Industrial relations: Post-virus flexibility for bosses

Retail, hospitality, restaurant and fast-food employers could offer part0-time workers extra hours without having to pay overtime under IR changes.

Attorney-General Christian Porter says the reforms ‘will give business the confidence and certainty they need to hire permanent employees’. Picture: Getty Images

Retail, hospitality, restaurant and fast-food employers would be able to offer part-time workers extra hours without having to pay overtime under industrial relations changes designed to support industries and employees hit by the COVID-19 pandemic.

As Labor and the ACTU criticised proposals impacting casuals, The Australian understands the government will also seek a two-year extension of JobKeeper flexibilities that give employers the power to change employees’ duties and locations of work.

Ahead of the bill being tabled in parliament on Wednesday, Industrial Relations Minister Christian Porter said the government would increase penalties for wage underpayments and create a new criminal offence for the “most egregious examples of genuine wage theft”.

Workers would also be able to use the small claims processes through the courts to seek to recover up to $50,000 in unpaid wages after the government proposed lifting the cap by $30,000.

Greenfields agreements would be able to operate for eight years on projects over $500m provided they guaranteed an annual pay rise each year. The eight-year deal would also apply to projects of more than $250m if deemed of national significance.

ACTU secretary Sally McManus said unions would not support the “high bar” set for criminal offences, while unions and the ALP opposed proposals affecting casuals that retrospectively removed employer exposure to billions of dollars in backpay.

ACTU Secretary Sally McManus has urged the Senate to block government proposals to retrospectively remove employer exposure to billions of dollars in backpay if Labor and the crossbench are unable to force changes to the IR bill. Picture: AAP

Under changes that would apply to 12 awards in industries impacted by the pandemic, including retail, hospitality and fast food, part-time employees working at least 16 hours a week can agree to work extra hours at their ordinary rate of pay.

Mr Porter said the changes were “groundbreaking and crucial when it comes to resolving a trio of ills in the current labour market — underemployment, the need for more flexibility and a desire by some employees for more permanent employment”.

“The reforms will give business the confidence and certainty they need to hire permanent employees rather than focusing on traditionally more flexible forms of employment,” he said. “For employees, it means a higher chance of securing permanent employment, with a guaranteed minimum number of hours, paid leave entitlements and, crucially, more hours of work if they want them.”

Criminal sanctions, including jail and multimillion-dollar penalties, would apply to employers found to have dishonestly engaged in deliberate and systemic wage theft of employees.

The new offence will carry a maximum penalty of up to four years imprisonment or a $1.1m penalty — or both — for individuals, and up to $5.55m for a body corporate. The four-year maximum is lower than the maximum five to 10 years’ jail for deliberate, systemic cases of wage theft that was proposed as an option by a 2019 government discussion paper.

The criminal offence would not apply to one-off underpayments, inadvertent mistakes or miscalculations.

Australian Chamber of Commerce and Industry chief executive James Pearson said: “With many business owners at breaking point in 2020, criminalising underpayments and increasing civil penalties for noncompliance risks tipping the scale against people in small and family enterprises.”

The bill also increases civil penalties for individuals and corporations. For most wage underpayments, the maximum penalty will increase by 50 per cent from $13,320 to $19,980 for individuals and from $66,6000 to $99,900 for a body corporate, including small businesses.

For underpayments by bigger businesses, maximum penalties will now be based on the higher of either “two times the benefit obtained”, or $99,900. Small business will be exempt from this change and it will not apply to individuals. For wage underpayment contraventions considered serious by bigger businesses, penalties will be based on the higher of either “three times the benefit obtained”, or $666,600.

Infringement notice fines and maximum penalties for sham contracting and for failing to comply with a Fair Work Ombudsman compliance notice will all also increase by 50 per cent.

“Whilst most employers do the right thing and ensure their staff receive their full entitlements, it is also clear that tougher penalties are needed — including a new criminal offence — to protect workers and honest businesses from the small minority of unscrupulous operators who deliberately exploit their staff,” Mr Porter said.

Ms McManus has urged the Senate to block government proposals to retrospectively remove employer exposure to billions of dollars in backpay if Labor and the crossbench are unable to force changes to the IR bill.