Summary of the legislation

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (the Bill), aims to provide greater certainty and flexibility to employers and employees, support productivity, employment and economic growth.

Of the raft of changes proposed in the Bill, the changes most relevant to hotel and hospitality industry relate to: 

1. Casual employees;
2. Award flexibilities;
3. Creation and approval of enterprise agreements;
4. Compliance and enforcement; and 
5. Powers of the FWC.

These changes are summarised below.

Casual employees
Arguably, one of the most significant inclusions in the Bill is the introduction of a statutory definition of casual employee. The definition focuses on the offer and acceptance of employment.  

The Bill intends to prevent ‘double dipping’ as a result of inadvertent misclassifications. In circumstances where an employee is misclassified as casual, the casual loading paid to an employee can be offset against claims for leave and other entitlements. 

This will give employers confidence to create jobs as well as encourage rehiring of many casuals who lost their jobs due to COVID-19.

Additionally, the Bill introduces a mandatory obligation requiring employers to offer regular casuals conversion to full-time or part-time employment and provides limited exceptions to the obligation. This obligation provides employees engaged as casuals, who work regularly to convert to permanent employment if it is their preference.  

The conversion entitlement is enlivened if the employee has been:
a)    employed for at least 12 months; and 
b)    worked a regular pattern of hours for six (6) months. 

There is a residual right for employees to convert in certain circumstances where they have not received or accepted an employer offer to convert. 

The Bill also requires casual employees to be provided with a Casual Employment Information Statement published by the Fair Work Ombudsman (FWO).

Modern award flexibilities 
The Bill will extend the current JobKeeper flexibilities contained in the Act relating to duties and location of work for two (2) years for award covered employees. 

The Bill introduces part-time flexibility provisions across ‘identified modern awards’, two of which are the Hospitality Industry (General) Award 2020 and the Restaurant Industry Award 2020. The new provisions allow employers and employees to work together and agree for employees who already work at least 16 hours per week to work additional hours and be paid at their ordinary rates. 

This change will provide benefits for both employers and employees, by:

• stimulating employment in recovering businesses; 
• additional hours of work for employees who want it; and 
• place permanent employment (with paid leave entitlements) on a more competitive footing with other traditionally more flexible forms of employment. 

Creation and approval of enterprise agreements
This Bill aims to make the enterprise agreement making and approval processes easier and faster. 

The Bill will reduce the level of prescription currently imposed by the Act and provide greater flexibility of how employees are provided with a fair and reasonable opportunity to consider an agreement prior to casting a vote.

As part of the approval process, the FWC will be required to listen to the views of the bargaining representatives, and intervention by other persons/ parties will be limited. 

The Bill proposes all enterprise agreements include a mandatory term which explains the interaction between the NES and the particular agreement. This will expedite the approval process as the FWC will no longer be required to satisfy itself the terms of an agreement exclude NES protections. The FWC will be required to approve agreements, as far as practicable, within 21 working days. 

The Bill clarifies the FWC is required to consider the following when applying the better off overall test (BOOT) (the process of assessing the agreement against the applicable modern award):

• only the patterns, kinds of work or types of employment employees are currently engaged in and is reasonably foreseeable for employees to be engaged in;
• the overall benefits (including non-monetary benefits) employees would receive under the agreement compared to a relevant modern award; and
• any views expressed by employers, employees and their bargaining representatives regarding whether the agreement passes the BOOT. 

Additionally, in limited circumstances, the Bill proposed to permit the FWC to approve an agreement which may not pass the BOOT after taking into account the views and circumstances of the:

• employees; 
• employer/s; 
• employee organisation/s covered by the agreement, 
• impact of COVID-19 on the enterprise; 
• extent of employee support for the agreement; and 
• whether agreement approval is in the public interest. 

This measure is limited to two (2) years and is intended to support businesses still recovering from the impact of COVID-19. 

Compliance and enforcement 
This Bill enhances the compliance and enforcement framework to deter non-compliance more effectively and make it easier to recover wages when underpayments occur. 

In effecting this, the Bill introduces a new criminal offence for dishonest and systematic wage underpayments and increases the value and scope of civil penalties and orders which a court can impose for non-compliance. 

Employees will be able to recover entitlements more efficiently through the small claims process, by increasing the small claims cap from $20,000 to $50,000. 

The Federal Circuit Court and Magistrates Courts will be able to refer small claims matters to the FWC for conciliation and consent arbitration. 

Also, the Bill makes it an offence for a business to publish job advertisements with pay rates below the minimum wage. 

Powers of the FWC
The Bill includes measures to support more efficient FWC processes, including to enable the FWC to:

• deal with appeals ‘on the papers’ where appropriate;
• vary or revoke decisions relating to agreements and workplace determinations more easily, to correct minor errors; and
• deal more effectively with unmeritorious applications.

These measures will enable the FWC to deal with matters more expeditiously and promote effective allocation of its resources. 
 

Please see below the AHA Media Release on the Federal Government’s proposed IR reforms.
 

AHA Media Release can be read here. 

Next steps
The legislation was introduced this week however it is expected that it will stimulate significant public debate and require substantial negotiation in the Parliament. 

The AHA will continue to lobby Federal Parliamentarians to support this Bill. There has always been an obvious need to bring greater certainty, clarity and simplicity to Australia's industrial relations system, but the COVID-19 crisis has only increased the urgency to do so.