Coronavirus: Split over Fair Work Act changes threatens $130bn wage rescue

A major dispute has arisen over the mechanism to deliver the ­proposed $130bn wage subsidy.

Industrial Relations Minister Christian Porter. Picture: AAP

A major dispute has arisen between­ the Morrison government and Labor over the mechanism to deliver the $130bn wage subsidy for half the workforce, scheduled for approval when parliament resumes next week.

This follows advice Industrial Relations Minister Christian Porter gave the expenditure review committee of cabinet last Sunday that the package, based on a $1500 wage subsidy per fortnight — in effect­ a temporary basic income — could not be implemented without authorising changes to the Fair Work Act.

While Labor has yet to see the government’s proposed law, talks between the two sides have ­quickly revealed a deadlock, not over the principle of the Job­Keeper payment but the mechanism to give effect to the policy.

These are differences over law, workplace power and the Fair Work system. Unless they are resolve­d, the historic policy will be in jeopardy. That would be an untenable political result but the extent of the deadlock is serious.

Opposition industrial relations spokesman Tony Burke said: “The government wants to do this by legislation, whereas we say it should be done through the Fair Work Commission. We don’t see any need to change the act.”

Explaining the government’s position, Mr Porter said: “Changes to the Fair Work Act will be ­temporary but without them you put the livelihoods of millions of people at risk. An ideological preference to not allow even temporary changes to the Fair Work Act should never stand between millions­ of Australian workers and a $1500 job-saving lifeline.”

The core of the problem is that eligibility for the JobKeeper Allowa­nce does not displace an employer’s existing obligation under the Fair Work Act 2009.

This is no problem where the employer, assisted by the $1500 subsidy, meets the employee’s curren­t pay or exceeds it.

The problem arises where the employee, while enjoying the $1500 subsidy, is getting less than the previous wage entitlement. That leads to a breach of the rele­vant award or agreement, a situation that must be rectified.

Mr Porter wants a sweeping and rapid solution — a Gordian Knot-type amendment to the Fair Work Act — while Labor’s method of proceeding through the Fair Work Commission requires changes to individual awards and ­agreements.

“At present there is unpreced­ented co-operation between ­unions and employers, and we should take advantage of that,” Mr Burke said. “It is incredibly difficult to use legislation to drive these changes in every workplace. We don’t believe these proposed legislative changes are necessary.”

Mr Porter regards this approach­ as untenable and far too slow. He said that to get payments to the people who needed them, provision must be made to allow employers to alter the hours of some employees so the business could survive. For some businesses, “this might be the difference between survival and complete closure”, he said.

Rejecting the Labor position, he said: “You would be gambling on whether it might even be possible­ in a reasonable period of time to change all 121 awards and a massive number of Australia’s 11,000 enterprise agreements, whose present terms may not allow someone to be paid the ­JobKeeper amount even if the ­alternative was no job, no wage and no way of providing for their family.”

Mr Porter said he had “greatly appreciated” the co-­operation shown by senior unionists and employer organisations in suspending the “usual hostilities” and working together but he added: “It is importa­nt that we don’t jump ahead of ourselves and that we focus on the problems at hand.”

It is inconceivable that this deadlock will not be resolved. Labor’s position is bi­part­isan support in terms of voting for the government’s packages in the parliament, but it has repeatedly made clear its opposition to many elements­ in the government’s fiscal­ programs. The issue is: on what basis will the deadlock be sorted?