With less than a week to the Federal election, many employer associations, unions and industrial relations stakeholders are eagerly awaiting a result that will determine the next 3 years, or more, of industrial relations reform. With wage growth dominating public discourse, industrial relations reform has arisen as a central factor in the election.

But what will the result on 21 May bring for employers and small to medium business, and what changes can they expect to see over the coming weeks, months and years? The answers to these questions will no doubt influence the decisions of countless business owners this week.

In this Update, we examine the key employment law and industrial relations policies the major parties are proposing to implement if elected.

Coalition

For small and medium businesses, the Coalition’s plans would present little day-to-day change to the IR agenda they have been implementing over recent years.  Still undoubtedly wary of the backlash from Howard’s WorkChoices reforms, the Coalition has been eager to retain a focus on the economy and appears to be less enthusiastic than the Australian Labor Party in seeking a mandate from the Australian public on widespread industrial relations reform.

The focus of the Coalition IR policy suite is largely the parts of the reform that failed in the 2020 ‘Omnibus Bill’. Some of those changes, such as defining casual employment, have since made their way into the Fair Work Act 2009 (‘FW Act’) whilst others, like proposed improvements to the enterprise bargaining system, fell by the wayside.

Since parts of the Omnibus Bill were dumped, the Coalition has moderated their policy to address some of their criticism. Chief among the reforms is the proposal to change ‘Greenfields’ enterprise agreements for major projects, which has since been watered down from an 8-year term to a 6-year term and has been bolstered with guaranteed annual wage increases.

Spruiking figures on increased female workforce participation and business ownership since 2013, the Coalition plans to continue addressing the issue of women’s economic security by making structural changes to the Paid Parental Leave (‘PPL’) scheme and directing additional funding for women in higher-paying and non-traditional trade roles. The PPL scheme changes would allow primary and secondary caregivers to flexibly share the 20-week minimum full-time wage entitlement, rather than the currently fixed 18-week primary caregiver and 2-week secondary caregiver entitlements.

One of the cornerstones of the Coalition’s IR policies is its increased investment in skills, training and apprentices, committing an additional $3.7 billion to support 800,000 additional training positions and $2.8 billion in incentives for apprentices.

The Australian Labor Party

The Australian Labor Party (‘ALP’) has relied heavily on its worker-centric background and appealed to its base of union support with its Secure Australian Jobs policy. Changes in parental leave entitlements, casual employee uncertainty and a prohibition on pay-secrecy clauses are some of the key policies that will impact employers should the ALP win on 21 May.

Under Labor’s plans and, in an effort to target the gender pay gap, employers with more than 250 employees will be prohibited from including pay-secrecy clauses in their employment contracts and will be required to report their gender pay gap publicly. In the same policy promoting equality for women, the ALP will also introduce 10 days’ employer-funded paid family and domestic violence leave into the National Employment Standards (‘NES’). In a decision handed down days before the election, the Fair Work Commission (‘FWC’) took the first step to providing this paid leave for all award-covered employees. The FWC expressed a provisional view that 10 days of paid leave should be inserted into all modern awards but left the issue of inclusion in the NES in the FW Act for the parliament to decide.

As at the date of publication, the ALP is yet to release the costing on its policies.

Broadly, the ALP’s industrial relations policy is focused on addressing two key areas: secure work and better work conditions. Should they be successful, Labor’s secure work policies propose to:

• introduce a national labour hire regime;
• reverse the definition of casual employee recently inserted into the FW Act and revert to the common-law definition;
• create a national portable entitlement scheme for annual leave, sick leave and long service leave for “insecure workers”;
• regulate fixed-term employment contracts to limit the maximum duration to 24 months and the number of renewals possible (not yet announced);
• insert “job security” into the objects of the FW Act; and
• extend the FWC powers to regulate workers in the gig-economy.

The ALP has proposed significant and numerous changes to the FW Act and the FWC in its better work conditions policy which will impact the day-to-day operations of employers across the country, including:

• terminating all remaining WorkChoices-era agreements;
• inserting nationally consistent long-service leave entitlements for all employees into the NES;
• adding superannuation into the NES so that employees can more easily pursue unpaid superannuation personally, rather than through the ATO;
• establishing a new Pay Equity Panel within the FWC;
• strengthening laws prohibiting sham contracting;

Labor’s Same Job, Same Pay reform intends to target the labour hire industry and ensure that employees working alongside one another doing the same job receive the same pay, whether they are employed directly or through a labour hire company.

In addition to proposing generous increases to the Paid Parental Leave scheme, the ALP propose to introduce changes to the unpaid parental leave scheme by automatically extending unpaid parental leave entitlements to two years and creating additional rights for employees to request a change of hours or other flexible arrangements for parenting and to work reasonable but not excessive hours.

Whatever the result on May 21, it is clear that industrial relations policy will remain a divisive and important issue for the 47th parliament.  Aitken Legal will closely monitor the measures implemented by the next government and ensure employers are kept up to date on any significant changes.