Anxious business watches IR reform go down to the wire
afr.com/work-and-careers/workplace/anxious-bu...
afr.comPosted Mar 16, 2021, 6:34 AM UTC
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afr.comArticle: Graeme owns a small, struggling family dry-cleaning business in Victoria. He is also one of many small business owners who have written to Senate crossbenchers pleading with them to pass the government’s industrial relations bill this week. Graeme’s alarm is due to one of his former casual employees seeking back pay worth tens of thousands of dollars in annual leave and other entitlements dating back six years. That’s despite that casual receiving the typical 25 per cent loading on the award rate for all of that period and repeatedly requesting to remain a casual because of the higher pay rate.
“I just don’t understand how a small business can follow every single law and pay every single entitlement but still be told they are liable for all this extra money they can’t afford,” Graeme says. The answer lies in a Federal Court judgment – now the subject of a High Court appeal – that found casual employees who work regular hours and days can also claim benefits of permanent employment like annual leave and sick leave. The claims can be applied retrospectively for up to six years. Such casual work is extremely common in precisely the sectors hardest hit by COVID-19 – retail, hospitality and tourism – with the Australian Industry Group arguing businesses would be liable for tens of billions of dollars in back-pay unless the bill is passed.
Employers want to avoid the uncertainty of a High Court case as well as the need to wait for many months to have this issue of retrospectivity determined just as businesses are looking to rehire and JobKeeper payments are ending. So addressing such “double dipping” became part of the Morrison government’s attempt at very modest reforms of Australia’s arcane industrial relations system now before the Senate.
The bill would allow casuals working regular rosters the right to become permanent employees after one year, for example, unless there were reasonable business grounds to refuse. But even before Christian Porter took leave after being engulfed by an allegation he had raped a girl 33 years ago, the government’s “omnibus” reform bill was facing trouble in the Senate, given Labor’s opposition and a range of changes demanded by crossbenchers. Senator Michaelia Cash is standing in for Porter to try to manoeuvre it through the Senate briar patch, stressing the importance of the reforms to Australia’s ongoing economic recovery.
That’s despite the dashing of early hopes – in government and business circles – that the COVID-19 crisis and Porter’s close consultation with ACTU secretary Sally McManus could finally produce a significant breakthrough in Australia’s inflexible morass of workplace laws. Working groups of unions and employers quietly negotiated over months to try to reach agreement, however limited, in five key areas. These involved casual employment, enterprising bargaining, award simplification, greenfields agreements, and compliance and enforcement.
But unions and Labor have since opposed almost every aspect of the government’s bill that Porter unveiled late last year. The government is still keen to get whatever it can through the Senate this week rather than having Labor’s attacks drag on for months given the political sensitivity of workplace reform and the end of JobKeeper this month. The result is a desperate political battle to finally persuade the two One Nation senators as well as South Australia’s Stirling Griff to provide the crucial three votes. The ACTU is now focused on blocking this by dissuading Griff from supporting the bill. The union movement has been particularly critical of what McManus claims is an unacceptable rise in casual – or “insecure” – work.
That is even though the percentage of the workforce employed as casuals – around 20 per cent – has remained stable for two decades and actually slightly decreased recently. The rise in overall workforce numbers certainly adds up to more individuals employed as casual but many of them also prefer to remain on the higher pay rates. Crossbenchers still want amendments to the bill ranging from reducing the timing threshold for the right to permanent employment from 12 months to six months, enforcing arbitration if the request is refused and a much tighter definition of casual employment.
The trigger for the union campaign was the determination of the CFMEU to fight the use of labour hire companies, particularly in the coal mining industry, in what has been a long-running legal battle now playing out in the High Court. But the impact of the argument over casual work is much broader. Of about 2.6 million people employed on a casual basis pre-COVID-19, some 1.6 million worked regular hours. About half worked for businesses with fewer than 20 employees.
Innes Willox, chief executive of Ai Group, on Tuesday said the government’s omnibus bill was essential for employment, investment and business confidence at a critical time, accusing the unions of running a misinformation campaign to try to pressure crossbench senators. “The JobKeeper scheme is about to end and businesses will be making important decisions over the next couple of weeks about whether to retain staff,” he said. “Ai Group’s member advice line this week has seen a significant jump in businesses calling about potential redundancies.”
The potential liability of small businesses for retrospective pay will also become even more acute given that timing. About a dozen class action lawsuits have already been filed on behalf of casuals seeking additional compensation for previous work on regular rosters. According to Willox, plaintiff law firms and litigation funders are gearing up to pursue widespread claims. “This issue will drive many businesses – small and large – into insolvency unless the bill is passed,” he said. Graeme won’t be the only small business owner anxiously awaiting the result.
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That fuckwit from ARITA came out today saying thousands of job losses if no dice on this. It’s just not the case that small businesses will be chased or that anyone will pull the pin because of contingent back-pay claims. So this just seems to be another hand out for big business.
That all said, on the one hand set-off makes certain moral sense, but on the other hand these punters are entitled to these things and can’t be stripped without just compensation under the takings clause. The idea that you can mis-classify your employees and just be like “nah it’s good” is also pretty poor.
Me personally, I want the little guys to get a few bucks. They deserve it, it might make some difference to them. Occasionally the system has to break in a way favourable to them. Normally they get the wrong end of the machine.
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I agree that post Workpac² there probably needs to be a tightening of the definition of casual work to reflect the realities of how casual labour actually functions.
Otherwise all this panic over "double-dipping" really seems to arise from a fundamental misunderstanding of the FCFCA's findings and their highly specific factual basis.
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Why has the AFR been pushing IR reform so hard for the last 12 months? Are they independently pushing that agenda or are they just a mouthpiece for cabinet?
Yes.
It's the AFR, they'll always be interested in reducing employee protections and entitlements (I'm sorry, "IR reform") even when the Coalition are running scared from doing it due to the hangover from Workchoices. It's more big business mouthpiece than Coalition mouthpiece I'd say.
See also: reducing directors' duties because being a director is just so risky and underpaid.
I suppose I’m more just wondering what the driver is this time – whether they’re doing this because it appeals to their readership (and advertisers?), because it’s part of whatever deal they obviously have for inside scoops from cabinet, or because their parent and parent’s board are predisposed towards it for other reasons.
It appeals to the long time editor who has very definite views about things. Presumably the board are happy with the job he does which means it probably goes over well enough with the advertisers and a core readership.
I used to be a daily AFR reader but it was in spite of the often ludicrous editorials and the Rowan Dean attempts at comedy that would appear opposite the more measured commentary from the rest of the AFR journos, not because of them.
I know what you mean – anything by Hewitt, Roskam or the editorial team drives me up the wall.
There’s currently a close vote on amendments to the FWA, which explains the timing. As others have pointed out, AFR is traditionally pro-business which explains their view point.