Employers, it's time to prepare for a Labor Government

Man for construction

Discussion around industrial relations and workplace laws has taken a backseat in the political and policy debate so far leading up to the 2019 election.  However, employers should be aware of the "sleeping giant"!  A 2019 Labor Government could see the biggest shake-up of Australian workplace laws since the inception of the Fair Work Act in 2009.

Although a major overhaul of the Fair Work Act 2009 is unlikely, at least in the short term, employers should be prepared for a number of key changes to the current system, particularly those employers who:

(a)           operate or carry on business within a franchising model;

(b)           employ a casual workforce; or

(c)           have businesses that trade on weekends, particularly in the retail and hospitality industry.

The key changes Labor has committed to implementing, that could impose greater compliance obligations and additional costs to you as employers are:

  1. Reversing cuts to penalty rates: Within the first 100 days of a Labor Government, Labor has committed to restoring Sunday and public holiday penalty rates.  The phased-in reduction of penalty rates, ordered by the Fair Work Commission and effective 1 July 2017, may become a thing of the past – with many employers potentially facing a return to full penalty rates in 2019.

  2. Greater scrutiny and higher penalties for responsible franchisors: A Labor Government is set to build on the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 to extend, where appropriate, responsibility for compliance with workplace laws to corporations who are the "economic decision makers", including franchisors, even where those corporations may not be the direct employer.  Labor also plans to increase penalties for employers and related entities (which is likely to include responsible franchisors) who systematically underpay and exploit workers.

  3. Less room to refuse under flexibility laws: Employers are likely to face extra scrutiny around refusing requests for flexibility arrangements, in light of Labor's commitment to including an effective right of review for unreasonable refusals of these requests.  This may mean that the previously untouched right to refuse an employee's flexibility request on "reasonable business grounds" may, for the first time, become the subject of review by tribunals and courts.

  4. Statutory test for casual employment: Labor has committed to introducing an objective test that will define who is a "casual employee".  We hope that this will end the uncertainty faced by many employers, particularly in the wake of the recent Full Federal Court decision in WorkPac Pty Ltd v Skene [2018] FCAFC 131. This may or may not be a welcome change for business, particularly given that the effect of this proposed change would effectively remove from employers the right to deem an employee "casual", without statutory interference.

  5. Harmonisation of long service leave laws: What will likely be a welcome relief for many employers, particularly those with a national workforce, is the harmonisation of the State and Territory long service leave laws.  Labor is committed to achieving a national minimum standard for long service leave which will form part of the National Employment Standards.

  6. New paid domestic violence leave entitlement: Labor is committed to introducing 10 days paid domestic violence leave as a universal workplace right in the National Employment Standards.

It's fair to say that a Labor Government in 2019 may require you, as an employer, to change how you manage your workplace and your workforce.  Taking note of these potential key changes should help you prepare your business for a Labor Government in 2019.

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Peter Wright

Dean Schubert