Chapter 2Views on the bill
2.1The Secure Jobs, Better Pay legislation delivered on the Australian Government’s (government’s) commitment to improve the workplace relations framework, and to ‘lift wages, improve job security and close the gender pay gap’. As outlined in its Explanatory Memorandum (EM), the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 (bill) being examined by the committee further delivers on this commitment.
2.2This chapter explores the support for the bill and then examines the evidence and key issues raised by participants, with regard to each specific schedule in the bill.
General views on the bill
2.3As detailed throughout this chapter, there was support from a variety of stakeholders for both the broad policy intents of the bill and specific schedules within the bill which, according to the Department of Employment and Workplace Relations (DEWR), ‘aims to enhance worker protections, promote gender equality, remove unnecessary administrative burden, and clarify aspects of the workplace relations system’.
2.4In its submission to the inquiry, DEWR also underscored the extensive consultations that informed development of the bill. This included a written submission process and meetings with peak employer bodies, state and territory workplace relations officials, unions and other key stakeholders.
2.5In providing broad support for the bill, Per Capita endorsed the bill's aims and saw it as ‘the next step in building a fairer more secure workplace relations system, after years of neglect’. Similarly, the Australian Lawyers Alliance supported the amendments in the bill, which it argued would 'afford workers greater protection of their entitlements and improve fairness in our workplace relations system’.
2.6There was also support for specific elements on the bill. For example, stakeholders such as the Federation of Ethnic Communities' Councils of Australia (FECCA), the Migrant Justice Institute (MJI), and the Uniting Church in Australia, Synod of Victoria and Tasmania expressed strong support for the amendments relating to protections for migrant workers. Likewise, both PerCapita and the Australian Council of Trade Unions (ACTU) welcomed the provisions dealing with unpaid parental leave.
2.7While supporting the bill, some participants put forward amendments or clarifications. For example, while the Australian Chamber of Commerce and Industry (ACCI) described the amendments as ‘largely uncontentious’ and did not oppose passage of the bill, it suggested that ‘some improvements could be made to minimise the adverse impact on businesses’.
2.8A similar view was expressed by the National Electrical and Communications Association (NECA), which drew attention to the operation of some provisions but did not oppose the bill in totality, given the uncontroversial nature of many of the amendments.
2.9However, stakeholders expressed a range of views in relation to particular aspects of the bill. For example, the Council of Small Business Organisations Australia (COSBOA) indicated in-principle support for amendments relating to protection for migrant workers and conditional in-principle support for increased flexibility in unpaid parental leave entitlements. At the same time, COSBOA raised concerns about the provisions relating to superannuation and opposed the proposed changes to employee authorised deductions, as discussed later in this chapter. In addition, the Ai Group—which had no issues with some provisions of the bill but raised concerns with others—argued that the bill required amendment before being passed.
2.10Despite this, a number of submitters who proposed amendments still advocated for the passage of the bill. For example, the MJI strongly supported ‘the passage of the bill in the current form’, while the Refugee Council of Australia also recommended that the bill be passed. Likewise, while the ACTU put forward ‘minor changes’, it contended that the bill contained ‘common sense measures which the ACTU supports and encourages the Parliament to promptly pass’.
Schedule 1 – Protection for migrant workers
2.11Submitters expressed support for amendments in Schedule 1, in relation to protection for migrant workers and the government’s commitment to meeting recommendation 3 of the Migrant Workers' Taskforce Report of 2019.
2.12The National Electrical and Communications Association (NECA) saw the amendments as ‘not only protecting migrant workers but also deterring employers from breaching minimum employment standards’, while assisting compliant employers.
2.13The Uniting Church in Australia, Synod of Victoria and Tasmania, offered its strong support for the Schedule 1 amendments, submitting that the ‘measure will go some way to address the criminal behaviour of employers that seek to exploit people working in breach of their visa conditions’.
2.14The Fair Work Ombudsman (FWO) recognised the intention of the provisions to expressly clarify that migrant workers are entitled to protections of the FWAct and stated that this was:
… consistent with the FWO’s existing and long-standing approach that temporary migrant workers are entitled to the same workplace rights and protections, and the same minimum rates of pay, as other national system employees.
2.15The MJI commended the government’s FWAct amendments which will protect all workers, regardless of immigration status, calling the amendments ‘much‑needed and overdue’. MJI called for complementary amendments to the Migration Act 1958 to ‘ensure this reform extends to labour protections beyond the FW Act’, in areas such as workers compensation and anti-discrimination laws.
2.16The Law Council of Australia (LCA) indicated it was supportive of the principle that a ‘migrant worker should be entitled to the same pay and conditions, and workplace protections, as an Australian worker’. As with MJI, the LCA suggested additional amendments to the bill which would better consider the provisions of the Migration Act 1958, and would clarify that the amendments as currently in the bill apply to circumstances where no contract had been created but the FW Act nevertheless applies.
2.17Broader concerns about the exploitation of migrant workers via superannuation and wage theft was voiced as a concern by several organisations. The Federation of Ethnic Communities’ Councils of Australia (FECCA), for example, recommended establishment of a Wage Theft Act to criminalise wage theft.
Schedule 2 – Unpaid parental leave
2.18Various submissions to the inquiry supported amendments which would improve access to unpaid parental leave (UPL), and which would in turn better support families after the birth or placement of a child, promote shared caring responsibilities, and therefore gender equality.
2.19Expanding UPL provisions to allow non-birthing parents to take leave and share in early-life care was commended by Per Capita, which submitted that:
By increasing the provision for flexible unpaid parental leave, allowing UPL to be taken in the weeks preceding birth, and removing ‘employee couple’ and ‘concurrent leave’ provisions, the Bill promotes shared caring responsibilities and gender equality.
2.20The ACTU welcomed the changes, stating ‘[t]hey will make a positive contribution to better supporting parents to balance care and work, and in particular, drive shared parenting and gender equality’. The ACTU recommended that further flexibility be introduced, including reducing the notice period from 10 weeks, as in the bill and legislation currently in effect, to 8 weeks. They also recommended adjustment so that the unpaid leave must start in the 24-month period from birth or placement, but does not have to end in that period, so that parents with various work patterns may make full use of their leave entitlements.
2.21DEWR confirmed in its submission that the proposed amendments would ‘mean more choice for families and how they take leave’ and will therefore ‘encourage better sharing of care responsibilities in a child’s early years’.
2.1In its supplementary submission, DEWR highlighted that increasing the flexibility of UPL also has benefits for business:
Flexibility has many benefits for businesses. It can mean experienced employees gradually recommence work after becoming a parent sooner, or only needing to fill a partial vacancy, instead of a full one.
Alternative views on the UPL amendments
2.22Despite support for the UPL amendments from many stakeholders, some expressed concerns about the provisions.
2.23Ai Group, for instance, argued that the amendments would have ‘severe and impossible consequences for employers, co-workers and replacement employees’. The Ai Group put forward a number of suggested amendments to the bill around the UPL provisions, claiming that:
The uncertainty, complexity and regulatory costs of administering flexible UPL as an NES entitlement will likely stunt the momentum of employers adopting their own paid parental leave schemes. Such schemes typically offer the employee’s usual rate of pay for employees on parental leave and play an important role in limiting the loss of earnings experienced by parents (and disproportionately women) on periods of UPL.
2.24The Motor Trades Association of Australia (MTAA) noted that it ‘strongly supports the principal’ that UPL should ‘assist employees in managing their work and care responsibilities’. However, the MTAA cautioned that ‘the needs of employees must necessarily be balanced with the operational requirements of the business for which they work’. The MTAA summarised its concerns around the proposed UPL provisions as:
the disproportionate adverse impact on smaller businesses;
confusion over the quantum of the entitlement for part-time and casual employees;
insufficient detail in employee notification requirements for flexible unpaid parental leave; and
the lack of certainty over employee notice period requirements.
2.25The Council of Small Business Organisations Australia (COSBOA) also noted that the UPL changes could impact on small businesses with a lesser number of employees, and called for a review of the provisions six months following their implementation.
2.26On the other hand, the Australian Chamber of Commerce and Industry (ACCI) proposed some ‘improvement’ to Schedule 2, but concluded ’ultimately, ACCI does not oppose the proposed amendments’.
2.27Generally speaking, organisations representing business groups expressed mixed views about Schedule 2, with a majority supporting the principle of flexible parental leave. Some held concerns about the ad hoc use of UPL negatively affecting business operations and discouraging adoption or expansion of employer-funded paid parental leave schemes.
2.28Requirements for consulting and negotiating with an employer about planning UPL, and an employer’s right to refuse the UPL on reasonable grounds were suggested, with NECA recommending ‘the committee turn its attention to how to address workforce and employee shortfalls’.
2.29DEWR addressed concerns about notice periods in its submission, explaining that:
The Bill substantively retains the existing notice requirements for taking unpaid parental leave, which recognise the importance of balancing certainty for employers to plan their workforce with flexibility for employees to adjust their leave plans where unexpected circumstances arise. Employees and employers can also agree to unpaid parental leave policies and notice requirements that are more beneficial than the minimum safety net provided by the NES.
2.30DEWR also noted that employers are ‘not obliged to allow an employee [to] take unpaid parental leave if they have not complied with the notice requirements in the Act’. In addition, DEWR made that point that:
It is expected that in most cases employers and employees will maintain open communication about the employee’s leave plans, avoiding the risk of any disputes arising. If there is a dispute, this can be dealt with like any other dispute under the NES, including at the FWC if necessary.
2.31DEWR further explained the amendments complement the recent reforms to Paid Parental Leave and implements commitments made at the Jobs and Skills Summit.
2.32To further accommodate these changes, the FWO advised that it would update its advice to ‘reflect any amendments made’ to UPL provisions, following passage of the bill. The FWO would also incorporate any amendments into the FWO’s existing materials and ‘communicated accordingly’.
Schedule 3 – Superannuation
2.33Support was received for enshrining the right to superannuation in the National Employment Standards (NES). Inquiry participants recognised the importance of a compulsory superannuation scheme to support people in their retirement, and the significant issue of lost superannuation payments amounting to billions in wage theft.
2.34In relation to unpaid superannuation, Cbus Super (Cbus) pointed out that ‘non‑compliance with the Superannuation Guarantee (SG) is a steady leak in Australia’s retirement system’, and reported that ‘across the economy workers lose out on $6 billion a year in super’. Cbus therefore welcomed the move to include superannuation in the NES, observing that:
The issue of unpaid super is not just a problem for workers, it penalises the majority of business which do the right thing and also represents significant lost Government revenue and an increased reliance on the Age Pension.
…
Cbus has long advocated for a legal avenue for all workers to recover unpaid super, as already exists for recovery of unpaid or underpaid wages. Parliament should empower workers and their representatives, including their superannuation fund, to take action against employers engaged in this form of wage theft for the under and non-payment of the SG or superannuation contributions.
2.35The Financial Services Council (FSC) was overall supportive of the bill’s amendments and inserting superannuation into the NES, and suggested it would ‘bolster the importance of the system within Australian workplace culture and deter employer non-compliance’. The FSC continued that it would welcome clarity on:
… a clear explanation of outcomes for employees so that there is a “no wrong doors” approach to addressing non-payment of superannuation. That is Government will need to make the pathways to the resolution of unpaid superannuation clear to the public to ensure that issues can be easily resolved, and employees can be assured of receiving the same outcome (payment of their owed superannuation) if the matter is pursued either through the ATO or the FWC.
2.36MJI also expressed its support for the superannuation amendments, observing that ‘many vulnerable migrant workers are not only denied their minimum wage, but do not receive any superannuation’. MJI continued that:
Without access to individual recourse, many workers never recover their superannuation. They may complain to the ATO, but we understand that, in many cases, no action is taken, and the worker is left without any enforcement options. The amendment proposed will more effectively enable vulnerable workers to recover their superannuation.
2.37Inquiry participants acknowledged the current system to make a claim for unpaid super through the Australian Taxation Office may not be the most efficient, leading submitters to the view that opening a new pathway to claims for unpaid superannuation via the FWO would be a positive development.
2.38The MJI gave evidence the amendment would greatly benefit migrant workers as well as other working people in Australia:
Many vulnerable migrant workers are not only denied their minimum wage, but do not receive any superannuation. Without access to individual recourse, many workers never recover their superannuation. They may complain to the ATO, but we understand that, in many cases, no action is taken, and the worker is left without any enforcement options. The amendment proposed will more effectively enable vulnerable workers to recover their superannuation.
2.39DEWR explained in its submission that employers who met their obligations under superannuation legislation would not be in contravention of the NES provision, and would not face duplication of work:
The Australian Taxation Office (ATO) will still have primary responsibility for ensuring compliance with the superannuation guarantee and associated obligations. All employees will continue to be able to report superannuation underpayments to the ATO. The Fair Work Ombudsman will be able to make referrals of unpaid superannuation to the ATO and, in appropriate circumstances, pursue unpaid superannuation in a complementary role to the ATO, under both the new NES entitlement and pursuant to a term of a modern award, enterprise agreement, or other industrial instrument.
The Bill provides that an employee cannot use the new NES entitlement to recover unpaid superannuation through the court if the ATO has already commenced legal proceedings to recover those same amounts of unpaid superannuation. This is to ensure that employers cannot be subject to multiple actions under both the Fair Work Act and superannuation legislation for the same unpaid superannuation contributions.
2.40The Association of Superannuation Funds of Australia Limited (ASFA) considered these to be ‘sensible settings which allow the new entitlement to operate efficiently and in alignment with existing mechanisms’.
Alternative views on the superannuation amendments
2.41Despite the support offered for the superannuation amendments, some stakeholders took a more cautious view. Ai Group, for example, opposed these amendments and suggested the bill’s provisions raise ‘significant concerns around the integrity and efficacy of superannuation legislation and enforcement generally’.
2.42While COSBOA supported the principal that all employees should receive all eligible superannuation payments, it made clear its view that the amendments in the bill would ‘do nothing to improve the superannuation payment process imposed upon employers’.
2.43Like COSBOA, the Housing Industry Association (HIA) supported the broad policy intent of a compulsory superannuation scheme, but it opposed the inclusion of superannuation in the NES, for two reasons:
Firstly, there is a risk that ‘deeming’ of independent contractors as ‘employees’ for superannuation purposes could be conflated with the application of other employment related obligations on legitimate independent contractors.
Secondly, the approach adds another enforcement and penalty regime on top of what is already an extensive and complex regime administered by the Australian Tax Office.
2.44In response to claims of increased regulatory burdens, DEWR clarified that an employee could not use the new NES entitlement to recover unpaid superannuation through the courts, if the Australian Taxation Office (ATO) has already commenced legal proceedings to recover those same amounts. DEWR confirmed that:
This is to ensure that employers cannot be subject to multiple actions under both the Fair Work Act and superannuation legislation for the same unpaid superannuation contributions.
2.45In addition, DEWR advised that the commencement of the new provisions would align the existing and new NES provisions:
The changes are proposed to come into effect at the beginning of the first financial quarter 6 months after Royal Assent. This will align the NES entitlement with the requirements under superannuation legislation for employers to make contributions on behalf of employees on a quarterly basis in order to avoid liability for the superannuation guarantee charge.
Schedule 4 – Workplace determinations
2.46The proposed amendments to workplace determinations outlined in Schedule 4 of the bill were supported by submitters. DEWR provide a fulsome explanation of the operation of the amendments, saying:
The Department is aware that the Fair Work Commission has made 66workplace determinations since the commencement of the Fair Work Act. A determination will commonly include a clause which states that the determination applies to the exclusion of other industrial instruments, including enterprise agreements. This measure … provides consistency and certainty for parties by confirming that workplace determinations that came into operation before this amendment replaced any earlier enterprise agreement.
2.47DEWR was of the view that the amendments were ‘not controversial’ and would ‘not disrupt the application of determinations previously made by the Fair Work Commission.’
2.48The ACTU agreed, saying the amendments ‘resolved an ambiguity in the Act’. The ACTU made clear its view that these amendments presented a ‘helpful change, especially given the likely increase in workplace determinations under the new bargaining changes that come into operation shortly’.
2.49The Australian Chamber of Commerce and Industry (ACCI) also observed that the amendments around workplace determinations would ‘provide greater clarity for employers’.
Schedule 5 – Employee authorised deductions
There was support for the amendments put forward by the bill which reduce administrative burdens around authorised regular deductions from worker payments.
2.51For example, the Australian Council of Trade Unions (ACTU) considered the amendments to be a ‘small common sense change’, which would ‘reduce red tape for the parties, and particularly for employers’, while providing appropriate protection that the deductions are principally for the employee’s benefit.
2.52In its submission, the FWO made the point that the bill’s amendments would ‘not negate the important legal requirements that a deduction authorised by an employee must be authorised in writing and principally for the employee’s benefit’. The FWO continued that the current legislation already contained ‘important protections’ to help reduce exploitative arrangements and:
… ensure employees receive their full wages and entitlements. In the FWO’s experience, exploitative arrangements are more likely where there is an absence of documentation or proper authorisation.
2.53In order to reduce any risks of worker exploitation, it was put to the committee that deductions could be itemised with a meaningful descriptor, so that workers know exactly what is coming out of their pay.
2.54However, Ai Group urged careful consideration of the practical implications the proposed deduction provisions, questioning whether they ‘may give rise to a situation in which an employer could be forced to process changes to the quantum of deductions frequently or at short notice’ and considered such outcomes as ‘unworkable’.
2.55Similarly, COSBOA opposed the amendments, on the basis that it was ‘unaware of any issue with the current system whereby an employee notifies an employer of their desired change to a deduction from their pay’. COSBOA further suggested the amendments would not decrease red tape or the regulatory burden on employers.
2.56Notwithstanding these views, DEWR made clear that the bill has instead ‘reduced as far as possible unnecessary administrative burden associated with the changes’, and advised that ‘employers may continue to make deductions in accordance with existing authorisations if they comply with the current provisions, until those authorisations are withdrawn or updated’.
Schedule 6 – Coal mining long service leave scheme amendments
2.57Changes to the Coal Long Service Leave Scheme (Coal LSL Scheme) were largely supported by inquiry participants. Submitters agreed it was important that casual employees did not continue to be treated less favourably than other employees in terms of accrual of long service leave entitlements.
2.58DEWR explained in its submission that this measure would improve the treatment of casual workers under the Scheme, would not create any additional entitlements, and would not unduly compensate casual workers in comparison to other workers in the black coal mining industry. DEWR explained:
Permanent employees accrue paid entitlements like personal leave and annual leave while on long service leave. The Bill provides equity for casuals as they will continue to receive casual loading (which was designed to compensate casuals for lack of paid entitlements and the insecure nature of their role) during their period of long service leave. Specifically including casual loading as part of the long service leave entitlement will alleviate possible disputes around some casuals taking a ‘pay cut’ during their period of long service leave. These amendments would make the Scheme broadly consistent with State and Territory portable long service leave schemes.
2.59Inclusion of casual loading amounts in long service leave entitlements was queried by some submitters who determined this would treat casual workers more favourably than other workers in the black coal mining industry. Others sought clarity on some of the definitions included in the bill, including ‘ordinary rate of pay’ and ‘ordinary hours of work’.
Committee views and recommendation
2.60Submitters to the inquiry offered their support for the protection of worker entitlements and for practical, common sense reforms to the workplace relations framework. The proposed changes put forward by this bill will protect important entitlements like superannuation, help to protect migrant workers, and remove administrative burdens on employers.
2.61The amendments to the FW Act to better protect migrant workers were broadly welcomed by submitters, and the committee anticipates that these overdue and long called-for amendments will provide clarity and fairness for all workers moving forward. Migrant workers are entitled to the same protections afforded to all Australian workers, including the right to full pay for time worked. As DEWR noted in its supplementary submission, the Government has made further commitments in relation to protecting migrant workers from exploitation, including implementing the recommendations of the Migrant Workers’ Taskforce.
2.62Likewise, the bill’s amendments clarifying the operation of workplace determinations will help to provide consistency and certainty for both employers and employees around the operation of these agreements. The committee welcomes the support offered in evidence for these provisions.
2.63The committee welcomes the bill’s provisions which remove the legal ambiguity around the continuing effect of employee authorised deductions, in the event the originally authorised amount is varied. The bill also ensures the deductions remain for the employee’s benefit. The committee concurs with the evidence it received suggesting these were common sense amendments, reducing red tape on both employers and employees.
2.64The amendments around coal mining long service leave will provide equality for casual workers in the black coal mining industry, and finally puts them on par with their permanent colleagues in accruing long service leave. Theinclusion of casual loading in determining a long service leave entitlement means that causal employees in the industry will no longer be disadvantaged, and the committee commends the bill for delivering these outcomes. The committee notes the Government has made additional commitments to providing fair pay and conditions for casual coal workers, the most important of which is the Same Job, Same Pay policy.
Unpaid parental leave
2.65Significant provisions in the bill strengthen access to UPL, in both the time available as UPL, and increasing flexibility in how UPL is used. The committee acknowledges the benefits that flexibility provides to employees and employers alike, but also notes the claims made by some submitters about the possibility that these provisions may have adverse impacts on some employers.
2.66However, on balance, the committee is persuaded by the advice of DEWR which makes clear that existing notice requirements on employees intending to take UPL will be retained. This will ensure that employers can continue to plan their workforce arrangements with certainty and flexibility. In addition, it remains open to employers and employees to agree to UPL policies and notice requirements, that are more beneficial than those provided by the NES. Conversely, an employer is not obliged to allow an employee to take UPL if they have not properly given notice to the employer.
2.67Together, these ongoing protections will ensure that parental leave remains flexible and adequate for modern workplaces and family structures. The proposed amendments around UPL will have significant, positive impacts on parents balancing work and care responsibilities, and will particularly help with women remaining engaged with the workforce.
Superannuation
2.68Including superannuation in the National Employment Standards is vital to ensuring that all Australian workers receive the payments to which they are legally entitled. For too long, superannuation loopholes have been used as a means of facilitating wage theft, and including superannuation in the NES sends a strong message to non-compliant employers.
2.69The bill provides that superannuation will apply to those employees who are not covered by awards, while improving the avenues available to employees to recover both underpaid superannuation and wages under the FW Act.
2.70It is important to note, however, that despite some claims to the contrary, under these provisions employers will not face duplication of work and will not be subject to multiple actions under both the FW Act and superannuation legislation, for the same contributions.
2.71The committee welcomes these essential amendments and the fact that superannuation will become an even stronger part of Australia’s workplace relations system.
2.72The committee acknowledges that a broad range of issues in relation to workplace relations were raised in submissions to this inquiry. While these issues may be out of scope for the bill currently being considered and have not been discussed further in this report, the committee recognises that reform of the workplace relations system is a constant process. As acknowledged by Minister Burke, this bill is a ‘first step’ in improving rights for workers and ameliorating administrative burdens on employers.
2.73Given the important initiatives put forward by the bill to improve fairness in the workplace relations system, promote gender equality and relieve administrative burdens, the committee recommends that the bill be passed.
2.74The committee recommends that the bill be passed.
Senator Tony Sheldon
Chair