2.1
This chapter outlines the context of the industrial relations reforms contained in the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 (the bill), before exploring the measures to be enacted by each of its schedules. Consideration of the bill by the Senate Standing Committee for the Scrutiny of Bills is also examined, along with the bill's compatibility with human rights and its financial impact.
Reform context
2.2
At the height of the COVID-19 pandemic, 1.3 million Australians either lost their jobs, or were stood down on zero hours. While the labour market has recovered ground since that time, there were still just under one million Australians looking for work and 1.6 million receiving unemployment benefits in September 2020. The bill aims to help Australia's recovery from the pandemic by improving the operation of the industrial relations system in order to support productivity, jobs and economic growth. Specifically, the bill would address:
uncertainty around casual employment arrangements;
a lack of award flexibility in relation to duties, location of work, and additional hours for part-time employees;
a decline in enterprise bargaining; and
uncertainty and risk arising from the current time limit on greenfields agreements.
2.3
The bill would also introduce measures to more effectively deter non-compliance with the Fair Work Act, enable employees to recover entitlements more easily, and support more efficient Fair Work Commission (FWC) processes.
2.4
This responds to the findings of various government inquiries, including the Migrant Workers' Taskforce and the Black Economy Taskforce, which have pointed to the need for stronger deterrents and a more effective wage recovery process. Ensuring that employees will be remunerated appropriately and that compliant employers cannot be undercut by unscrupulous operators are key pillars of an effective industrial relations system.
Casual employment arrangements
2.5
Despite a long history of casual employment in Australia, the legal framework supporting its use, which covers more than 2 million employees, does not provide certainty or confidence in casual employment as a genuine employment option.
2.6
Casual employees also represented about 500 000 of the 800 000 jobs lost during the early months of the COVID-19 pandemic. While there has been some recovery in casual job numbers, the pandemic has heightened concerns about casual employment arrangements, both in terms of employer confidence to create jobs, as well as employee preferences for long term job security.
Definition of casual employee
2.7
While the term 'casual employee' is not defined in the Fair Work Act 2009 (Fair Work Act), most modern awards define casual employees as those who are engaged as such and are paid a loading (generally 25 per cent in lieu of paid entitlements received by ongoing employees). Historically, general industrial practice has been aligned with this description. Previous FWC decisions have also reflected the view that an employee's status is based on the terms of the applicable modern award or enterprise agreement.
2.8
However, over time, a number of court decisions have favoured the common law meaning of casual employee. This gives regard to the nature of the employment relationship at engagement but may also recognise changes in the employment relationship over time. These changes can be gradual, resulting in a casual employee becoming 'other than casual' at an indeterminate point in time and therefore entitled to paid entitlements not available to casual employees—notwithstanding the loading paid to that casual employee in lieu of those entitlements.
2.9
Accordingly, the current state of the law requires employers and employees to agree to enter into a contractual arrangement on a specific basis, continually assess the employment relationship in order to understand the nature of their obligations and entitlements and, potentially, have obligations imposed upon the employer back-dated to the outset of the arrangement. In some cases, certainty can only be provided via court proceedings, which may be out of reach due to resource, time and/or capacity constraints—particularly for individual employees and small businesses.
Financial uncertainty
2.10
While subject to an upcoming High Court challenge in 2021, a 2020 Federal Court decision in Workpac Pty Ltd v Rossato [2020] FCAFC 84 indicates that employers may not be able to offset the casual loading already paid to an employee against any claim for unpaid entitlements. This has highlighted the risk of significant potential financial liabilities for accrued entitlements, on top of having paid a casual loading instead of those entitlements, which is 'undermining business confidence during a time of unprecedented economic challenge'.
2.11
Following recent court cases concerning the definition of casual employment, Australian accounting standards now require 25 000 companies to consider any potential contingent liabilities of casual employees who may be found to be other than casual at common law. The Attorney-General's Department has calculated that the existing back pay liabilities for employees who may be found to be other than casual could be as high as $39 billion.
Conversion from casual employment to full-time or part-time employment
2.12
While many employees deliberately choose casual employment arrangements, others would prefer the benefits associated with ongoing employment. Since 2017, most modern awards have included a model casual conversion clause. This clause allows employees who have worked a regular pattern of hours over the preceding 12 months to request to convert to part-time or full-time employment. A request to convert may only be refused by an employer on reasonable grounds based on facts that are known or reasonably foreseeable.
2.13
However, there are seven modern awards, including the Black Coal Mining Industry Award 2010, which do not contain casual conversion clauses. In addition, the right to convert does not apply to award/agreement-free employees or people employed under an enterprise agreement that does not contain a casual conversion clause. As a result, it is estimated that approximately 600 000 casual employees do not have access to casual conversion provisions.
2.14
Even for employees with access to casual conversion rights, concerns about potential negative consequences (such as losing work or being treated differently) may prevent them from making a conversion request.
Award flexibility
2.15
The complexity of modern awards is an issue for many businesses. In particular, small businesses may lack the resources needed to understand awards in detail. There are also indications that award complexity is leading employers to delay or reconsider hiring decisions, or to rely on contract employment.
Flexible work directions
2.16
The COVID-19 pandemic had a severe impact on hospitality and retail business, with net decreases of 294 100 workers in the accommodation and food industry and 60 000 workers in the retail trade industry between February–May 2020. These industries involve a large proportion of small business employers, are particularly reliant on awards, and have high rates of casual and part-time employment and underemployment.
2.17
During the early months of the pandemic, restrictive award rules around duties and locations of work amplified uncertainty for businesses while they were trying to adapt to changed conditions and trading restrictions. This was addressed via expedited, temporary variations by the FWC (COVID schedules) and JobKeeper flexibilities in the Fair Work Act, which allowed employers to deploy their workforce more flexibly in terms of both duties performed and location of work. Under the current arrangements, these provisions will cease to apply after 28 March 2021.
Additional hours for part-time employees
2.18
The concept of ordinary hours of work is designed to discourage overwork and establish safeguards for employees. For part-time employees, ordinary hours are usually defined by an agreement with their employer about their regular pattern of work. However, more than one quarter of part-time employees would prefer to work more hours.
2.19
While most awards include provisions that allow part-time workers to work additional hours, they vary in their clarity, complexity and efficacy in meeting business needs. This can result in business either not offering additional hours, or opting to use casual employment instead, which disadvantages part-time employees.
Enterprise bargaining
2.20
Enterprise bargaining allows businesses and employees to tailor working arrangements that suit their particular circumstances and incentivise the pursuit of productivity in exchange for higher wages and conditions. Historically, enterprise agreements have delivered equivalent, or higher, wage increases than the economy-wide Wage Price Index. On average, employees working under collective agreements also receive 69 per cent higher wages than those working under relevant modern awards.
2.21
While enterprise bargaining and coverage increased steadily between
1996 and 2008, a decline in new agreements has been recorded since 2014. The proportion of employees covered by enterprise agreements has decreased from a peak of 43 per cent in 2010 to 38 per cent in 2018. Over this period, the use of modern awards increased from around 15 per cent to 21 per cent.
2.22
Despite the decline in enterprise bargaining, enterprise agreements remain the dominant industrial instrument, setting pay and conditions for an estimated 4 million employees. However, a large number of employees are covered by nominally expired agreements that have not been replaced. This is particularly the case for small enterprises (74 per cent of agreements that nominally expired in 2018 were not replaced) but is also an issue for medium (49 per cent not replaced) and large businesses (33 per cent not replaced).
The accommodation and food services industry and retail trade industry have the highest rates of non-replacement (86.4 per cent and 83.3 per cent respectively).
2.23
Possible reasons for the decline in enterprise bargaining include the complexity of the bargaining system and approval tests, and process delays. Various other issues have been identified that relate to enterprise bargaining, including the preservation of legacy agreements made under previous workplace relations laws, concerns about employers seeking to terminate existing enterprise agreements during bargaining, a lack of flexibility for new franchisees, and the transfer of industrial instruments between associated employer entities.
Complexity of the bargaining system
2.24
A number of reviews have found that the agreement making and approval process can be complex, cumbersome and highly technical. This can lead to process delays and may also contribute to adversarial relationships, disputes and mistrust between employers and employees.
2.25
Employers have raised concerns that agreement making focuses on process and meeting technical requirements, rather than the end goal of making mutually beneficial agreements in a timely way. For example, applications to approve agreements have previously been dismissed by the FWC for technical errors—such as issuing the notice of employee representational rights (NERR) after the required 14 day timeframe—meaning parts of the agreement making process have to be repeated.
2.26
There is also uncertainty about the genuine agreement requirement, including employee eligibility to vote. In one example, an agreement was challenged for both casting the voting net too narrowly and too widely. The application was dismissed almost nine months after it was lodged with the FWC and over two years since the start of the bargaining process. While this decision was later quashed, the initial result led to the withdrawal of another major enterprise agreement covering 106 000 employees.
2.27
Some of these concerns were addressed via amendments to the Fair Work Act in December 2018. These amendments provided the FWC with the ability to approve enterprise agreements despite minor procedural or technical errors made in relation to the genuine agreement requirement—provided the error was not likely to have disadvantaged employees. As of November 2020, the FWC had approved approximately 325 agreements that it would previously have had to refuse. Despite these improvements, the agreement making process is still seen as uncertain and protracted.
Approval tests and process delays
Better off overall test
2.28
The application of the better off overall test (BOOT) is the issue raised most consistently by employers in relation to enterprise bargaining. The BOOT is the key means of safeguarding employee wages and conditions and requires that each award covered employee and each prospective award covered employee would be better off overall under the enterprise agreement, rather than the relevant award.
2.29
While the BOOT was designed to be a global test, concerns have been raised that it is being applied as a forensic, clause-by-clause assessment. This approach makes the process more complex and time-consuming, which may discourage agreement making. The 2015 Productivity Commission Inquiry into the Workplace Relations Framework found that issues with the application of the BOOT also discouraged innovation and led to the retention of inefficiencies for fear of failing an unclear test.
2.30
As part of the BOOT, enterprise agreements may also be assessed against hypothetical scenarios covered by the modern award, even where it may not be relevant to the work of the enterprise. For example, in assessing an agreement for a stationery and office supplies retailer, the FWC sought undertakings relating to the service of alcohol, even though this was not relevant to the business.
2.31
In some circumstances, the current approach can deny work arrangements agreed to, and even preferred by, employers and employees. In one example, an agreement approved by over 76 per cent of employees and the main employee union ended up being withdrawn for approval by the employer because of the lengthy process of review and bargaining to make the agreement fully compliant with the BOOT.
2.32
The current approach has also seen a rise in the number of agreements requiring undertakings, including to address non-compliance with the BOOT. This is despite the BOOT being designed to simplify agreement processing by avoiding complicated assessment procedures as well as the need for undertakings in most circumstances.
2.33
Undertakings can also be necessary to address compliance with the National Employment Standards (NES) as the Fair Work Act requires the FWC to be satisfied that an agreement does not include terms that would exclude the NES. This is despite the Fair Work Act also providing that a term of an agreement has no effect to the extent that it excludes the NES. A 2019 review found that NES inconsistencies were the second most common issue affecting applications (affecting 38 per cent of applications).
2.34
Undertakings can affect approval timeframes as they require parties to provide additional assurances and paperwork to the FWC. In 2019–20, the median approval time for agreements with undertakings was almost three times longer than the median approval time for agreements without undertakings (46 calendar days versus 17 calendar days).
Approval timeframes
2.35
Stakeholders have raised concerns about the time it takes to approve enterprise agreements. As an agreement comes into effect once it is approved by the FWC (unless the agreement specifies a later commencement date), delays in the approval process can impact the delivery of pay increases for employees and hamper an employer's ability to plan for labour costs and work patterns. This makes employers more likely to disengage from the process, which in turn, impacts negatively on workplace cooperation and adds to the overall decline in enterprise bargaining.
2.36
While the FWC’s approval times have improved since 2018–19, data for the period 1 July 2019 to 31 December 2019 shows that the median time for the FWC to approve all agreements was 37 days. However, in 2018–19 the median number of days for the FWC to approve single-enterprise agreements with undertakings was 122 calendar days. In one example, it took more than two years from the start of bargaining and just under one year from lodgement with the FWC, for an agreement to be approved. During this time, around 32 000 employees remained on a nominally expired agreement, leaving them worse off than if the new agreement had commenced more quickly. The final decision to approve the agreement raises questions about whether a more streamlined process could achieve faster approvals while maintaining protections within the system.
How the Fair Work Commission may inform itself
2.37
Delays in the approval process can be exacerbated by the FWC's power to inform itself in relation to any matter before it in such a manner as it considers appropriate. In relation to approval hearings, this can include hearing from parties who are not parties to the agreement. While noting that the number of third party interventions in the approval process appears to be low, the impact of intervention can be significant and leave employers and employees in limbo despite months or even years of bargaining for better conditions.
Other enterprise bargaining issues
Legacy agreements
2.38
The continuing preservation of agreements made under previous workplace relations laws is potentially harming employee interests and fair market competition between employers. Under legacy agreements, conditions such as penalty rates and casual loadings do not need to meet award standards. Employees are often unaware of this situation, with young people and migrant workers most vulnerable in this regard. As legacy agreements continue to operate until replaced or terminated, they can also unfairly advantage employers who use them to pay lower labour costs than they would under the relevant modern award.
Seeking to terminate existing agreements during bargaining
2.39
Stakeholders have raised concerns about employers seeking to terminate agreements during bargaining. This is seen as a way of shifting bargaining power in an employer's favour, thereby undermining a fair and genuine agreement making process. While there is no evidence about the scale of the problem, the perception affects confidence in the enterprise bargaining system.
Lack of flexibility for new franchisees
2.40
Currently, there are barriers to employers using simple and common sense approaches to making and varying enterprise agreements. For example, new franchisees are required to negotiate their own agreement with employees when it may be more efficient and effective to join an existing enterprise agreement covering an existing group of employers who operate under the same franchise.
Transfer of industrial instruments between associated employer entities
2.41
Having multiple enterprise agreements at an enterprise may complicate operations and increase labour costs for the business. Under existing arrangements, employers must seek an order from the FWC to stop an industrial instrument transferring with an employee when they move between associated entities. This applies even when an employee initiates the move, which is seen as an example of an unnecessary process for employers.
Greenfields agreements
2.42
Greenfields agreements are enterprise agreements relating to a new enterprise, which are made before the employer has employed any of the employees needed for the new enterprise. Typically, these agreements are made between the employer(s) and the relevant union(s). While provisions exist for greenfields agreements to be made without union agreement in certain circumstances and after the relevant union(s) have had the opportunity to negotiate, to date none have been approved under these provisions.
2.43
Greenfields agreements are used extensively for major projects in construction, mining, infrastructure, and oil and gas production. Consistent with arrangements for other enterprise agreements, greenfields agreements expire four years from the date of approval by the FWC. Employers and employer groups have raised concerns about the four-year time limit on greenfields agreements as it means the nominal expiry date can occur earlier than the expected project completion date. This introduces uncertainty for investors by potentially exposing parties to delays arising from negotiations for a new agreement, as well as the possibility of protected industrial action.
Overview of the bill
2.44
The bill would amend the Fair Work Act and related legislation to address identified problems in the industrial relations system with the aim of supporting productivity, employment and economic growth to assist Australia's recovery from the COVID-19 pandemic.
2.45
The bill has been developed with input from a range of stakeholders, including unions and employers, to ensure that the reforms are appropriately balanced, providing flexibility and certainty for business and important protections for employees.
Schedule 1 – Casual Employees
2.46
Schedule 1 would amend the Fair Work Act to:
insert a definition of casual employee that provides both parties to an employment relationship with certainty about an employee’s status and entitlements from commencement and at all times during the employment relationship;
insert a casual conversion entitlement in the NES that provides eligible casual employees with a pathway to convert to ongoing full-time or part-time employment;
require an employer to provide all new casual employees with a Casual Employment Information Statement, published by the Fair Work Ombudsman (FWO);
allow a court to offset casual loading amounts paid to an employee against certain entitlements that the loading was paid in compensation for (during a period when that employee was not a casual employee); and
make consequential amendments.
Statutory definition of a casual employee
2.47
The bill would establish a statutory definition of casual employee that would override the meaning of casual employee that has evolved over time at common law. However, the definition would incorporate elements of the common law meaning and would provide that a person is a casual employee if:
an offer of employment was made on the basis that the employer made no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person; and
the person accepted the offer on that basis; and
the person was an employee as a result of that acceptance.
2.48
To determine whether an offer of employment was made on the basis that there was no firm advance commitment to continuing and indefinite work, regard would be made to the following considerations (drawn from the existing common law test of casual employment):
whether the employer could elect to offer work and whether the person could elect to accept or reject work;
whether the person would work only as required;
whether the employment was described as casual employment; and
whether the person would 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.
2.49
This list would narrow the factors a court can consider in assessing whether an offer of employment had the necessary absence of a firm advance commitment to continuing and indefinite work according to an agreed pattern of work. All of the factors would be relevant and none would be determinative. For example, if an employment offer described employment as casual and included payment of a casual loading—but also provided guaranteed hours on an ongoing, indefinite basis—the employment would not be casual.
2.50
To avoid doubt, the bill would also make clear that:
a regular pattern of hours would 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 was a casual employee of an employer would be assessed on the basis of the offer of employment and the acceptance of that offer, not on any subsequent conduct of either party—this means a person’s employment status cannot unintentionally change over time.
2.51
A person employed as a casual under this provision would remain a casual employee until either:
the employment was converted to full-time or part-time employment (under the new casual conversion entitlement); or
the employee accepted an alternative offer of employment by the employer and commenced work on that basis.
Conversion from casual employment to full-time or part-time employment
2.52
The bill would insert a new provision into the NES regarding offers and requests for casual conversion. In line with existing NES interaction rules, a modern award or enterprise agreement would not be able to exclude this provision.
Employer offers for casual conversion
2.53
Under this provision, employers would be required to offer eligible casual employees conversion to ongoing full-time or part-time employment.
This would need to occur within 21 days of the employee having being employed for 12 months (subject to reasonable grounds not to offer). An employee would be eligible if:
they had been employed by the employer for a period of 12 months beginning the day the employment started; and
during at least the last six months of that period, the employee had worked a regular pattern of hours on an ongoing basis which, without significant adjustment, the employee could continue to work as a full-time employee or a part-time employee, as the case may be.
2.54
Whether a person would be deemed as having met the eligibility criteria would depend on the particular circumstances, as well as the pattern of hours worked during the preceding six month period. The pattern of hours would need to be able to be continued as a full-time or part-time employee without significant adjustment.
2.55
The provision would also require an offer for conversion to either:
full-time employment, if the employee had worked the equivalent of full-time hours in the relevant six month period; or
part-time employment consistent with the regular pattern of hours worked during the relevant six month period, if the employee had worked less than the equivalent of full-time hours in that period.
2.56
Where full-time hours for an employee were not set out in a modern award or enterprise agreement, regard could be had to the hours of work of the other full-time employees who worked in the same or comparable positions.
2.57
Offers of part-time employment would need to be consistent with the regular pattern of hours worked during the relevant period. This would ensure the offer was not made only on the basis that the employee would have to significantly change their working patterns in order to accept.
2.58
References to full-time or part-time employment under this provision would not include employment for a specified period of time, for a specified task or for the duration of a specified season.
When employer offers would not be required
2.59
An employer would not be required to make an offer to convert if there were reasonable grounds not to do so. These grounds would need to be based on facts that are known or reasonably foreseeable at the time of deciding not to make an offer. Assessment of whether a ground is reasonable would take account of all circumstances, including the needs of the employer's business and the nature of the employee's role. Reasonable grounds to decide not to make an offer would include (but not be limited to) situations where:
the employee’s position would cease to exist in the period of 12 months after the time of deciding not to make the offer;
the hours of work the employee would be required to perform would be significantly reduced in that 12 month period;
there would be a significant change in either (or both) the days or times at which the employee would be required to work in that period, which could not be accommodated within the days or times the employee was available; 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.
Residual right to request casual conversion
2.60
This provision would provide casual employees who had not received or accepted an employer offer to convert, with a residual right to request casual conversion in certain circumstances. A casual employee would be eligible to make a request if:
they had been employed by the employer for at least 12 months; and
they had, in the six months before making the request, worked a regular pattern of hours on an ongoing basis which, without significant adjustment, they could continue to work as a full- or part-time employee; and
all of the following apply:
they had not, in the six months before making the request, refused an offer to convert to full-time or part-time employment; and
they had not, in the six months before making the request, received notice from the employer of a decision not to make an offer for conversion on reasonable grounds; and
they had not, in the six months before making the request, received a response from the employer refusing a previous request; and
the request was not made during the 21 days after they completed
12 months' employment with that employer.
2.61
The eligibility criteria, grounds for refusal and formal requirements for employee requests would broadly reflect those applying to employer offers for casual conversion.
Other rights and obligations
2.62
The provision also sets out additional rights and obligations to those in the general protections in Part 3-1 of the Fair Work Act. For example, an employer would not be permitted to vary or reduce an employee's hours or work, or terminate an employee's employment in order to avoid any right or obligation under the provision. Similarly, nothing in the provision would:
require an employee to convert to full-time or part-time employment; or
permit an employer to require an employee to convert; or
require an employer to increase the hours of work of an employee who requested conversion to full-time or part-time employment.
2.63
The provision would also provide a dispute resolution procedure that broadly mirrors dispute resolution terms of modern awards. However, the proposed dispute resolution procedure would only apply if employee was not covered by a modern award or enterprise agreement (which contain dispute settlement terms) and did not otherwise have access to a procedure capable of dealing with a dispute about this provision.
Provision of a Casual Employment Information Statement
2.64
To ensure employees are aware of their casual employment status and consequential rights and entitlements, the bill would require the FWO to prepare and publish a Casual Employment Information Statement (Statement). Employers would be required to provide the Statement to new casual employees before, or as soon as practicable after, the employee commenced. The Statement would need to contain (but would not be limited to) the following information:
the meaning of 'casual employee';
that an employer offer for casual conversion must generally be made to certain casual employees within 21 days after the employee had completed 12 months of employment;
that an employer could decide not to make an offer for casual conversion if there were reasonable grounds to do so (but the employer would need to notify the employee of these grounds);
that certain casual employees would have a residual right to request casual conversion; and
that the FWC may deal with disputes about the operation of this provision.
Claims for entitlements able to be offset by casual loading amounts
2.65
The bill would introduce a statutory rule for offsetting claims for entitlements by the amount of a casual loading previously paid to a person to compensate for the absence of certain entitlements. The relevant entitlements would be those that casual employees do not receive under the NES and for which a casual loading has historically been paid. The bill would define these as:
paid personal/carer’s leave;
paid compassionate leave;
payment for absence on a public holiday;
payment in lieu of notice of termination; and
2.66
The statutory rule would apply when an employee was paid on the understanding they were a casual employee but was later found not to be a casual employee and a claim for entitlements was made. The rule aims to achieve a balance between ensuring that employers do not have to effectively pay for such entitlements twice, while also making sure employees are appropriately classified and that they receive their correct entitlements.
2.67
Under this provision, a court would need to reduce (but not below nil) any claim amount by an amount equal to the loading amount paid to the person. However, a court would also be allowed to reduce the claim amount by an amount equal to a proportion (which may be nil) of the loading. To determine a proportionate reduction, the court would need to have regard to:
the term of the fair work instrument (or contract of employment) that specified both the entitlements the loading amount is compensating for and the proportion of the loading amount attributable to each entitlement; or
if such a term specified the relevant entitlements the loading amount is compensating for but did not specify the proportion of the loading amount attributable to each such entitlement—that term, and what would be an appropriate proportion of the loading amount attributable to each of those entitlements in all the circumstances; or
if neither of the above apply, an appropriate proportion of the loading amount attributable to each of those entitlements in all the circumstances.
2.68
Allowing for proportionality aims to provide fairness between the parties in the adjustment of their rights, claims and obligations. For example, if a person's employment contract specified a 25 per cent casual loading instead of paid annual leave and personal/carer's leave, but their claim was for payment in relation to absence on a public holiday and redundancy pay, it would be appropriate for a court not to offset the claimed amount at all (a nil reduction) because the loading was not provided as compensation for absence of the claimed entitlements. More broadly, if no identifiable amount was paid, no offset can occur.
Schedule 2 – Modern Awards
2.69
Part 1 of Schedule 2 would insert a new Division 9 into Part 2–3 of the Fair Work Act. This would:
allow eligible part-time employees and their employers to agree to work additional agreed hours at ordinary time rates (as an alternative to entering into an arrangement under the existing terms of their modern award);
allow proposed Division 9 to operate as terms of a relevant identified modern award (allowing them to be enforced as award terms, with disputes to be resolved in accordance with the dispute settlement terms of the award); and
provide the FWC with power to vary existing terms of an identified modern award to resolve uncertainty or difficulty, or to ensure the effective operation of the award with the proposed Division 9 provisions.
2.70
Part 2 of Schedule 2 would insert a new Part 6-4D into the Fair Work Act for a temporary period of two years. This would:
enable employers to whom an identified modern award applies to issue 'flexible work directions' to their employees relating to duties and location of work; and
allow proposed Part 6-4D to operate as terms of a relevant identified modern award.
Additional hours for part-time employees
2.71
The bill would supplement existing award flexibility arrangements in
12 identified modern awards by providing a mechanism for employers and eligible part-time employees to agree to additional hours of work at ordinary time rates of pay (a simplified additional hours agreement). The identified modern 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;
Pharmacy Industry Award 2020;
Restaurant Industry Award 2020;
Registered and Licensed Clubs Award 2010;
Seafood Processing Award 2020; and
Vehicle Repair, Services and Retail Award 2020.
2.72
The Minister would also be able to make regulations prescribing whether a modern award is, or is not, an identified modern award. This would ensure that the framework could adapt to changing circumstances that may warrant the inclusion or exclusion of a particular award.
2.73
Under this provision, an employer and employee would be able to enter into a simplified additional hours agreement if:
an identified modern award applied to the employer and employee; and
the employee was employed as a part-time employee under the modern award; and
the employee's ordinary hours of work were at least 16 hours per week, or at least 16 hours per week averaged over a period (such as a roster cycle), if the modern award provided for an averaging arrangement.
2.74
However, an employer would not be able to require an employee to enter into a simplified additional hours agreement. In line with existing safeguards around similar award-based processes, parental or guardian consent would also be required for an employer to enter into an agreement with an employee under 18 years of age.
2.75
Under a simplified additional hours agreement, each period of additional hours would need to be either a continuous period of at least three hours, or part of a period of continuous work of at least three hours. However, simplified hours agreements would not be able to be used to circumvent provisions in modern awards that limit the maximum number of continuous days an employee may be required to work, or that require an employee not to work on a day.
2.76
Additional agreed hours would be paid without overtime, unless:
the additional hours resulted in the employee working outside the span or spread of hours for which the relevant identified modern award required any part-time employee to be paid overtime; or
the additional hours, together with other hours worked by the employee (not including those for which overtime is paid), resulted in the employee working more than:
the maximum number of hours that a part-time employee may work without being paid overtime; or
38 hours in a week (or a period, such as a roster cycle, where provided for by the identified modern award).
2.77
While the Minister would also have the ability to prescribe by regulation additional circumstances where overtime would be payable in relation to additional agreed hours, these regulations could not be used to reduce the availability of overtime payments.
2.78
Except for situations where overtime was payable, additional agreed hours would be treated as ordinary hours of work for the purposes of paying penalty rates, accruing and taking annual leave and paid personal/carer's leave, the superannuation guarantee, and any purposes prescribed by the regulations. When working additional agreed hours, employees would also need to be remunerated for any additional pay (other than overtime) required by an identified modern award. This would include—but would not be limited to—penalty rates, incentive-based payments and bonuses, loadings and monetary allowances.
2.79
The provisions of Division 9 would operate as terms of relevant awards and could not be varied or revoked. The bill would also enable the FWC to vary an award to resolve any uncertainty or difficulty relating to the interaction of award terms with Division 9, or to make the award operate effectively with the proposed provisions.
Flexible work directions
2.80
Proposed Part 6-4D would allow identified modern awards to include terms that enable employers to direct their employees about duties to be performed and the location of their work. A direction given by an employer would be effective until withdrawn or replaced by the employer. Flexible work directions would be a temporary provision and would cease to have effect two years from the day on which the bill received Royal Assent.
2.81
An employer would be able to give a flexible work duties direction if:
the duties were safe having regard (without limitation) to the nature and spread of COVID-19;
the employee was licensed and qualified to perform the duties (if a licence or qualification was required); and
the duties were reasonably within scope of the employer’s business operations.
2.82
An employer would be able to give a flexible work location direction if:
the place was suitable for the employee’s duties;
if the place was not the employee’s home—it did not require the employee to travel a distance that was unreasonable in all the circumstances (including those surrounding the COVID-19 pandemic); and
performance of the employee’s duties at the place was safe (having regard, without limitation, to the nature and spread of COVID-19) and was reasonably within scope of the employer’s business operations.
2.83
A flexible work direction could not reduce an employee's hourly rate of pay. It would also be subject to provisions around its reasonableness, including its impact on an employee's caring responsibilities, and its necessity as part of a reasonable strategy to assist in the revival of the employer's enterprise.
2.84
Flexible work directions would also require consultation with the employee (or a representative of the employee), as well as written notice of the intention to give the direction at least three days before it is given—unless a shorter notice period is genuinely agreed by the employee.
2.85
These provisions would be taken to be terms of an identified modern award and could not be varied of revoked. However, the FWC would be authorised to vary an award to resolve any uncertainty or difficulty relating to the interaction of award terms with the new provisions, or to make the award operate effectively with them.
Schedule 3 – Enterprise Agreements
2.86
The bill would amend the Fair Work Act to:
change the objects of Part 2-4 to better reflect the intended operation and outcomes of the enterprise agreement framework;
extend the time for an employer to provide the NERR;
modify pre-approval requirements for enterprise agreements;
clarify the circumstances in which casual employees may vote to approve an enterprise agreement;
modify the operation of the BOOT for enterprise agreements and variations of agreements by:
permitting the FWC to take into account only patterns or kinds of work, or types of employment, that employees perform or could reasonably be foreseen to perform;
enabling the FWC to have regard to overall benefits (including non-monetary benefits) employees would receive under an agreement compared to a relevant modern award; and
requiring the FWC to give significant weight to any views of the employees, employer, and bargaining representatives for the agreement that have been expressed as to whether the agreement passes the BOOT;
provide a new temporary mechanism for the FWC to approve an enterprise agreement that does not pass the BOOT (where appropriate to do so taking into account all the circumstances);
require agreements to include a new model term that explains the interaction between the NES and enterprise agreements;
enable an eligible franchisee employer to apply to the FWC to be covered by an existing single-enterprise agreement that covers a group of employers who operate under the same franchise;
permit an application to terminate an enterprise agreement after its nominal expiry date only to be made three months after that date;
limit who can be heard by the FWC in relation to an application to approve or vary an enterprise agreement;
require the FWC, as far as practicable, to determine an application to approve or vary an enterprise agreement within 21 working days after the application is made – otherwise the FWC must notify relevant parties of the reasons why, including any exceptional circumstances;
require the FWC to perform its functions and exercise its powers in a manner that recognises bargaining outcomes at the enterprise level;
amend Part 2-8 of the Fair Work Act to ensure industrial instruments do not transfer in relation to voluntary transfers of staff between associated entities; and
provide for the sunsetting on 1 July 2022 of agreement-based transitional instruments.
Notice of employee representational rights (NERR)
2.87
The bill would replace the existing reference to 14 days with a reference to 28 days. This would mean employers would need to give employees notice of the right to be represented by a bargaining representative as soon as practicable but not later than 28 days after the notification time. The FWC would also be required to publish the NERR on its website.
Pre-approval requirements
2.88
The bill would repeal and replace current subsections 180(2) and (3). Proposed subsection 180(2) would require an employer to take reasonable steps to ensure that relevant employees were given a fair and reasonable opportunity to decide whether or not to approve a proposed agreement. The opportunity would be fair if employees were treated equally, without favouritism or discrimination. The opportunity would be reasonable if it was objectively sensible, rational, practical and logical in the circumstances.
2.89
Proposed subsection 180(3) provides that an employer would be taken to have complied with subsection 180(2) if the employer had taken reasonable steps to ensure that:
during the access period (seven calendar days before the vote commenced), the relevant employees had access to a copy of the written text of the agreement and any other material incorporated by reference in the agreement that was not publicly available; and
by the start of the access period, the employer had notified relevant employees of the time and place the vote would take place and the voting method to be used; and
the terms of the agreement (and their effect) were explained to relevant employees, taking into account their particular circumstances and needs.
Voting requirements
2.90
The bill would clarify when casual employees can vote to approve an enterprise agreement. Under proposed subsection 181(1), an employee would be able to vote to approve an enterprise agreement if they would be covered by it and are employed:
other than as a casual employee (e.g. as a full-time or part-time employee) at the time of the request to vote; or
as a casual employee and performed work at any time during the access period for the agreement.
2.91
Employees would not be entitled to vote on an agreement if they commenced employment after the time the request to vote was made, or if they were a casual employee who only performed work before or after the access period (but not during the access period).
Better off overall test
2.92
The bill would make temporary amendments related to the existing circumstances when the FWC could approve an enterprise agreement that did not pass the BOOT. Under this provision, the FWC could approve an enterprise agreement (other than a greenfields agreement) if it was satisfied that it would be appropriate to do so taking account of all the circumstances, including:
the views of the employees and each employer covered by the agreement, and each bargaining representative for the agreement;
the circumstances of those employees and employers, and any employee organisation that had applied to be covered by the agreement, including the likely effect of approval or non-approval;
the impact of COVID-19 on the enterprise or enterprises to which the agreement relates;
the extent of employee support for the agreement as expressed in the outcome of the voting process; and
because of these circumstances, approving the agreement would not be contrary to the public interest.
2.93
This provision aims to assist recovery from COVID-19 and would be time limited for two years, noting that this time limit would not affect the validity of agreements approved during this period. Agreements approved under this provision would have a nominal expiry date not longer than two years after the day on which the FWC approved the agreement.
2.94
The provision would also operate within the broader agreement-making context. For example, the FWC would still be required to be satisfied (among other things) that the employees genuinely agreed to the agreement, the group of employees covered by the agreement was chosen fairly, and that the agreement did not contain any unlawful terms.
2.95
This provision was removed from the bill by the Government in the House of Representatives on 23 February 2021, prior to the bill’s transmittal to the Senate.
2.96
The bill would set out the matters to which the FWC would, or would not, need to have regard when deciding whether an enterprise agreement passed the BOOT:
(a)
the FWC could have regard to pattern or kinds of work, or types of employment, only if they were:
(i)
engaged in by the award covered employees (if the agreement was not a greenfields agreements); or
(ii)
reasonably foreseeable to be engaged in by award covered employees or prospective award covered employees (in any case); and
(b)
the FWC could have regard to other matters including the overall benefits (including non-monetary benefits) an award covered employee or prospective award covered employee would receive under the agreement when compared to the relevant modern award; and
(c)
the FWC would need to give significant weight to views relating to whether the agreement passes the BOOT that are expressed by the employer, the award covered employees (if not a greenfields agreement), or a bargaining representative for the agreement (in any case); and
(d)
the FWC would need to disregard an individual flexibility arrangement where the agreement was not a greenfields agreement and an individual flexibility agreement had been agreed to (under the flexibility term in the relevant term in the modern award).
2.97
Patterns of work could include the rosters, ordinary hours of work, span of hours, and shift patterns that can be worked under an agreement.
Kinds of work could include the nature of work, the level of skill or responsibility involved in the work, and the conditions under which the work is done. Types of employment could include whether the agreement provides for full-time, part-time, casual, and shift work.
2.98
Non-monetary benefits that could be considered by the FWC include flexible working arrangements, time off in lieu, time off to participate in community service activity, provision of training, or health care benefits.
2.99
While the FWC must give significant weight to the views of employers, employees and bargaining representatives, it would not be obliged to decide an agreement passed the BOOT on that basis.
National Employment Standards interaction terms
2.100
The bill would amend the Fair Work Act to require enterprise agreements to include a model term—to be prescribed by the regulations—that explains the interaction between the NES and enterprise agreements. It would also remove the requirement for the FWC to be satisfied that the terms of an agreement did not contravene section 55 (which governs interaction between the NES and enterprise agreements).
2.101
This amendment aims to simplify the enterprise agreement approval process by avoiding the need for the FWC to examine each term of an agreement to determine whether it contravenes section 55 of the Fair Work Act. Instead the FWC would only need to consider whether the agreement included the model NES interaction term.
2.102
The model interaction term would explain the provisions of the Fair Work Act that regulate interaction between the NES and enterprise agreements. These provisions include:
section 55—which concerns the interaction between the NES and a modern award or an enterprise agreement;
section 56—which provides that a term of a modern award or enterprise agreement has no effect to the extent that it contravenes section 55; and
section 61—which provides that the NES are minimum standards that cannot be displaced, even if an agreement includes terms that have the same, or substantially the same, effect as provisions of the NES.
Variation of single enterprise agreements to cover eligible franchisee employers and their employees
2.103
The bill would amend the Fair Work Act to allow an enterprise agreement to be varied to cover an eligible franchisee employer and its employees.
Under this provision, an eligible franchisee employer would be able to apply to the FWC to vary an existing single-enterprise agreement that covers other employers operating under the same franchise, so that it also covers the eligible franchisee employer and its employees.
2.104
An employer would be defined as an eligible franchisee employer for a single enterprise agreement if:
the agreement did not cover the employer, but covered two or more other employers that were single interest employers;
the employer carried on similar business activities under the same franchise as those other employers; and
the employer and those other employers were either franchisees of the same franchisor, or are related bodies corporate of the same franchisor, or any combination of these.
2.105
Prior to making the application, a majority of affected employees of the eligible franchisee employer would need to vote to approve an application to the FWC for this purpose. Before requesting employees vote to approve an application, the eligible franchise employer would need to take reasonable steps to notify the affected employees of the time and place at which the vote will occur, the voting method to be used, and the employees who would be covered by the agreement if the FWC made the variation. The employer would also need to take reasonable steps to ensure that affected employees were given a fair and reasonable opportunity to decide whether they wanted to approve the proposed application.
2.106
Affected employees would be defined as:
non-casual employees employed at the time the request was made; and
casual employees who performed work at any time during the seven day period immediately before voting began.
2.107
Unless there were serious public interest grounds for not doing so, the FWC would be required to vary the agreement if it was satisfied that:
the agreement had 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 a majority of the affected employees casting a valid vote to approve the application; and
there were no other reasonable grounds for believing that the affected employees had not agreed to the variation.
Terminating agreements after nominal expiry date
2.108
The bill would amend the Fair Work Act so that an application to terminate an enterprise agreement after its nominal expiry date could not be made until at least three months after that date.
How the Fair Work Commission may inform itself
2.109
The bill would insert a new section 254AA into the Fair Work Act that would set out how the FWC could inform itself in relation to applications to approve or vary enterprise agreements. Unless the FWC was satisfied that there were exceptional circumstances, this would be limited to:
publicly available information;
submissions made by a volunteer body under section 254A;
submissions, evidence or other information provided by or requested from:
the person who made the application to approve or vary the enterprise agreement to the FWC;
the employer or employers covered by the agreement;
an employee covered by the agreement;
a bargaining representative for the agreement, such as a union;
in the case of a variation, an employee who would be covered by the agreement if the FWC approved the variation;
in the case of a variation, an employee organisation covered by the agreement; or
the Minister or a minister of a state or territory who has responsibility for workplace relations matters.
2.110
Exceptional circumstances could include situations, for example, where there were significant public interest concerns about an enterprise agreement, such as human rights issues, or implications for the economy or public health and safety.
Time limits for determining certain applications
2.111
The bill would insert a new section 255A into the Fair Work Act to provide a timeframe for the FWC to determine applications to approve or vary enterprise agreements. This timeframe would be 21 working days after an application was made—unless it was not practicable to determine the application within that period.
2.112
If the FWC did not determine an application within 21 working days, it would be required to give written notice setting out why it was unable to do so, including any exceptional circumstances. Notice would need to be published on the FWC website and be provided to:
each employer covered by the agreement;
for an application to approve an enterprise agreement:
if the agreement was a greenfields agreement—each relevant employee organisation the agreement was expressed to cover;
if the agreement was not a greenfields agreement—each employee organisation that had given notice under subsection 183(1) stating that the organisation wanted to be covered by the agreement;
for an application to approve a variation of an enterprise agreement—each employee organisation covered by the agreement; or
in any case—the applicant (if not covered by the preceding paragraphs).
Fair Work Commission functions
2.113
The bill would insert a new section 254BA into the Fair Work Act that required the FWC to perform its functions and exercise its powers under Part 2-4 of the Fair Work Act in a manner that recognised the outcome of bargaining at the enterprise level. This requirement would operate together with section 578, which sets out matters the FWC would need to take into account when performing functions or exercising powers of the Fair Work Act.
Transfer of business
2.114
The bill would insert a new subsection 311(1A) to turn off the transfer of business rules in the case of a person who seeks employment with an associated entity of their former employer on their own initiative (and before the termination of their employment with the old employer).
2.115
However, this would not apply in cases where an employee accepted employment with an associated entity in the context of an organisational restructure (such as a redundancy, redeployment or stand down scenario).
In these circumstances, the transfer of business rules would apply and an order from the FWC would be required to displace coverage of the old employer's industrial instrument.
Cessation of certain instruments
2.116
The bill would amend the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Act) to include additional sunsetting rules for particular transitional instruments currently preserved by the Act.
These include all remaining agreement-based transitional instruments, all remaining Division 2B State employment agreements, and all enterprise agreements and workplace determinations made during the bridging period
1 July 2009 to 31 December 2009.
2.117
Under this provision, these instruments would terminate on 1 July 2022. This would not affect any accrued rights, liabilities or extant investigations. Any investigation, legal proceeding or remedy in relation to such rights or liabilities could be instituted, continued or enforced as if the transitional instrument had not terminated or ceased to apply.
2.118
Employers and employees covered by instruments that terminate on 1 July 2022 would be able to transition to the current framework by making new enterprise agreements. If a replacement enterprise agreement was not in place by 1 July 2022, a relevant modern award would apply from that date.
Schedule 4 – Greenfields Agreements
2.119
Schedule 4 of the bill would amend the Fair Work Act to:
enable the FWC to approve a greenfields agreement made in relation to the construction of a major project, which specifies a nominal expiry date of up to eight years after the day the agreement comes into operation (instead of the current maximum nominal expiry date of four years after the date of approval) to improve cost certainty and minimise delays for projects;
provide a definition of a 'major project' and enable the Minister prescribed by the regulations to declare, by legislative instrument, that a particular project is a 'major project'; and
require the FWC to be satisfied that a greenfields agreement provides for annual increases to the base rate of pay for each employee covered by the agreement for its nominal life, if work to be performed under the agreement relates only to the construction of a major project, and the agreement specifies a nominal expiry date more than four years after the day on which the FWC approves the agreement.
2.120
A project would be defined as a major project if the total expenditure of a capital nature that was incurred (or was reasonably likely to be incurred) in carrying out the project was at least $500 million, or if the responsible Minister made a declaration that the project is a major project.
2.121
The responsible Minister could only make a declaration if they were satisfied that the total expenditure of a capital nature that was incurred (or was reasonably likely to be incurred) was at least $250 million but less than
$500 million. In deciding whether or not to make a declaration, the Minister would need to take into account:
the national and regional significance (if any) of the project;
the contribution the project was expected to make to job creation; and
any other matter the responsible Minister considered relevant.
2.122
While a declaration by the Minister would be a legislative instrument, it would not be subject to disallowance in order to avoid commercial uncertainty for parties negotiating greenfields agreements and the enterprise bargaining framework more generally.
Schedule 5 – Compliance and Enforcement
2.123
Schedule 5 would amend the Fair Work Act's compliance and enforcement framework by:
increasing civil pecuniary penalties for ordinary remuneration-related contraventions and sham arrangements by 50 per cent;
introducing a new penalty for remuneration-related contraventions by bodies corporate (other than small business employers) based on a multiple of the ‘value of the benefit’ of the contravention;
increasing the cap for amounts that can be awarded in small claims proceedings from $20,000 to $50,000;
making provision for courts to refer small claims matters to the FWC for conciliation and, if conciliation is unsuccessful, enabling the FWC to subsequently arbitrate such matters with consent of the parties;
introducing a new civil contravention (at the end of six months after the bill receives Royal Assent) that prohibits employers publishing, or causing to be published, job advertisements with pay rates specified at less than the relevant national minimum wage;
increasing civil pecuniary penalties for non-compliance with a compliance notice and the maximum penalty payable under an infringement notice by 50 per cent;
requiring (at the end of six months after the bill receives Royal Assent) the FWO to publish information relating to the circumstances in which enforcement proceedings will be commenced or deferred;
codifying factors the FWO may take into account in deciding whether to accept an enforceable undertaking; and
introducing a new criminal offence for employers who dishonestly engage in a systematic pattern of underpaying employees.
2.124
The Building and Construction Industry (Improving Productivity) Act 2016 would be amended to:
enable the Australian Building and Construction (ABC) Commissioner to accept an enforceable undertaking in relation to a suspected remuneration-related contravention within their jurisdiction;
require (at the end of six months after the bill receives Royal Assent) the ABC Commissioner to publish information relating to the circumstances in which enforcement proceedings will be instituted or deferred; and
ensure the ABC Commissioner has the same role as the FWO in relation to investigating, etc., the new criminal underpayments offence in the building and construction sector.
2.125
Schedule 5 would also amend the Federal Circuit Court of Australia Act 1999 and the Federal Court of Australia Act 1976. Amendments would also be made to the Federal Circuit and Family Court of Australia Act 2020 (should the relevant bill be enacted), along with changes to the Fair Work Act referencing the courts legislation that would be contingent on the commencement of that legislation.
Small claims procedure
2.126
The bill would amend the Fair Work Act to expand access to the small claims procedure (by increasing the limit for small claims from $20 000 to $50 000).
It would also enable successful small claims applicants to recover filing fees, empower the Federal Circuit Court and magistrates courts to refer small claims matters to the FWC for conciliation and, if conciliation is unsuccessful, enable the FWC to subsequently arbitrate such matters with the consent of the parties.
2.127
Under the proposed conciliation provisions, a court would be required to consider the appropriateness of conciliation by the FWC as soon as practicable after proceedings commence. While not an exhaustive list, proposed subsection 546B(3) would require the court to have reference to:
the stage the proceedings have reached since the commencement of the proceedings;
the complexity of the matters in dispute, including questions of law that might arise;
whether conciliation would be effective in resolving the matters in dispute in the proceedings.
2.128
While parties to the proceedings would bear their own costs in relation to conciliation before the FWC, a court may order costs against a party that unreasonably refuses to participate in a matter before the FWC.
2.129
The FWC would be able to end conciliation if the parties made a joint application to do so, or if the FWC was satisfied that the matter was resolved, or the FWC was satisfied that all reasonable attempts to resolve the matter by conciliation were—or were likely to be—unsuccessful. If the FWC ends conciliation for these reasons, it must issue a certification to that effect to the parties and the court in the proceedings. Conciliation must also be ended if the court in the proceedings makes an order to that effect.
2.130
Under the proposed arbitration provisions, the FWC would be able to arbitrate small claims matters by consent of the parties in situations where conciliation had been unsuccessful and a certificate issued. Under the provisions, the FWC would only be able to make an order awarding one or more of the following:
an amount that related to the disputed amount;
any interest that a court could have included, if the court had made the order; and/or
any filing fees paid to the court by the applicant in relation to the disputed amount.
2.131
Arbitration orders made under this provision would be appealable to the full bench of the FWC.
Criminalising underpayments
2.132
The bill would amend the Fair Work Act to introduce a new criminal offence for the dishonest and systematic underpayment of employees.
2.133
Under this provision, an underpayment would be deemed to have occurred if an employer failed to pay the employee an amount payable in relation to the performance of work:
in full (except for permitted deductions); or
2.134
Dishonest would be defined as meaning dishonest according to the standards of ordinary people and known by the defendant to be so. If the conduct was not intentional (including if it was accidental, inadvertent or otherwise a genuine mistake), it could not be dishonest by this standard. A defendant would not be dishonest if they genuinely believed there was no underpayment, even if this belief was unreasonable or unfounded. However, the reasonableness of a defendant's claim would be a factor in determining whether they actually held such a belief. Ultimately, determining whether or not a defendant had been dishonest would be a matter for the judge or jury.
2.135
A systematic pattern of underpayment would be taken to refer to a recurring pattern of conduct or a series of methodical acts over time affecting one or more employees. It would not encompass inadvertent or one-off conduct. It would not require mathematical precision, frequency or regularity.
While not an exhaustive list, a court could have regard to the following in order to determine whether an employer had engaged in a systematic pattern of underpayment:
the number of underpayments; and
the period over which the underpayments occurred; and
the number of employees affected by the underpayments; and
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 subsection 535(1), (2) or (4) in relation to an employee record relating to the underpayments; and
whether the employer failed to comply with a requirement in subsection 536(1), (2) or (3) in relation to a pay slip relating to the underpayments.
Schedule 6 – The Fair Work Commission
2.136
Schedule 6 would broaden the grounds on which the FWC could dismiss unmeritorious applications and would enable it to deal effectively with applicants who demonstrate a pattern of initiating unmeritorious proceedings. Schedule 6 would also enable the FWC to vary or revoke decisions relating to enterprise agreements and workplace determinations more easily and would confer greater discretion on the FWC to decide when a matter on appeal or review may be determined without a hearing.
2.137
Under proposed paragraph 587(2)(a), the FWC could dismiss an application at any stage in dealing with a matter if it was satisfied that the application was frivolous, vexation, misconceived or lacking in substance, or had no reasonable prospects of success, or was otherwise an abuse of the processes of the FWC. However, an application could not be dismissed unless the applicant was given a reasonable opportunity to make submissions in relation to whether the application should be dismissed.
2.138
In addition, applications made under existing sections 365 or 773, which trigger FWC dispute resolution processes in relation to disputes involving termination of employment, may not be dismissed on the grounds set out in new subsection 587(2). This ensures applicants would not be prevented from applying for remedies from a court as a result of the FWC dismissing an application in the course of exercising conciliation/mediation functions in relation to disputes about termination of employment.
Schedule 7 – Application, Saving and Transitional Provisions
2.139
Schedule 7 would amend the Fair Work Act to make application, saving and transitional provisions arising from the amendments made by the bill.
Consideration by the Senate Standing Committee for the Scrutiny of Bills
2.140
The Senate Standing Committee for the Scrutiny of Bills considered the bill in the Scrutiny Digest 2 of 2021.
2.141
The Scrutiny of Bills Committee raised concerns about the use of delegated legislation to establish the model NES interaction term. In doing so, it highlighted the lack of justification in the explanatory memorandum regarding why it was necessary to allow this matter to be set out in delegated legislation.
2.142
The Scrutiny of Bills Committee also highlighted the proposed use of delegated legislation to prescribe:
matters relating to the content or form of a Casual Employment Information Statement that must be provided to new casual employees, and the manner in which employers may give the statement to employees; and
purposes for which additional agreed hours are to be treated as ordinary hours.
2.143
Accordingly, the Scrutiny of Bills Committee requested the Minister provide advice as to why it was considered necessary and appropriate to leave these matters to delegated legislation.
2.144
The Scrutiny of Bills Committee also highlighted proposed subsection 23B(2), which would allow the minister to declare by legislative instrument that a project was a major project. Proposed subsection 23B(5) would provide such a declaration would not subject to disallowance. While it noted the justification provided in the explanatory memorandum, the Scrutiny of Bills Committee drew its concerns to the attention of senators and left to the Senate as a whole the appropriateness of proposed subsection 23B(5).
2.145
The Scrutiny of Bills Committee also raised concerns about the impact of proposed Item 3 of Schedule 6 on the right to procedural fairness. The proposed item would enable the FWC to conduct an appeal or review without a hearing, provided it takes into account the views of persons making submissions in the matter as to whether a hearing is appropriate. Currently, an appeal or review of a decision may only be conducted by the FWC without a hearing if persons making submissions in the matter consent.
2.146
The Scrutiny of Bills Committee set out its expectation that any limitation on the right to procedural fairness should be justified in the explanatory memorandum. As no justification was provided in the explanatory memorandum, the Scrutiny of Bills Committee requested that the Minister provide advice about the justification for the proposed amendments.
2.147
The Scrutiny of Bills Committee also raised concerns about the retrospective application of proposed clauses 45 and 46. The proposed clauses would provide that:
a variation of an enterprise agreement under clause 45 would operate from the day specified in the determination, which may be a day before the determination is made;
section 15A of the amended Act (which would establish a definition of ‘casual employee’) would apply on and after commencement in relation to offers of employment given before, on or after commencement; and
section 545A of the amended Act would also apply in relation to entitlements that accrued, and loading amounts that were paid, before commencement.
2.148
In relation to these clauses, the committee noted that it had:
…a long-standing scrutiny concern about provisions that have the effect of applying retrospectively, as it challenges a basic value of the rule of law that, in general, laws should only operate prospectively (not retrospectively). The committee has a particular concern if the legislation will, or might, have a detrimental effect on individuals.
2.149
Accordingly, the committee requested the minister’s advice about the need for retrospective application of the matters set out in clauses 45 and 46, and the extent to which this retrospective effect may have any adverse impact on individuals.
2.150
At the time of writing, the minister's response had not been published by the Scrutiny of Bills Committee.
Compatibility with human rights
2.151
The statement on compatibility with human rights concluded that the bill is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
2.152
The Parliamentary Joint Committee on Human Rights (PJCHR) considered the bill in its Report 2 of 2021.
2.153
In relation to the proposed compliance and enforcement measures, the PJCHR considered that the measures would be important to more effectively deter non-compliance with workplace laws by employers. The committee also concluded that, to the extent the measures achieve this aim, they would promote rights to work and just and favourable conditions of work.
2.154
The committee noted that further information was required to assess the human rights implications of the following provisions:
simplified additional hours agreements;
flexible work directions;
extending the nominal expiry date of greenfields agreements; and
FWC appeal or review without a hearing.
2.155
Accordingly, the PJCHR has sought the minister's advice in relation to these matters.
2.156
The PJCHR made no further comment in relation to enterprise agreements and noted that the House of Representatives had agreed to withdraw the proposed measure that would have amended the BOOT provisions.
2.157
The minister's response was not due until 11 March 2021 and, as such, was unavailable at the time of writing.
Financial impact statement
2.158
The measures in the bill are estimated to have a minor financial impact and will be reported once the costings have been finalised.