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A bus pulled up at Parliament – the highly anticipated Fair Work Amendment Bill: Supporting Australia’s Jobs and Economic Recovery colloquially known as the ‘Omnibus Bill’.
The Bill emerged out of consultations aimed to harness the COVID-19 generated cooperation between usually warring parties in industrial relations.
Overall, the Omnibus Bill is a well-honed, highly-targeted piece of legislation, aiming to address some longstanding irritants in the system. There is not consensus behind all its measures – it’s clear there will be scrutiny and debate as the bus travels through the Parliament.
Here, we’ll focus on two big-ticket items: casual workers and compliance with wage obligations.
The features of casual employment have been a hot topic following court decisions finding employees labelled ‘casual’ to be entitled to both casual loading as well as leave entitlements reserved for permanent workers. This generated confusion and concern about ‘double dipping’ and the need for business to provision for liabilities across casual workforces.
This Bill delivers greater clarity, defining a ‘casual employee’ in law for the first time. While drawing on the traditional characteristics of a casual, it focuses on the intention of parties at the framing of the relationship. To balance this out, employers would have to offer permanency to an employee who has a regular pattern of hours after 12 months.
The message here is parties will be encouraged to clearly frame the relationship from the outset.
The Bill also recognises the need for better targeted penalties for wage underpayment.
The Bill proposes criminal penalties for dishonest and systematic wage non-compliance. These penalties, up to 4 years imprisonment, $1.1million fine for individuals and $5.5million for corporates, would be confined to proven deliberate non-compliance ‘beyond all reasonable doubt’ and we would expect the Fair Work Ombudsman (FWO) to reserve this tool for the most serious of cases. The Bill also increases the monetary civil penalties, by 33% for bigger businesses to $99,900 and enables even higher penalties based on the ‘value’ of the ‘benefit’ of the underpayment of a corporate (non-small business) employer.
This new approach aims to deter non-compliance by large corporates of the type we’ve seen in the headlines over the last 2 years. The FWO has received over 70 self-reports and many are still working their way to resolution. These new penalties would increase the existing risks to business not cooperating with the FWO. While some may speculate the FWO would not litigate some of the large self reports (on the basis that the businesses are addressing the errors), FWO retains the right to do so. These significant penalties may strengthen its resolve where businesses limit their remediation exercises or do not engage openly with the FWO about their methodologies. Playing hardball with FWO over EU negotiations looks a little different with this implicit threat on the table.
There are many more items of interest and impact in this Bill. We will continue to monitor the journey of the Fair Work OmniBus Bill and bring you more detailed briefings in 2021.
Natalie James is a Partner in Deloitte’s Regulatory and Risk Insights practice. She leads Deloitte’s Workplace Integrity Team working with businesses to enhance their workplace integrity and ensure compliance with work laws. She brings deep expertise and insight to helping companies identify and resolve compliance risks, reduce complexity and build fit for purpose, compliant and sustainable workplace practices. Natalie was the Fair Work Ombudsman, leading Australia’s national workplace relations regulator, from July 2013 to July 2018. Prior to that she led the development of work laws as Chief Counsel for the Commonwealth Government. Natalie has a Bachelor of Arts Law and a Masters in Law (Commercial – Labour Law).