Jobs agenda drives new wave of workplace reform

The COVID-19 pandemic has delivered a rare opportunity for warring parties to come together in a spirit of co-operation to safeguard the common good. Rising levels of debt, high unemployment, trade tensions and uncertainty about the global economic outlook as a result of the pandemic make all efforts to boost productivity and remove impediments to growth more important than ever.

There exists broad agreement across the political and social spectrum that job creation is the priority task at hand. The COVID-19 emergency has enabled a period of deep collaboration between government, employer and trade unions, unseen since the Prices and Incomes Accord period of the Hawke and Keating governments in the 1980s and 1990s. It is time to see if those discussions and a newfound co-operation led by Industrial Relations Minister Christian Porter and ACTU secretary Sally McManus can bear the promised fruit.

Mr Porter is preparing to introduce wide-ranging legislation to parliament that will set the tone of Australia’s industrial relations landscape for the future. The federal government has reset the clock on its approach, abandoning the union-restricting Ensuring Integrity Bill that was politically divisive and seen as a continuation of the Howard-era WorkChoices reforms that galvanised the union movement but delivered significant benefits in terms of workplace flexibility and for the economy.

The ACTU leadership has been actively engaged in the latest negotiations but it remains to be seen whether it and the ALP can truly change their spots. Already, there are signs of trouble ahead.

Under Mr Porter’s planned changes, the thuggery and industrial excesses of wayward unions will be addressed by allowing the demerger of super unions, notably the Construction Forestry Maritime Mining and Energy Union. As Paul Kelly wrote in The Weekend Australian on Saturday, the bill to allow demergers strikes at the foundations of the big amalgamated unions. But given the widespread concerns about the construction wing of the CFMEU and its Victorian secretary, John Setka, the bill is not expected to be strongly opposed by either the ALP or ACTU.

Further details are now emerging on measures the government will take flowing from consultations of five working groups which brought together employers, unions and other stakeholders. Mr Porter says that getting the IR settings right to help create jobs is the most critical challenge facing Australia in a century. Rather than radical change, Mr Porter says, the Morrison government’s approach will be practical, incremental solutions to key issues that are known barriers to creating jobs.

As Kelly explained, the omnibus bill seeks to ­revive enterprise bargaining, with a 21-day approval deadline to fast-track agreements; it makes it easier for employers to pay retail workers for longer hours; it introduces a new system of “loaded rates” operating across key awards to enable employers to pay a single higher rate rather than work through multiple penalty rates and allowances; it authorises longer-run greenfields or “life of projects” agreements in the resources sector; it provides for ­better conversion from casual to permanent employment; and it seeks to address a “double-dipping” system for leave entitlements.

Mr Porter has given detail on how the changes to casual work will be framed in the new laws. He says casual jobs will regrow faster if the significant confusion and legal uncertainty surrounding casual employment arrangements can be overcome. That confusion was stoked by a Federal Court decision, WorkPac v Rossato, that businesses may now have to pay for sick leave and other leave as well as the 25 per cent casual loading that is meant to compensate for those benefits. The cost of the decision to employers is estimated at between $18bn and $39bn.

Mr Porter is right to say that this uncertainty, coupled with the lack of a clear definition of what constitutes casual employment, has made many employers reluctant to hire new staff. The government’s IR legislation seeks to address these problems via three interrelated measures. First is to introduce a statutory definition of casual employment into the Fair Work Act. Second is to enable employers to offset the 25 per cent loading already paid against claims for holiday and sick leave. The third is to create a new minimum standard for casual conversion so that casuals who work regular shift patterns can move — if desired — to part-time or full-time employment after 12 months.

Mr Porter says the government’s definition of casual employment is likely broader than some business groups had wanted and narrower than unions had argued. Ms McManus has said the ACTU does not support the changes for casual workers. Business Council of Australia chief executive Jennifer Westacott has indicated employers are taking a pragmatic approach.

It is early days but it will be a remarkable achievement if the Morrison government can secured a new round of workplace flexibility without unleashing a repeat of the ACTU’s anti-WorkChoices campaign that was waged against the Howard and Abbott governments.