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COVID-19 has heightened unpredictability for many industries, hospitality being one of the most hard hit. Lockdowns, density limitations, extra policing, and mask rules have all had an affect on individuals, businesses and ultimately, our economy. So much so that former Industrial Relations Minister Christian Porter urged the Fair Work Commission (FWC) late last year to grant "increased flexibility" to four Modern Awards, three of which apply to hospitality. And because of this, the Commission began reviewing whether loaded rates and exemption rates might be included in the four awards to “support Australia’s economic recovery”.
The first of these decisions was made on 14 July, with a Full Bench approving three changes to the Restaurant Industry Award which will go live on 11 August for a 12 month trial. This experimental and constructive approach taken by the FWC even has Justice Ian Ross, President of the FWC calling the changes "somewhat novel".
So, what are these three ‘novel’ changes?
Did it take a global pandemic to inspire real workplace relations system simplification?
After the failure of centrally convened talks in 2020 and the Commonwealth's abandonment of reforms in the Omnibus Bill, it is positive to see the FWC driving evidence-led, carefully considered change.
The United Workers Union (UWU) has tentatively agreed but flagged with the Commission to be "cautious”. Their key objections were the ‘multi-skilling’ requirements of the classification simplification, and potential lack of mobility between some new classifications. The Commission echoed that, ‘a cautious approach is warranted’. The UWU will also form a monitoring committee with the Restaurant and Catering Industrial Association to track the changes.
What do these changes mean?
If there was ever a time to consider employee flexibility in our industrial relation system, it is now. The changes to the Restaurant Award, as well as the changes to the Retail Award that took effect in June part-time flexibility may herald further changes.
Some see the exemption rate clauses as going 'back to the future.' Exemption rates were common in pre-reform awards, but now rare (only six of 121 awards currently have them).
The obvious candidates for the next change are other hospitality awards in Porter’s request (Hospitality Industry General Award 2020, and Registered and Licensed Clubs Award 2010). Interestingly, the Australian Hotels Association has already applied to include a simplified loaded rate in the Clubs Award.
It remains to be seen if this approach will be adopted in other sectors where workers currently work under very flexible conditions, particularly work-from-home/hybrid arrangements: consider banking and finance, as well as clerical workers.
It appears we are now receiving what the system has been requesting for some time: (micro)reform to enable businesses and their employees to make arrangements that suit them while maintaining compliance.
Although anticipating the changing demands on the hospitality sector will continue to be a challenge for the industry and its employees, the industry may now be able to respond more readily as a result of the trial changes to the Award.
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).
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