The Federal Government has recently enacted its third wave of pivotal IR reforms under the Fair Work Legislation Amendment (Closing Loopholes) Bill No 2 2024.
This update addresses several key modifications to the Fair Work Act 2009 (Cth) (Act) introduced by the Closing Loopholes Legislation:
Implementation of the ‘Same Job, Same Pay’ principle, now dubbed ‘Closing the Labour hire loophole,’ enabling applications for ‘Regulated Labour Hire Arrangement Orders.’ These orders would guarantee that employees engaged through labour hire or service contracts receive pay equivalent to that of enterprise agreement-covered employees of the host corporation.
Criminalization of wage underpayment.
Expanded entry rights for unions.
Introduction of training payments for workplace union representatives.
Changes to bargaining procedures, including alterations to arbitration proceedings in cases of bargaining stalemates.
Measures addressing the impact of small business redundancy exemptions under the Fair Entitlements Guarantee.
Drawing upon our extensive experience in advising various peak and industry bodies on legislative reforms, we are delighted to share insights into the specific details of these changes and their potential implications for businesses.
Introducing the ‘Same Job, Same Pay’ Regime:
A particularly contentious aspect of the reform agenda has been the ‘same job, same pay’ principle. The actual reforms, encompassed in the Closing Loopholes Legislation, enable parties to seek ‘Regulated Labour Hire Arrangement Orders’ under a new Part 2-7A of the Act.
These orders mandate that labour hire companies pay their employees working for a host corporation, the rates specified in the host’s enterprise agreement. Essentially, if an enterprise agreement covers certain work at a host employer, these orders ensure that labour hire employees performing similar tasks receive comparable pay.
Regulated Labour Hire Arrangement Orders are subject to approval by the Fair Work Commission, considering various factors such as the nature of the work, the relationship between the employer and the host, and historical industrial arrangements.
Importantly:
Applications for Regulated Labour Hire Arrangement Orders must be initiated by unions or employees.
These orders don’t apply to small businesses.
The Commission’s decision must ensure fairness and reasonableness.
The reforms aim to prevent ‘bargained rates’ from being undercut through labour outsourcing.
The Criminalization of Wage Underpayment:
The Closing Loopholes Legislation criminalises wage underpayment, termed ‘Wage Theft.’ Employers commit an offense if they intentionally fail to pay the required amount to employees, as stipulated by the Act or relevant instruments.
Penalties upon conviction can include imprisonment and significant fines, highlighting the seriousness of the offense.
Additional Measures:
To complement these reforms, the Minister will publish a Voluntary Small Business Wage Compliance Code, offering small businesses a compliance framework.
Cooperation agreements between the Fair Work Ombudsman (FWO) and reported entities may mitigate penalties for underpayment, provided the entity cooperates fully.
New Entry Rights and Training Payments for Workplace Delegates:
Union officials and delegates gain expanded entry rights under the Closing Loopholes Legislation. Union entry without notice is permitted in cases of suspected underpayment breaches.
Additionally, workplace delegates are entitled to represent members, communicate with union members, and access workplace facilities, fostering stronger union representation and employee advocacy.
Bargaining Changes:
Notable amendments to bargaining procedures include changes to arbitration, where outcomes cannot be less favourable than existing enterprise agreement terms.
Technical changes streamline multi-employer bargaining and provide a more flexible approach to enterprise agreements.
Small Business Redundancy FEG Changes:
Finally, measures ensure that employees affected by small business insolvency are not deprived of redundancy entitlements under the Fair Entitlements Guarantee.
In conclusion, these reforms signal a significant shift in workplace regulation, emphasising wage equality and empowering union representation. As these changes take effect, businesses must adapt to ensure compliance and uphold fair workplace practices. Our team stands ready to assist in navigating these reforms. Feel free to reach out to us for guidance.
