Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 – What it means for you

The Morrison Government introduced the Fair Work Amendment (Supporting Australia’s Job and Economic Recovery) Bill 2020 (Bill) to Federal Parliament on 9 December 2020.  Employer groups have welcomed the Bill’s changes as the first step to getting industrial relations back on track.  Unions have derided the Bill as the worst attack on workers’ rights since Work Choices.  We take a look at the main changes proposed by the Bill.

Casual employees

  • If passed, the Bill will insert a definition of ‘casual employee’ into the Fair Work Act 2009 (Cth), with the test hinging on whether the offer of employment makes a firm advance commitment to continuing and indefinite work according to an agreed pattern of work.
  • The Bill also addresses the so called ‘double dipping’ for mischaracterised casual employees who are paid a loading but are later found to be entitled to amounts of paid leave and other employment entitlements not typically afforded to casuals.
  • There will be a new requirement for an employer to offer a casual employee conversion to a permanent role, and a requirement on employers to provide a Casual Work Information Statement in addition to the Fair Work Information Statement when a casual employee commences employment.

Bargaining

  • The Bill includes a new requirement for the Fair Work Commission (FWC) to approve enterprise agreements within 21 working days, or publish reasons that prevented it from doing so.
  • The Bill will remove the requirement for the FWC to consider scenarios for patterns of work that are not reasonably forseeable by the employer when assessing the better off overall test (BOOT).
  • The FWC will be required to give ‘significant weight’ to the views of the employer, employees and appointed bargaining representatives as to whether the enterprise agreement passes the BOOT.
  • The Bill will also simplify the prescriptive requirements for ‘genuine agreement’ with the FWC.
  • Employers will have 28 days (up from 14 days) from the day the employer agrees to bargain or initiates bargaining, to give employees the notice of employee representational rights.
  • The Bill will also restrict the intervention of non‑bargaining representatives to contest approval applications.  This proposed change is designed to reduce the prospect of the agreement approval stage being held up by unions which were not appointed bargaining representatives opposing the approval application.  The coal mining sector, in particular, has seen many occasions over the last five years, where the CFMMEU has opposed the approval of an enterprise agreement when they were not appointed as bargaining representative by any relevant employee.
  • The Bill will permit franchisee employers to join enterprise agreements of their franchise network without requiring a vote of the entire workforce.
  • The Bill will prevent an application being made to the FWC to terminate an enterprise agreement before 90 days has lapsed after the nominal expiry date.
  • Most controversially, the Bill will give the FWC limited discretion to approve an enterprise agreement that fails the BOOT because of the impacts of COVID‑19, and where it is not contrary to the public interest.  The maximum nominal life of these agreements will be two years.  The FWC will only have this COVID-19 related discretion for two years.
  • Finally, the Bill will terminate all pre‑Fair Work agreements from 1 July 2022 – so called ‘zombie agreements’ – made before the commencement of the Fair Work Act.  This will have the significant effect of removing agreement coverage for many employees and returning their minimum terms and conditions to the modern awards, until such time as a new agreement is approved, which in some cases may result in significant financial impost on businesses.

Greenfields agreement

  • The Bill will extend the nominal expiry date for major construction project greenfields agreements (that is, greenfields agreements for projects with a total capital expenditure of at least $500M) for up to eight years.  For agreements that operate longer than four years, the agreement must include a term for annual pay rises.  This is designed to prevent the need for mid-project bargaining and exposure to mid-project industrial action.

Modern Awards

  • The Bill will provide scope for employers to enter into agreements for additional hours with part‑time employees without the requirement to pay overtime.  Overtime would still be payable if those additional hours are worked outside the spread of ordinary hours in the relevant award, or above the maximum ordinary hours for a full-time employee under the award.  The intention is clearly to increase the attraction of part‑time work as part of a person’s ordinary hours, over casual employment.  This proposed change will apply in relation to a number of identified modern awards, including the General Retail Industry, Fast Food Industry, Hospitality Industry (General) and Restaurant Industry Awards.
  • There will be new rules to enable employers to give flexible work directions, as employers receiving the JobKeeper wage subsidy were able to do, which will sunset after two years.  The employer must have a reasonable belief that the direction will assist with the revival of the enterprise in order for the direction to be valid.

Compliance and enforcement

  • The Bill will introduce a range of new penalties and increase fines in some cases.  Penalties for remuneration‑based contraventions for large businesses will have an increased maximum fine for the multiple value of the benefit, as opposed to a fixed monetary amount.
  • The FWC will gain jurisdiction to conciliate small claims (which are currently dealt with in the Federal Circuit Court).
  • The Bill also introduces a new criminal offence for dishonestly engaging in an underpayment scheme.

Fair Work Commission

  • The Bill will give the FWC new power to dismiss claims, and to make orders to prevent certain applicants from making unmeritorious claims in the future.
  • There will also be some minor procedural amendments to streamline appeals in the FWC.

Summary

We will be providing in depth analysis of the proposed changes in the New Year in webinars and further updates. 

It is unlikely that the Bill will make its way through the Senate without amendments.  The Senate Education and Employment Legislation Committee is considering the Bill, with its report due back by 12 March 2021.

We will continue to monitor the progress of the Bill through the Committee and keep you updated on further developments.

For further information on any of the issues raised in this alert, please contact one of authors below.