Labor’s Industrial Relations Plan A Step Backward For Employers

Published February 10, 2021 (last updated January 25, 2022) -
Labor IR

Labor’s proposed industrial relations policies would force struggling business owners across the country to close their doors.

Opposition leader Anthony Albanese has unveiled his party’s plan to overhaul industrial relations in Australia, following the Federal Government’s unveiling of its own IR omnibus bill late last year.

Labor has stated it opposes the Morrison Government’s entire IR bill, over concerns it will cut the pay of workers, leave some on rolling contracts uncertain whether they would keep their jobs, and allow pandemic hit businesses to strike wages deals which it says will leave workers worse off.

“While there are certain aspects of Labor’s plan that would benefit struggling workers, it won’t do them much good if their employer can’t afford to keep them on as a result of extra costs,” said Ed Mallett, Managing Director of Employsure, Australia’s largest workplace relations advisor to more than 28,000 small to medium-sized enterprises.

“Labor’s so called ‘same job, same pay’ pledge, which would allow a labour hire worker doing the same job as a full-time employee to be paid the same, is one example of this. While this wouldn’t matter as much for larger companies, for the little guy it could be detrimental.

“Labour hire, casuals and fixed-contract workers give employers that flexibility to scale up or scale down their operations depending on customer demands. Many businesses have union-negotiated enterprise agreements with staff, something those who come in externally do not have.”

Another part of Labor’s policy is to work with state and territory governments, unions and industries to introduce and develop ‘portable leave entitlements’ for those in insecure work. Portable long service leave already exists in certain industries in certain states.

While this will benefit a wider range of employees, for the businesses that hire them it could see their costs blowout exponentially by having to provide other forms of leave for workers, regardless of their casual or contract status.

In contrast, part of the Government’s proposed IR bill seeks to provide a legal definition of a casual worker to help employers avoid underpaying staff who aren’t considered permanent workers.

“There has never been a clear, legal definition of casual employment in the Fair Work Act before. What we currently assume to be a casual worker is subjective, and lacks any real sense of clarity if brought before a court,” continued Mr Mallett.

“If the Government’s IR bill was to pass, it would help deny double dipping claims by allowing employers to ask a court to reduce permanent entitlements by the amount of casual loading paid if a court considers a casual employee to be a permanent employee.

“Labor’s plan to develop portable entitlements for certain workers will put employers further out of pocket. A business looking to hire casual workers over the holiday period may have to reconsider the need. It simply wouldn’t be financially viable to the employer, and ultimately it would result in more people missing out on employment.

“There are arguments for and against both parties and which policy would better suit our economy as we come out of the pandemic. With initiatives like JobKeeper coming to an end in March, new policies will need to be correctly introduced to help struggling business owners stay on their feet. No matter what bill comes to pass, it will be a very different future for the country moving forward,” he concluded.

Further enquiries:

Matthew Bridges

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