IR changes to add cost, complexity and delay

The Government’s changes to workplace relations, as set out in today’s Bill and introduced into parliament, represents one of the most radical overhauls of Australia’s system in decades and will impact every worker, contractor and business at a time of rising economic uncertainty and a cost of living crisis, Business Council chief executive Jennifer Westacott said.

“The government has already admitted these changes will drive up costs for consumers at a time when people can least afford it while adding complexity and confusion for both workers and businesses.

“The case has simply not been made for proposals that will be highly disruptive, despite the Government’s claims that they will be minor, they will have an impact right across the economy.

“The reality is these changes will stifle productivity – increased productivity drives wages growth - leaving Australians facing another decade of low, stagnate wages.

“Everyone believes that Australian workers deserve to be paid a fair rate for their labour, but these changes are taking Australia in the wrong direction at precisely the wrong time.

“As recent polling has confirmed, Australians do not rate industrial relations as a priority issue of concern. Their focus is on cost of living, and this will only make that worse, including by attempting to retrofit an outdated system on the innovative gig economy.

“It will remove the flexibility that businesses need to innovate and grow by adding extra regulations.

Ms Westacott said that while there were elements of the Bill that had been improved from the original consultation papers, the exemption of small business only highlights how complex it is. The overall case for change has not been made given the scale of the impact.

She warned the Government’s proposed delay to one element of the changes would only create months of further uncertainty for employers and workers and was at odds with the Government’s claim that it needed to act urgently to close ‘loopholes’.

“While the Minister has made broad statements that the measures will only have limited impact. Instead, what has been tabled is a lengthy set of measures that no business or worker will be able to interpret or apply without the benefit of lawyers or other expert advisers.

“This is of significant concern given the dramatic increase to fines and the inclusion of criminal penalties, including gaol time, for breaches of these new laws.”

Ms Westacott said the increase in union powers in areas such as, expanding union entry to workplaces without prior notice, unlimited paid time off work for union shop stewards, and watering down consequences for unions misusing their entry powers, as now revealed in the Bill, had not been canvassed as part of any public consultation paper.

She said business was also concerned about the changing definitions of casual work and the gig economy.

“We are particularly concerned about the changed definition of casual work, putting at risk the ability of businesses to hire casual employees,” Ms Westacott said.

“This will only add confusion and costs, while limiting the opportunities for people to get jobs with the flexibility they need.

“If the government thinks few people will take up the right to convert to permanent employment, then why is it making this change?

“In the gig economy, there remains significant confusion, with the definition applying very broadly and conflicting statements of who is in and who is out.

“While the BCA has been supportive of minimum standards to protect gig workers, we have argued that those protections should be in legislation and not left to the Fair Work Commission.

“What we are seeing through this legislation is a massive increase in power back to an outdated centralised model of wage setting. Many of the decisions will now be out of the hands of businesses, employees, and the legislature, and in the hands of over-stretched, unelected officials at the Fair Work Commission leading to delay, cost and confusion.”

On the issue of underpayments, Ms Westacott said the BCA continued to support the concept of a safe harbour to support identification and quick rectification of underpayments caused by an unintended error.

“We must encourage businesses to have strong processes in place to ensure workers are paid correctly,” she said. “However, giving unions additional rights to enter workplaces and inspect payrolls raises serious concerns regarding over-reach and privacy for all businesses.

“The major problem is the complexity already within the system with more than 120 awards which is leading to unintended errors and this is the real issue which has to be addressed.”

Ms Westacott said the Government’s proposed changes to labour hire arrangements were also unworkable.

“Given the breadth of these changes there is no justification for rushing the Bill through parliament and we encourage the Senate to take a comprehensive look at what is proposed.

“At a time when families are struggling with cost of living and the economy is on a knife edge we need an industrial relations system that takes us forwards not backwards.”