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Workplace Relations Update (Australia), December 2020

11 December 2020

Look out for some big changes to the Fair Work Act 2009 (Cth) in 2021.On 9 December 2020, the Coalition Government introduced the much anticipated Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020. The Bill must now make its way through the Parliament, and there might be some tweaks in the process, but for now, the six most important things for employers to know about the Bill are –

  1. Old enterprise agreements made before 31 December 2009 will automatically terminate on 1 July 2022. This means that for businesses with an old enterprise agreement still in place, modern awards will start to apply to employees covered by the old enterprise agreement from 1 July 2022 unless it is replaced by a new enterprise agreement.
  2. Casual employment difficulties will be addressed by the introduction of a statutory definition of casual employment aligned with genuine casual work (ie where there is no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person). There will be various procedural steps employers will need to take to offer casuals conversion to permanent employment, and respond to requests for casual conversion. Provided the employee was a genuine casual at the time of their initial engagement, the risk of a casual being deemed a permanent employee will be low. It will be important for employers to review their casual contracts to ensure they set up genuine casual arrangements consistent with the new provisions. The issue of potential liability for permanent entitlements will be addressed by the introduction of a statutory casual loading offset mechanism.
  3. JobKeeper flexible work provisions concerning duties and location of work will continue to apply for a further two years for some of the industries hardest hit by COVID-19, as covered by 12 identified modern awards (the Business Equipment, Commercial Sales, Fast Food, General Retail, Hospitality, Meat, Nursery, Pharmacy, Restaurant, Clubs, Seafood Processing and Vehicle Repair industry awards). New flexi-part time provisions will allow part-time employees covered by one of the identified modern awards who have been guaranteed at least 16 hours of work a week to work up to 38 hours per week, by agreement, without payment of overtime.
  4. Wage theft will be criminalised with the objective of creating a national scheme to replace State and Territory wage theft laws. An employer that dishonestly engages in a systematic pattern of underpaying employees will commit a criminal offence. Employers will need to be very vigilant to address concerns raised around underpayments quickly. There will be a heavy price to pay for employers and managers who deliberately turn a blind eye. Penalties of imprisonment for 4 years, or $1,110,000, or both, are proposed for individuals, and $5,550,000 for a corporation.
  5. Enterprise bargaining processes will be subject to less formality around the current complex agreement-making rules, including the introduction of a more employer-friendly BOOT and a general streamlining of the process. Greenfields agreements for major projects may have a nominal expiry date of eight years. Franchisee employers may ask their employees to agree to vary an existing enterprise agreement that is within its nominal term to cover them.
  6. Numerous additional compliance and enforcement changes will apply, including more money for the FWO to investigate and rectify non-compliance with workplace laws, the creation of a new employer advisory service, an increased small claims cap of $50,000 and powers for the Fair Work Commission to conciliate small claims matters and arbitrate by consent, increased penalties for sham contracting (up to $99,900 from $66,600 for a corporation), and a new civil remedy provision for advertising employment below the rate of the national minimum wage.

We will keep you posted over the coming months.