Industrial Relations Reforms 2022

What is the Labor Party’s Industrial Relations Reform agenda?

The Australian Labor Government has recently announced updates to the Industrial Relations Reforms alongside reforms currently before Parliament.

With each new government businesses can expect a host of changes including to Industrial Relations which is a key campaign area for all parties and often closely aligned with the party’s core values. A new government is akin to a new CEO coming into a company who takes stock, reviews and refines according to their agenda and what’s important to the company in their perspective.

We are seeing the Labor Party, traditionally representing workers' rights, coming into power after a long period as the Opposition. As part of the 2022 Industrial Relations Reform, after the unprecedented global pandemic, we are seeing a key focus on job security, protecting employees’ rights, eliminating the gender pay gap and maintaining wage increases to better meet the rising cost of living in Australia.

The imbalance between wage and cost of living puts pressure on households, families and ultimately on the government through welfare initiatives so while the government can’t determine what the next wage review looks like, they can still advocate for a wage increase across the board.

At the time of writing, the “Fair Work Legislation Amendment (Secure Jobs Better Pay) Bill 2022” is before Parliament so right now there are still a lot of unknowns. What we do know is that there have been recent changes to the Paid Parental Leave Scheme and the introduction of Paid Family and Domestic Violence Leave.

What do we know about the Labor Party’s Industrial Relations Reforms?

What we do know at the time of writing is that there is still a lot of Industrial Relations Reform still before Parliament including the “Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022”.

Enterprise Bargaining
One of the most notable pieces of legislation as part of Labor’s proposed Industrial Relations Reforms are an overhaul of the enterprise bargaining system which will affect a lot of businesses. This is one of the reasons why following the award is a better structure for many smaller businesses with individual flexibility agreements as needed to circumvent needing to set up an enterprise agreement.

Of course, some businesses will be an exception to this recommendation, particularly if they’re more complex. If you’re unsure where you stand, get in touch with our team at People Powered HR to discuss what’s best for your business.

While we’re yet to see the outcomes of this proposed legislation, there will be certain impacts on businesses of all sizes as a result of any changes to the enterprise bargaining system.

Hybrid Work Models
There is a push for the Fair Work Commission to rule on hybrid working models, especially for certain groups of employees.

The National Employee Standards highlight certain groups of employees who have the ability to make flexible working requests including, but not limited to, parents of school-aged children and carers.

While this ability to request flexible working arrangements already exists, it’s often not put into practice but off the back of the pandemic and multiple lockdowns with businesses having to pivot and many roles being undertaken from home, there is a new precedent for this legislation based on popular opinion amongst workers about a preference for hybrid working models.

This plan will see the protections around flexibility requests extend to hybrid work and it will create a pathway for employees to seek the Fair Work Commission's intervention to enforce the agreement of a hybrid working model. This will make it more challenging for employers however, it also provides an opportunity to economise business models and expand the pool of talent that geography typically limits.

Fixed-term Contracts
There’s also a proposed tightening of rules around rolling fixed-term contracts to provide more job security for employees and protect their rights. While this is more prevalent in larger businesses and across government departments than in small businesses, it will be interesting to see the outcomes for employees across the board in this area.

Remuneration
The sitting government is also seeking the ability for the Fair Work Commission to make rulings on remuneration orders as part of an attempt to close the gender pay gap so that females are paid equitably alongside their male counterparts. They are also seeking to abolish pay secrecy clauses in employment contracts as a way of creating more transparency around gender pay discrepancies.

Small Claims
Labor is planning to expand the small claims process from the current cap of $20k in unpaid wages and entitlements to $100k.

Sexual Harassment at Work
Last, but not least, is creating a pathway for victims of sexual harassment at work to access the support and the rulings they need from the Fair Work Commission in a timely way. This will mean more liability on employers and business owners but is part of legislation around creating safer workplaces for everyone. It will be incredibly important for employers and business to understand their responsibilities if this reform is passed.

What Labor Party Industrial Relations Reforms have been confirmed?

In the meantime, what we do know is that there has been updates to Industrial Relations in the following areas:

Paid Parental Leave
The government-funded paid parental leave scheme which currently sits at 20 weeks' pay at the national minimum wage is set to increase to 26 weeks at the national minimum wage. This increase will happen incrementally from 1 July 2023 with an additional 2 weeks being added each year until we reach the 26 weeks. In addition, more flexibility about how both parents can access this leave entitlement is being added effective 2023.

Paid Family and Domestic Violence Leave
Paid Family and Domestic Violence Leave has been added to NES and Modern Awards and will be coming into effect from 1 Feb 2023 (1 August for small business). These leave allowances are now 10 days paid leave per year that don’t accrue and are reset each year for each employee, including casuals. This replaces the current unpaid entitlement that is in the National Employment Standards and Modern Awards. More details on these new leave entitlements are yet to be released.

Conclusion

There are a lot of changes heading our way as employers and business owners, particularly for small business owners, that we need to stay on top of. A lot of the changes are around employees’ rights and entitlements as well as closing the gender pay gap.

While these changes can often seem overwhelming, or you might not even be paying attention to them, it’s important to be across your responsibilities as an employer. If you’re unsure what the changes in the Industrial Relations Reforms mean for you, get in touch with our team at People Powered HR.

An invitation to join a thriving business community

If you’d like to connect with other businesses who are also navigating the industrial relations law changes, I’d love for you to join us inside our free Facebook Group where you can connect with other like-minded business owners, leaders and managers to discuss all things HR - www.facebook.com/groups/hrsupportaustralia