Big business alarm at Labor’s second IR wave

Employers warn the changes proposed by Labor risk compromising the enterprise bargaining system.

Business Council of Australia CEO Jennifer Westacott. Jane Dempster/The Australian.

Big business will seek to limit Labor’s planned second wave of workplace relations reforms, warning the changes risk compromising the enterprise bargaining system and bogging the courts down in claims.

Challenging the Albanese government to devise changes that do not put a “handbrake on productivity”, the Business Council of Australia has identified a raft of concerns about the proposals, ­declaring the country cannot ­afford to “leave our feet stuck in the cement of rigid and outdated workplace practices”.

Business Council chief executive Jennifer Westacott urged the government to provide more policy detail during consultations with stakeholders and to avoid “needless ideological changes that leave Australians worse off”.

After their unsuccessful campaign to thwart passage of the government’s first tranche of workplace law changes, business groups are expressing concern at Labor’s second round, which includes a “same job, same pay” policy cracking down on worker exploitation by labour hire firms.

The government says while there are legitimate uses for labour hire, particularly when companies need a seasonal or surge workforce, workers doing the same job at the same site should get the same pay. The next wave will also include measures to tackle wage theft, the creation of a fair test to determine when a worker can be classified as a casual and a proposed extension of the Fair Work Commission’s powers to ­include employee-like forms of employment, notably gig economy work.

The first tranche’s contentious multi-employer changes come into operation from June while the government wants to legislate the second wave later this year.

In its submission to the Department of Employment and Workplace Relations, the Business Council opposes the same job, same pay policy. It says imposing terms and conditions on businesses based on the arrangements of other businesses risks complicating and compromising the enterprise bargaining system.

It seeks to restrict the policy by: applying it to “labour hire” and not other forms of contracting; excluding internal labour hire; limiting the obligation to provide terms and conditions of employment to employees of labour hire providers and not “workers” at large; and confining the policy to monetary base rates of pay and not broader and undefined “conditions”.

It says any amended casual definition should only apply after 12 months of employment, must not have retrospective application, be simple and easy to understand, and there must be protection and certainty for employers who have offered permanent employment to a relevant casual.

On criminalising wage theft, the Business Council says criminal sanctions should only apply to the most serious forms of exploitative conduct, and where the conduct is clear, deliberate and systemic.

It says the commonwealth scheme should cover the field and apply to the exclusion of state wage theft laws; vicarious liability should be strictly confined, and employers who have acted on advice of experts and regulators, such as the Fair Work Ombudsman, should be exempted from the imposition of criminal sanctions.

“There should be a different prosecution path where people have self-identified and proactively looked and audited their payroll for compliance, as an incentive to ensuring ongoing integrity of wage payments,” it says.

In seeking to address the exploitation of gig workers and their dangerous working conditions, the Business Council says the government changes should not hold back the “formation of new business models driven by consumer demand”.

“While there is a large amount of rhetoric, particularly from unions regarding ‘insecure work’, the fact remains that many workers deeply value the flexibility and autonomy afforded to them by non-permanent engagement models,” it says.

“Customers also appreciate the level of control and autonomy they derive from these services, including in the areas of food delivery, ride sharing, aged and disability care, accommodation, and general freelanced services.”

On the proposal for the Fair Work Commission to set minimum rates in road transport, it says: “The BCA does not understand there to be an established link between the payment of certain rates and improved safety outcomes within the industry. As such, there is no proper basis for the FWC to be assigned powers to set minimum rates for contract carriers and other contractors in the road transport industry on the basis of improved safety outcomes.”

Ms Westacott said the government needed to be clear about the problems it was trying to solve. “If we end up with changes that aren’t grounded in serious analysis of the problem, we’ll be making a complex system even more difficult to navigate and even more stuck in old ways of working,” she said.

“At a time of global economic uncertainty … Australia has almost full employment and wages are beginning to strengthen. Every time we want to make a change we should ask ourselves, what are we risking?”