What would IR look like under a future Labor Government?

By Lauren Drummond on May 9th, 2018
  1. Industrial Instruments
  2. Fair Work Act


The Federal Labor Party has released a draft policy platform, which gives some insight into the changes a future Federal Labor Government would make to employment laws. While these are yet to be confirmed, this bulletin looks at some of the key changes mooted in the draft platform.

Return to compulsory arbitration for award and NES disputes?

Currently, award-based employees can refer to the Fair Work Commission (FWC) a dispute with their employer about a matter under an award, or in relation to a National Employment Standard (NES). However, the FWC’s powers to deal with the dispute are largely limited to what the parties agree should be the process for resolution.

Labor proposes changes that would give the FWC power to unilaterally arbitrate such disputes where the dispute is ‘intractable’. For example, the FWC would have powers to issue enforceable orders to resolve a dispute about whether the cancellation of an employee’s annual leave was reasonable.

Domestic violence leave

The draft platform proposes amendments to the NES to introduce a right to 10 days of paid domestic violence leave per annum.

Retail and hospitality penalty rates

Labor has said that it would legislate to reverse the phased reduction in Sunday and public holiday penalty rates for award-based retail and hospitality workers. It is also proposing to amend the Fair Work Act 2009 (Cth) (FW Act) so that “awards cannot be varied to cut workers’ take-home pay”.

Enterprise bargaining

Currently, employers can make enterprise agreements with a handful of ‘trusted’ employees, despite the fact that during its life the agreement will extend to a much broader workforce. The proposed policy would amend the FW Act to ensure enterprise agreements are made with a “representative cohort” of employees.

Labor will also amend the FW Act to prevent the unilateral termination of enterprise agreements. This is a significant departure from the mechanisms currently available to employers to have an expired enterprise agreement terminated. Currently, employers are able to terminate an agreement without the consent of the unions and employees covered by the agreement, where the FWC is satisfied that terminating the agreement is appropriate and not contrary to the public interest.

Labor has also said that it will:

  • issue guidelines on good faith conduct in enterprise-bargaining negotiations to allow access to and assistance from the FWC to resolve disputes;
  • facilitate bargaining for multi-employer and multi-agency public sector agreements.

Skilled migration

In the area of business migration, Labor would:

  • implement stronger labour market testing for temporary work visas to ensure that, as far as possible, skilled vacancies are filled by local workers first;
  • implement stronger requirements to ensure skilled migrants receive Australian market wages and employment rights;
  • ensure that skilled migrants, if dismissed from their employment, can remain in Australia while any legal challenge to the dismissal is considered;
  • ensure ‘whistle-blower’ status for skilled migrants and temporary visa holders who are exploited; and
  • review the Migration Act with a view to ensuring the definition of the ‘Migration Zone’ encapsulates all offshore Australian employment and industries.

Offshore supply chain

In this area, a Labor Government would:

  • resume funding for Ethical Clothing Australia and require all companies that tender for textile, clothing and footwear contracts from offshore to hold Ethical Clothing Australia accreditation; and
  • legislate to ensure Australian enterprises’ domestic and global supply chains are transparent and do not breach state and international labour organisation labour standards, international human rights, anti-slavery, child labour and human trafficking laws.

Equal pay

Labor is proposing amendments to the FW Act to require the FWC to take into account the principle of pay equity when conducting periodic reviews of modern awards, and by ensuring that equal remuneration provisions in the FW Act deliver for low-paid women. It would also enact an equal pay for equal or comparable work strategy underpinned by legal and reporting obligations.

Default super

Labor is proposing to implement a “practical industry-based system” for selecting default funds in modern awards overseen by the FWC with input from employees, employers and experts. This probably means it would re-activate the current mechanism in the FW Act.

Protection of employee rights

Labor appears to be proposing to build on the amendments made recently to the FW Act to make franchisors responsible, where appropriate, for compliance with workplace laws, by extending obligations to other economic decision-makers along the supply chain. For instance, a major supermarket chain or a principal contractor on a building project might become responsible for industrial compliance by fruit-growers or sub-contractors.

It is also suggesting amendments to the Corporations Act 2001 (Cth) to improve the ranking of employee entitlements relative to other creditors in an insolvency situation and to prohibit corporate and director conduct that has the consequence of preventing recovery of employee entitlements. Employee creditors and their representatives would be given power to directly recover employee entitlements.

Other areas of focus for Labor under the draft policy platform include:

  • strengthening the FW Act provisions that prohibit sham contracting;
  • ensuring employees, employers and unions are protected in communicating through websites, email and social media on industrial rights and concerns;
  • abolishing the Registered Organisations Commission and restoring the FWC as the body responsible for regulating registered organisations;
  • protecting owner-drivers and employees in the road transport industry by maintaining safe rates, conditions and payments systems for employees and owner-drivers (presumably by restoring the Road Safety Remuneration Tribunal);
  • giving the FWC the power to refer serious contraventions of regulatory laws by registered organisations to ASIC for investigation and prosecution; and
  • abolishing the Australian Building and Construction Commission.

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