New industrial relations laws to encourage more flexible working arrangements

By Gabrielle Stannus

The Federal Government has developed an industrial relations reform package it claims will give businesses the confidence to get back to growing and creating jobs, as well as the tools to help employers and employees to work together in a post-COVID Australia. We take a quick look at how these reforms may affect employers and employees in the greenlife industry.

In December, Attorney General Christian Porter announced the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 (“The Bill”), addressing five key areas of industrial relations reform around award simplification, casuals and fixed term employees, compliance and enforcement, enterprise agreements and greenfield agreements. The Bill also includes an additional schedule outlining new measures designed to support the Fair Work Commission in its work.

Flexible work directions

JobKeeper flexibilities in the Fair Work Act 2009 will expire this March. However, the Bill will allow some employers to continue to direct employees to perform different duties that are consistent with their skill or competence, or work at locations different from their normal place of work. These new ‘flexible work directions’ will be available for a period of 2 years where employees are covered by specific awards, including the Nursery Award 2020 and the General Retail Industry Award 2020.

Flexible part-time arrangements

The Bill will allow an employee to agree to work additional hours at their normal rates of pay when it suits them, without attracting penalty rates. To be eligible, an employee must work at least 16 hours per week and be given additional hours of no fewer than 3 hours in a shift. The employee must still be paid applicable penalty rates for work conducted outside their usual spread of hours or in excess of daily or weekly maximums contained in their award.

Casual employment

The Bill includes a new statutory definition of casual employment, missing from the Fair Work Act 2009. A person will be considered a casual employee if they accept an offer of employment where there is no firm advance commitment to continuing and indefinite work according to an agreed pattern of work. Employers will be required to assess all casual employees after 12 months’ employment and, if appropriate, offer them conversion to full-time or part-time employment. Casual employees cannot be compelled to convert at any time.

Employers who paid an employee an identifiable loading as compensation for leave entitlements is not then forced to also pay for leave entitlements without the capacity to offset that liability via the compensation already paid (“double-dipping”).

Employees who received no casual loading remain entitled to back-pay.

Compliance and enforcement

A new criminal penalty will apply to those employers convicted of deliberately underpaying their employees. The worst abuses will be punishable by up to 4 years imprisonment and significant fines, with convicted individuals being disqualified from managing corporations for five years under the Corporations Act.

The Fair Work Ombudsman will establish an Employer Advisory Service for small businesses to receive free advice on their workplace obligations, helping them avoid underpayments.

Enterprise agreements

The new Bill will require all enterprise agreements to be approved by the Fair Work Commission within 21 working days, as far as practicable.

The Better Off Overall Test (BOOT) will be simplified and will continue to apply to each individual employee.

The Fair Work Commission will implement an online guidance and application tool ($4.4 million) for parties involved in bargaining to support more productive enterprise bargaining.

Industry opinion

Retail associations are supportive of the reforms, which they say will reduce red tape, provide more choice for staff employed on a casual basis¹ ; allow businesses to offer additional shifts more easily to part-time staff² ; and speed up the enterprise bargaining process, which for some retailers has taken more than 12 months¹ .

Leigh Siebler, Manager of the Garden Centres Association of Australia Inc. (GCAA), says his organisation is tentatively supportive of this reform if it simplifies a complex industrial relations system without adding to an employer’s administrative workload. “If large businesses such as Woolworths have trouble calculating correct wages, even with their systems and specialists, how can we expect a smaller business such as a garden centre to avoid problems?” asks Leigh.

Streamlining the enterprise bargaining agreement process may enable garden centres and other nurseries to attract and retain valuable employees if they can negotiate improved pay and conditions which better suit their circumstances. “Like a lot of small businesses, garden centres can have trouble getting the staff they need. It is important to have employees who are remunerated sufficiently to enjoy what they are doing,” says Leigh, ““However, the remuneration has to be affordable for employers. No profit, no business, no workers, no jobs.” Similarly, the proposed flexible part-time working arrangements may help reward valued part-time employees with extra income without having to commit to additional hours permanently.

Next steps

The Bill has been referred to the Senate Education and Employment Legislation Committee for consideration. This committee’s report is due 12 March.

References

Australian Retailers Association (ARA) 2020, 'ARA welcomes industrial relations reforms, with a hard-fought win on casual employment', Australian Retailers Association, media release, 21 December 2020, updated 18 January 2021, viewed 5 February 2021, https://www.retail.org.au/post/ara-welcomes-industrial-relations-reforms-with-a-hard-fought-win-on-casual-employment
National Retail Association 2020, 'Retailers back the Morrison Government’s vital industrial relations reforms', National Retail Association, media release, 8 December 2020, viewed 5 February 2021, https://www.nra.net.au/retailers-back-the-morrison-governments-vital-industrial-relations-reforms/

Leigh Siebler

Leigh Siebler, Manager, Garden Centres of Australia