On May 21, 2022, the Australian federal government changed with the election of the Australian Labor Party. During the election campaign, the new government proposed to hold a summit bringing together leaders of employers, business, trade unions and government to explore mechanisms to improve wages and boost productivity.
The government’s new Jobs and Skills Summit will take place on 1-2 September 2022 in Canberra. We’ve outlined what we think could come out of the Summit and what it could mean for US customers with a workforce in Australia.
Areas of intervention
The Summit will explore five high-level themes:
- Maintain full employment and increase productivity;
- Improve job security and wages;
- Increase participation and reduce barriers to employment;
- Provide a high quality workforce through skills, training and migration; and
- Maximize opportunities in the industries of the future.
These themes are developed in a background paper published by the Treasury last week – available here.
The government has indicated that it will seek to identify what changes can be made through legislative amendment in the short term, with the employment minister publicly stating that he intends to introduce “as many measures as possible” in a single bill later. this year after the Summit.
Do we know what the likely outcomes will be?
Although this involves a ‘crystal ball’ element, the government has been quite explicit about the changes it wants to make to certain aspects of employment regulations. These elements include:
- Increased protections and rights for employees who are engaged on a casual basis. In particular, we think it is likely that the government will seek to:
- Modify the Fair Work Act 2009 restrict the circumstances in which an employee can properly be considered a casual employee; and
- Limit the number of consecutive fixed-term contracts that an employer can offer for the same position to a total duration of 24 months.
- Modification of the Fair Work Act 2009 to include greater protections, and possibly introduce certain legal rights (such as carer’s leave), for people who are not employees but who are engaged in “employment-like” forms of work “, with a particular focus on people who are hired to perform work in the gig economy.
- Take steps to reduce the number of situations where people are employed or contracted to do the same work, but are paid differently. We expect that this “same job, same pay” approach will primarily focus on the gender wage disparity, but that steps can also be taken to reduce the difference in pay received by hired workers compared to directly employed employees. .
- Increase the penalties that can be imposed on employers who engage in or are involved in the willful underpayment of workers (commonly referred to as “wage theft”) and potentially criminalize such conduct.
- Modification of the Fair Work Act 2009 prevent (or significantly reduce) the ability of an employer engaged in collective bargaining to unilaterally apply to the national labor tribunal, known as the Fair Work Commission, to terminate a collective agreement, which is an instrument containing the terms and conditions of employment that is negotiated at workplace level and approved by the Fair Work Commission. From time to time, employers have, during bargaining, asked the Fair Work Commission to terminate an existing collective agreement while negotiating a replacement agreement. The employment minister recently said that “on the face of it, I don’t see how this tactic can possibly be justified”.
- The government has also consistently emphasized the desire to reinvigorate collective bargaining as a means of setting terms and conditions of employment (possibly including through sectoral bargaining) and to relax some of the legislative restrictions that severely restrict the ability of employees to strike or take other forms of industrial action.
Although the discussion paper highlights the need for Australia’s migration system to complement the domestic workforce while delivering better long-term economic and social outcomes, it is difficult to identify the particular changes the government might want. bring to the migration system. However, what is clear to us, based on the migration work carried out by our Australian team, is that steps will need to be taken to reduce the current level of backlog in processing skilled visa applications. Currently, it is not uncommon for the application process to take longer than 12 months.
What does this mean for your business with a workforce in Australia?
The government is likely to act quickly enough to initiate and implement the reform soon after the Summit concludes. It will therefore be important for your organization to monitor developments closely to ensure that you remain compliant with Australian labor laws.
Key points for your legal and HR teams to consider at this stage include:
- Given the current level of backlog in visa processing times, consider taking steps to advance any scheduled visa applications. The Australian team includes a number of migration specialists who can tell you about the process involved in taking such steps (and any other migration law issues related to the movement of staff into Australia);
- Map your casual, fixed-term and maximum employees and the extent to which they use labor hire in Australia, so they can more easily assess the implications of legislative change once that the proposed legislation will be presented to Parliament;
- If you have any concerns about possible underpayments or if you have not provided employees with all of their rights, it is best to take a proactive approach to ensuring wage compliance, we recommend that you seek advice from our Australian LEWS team who regularly help employers with underpayment issues; and
- If you have a collective agreement that you are about to renew or are considering terminating, seek advice from the Australian LEWS team without delay.