, op. cit., p. 146.

[256]. Ibid., p. 153; FW Act, subsection 193(7).

[257]. Ibid.

[258]. Proposed paragraph 193(8)(a) of the Act.

[259]. RIS, op. cit., p. xlix. If the FWC has concerns with respect to the BOOT, it can seek undertakings from employers that address this concern (see: FWC, 'Undertakings in enterprise agreements', FWC website, last updated 20 August 2020).

[260]. See for example ACTU, ‘Submission’, op. cit., p. 44; AWU, ‘Submission’, op. cit., pp. 14–15; Community and Public Sector Union (CPSU), [Submission no. 4], p. 17.

[261]. Proposed paragraph 193(8)(b).

[262]. Transport Workers' Union of Australia v Jarman Ace Pty Ltd T/A Ace Buses [2014] FWCFB 7097, [28].

[263]. RIS, op. cit., pp. xlviii–xlix.

[264]. Proposed paragraph 193(8)(c).

[265]. RIS, op. cit., pp. l–li.

[266]. Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887.

[267]. Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo [2015] FWCA 4136, at [2].

[268]. Ibid., at [35].

[269]. Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited T/A Coles and Bi Lo [2015] FWCA 4136.

[270]. Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887.

[271]. Ibid., at [7].

[272]. Ibid., at [10].

[273]. Ibid., at [33].

[274]. See, for example, J Winckworth, ‘Coles – the BOOT needs to fit all feet (not just the majority)’, Clayton Utz website, 4 August 2016.

[275]. B Schneiders and R Millar, ‘Coles settles big underpayment case', The Age, 8 November 2017, p. 12; A Probyn, 'Coles worker could bring down enterprise bargaining system if wage challenge is successful', ABC News (online), 4 April 2017.

[276]. D Marin-Guzman, ‘Bargaining ‘in danger’ if IR bill blocked’, The Australian Financial Review, 19 February 2021, p. 5.

[277]. Loaded Rates Agreements [2018] FWCFB 3610 (28 June 2018), [1].

[278]. Ibid., [115].

[279]. Ibid.

[280]. See for example: NRA, ‘Full bench hands down decision on loaded rates’, NRA website, 10 July 2018; M Procter and A Miller (Clarke Kann Lawyers), ‘The future of BOOT and loaded rates in enterprise agreements’, Mondaq website, 14 December 2018.

[281]. Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited [2016] FWCFB 2887, [32].

[282]. ACCI, ‘Submission’, op. cit., p. 65.

[283]. Ibid., p. 67.

[284]. Ibid.

[285]. CCI WA, ‘Submission’, op. cit., p. 18.

[286]. Ibid.

[287]. MCA, ‘Submission’, op. cit., p. [6].

[288]. AIG, ‘Submission’, op. cit., p. 47.

[289]. Ibid.

[290]. NRA, ‘Submission’, op. cit., p. [11].

[291]. ACTU, ‘Submission’, op. cit., p. 44.

[292]. Ibid.

[293]. Ibid.

[294]. FW Act, subsection 55(1).

[295]. FW Act, paragraph 186(2)(c).

[296]. FW Act, section 190, subsection 191(1); FWC, 'Undertakings in enterprise agreements', FWC website, last updated 20 August 2020.

[297]. FWC, Benchbook: Enterprise agreements, op. cit., p. 57.

[298]. Ibid.

[299]. Proposed section 205A of the Act at item 42 of Schedule 3 to the Bill.

[300]. Proposed subsection 205A(3).

[301]. Ibid., sections 247 and 249.

[302]. Ibid., section 251.

[303]. Proposed section 216B of the Act at item 51 of Schedule 3 to the Bill .

[304]. Proposed subsection 216A(2).

[305]. Proposed subsections 216A(1) and (7).

[306]. Proposed section 216C.

[307]. Proposed subsection 58(4) is inserted into the Act by item 49 of Schedule 3 to the Bill; proposed subsection 278(1A) is inserted into the Act by item 52 of Schedule 3 to the Bill.

[308]. Franchise Council of Australia, [Submission no. 78], 5 February 2021, p. [7].

[309]. Ibid.

[310]. FW Act, section 225.

[311]. Ibid., section 226.

[312]. RIS, op. cit., pp. lxxiii, lxxiv.

[313]. RIS, op. cit., p. lxxiv.

[314]. RIS, op. cit., p. lxxiii.

[315]. RIS, op. cit., p. lxxiii.

[316]. Application by Aurizon Operations Limited & Aurizon Network Pty Ltd and Another [2015] FWCFB 540, and upheld by the Full Federal Court in CEPU v Aurizon Operations Limited [2015] FCAFC 126.

[317]. Esso Australia Pty Ltd v Australian Workers' Union; Australian Manufacturing Workers' Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2020] FWCFB 1077.

[318]. RIS, op. cit., p. lxxiii.

[319]. CPSU, ‘Submission’, op. cit., p. 20.

[320]. ACTU, ‘Submission’, op. cit., pp. 46–47.

[321]. ACCI, ‘Submission’, op. cit., p. 75.

[322]. AIG, ‘Submission’, op. cit., p. 49.

[323]. A Stewart and others, ‘Submission’, op. cit., p. 39.

[324]. Ibid.

[325]. FW Act, section 176, subsections 185(1) and 185(1A). In Construction, Forestry, Mining and Energy Union v Collinsville Coal Operations Pty Limited [2014] FWCFB 7940 the central issue was whether a bargaining representative for an enterprise agreement has automatic standing to be heard in the application for the approval of the agreement (at [15]). The Full Bench of the FWC noted: ‘There can be little doubt that a bargaining representative for a proposed agreement will have standing to be heard in relation to an application to approve the agreement’ (at [16]). More recently in National Union of Workers v Sigma Company Limited T/A Sigma Healthcare [2017] FWCFB 3892 the Full Bench of the FWC noted ‘A person that is a bargaining representative at the time an application is lodged for approval of an enterprise agreement has standing to be heard in relation to the application for approval. Although a person who was a bargaining representative at some point in the bargaining process, but ceased to be a bargaining representative prior to the lodgement of the application for approval of the enterprise agreement, does not have an automatic right to be heard in relation to an application for approval of an enterprise agreement, the person can request the member considering the application for approval of the enterprise agreement to exercise his or her discretion under section 590 of the Act to be heard in relation to the application. Further, such a person is entitled to be given a proper opportunity to develop their argument on the question of whether they should be heard.’ (at [16], emphasis added).

[326]. This does not apply where the Commonwealth Minister is seeking to make a submission in relation to a matter that involves public sector employment. See also section 605.

[327]. Ibid., section 590.

[328]. See for example: Inco Ships Pty Ltd v Australian Institute of Marine and Power Engineers, The & Australian Maritime Officers' Union, The [2016] FWCFB 3370 where the FWC exercised its discretion to allow the unions to be heard, despite neither union being a bargaining representative; Australian Industry Group v Fair Work Australia [2012] FCAFC 108 where the Australian Industry Group (AIG) was granted standing to challenge a decision to approve an enterprise agreement on the basis of the potential impact of the agreement on its members; Minister for Employment and Workplace Relations [2010] FWAFB 3552 where the Full Bench of Fair Work Australia (as the FWC was called at the time) considered when a Minister may appeal a decision to approve an enterprise agreement under section 605 of the FW Act. See also Woolworths Ltd trading as Produce and Recycling Distribution Centre [2010] FWAFB 1464 and Liviende Incorporated v Health Services Union [2014] FWCFB 8089 which both dealt with a Minister seeking to intervene in an application to have an enterprise agreement approved. In Liviende the FWC did not determine if it was in the public interest for the Minister to have standing under section 597A of the FW Act and instead accepted that as the Minister had a sufficient interest beyond that of an ordinary person, permission for the Minister to put submissions was provided under section 590 of the FW Act, whether or not there was an entitlement to make submissions under section 597A.

[329]. Porter, ‘Second reading speech’, op. cit., p. 11016.

[330]. Ibid.

[331]. Explanatory Memorandum, op. cit., p. cxiii.

[332]. Porter, ‘Second reading speech’, op. cit., p. 11015.

[333]. Proposed subsection 254AA(2) of the Act at item 54 of Schedule 3 to the Bill.

[334]. RIS, op. cit., p. lxiii.

[335]. RIS, op. cit., p. lxiii.

[336]. AIG, ‘Submission’, op. cit., p. 50.

[337]. ACTU, ‘Submission’, op. cit., pp. 49–50.

[338]. FW Act, subparagraph 171(b)(iii).

[339]. Porter, ‘Second reading speech’, op. cit., p. 11015.

[340]. RIS, op. cit., p. lxxv.

[341]. Ibid., p. lxxv.

[342]. Ibid., p. lxxv.

[343]. Proposed subsection 255AA(2) of the Act at item 57 of Schedule 3 to the Bill.

[344]. Proposed subsection 255AA(3).

[345]. RIS, op. cit., p. lxxv.

[346]. CPSU, ‘Submission’, op. cit., pp. 20–21.

[347]. ACTU, ‘Submission’, op. cit., p. 52.

[348]. Business Council of Australia, [Submission no. 92], pp. 11 and 20.

[349]. FW Act, part 2-8 generally.

[350]. RIS, op. cit., pp. lxxvi–lxvii.

[351]. Ibid., p. lxxvi.

[352]. CPSU, ‘Submission’, op. cit., p. 21.

[353]. AWU, ‘Submission’, op. cit., p. 22.

[354]. ACCI, ‘Submission’, op. cit., p. 89; Master Grocers Australia (MGA), [Submission no 45], p. 15.

[355]. Stewart, Stewart’s guide to employment law, The Federation Press, Sydney, 5^th ed., 2015, p. 173.

[356]. RIS, op. cit., p. lxv.

[357]. Stewart, Stewart’s guide to employment law’, 5^th ed., 2015, op. cit., p. 173; Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Schedule 3, item 3.

[358]. Fair Work (Transitional Provisions and Consequential Amendments) Act 2009, Schedule 3, items 4 and 5.

[359]. RIS, op. cit., p. liii; N Toscano, ‘Thousands stuck on “zombie” deals’, The Sydney Morning Herald, 3 January 2017, p. 32.

[360]. RIS, op. cit., p. lxxviii.

[361]. Ibid.

[362]. Ibid.

[363]. AWU, ‘Submission’, op. cit., p. 23.

[364]. Western Australian Government, ‘Submission’, op, cit., p. 9.

[365]. National Road Transport Association (NRTA), [Submission no. 5], 5 February 2021, p. [9].

[366]. FW Act, paragraphs 172(2)(b) and 172(3)(b); see also: FWC, Benchbook: Enterprise agreements, op. cit., pp. 21–22.

[367]. FW Act, subsections 178B(1) and 182(4).

[368]. FW Act, paragraph 186(5)(b).

[369]. Proposed subparagraph 186(5)(b)(i) of the Act at item 3 of Schedule 4 to the Bill.

[370]. Proposed section 23B of the Act at item 2 of Schedule 4 to the Bill.

[371]. Proposed subsection 23B(4).

[372]. Proposed subsection 187(7) of the Act at item 4 of Schedule 4 to the Bill.

[373]. RIS, op. cit., pp. lxxxiii–lxxxiv.

[374]. RIS, op. cit., p. xc.

[375]. Ibid.

[376]. CCI WA, ‘Submission’, op. cit., p. 26.

[377]. Ibid.

[378]. Australian Resources & Energy Group AMMA (AMMA), [Submission no. 23], pp. 53–54.

[379]. Ibid., pp. 54–55.

[380]. ACTU, ‘Submission’, op. cit., p. 55.

[381]. Ibid., pp. 55–56.

[382]. Construction and General and Maritime Union of Australia divisions of the Construction Forestry, Maritime , Mining and Energy Union, [Submission no. 25], pp. 32–35.

[383]. Ibid., p. 32.

[384]. Ibid.

[385]. Ibid.

[386]. Queensland Government, ‘Submission’, op. cit., p. 7.

[387]. FW Act, section 45.

[388]. Section 539 and subsection 546(2) of the Act. Crimes Act 1914, subsection 4AA(3). The current value of a penalty unit is $222.

[389]. Section 557A of the Act.

[390]. Section 557B of the Act.

[391]. Amendments made by Item 1 of Schedule 5.

[392]. Proposed subsection 546(2), table items 3 (individual) , 4 (small business employer, and 5 (employers that are not small businesses)—item 4 of Schedule 5 to the Bill.

[393]. Proposed section 546A, subsection 546(2), table item 6.

[394]. For example the Competition and Consumer Act 2010 uses the value of the benefit in the cartel provisions (for example, subsection 45AF(3)) and certain misleading and deceptive conduct provisions (for example, subsection 56BN(3)) among others).

[395]. A Stewart and others, ‘Submission’, op. cit., p. 47.

[396]. FW Act, sections 539 and 540, subsection 546(3).

[397]. A Stewart and others, ‘Submission’, op. cit., p. 48.

[398]. Retail and Fast Food Workers Union Incorporated v Tantex Holdings Pty Ltd (No 2) [2020] FCA 1644 as per Logan J [66].

[399]. A Stewart and others, ‘Submission’, op. cit., pp. 47–48.

[400]. ACTU, ‘Submission’, op. cit., pp. 58–59.

[401]. ACCI, ‘Submission’, op. cit., pp. iv–v, 114–117; AIG, ‘Submission’, op. cit., p. 61.

[402]. AIG, ‘Submission’, op. cit., pp. 61, 63–64.

[403]. FW Act, subsection 539(2) table item 11, subsection 357(1), sections 358, 359 and paragraph 546(2)(a).

[404]. Ibid., subsection 539(2) table item 11, subsection 357(1), sections 358, 359 and paragraph 546(2)(b).

[405]. Subsection 539(2) , proposed table item 11B (item 39 of Schedule 5 to the Bill).

[406]. Ibid., proposed subsection 546(2), table item 2.

[407]. FW Act, subsection 539(2) table item 33, subsection 716(5) and paragraph 546(2)(a).

[408]. Ibid., subsection 539(2) table item 33, subsection 716(5) and paragraph 546(2)(b).

[409]. Item 33 of Schedule 5.

[410]. Item 33 and proposed subsection 546(2), table item 2.

[411]. Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (No 2) [2013] FCA 582 as per McKerracher J [2].

[412]. FW Act, see Division 6 of Part 3-1 generally, and sections 357 to 359 in particular.

[413]. See for example: ACTU, ‘Submission’, op. cit., p. 62.

[414]. A Stewart and others, ‘Submission’, op. cit., p. 56.

[415]. AIG, ‘Submission’, op. cit., pp. 63 and 69.

[416]. Fair Work Commission (FWC), National minimum wage orders, FWC website.

[417]. Proposed section 536AA of the Act at item 24 of Schedule 5 to the Bill and item 25 of Schedule 5.

[418]. Explanatory Memorandum, op. cit., pp. 71–72.

[419]. Ibid., p. 72.

[420]. ACTU, ‘Submission’, op. cit., p. 61.

[421]. A Stewart and others, ‘Submission’, op. cit., p. 55.

[422]. ACCI, ‘Submission’, op. cit., pp. v and 114.

[423]. LCA, ‘Submission’, op. cit., p. 22.

[424]. A Stewart and others, ‘Submission’, op. cit., p. 52.

[425]. ACTU, ‘Submission’, op. cit., p. 60.

[426]. Ibid., p. 61.

[427]. ACCI, ‘Submission’, op. cit., pp. v and 122; AIG, ‘Submission’, op. cit., p. 67.

[428]. AIG, ‘Submission’, op. cit., p. 67.

[429]. Queensland Education, Employment, and Small Business Committee, A fair day’s pay for a fair day’s work? Exposing the true cost of wage theft in Queensland, Report, 9, November 2018, p. viii.

[430]. See for example sections 252A, 253 and 253A of Tasmania’s Criminal Code Act 1924

[431]. See for example: Matthews v Fountain [1982] VR 1045, [1982] VicRp 104 where the defendant was convicted on a charge of obtaining a financial advantage by deception (that is, fraud) on the basis of having refused to pay a former employee her salary and commission; Siwek v R [2017] NSWCCA 178 where an employee was convicted of multiple fraud offences for diverting payroll amounts to his personal account (which resulted in employees being underpaid).

[432]. See, Industrial Relations Legislation Amendment Bill 2020 (WA) and related materials.

[433]. Item 42 of Schedule 5.

[434]. Explanatory Memorandum, op. cit., p. 80.

[435]. Ibid., p. cxvii.

[436]. Wage Theft Act 2020 (Vic), subsections 6(6) and 6(10) (see also 6(4)).

[437]. Criminal Code Act 1899 (Qld), sections 23, 24, and 391.

[438]. Explanatory Memorandum, op. cit., p. 81.

[439]. Proposed paragraph 324B(1)(a).

[440]. Wage Theft Act 2020 (Vic), subsections 6(1) and 6(7).

[441]. Criminal Code Act 1899 (Qld), sections 391 and 398 (see item 16 of list titled ‘punishment in special cases’ in section 398).

[442]. The question in relation to the Queensland law arises due to uncertainty as to whether the recently introduced Queensland amendments are ‘general criminal laws of theft and fraud’. See LCA, ‘Submission’, op. cit., pp. 22–24, discussed below.

[443]. This is because of the operation of section 109 of the Constitution.

[444]. Wage Theft Act 2020 (Vic), sections 7 and 8.

[445]. AIG, ‘Submission’, op. cit., pp. 69–72; ACCI, ‘Submission’, op. cit., pp. v–vi, 128, 134; Australian Federation of Employers and Industries (AFEI), [Submission no. 108], 5 February 2021, p. 9.

[446]. National Farmers Federation (NFF), [Submission no. 101], 9 February 2021, pp. 21–22; Australian Retail Association (ARA), [Submission no. 98], pp. 9–10; BCA, ‘Submission’, op. cit., pp. 29–30.

[447]. ACTU, ‘Submission’, op. cit., pp. 63–64.

[448]. LCA, ‘Submission’, op. cit., pp. 22–24.

[449]. A Stewart and others, ‘Submission’, op. cit., pp. 57–58.

[450]. See: FWC, 'Lodge an application', FWC website, last updated 10 March 2021.

[451]. FW Act, subsection 587(1).

[452]. Proposed subsection 587(1) and proposed paragraph 587(2)(a) of the Act at item 1 of Schedule 6 to the Bill.

[453]. Administrative Appeals Tribunal Act 1975, section 42B; Explanatory Memorandum, op. cit., p. 87.

[454]. FW Act, subsection 603(1)–(2). The FWC can issue a workplace determination setting out the terms and conditions of employment where the bargaining representatives for a proposed enterprise agreement cannot agree (see: FWC, 'Workplace determinations', FWC website, last updated 24 May 2019).

[455]. FW Act, paragraphs 603(3)(b)–(c).

[456]. See, H Donovan, ‘When the wrong version of an EA is approved by the FWC’, Allens Linklaters website, 9 July 2020.

[457]. FW Act, subsection 607(1).

[458]. Ibid.

[459]. FWC, [Submission no. 19], p. 5.

[460]. LCA, ‘Submission’, op. cit., p. 24.

[461]. ACCI, ‘Submission’, op. cit., pp. 141 and 144.

[462]. AIG, ‘Submission’, op. cit., pp. 73–74.

[463]. ACTU, ‘Submission’, op. cit., pp. 65–66.

[464]. Ibid., p. 67.

[465]. Ibid., p. 69.

[466]. Ibid., p. 68.

[467]. P Karp, ‘Coalition stacking Fair Work Commission with mates, Labor says’, The Guardian, 7 December 2018.

[468]. Ibid. AMMA, ‘Opposition’s Hypocrisy On Fwc Appointments Breathtaking’, AMMA website, 6 May 2016.

[469]. D Marin-Guzman, ‘Employers push for Fair Work review’, The Australian Financial Review, 3 February 2020, p. 9.

[470]. Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, amendment, sheet QM128, House of Representatives, 25 February 2021.

[471]. FW Act, section 189.

[472]. FWC, Benchbook: Enterprise agreements, op. cit., p. 178 (citing Re Top End Consulting Pty Ltd [2010] FWA 6442 (Bartel DP, 24 August 2010) at [46]).

[473]. Cheyne Leanne Nulty v Blue Star Group Pty Ltd [2011] FWAFB 975, at [13].

[474]. FW Act, subsection 189(4).

[475]. See clause 2 and Division 2, Part 5 of Schedule 3 of the Bill as introduced.

[476]. Proposed paragraph 189(1A)(a) of the Act at item 19 of Schedule 3 to the Bill as introduced.

[477]. ACTU, ‘Submission’, op. cit., p. 40.

[478]. Ibid., p. 43.

[479]. Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020, amendment, sheet QM128, op. cit. M Grattan, ‘Government drops BOOT change but Labor and ACTU will still fight workplace legislation’, The Conversation, 16 February 2021.

[480]. Grattan, ‘Government drops BOOT change’, op. cit.

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