The Federal Election has come and gone with a surprise win for Prime Minister Scott Morrison and the Coalition. In this alert we look at what a re-elected Coalition will mean for employers.
CRACK DOWN ON UNDERPAYING EMPLOYEES
‘Wage theft’ is a hot topic and a big focus for the Government and the Fair Work Ombudsman (FWO).
Prior to the election the Minister for Jobs and Industrial Relations announced the Government will “…introduce criminal sanctions for the most serious and egregious forms of deliberate exploitation of workers.” The Fair Work Ombudsman is also likely to be more active with additional funding being allocated for targeted education, compliance, investigation and prosecution of businesses who underpay workers.
Employers should be proactive in ensuring they are paying their employees correctly and complying with awards and the Fair Work Act.
CRACK DOWN ON SHAM CONTRACTING
The Government is also cracking down on sham contracting with the recent budget including $9.2 million over 4 years for a dedicated sham contracting unit within the FWO.
There may also be other sham contracting changes following a 2017 Black Economy Taskforce Report. In late 2018, the Government sought submissions on increasing penalties and lowering the legal threshold from ‘recklessness’ to ‘reasonableness’. This would make it easier for the FWO to prove sham contracting and harder for businesses to defend the engagement of their contractors with potential higher penalties to boot.
Now is a good time to review your independent contractor arrangements and seek advice to ensure you have correctly engaged your contractors, before these changes come through.
AWAITING OUTCOMES TO CLARIFY CASUAL EMPLOYMENT
Casual employment remains uncertain following a lot of developments in 2018. With Labor’s promised definition of ‘casual’ and other changes now not likely to occur, the focus will be on the outcome of:
- The upcoming full federal court decision in Workpac v Rossato, hoping it will provide some clarity on casual employment, double-dipping and the ability for employers to offset paid casual loading against unpaid entitlements; and
- Labor’s motion to dismiss the Government’s new Fair Work Regulation which enables employers to claim that clearly identifiable casual loading be offset against unpaid entitlements in certain circumstances. The motion to dismiss was postponed until after the election and will be tabled anew when Parliament resumes.
It looks like the Government’s proposed amendments to the Fair Work Act enabling regular casuals to request to be converted to permanent employees will be passed. The amendments are similar to the casual conversion provisions inserted into modern awards late last year but will apply to all national system employees.
Employers should be on top of the current state of casual employment and be aware of the risks of long-term regular casuals. For a reminder, see our Employment Update here.
Prior to the election the Minister for Jobs and Industrial Relations announced that the Government will “…finalise a model for a National Labour Hire Registration Scheme which will reduce worker exploitation and drive behavioural change among labour hire operators in high-risk sectors”.
A labour hire scheme commenced in Queensland in 2018 requiring providers’ of ‘labour hire services’ to obtain a labour hire license and it is likely the national scheme will be similar.
With Labor not winning the election and restoring penalty rates, the status quo will remain, and penalty rates in certain awards will continue to be phased down as per the 2017 Fair Work Commission decision.
The Government’s announced changes, and its proposed changes, may take some time to come into force.
Aitken Legal will keep you updated on the status of the changes and any other announcements made by the Government.