Industrial relations bill: Workplace shake-up to get companies hiring

Employers to avoid exposure to backpay and casuals to get greater rights to convert to permanent under proposed IR changes.

Christian Porter says the changes will give business the confidence and certainty they needed to invest and hire again. Picture: AAP

Employers would avoid exposure to billions of dollars in backpay, and regular casuals get greater rights to convert to permanent employment, under proposed ­industrial relations changes that have been backed by business but sparked anger from the union movement.

The government’s industrial relations bill, to be unveiled this week, seeks to deny “double dipping” claims by allowing employers to offset previously paid casual loadings against a leave claim by a casual found by a court to be ­permanent. Industrial Relations Minister Christian Porter said the changes would give certainty to employers who faced a “massive liability” of up to $39bn due to a landmark Federal Court ruling that workers on regular casual shifts were entitled to seek paid leave.

Under the bill, employers will also be required to offer part-time or full-time roles to people after 12 months if they have worked a regular pattern of hours for the previous six months. The bill introduces a new statutory definition of casual employment, with a worker defined as a casual if ­employment is offered without any firm advance commitment that the work will continue indefinitely, follows an agreed pattern of work, and the employee accepts the offer on that basis.

Mr Porter said the changes would give business the confidence and certainty they needed to invest and hire again, knowing they would “not have to pay people twice for things like sick leave and loadings always meant to compensate casual workers for those things”.

“These are significant reforms which together will solve the problem of uncertainty, provide better avenues for job security, remove the burden of double-dipping claims and recognise employee choice,” he said.

But ACTU secretary Sally McManus attacked the plan to ­remove employer exposure to backpay claims, in comments that signal unions will press Labor and the Senate crossbench to oppose the changes.

“This is a huge missed opportunity to begin to make jobs more secure and turn around the number of causal and insecure jobs,” she said. “Instead, this proposal will entrench casual work. This is exactly the opposite to what our country should be doing after a pandemic where casual work literally spread the virus.”

Australian Industry Group chief executive Innes Willox said the eight class actions filed off the back of two Federal Court decisions had increased uncertainty faced by employers and many small businesses faced financial ruin if the double-dipping claims succeeded.

“Certainty needs to be restored without delay to encourage employers to employ the hundreds of thousands of casuals who have lost their jobs since the onset of COVID-19,” he said.

The government said the new definition of casual would be an objective commonsense test that provided certainty for employers and employees.

The meaning of “firm advance commitment” will be guided by specific factors, including whether the employee can elect to accept or reject work; the employment is described as casual employment; and the employee will be entitled to a casual loading or a specific rate of casual pay.

“Our definition of casual ­employment is likely broader than some business groups had wanted (while) unions are likely to say we should have made the definition broader still, suggesting to me that we have struck the right balance on this issue and delivered a fair and equitable outcome that will benefit both workers and employers,” Mr Porter said.

Under the casual conversion proposal, an employer must make an offer to a casual employee to convert if the employee has been with them for 12 months, and worked a regular pattern of hours on an ongoing basis for the past six months.

The employee could be converted to full time or part time work if there was no significant adjustment to hours of work.

An employer can decide not to make an offer or accept an employee request if they have reasonable grounds not to do so. If an employee declines an initial offer to convert, a further right to request will be available every six months, as long as the worker remains eligible.

Mr Porter said the proposal resolved the key issue of job security for long-term regular casuals by strengthening processes for casuals to convert their employment to more secure and predictable arrangements.

“The changes to casual conversion rights strike that essential balance, ensuring those working regular shift patterns who want greater job security can convert to part-time or full-time work, while maintaining the existing rights for employers to refuse such requests if there are reasonable grounds for doing so,” he said.

But Ms McManus said the bill gave employers the ability to legally label someone a casual, even if they were hired for a permanent, ongoing job.

“Courts have found this to be a fiction, this proposal from the Government would overturn the decisions of the courts,” she said.

“The proposal makes it almost impossible for casual workers to convert to permanent work as if an employer is unreasonable or does not offer them permanent employment, there is little they can do about it. Even though we know so many casual workers are not paid more than permanent workers, it also retrospectively takes away rights they would have to paid leave. Casual workers who are incorrectly classified by their employers currently have this right, this legislation would take it away.”

The industrial relations bill to be tabled in parliament this week will also allow longer enterprise agreements on major projects; require Fair Work to approve agreements within 21 days; make changes to the better off overall test and insert tougher compliance provisions for wage underpayments.