Statement by Chief Executive Officer Steve Knott AM, Australian Resources & Energy Employer Association:
The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 is fundamentally flawed.
AREEA shares the Government’s vision for a “dynamic and inclusive labour market”[1] but this can’t be delivered without a flexible workplace relations system that supports productivity growth and competitive businesses.
This Bill at best fails all of these requirements and at worst, is a sop to union bosses.
It is blindingly obvious that what is proposed will reduce wages, add to business costs and increase cost of living pressures on all Australians.
That’s why AREEA calls for the Bill to be withdrawn – and stands with other major employer groups including ACCI, BCA, Ai Group, Master Builders and the Minerals Council, in condemning it.
‘Closing Loopholes’ contains the most significant changes to Australia’s employment regulation since the Fair Work Act took effect in 2009 with little understanding or regard to its negative consequences.
If the Albanese Government does not listen to employer groups and the Bill is passed into law, the resources and energy industry will pay a heavy cost – with operations likely to close, jobs lost, regional communities adversely hit and state and federal tax and royalty revenues forgone.
AREEA reminds the Government the Federal Budget surplus of more than $22 billion was delivered on the back of record resources export volumes, royalties and taxation revenues. These receipts are integral to public investment in the services all Australians need.
The Albanese Government must admit its mistake on this ill-conceived legislation and reconsider.
Notwithstanding AREEA’s overall opposition to the legislation, some parts that are non-contentious could be split out from the current omnibus bill and passed immediately.
These include measures relating to family and domestic violence leave, PTSD, asbestos management and small businesses redundancy exemptions.
AREEA’s submission to the Senate Committee Inquiry into the Closing Loopholes Bill asserts it fails Australians employers, and employees, in the below key areas:
Contractors of all types will be captured by proposed labour hire laws
Despite public assurances made by Minister Burke, the proposed labour hire provisions do not provide a true exemption for genuine service contractors.
Rather, applications could be made against service contractors and the business would be subjected to a reverse onus of proof to convince the Fair Work Commission (FWC) that they are providing a service, not labour hire, and it would not be ‘fair and reasonable’ to make an order capturing their service arrangements.
Under such a model, specialist contractors will have no certainty that they would avoid being unjustly pulled into a complex and costly IR administrative process, and they would be unable to tender for work with any certainty the rates they quote will be the rates incurred and passed onto clients.
Labour hire will be killed off by absurd red tape and administrative burden
Even if the regulation was to apply strictly to labour hire and not contractors, there are many unresolved issues with the proposed new obligations on labour hire firms that would at the very least disincentivise use of their services and at worst send many bankrupt.
The Bill would require labour hire employers to pay out leave (including long service leave) and redundancy entitlements at clients’ rates of pay and give labour hire workers incentives, bonuses and other enterprise-specific payments provided to direct employees of the host business.
These expectations are unreasonable and will devastate competitive and flexible labour hire services that the resources sector, and many other industries, rely upon to be productive and competitive.
Employers will be forced to fund union activism in their own workplaces
The proposed new rights and protections for union workplace delegates are unjustified. The Government is effectively legislating to empower workplace delegates to be de facto union officials. Expecting employers to foot the bill for their own employees to be industrial activists is unreasonable.
Further, by allowing for a single union member to purport to represent the industrial interests of all employees in that workplace the proposal is fundamentally inconsistent with freedom of association principles both within the objects of the Fair Work Act and in international labour conventions
Unions can demand access to pay records with no notice
There is no justification for allowing union officials to come knocking at employers’ premises, without notice, to inspect pay records.
No reasonable case has been put forward for this change, outside of the wishes of union officials to masquerade as Fair Work Ombudsman inspectors and find novel new ways to force entry into private sector businesses.
‘Wage theft’ laws fail to address the complexity of the system
The Bill seeks to impose severe penalties on wage underpayments, including new criminal charges, a five-fold increase in civil penalties and liability for company directors, without any attempt to simplify Australia’s outdated and absurdly complex awards system.
New employment definitions are complex and will result in widespread litigation
The Bill inserts ambiguous, fluid new definitions on concepts already settled by the High Court and could be inconsistent with taxation, superannuation and state contracting law. The proposed new definition of casual employee will result in the legal status of certain casual employees being fluid, constantly changing and not able to be determined easily by reference to signed terms of an employment contract.
Employees may argue they are/were casual to access higher rates of pay, and argue they are/were permanent to access certain entitlements. This will re-open the prospect of casual employees initiating disputes with their employers over the status of their employment and any back-paid leave entitlements.
[1] Working Future: The Australian Government’s White Paper on Jobs and Opportunities, 25 September 2023
