IR changes don’t fix fundamental flaws in bad policy

The Fair Work Legislation Amendment (Closing Loopholes) Bill will affect every Australian business employing casual workers.

The best thing said about the government’s supposed concessions on the omnibus workplace relations bill is the acknowledgment of serious flaws in this far-reaching legislation.

We are yet to see the detail, and previous promises made in the workplace relations debate have not been delivered.

The apparent removal of heavy fines of up to $469,500 for employers who mistakenly misclassify an employee as casual or permanent is welcome recognition that the overwhelming majority of employers do the right thing by their workers.

But the reality is the other limited concessions offered do not even address the central issues around casual employment, let alone the other flaws in the nearly 300 pages of legislation and 500 pages of explanatory material.

As the Business Council and other employer groups have warned, the government’s Fair Work Legislation Amendment (Closing Loopholes) Bill will affect every Australian business, big and small, that employs casual workers in every community in Australia.

It seeks to overturn the existing clear definition of a casual employee in the Fair Work Act, based on what employees and employers agree in writing, which has been reaffirmed by the High Court, in favour of a vague and unreliable definition.

It opens a new parallel pathway for workers to request a conversion from casual to permanent roles after six months that will force employers to apply a 12-point test to determine whether they have an obligation to change a role from casual to permanent.

One of those considerations is whether a casual employee works regular shifts – as many do.

What the government is reportedly offering is clarification that no single consideration can determine if someone is a casual or permanent employee, which means it would be possible for a person to work regular shifts and remain a casual employee.

Importantly, the Bill already says that not all considerations need to be satisfied to determine the status of an employee, so it is unclear what this change means.

If, as we fear, it still means employers cannot give their workers a firm advance commitment to shifts – because that looks too much like permanent employment – what does that mean for rosters, or for employees seeking to manage work and family, work and study, or work and care?

Regardless of this concession, what doesn’t change is the requirement for employers to have constant vigilance about the work patterns and intentions – stated or otherwise – of their employees in case they are captured by the new definition of casual employment.

There are two consequences of this new administrative burden on business: a significant increase in cost and complexity for anyone with a casual workforce; and the likelihood that, faced with these costs and complexity, businesses will simply employ fewer casuals.

That is the conclusion of one of the nation’s leading industrial relations lawyers, Stuart Wood KC, who was commissioned by the Business Council to assess the impact of the Bill.

Wood warns that the new definition will prove “frustrating, impractical and unreliable” for employers who will be forced to “constantly check the work patterns of their casuals to avoid the surprise of a notification that they’re no longer casuals”.

As for the implications?

“Faced with the challenges that will arise from the new and unworkable definition of casual employment, I expect that many employers will decide to structure their workforce so casual employment is no longer a choice for employees,” he says.

“They’ll only be left with inflexible full and part-time employment. Alternatively, casual employment might be reduced to an unattractive offering for employees that is characterised, from the get-go, by irregular shifts, no representations about any certainty of shifts, and short-term employment to mitigate as much as possible any risk of the employment drifting into something more permanent.”

Nothing the government has apparently proposed in the past 24 hours removes the threat of the Bill making casual work less secure and, for the nation’s 2.7 million casual workers, reducing the hours, jobs and extra pay available to them.

Our caution regarding the supposed concessions is heightened because we haven’t seen the detail of the mooted changes – the actual language is critical – and suggestions of simply making a legislative note are insufficient to provide the legal clarity a business needs.

These issues are just the tip of the iceberg and many other significant problems remain.

Across just about every sector of the economy, the proposed changes are certain to drive up business costs, which will ultimately hit Australian households in the middle of a cost-of-living crisis.

The only real winners seem to be union officials and shop stewards, who will be gifted with sweeping new powers.

Rather than tinkering at the edges, the government must go back to the drawing board on this ill-considered Bill, which far from creating secure jobs will actively reduce them.

Bran Black is chief executive of the Business Council of Australia