Editorial. New IR laws will reduce productivity, flexibility

There is nothing casual for workers and employers who value making their own arrangements about work. The Albanese government’s new employment laws are so complex that it took several attempts to introduce them – the existence of the Fair Work Amendment (Closing Loopholes Number Two) Act, which is about to apply, makes the point.

But the industrial relations establishment is not done with workers and small businesses yet. As of August 26, the Fair Work Commission will have the power to set minimum standards for workers in the gig economy and “employee-like” contractors in road transport. It’s all about protecting low-income workers who are paid less for their work than they would if they were employed to do their job but do not have independence as to how they do it.

The Fair Work Commission also announces changes are now required under the act to 100-plus awards setting employment conditions covering workers everywhere from the Reserve Bank to the funeral industry, from nurses to winemakers. The new law also will apply to individual enterprise agreements. And the FWC has decided it will undertake a “fundamental review” of part-time work under industrial law, including hours and days worked and how they can be changed. The objective is a “standard model for part-time employment”, FWC president Justice Adam Hatcher says.

But wait, there’s more. And for small business it could well be worse. The government’s new industrial relations laws now extend the role of “workplace delegates”, a flash term for union representatives, beyond representing union members and “potential members”. From August 26, delegates in businesses with more than 15 staff will be entitled to paid time during regular working hours for “union training”. And the definition of staff covers people who aren’t often, if ever, in the physical workplace – it includes regulated road transport contractors and “employee-like” digital workers in the gig economy, who will now have commission-dictated minimum standards.

The new laws will help Labor’s core constituents in the trade unions get back in the workplace power game – private sector union membership is under 10 per cent. The long decline in union membership is largely due to the end of the old Australian economy where work was standardised under industrial awards, industry-wide conditions were easily imposed and enforced, and unions used the FWC’s predecessors to impose centrally set rules across the continent that ignored the circumstance of the small businesses that account for 40 per cent of private sector workers. The assumption that everybody wants a full-time job that comes with union-regulated rules is improbable. And the possibility that small and medium enterprises will dare defy a union official with recourse to an industrial court unlikely.

The result will be less an industrial lawyers’ picnic than a banquet that will run for years as anomalies in the law emerge and unions drag employers into the commission for rulings. One of the new rules requires employers to offer a full-time job after two consecutive one-year contracts. It sounds straightforward but isn’t in universities, where the union and employer association are into their second six-month extension to sort out how it will work. The FWC has now decided to get involved.

It’s the sort of thing that happens when government sets all-encompassing rules that don’t take industries’ unique circumstances into account.