Australia: Our top 10 employment, workplace & safety issues for 2015

In this In Brief, we look ahead and identify the 10 key issues that are likely to dominate Australian employment, workplace and safety law in 2015.

1. PRODUCTIVITY COMMISSION INQUIRY

The major focus of the workplace reform debate this year, undoubtedly, will be the Productivity Commission (PC) Review of the Workplace Relations Framework.

The terms of reference for this inquiry were released by the Abbott Government on 19 December 2014. They require the PC to assess the performance of the federal workplace relations framework, including the Fair Work Act 2009 (Cth) (FW Act) and instruments operating under the legislation, focusing particularly on:

• key social and economic indicators important to national wellbeing, productivity and competitiveness;
• the capacity of the IR framework to adapt over the longer term to issues arising due to structural adjustments and changes in the global economy;
• the impact of the FW Act and related legislation on jobs, incomes and the economy; according to business size, region and industry sector; and with reference to the experience in other OECD countries.

On 24 January 2015, the PC released five Issues Papers¹ which provide further details of the focus of the review and invite submissions from stakeholders. The Issues Papers indicate that the following will be among the key matters to be addressed in the PC review:

• the level of minimum wages, the connection between wages and productivity, and whether the Fair Work Commission (FWC) process for the annual review of minimum wages may need to be changed;
• the interaction between elements of the "safety net" of minimum employment conditions, including the option of a reduced role for modern awards and provision of additional entitlements through the National Employment Standards (NES);
• penalty rates, particularly for weekend work, including the possibility of removing regulation of penalty rates altogether (leaving employers and employees to reach agreement on whether these rates would apply);
• various aspects of the enterprise bargaining framework, including whether there should be further limits on agreement content and pattern bargaining, whether the provisions for greenfields agreements and individual flexibility arrangements are appropriate, and whether more incentives are needed to ensure parties bargain for productivity;
• whether the secret ballot requirements for protected industrial action are too prescriptive, the possibility of other industrial action options for employers beyond lockouts, and how legislation might address the question of "aborted" industrial action (i.e. withdrawal of notified industrial action);
• the effects of current protections against unfair dismissal on firm costs, productivity, hiring and recruitment practices and employment structures;
• whether the general protections under the FW Act have provided certainty and clarity to all parties;
• the operation of the new protections against workplace bullying, including their interaction with work health and safety laws;
• how effectively the institutions overseeing the IR system, including the FWC and the Fair Work Ombudsman, are working;
• whether there is a greater role for competition law in regulating workplace relations;
• the extent to which differing arrangements are needed for the regulation of employment relations in the public sector (at federal, state and local levels) as opposed to the private sector;
• the regulation of alternative working arrangements, including contracting and labour hire (including whether enterprise agreements restrict the use of these types of labour).

If your organisation is interested in making a submission to the PC Review and/or attending one of its public hearings, you can register your interest here.

An indication of the PC's perspective on the current workplace relations framework is provided by its observation that:

[The] combined influence of the employment contract, awards, the NES and enterprise agreements on the employment relationship makes Australia's WR system one of the most complex in the world. (PC Issues Paper 3, page 15)

Therefore, recommendations for significant amendments to the FW Act are likely to emerge from the PC inquiry. It will then be a question of which recommendations are taken up by the Government in the lead-up to the 2016 federal election – hence the importance of this review process over the next 12-18 months.

2. FEDERAL GOVERNMENT'S LEGISLATIVE AGENDA

The PC Review was a key feature of the Coalition's 2013 "Policy to Improve the Fair Work Laws", which also committed the incoming Government to implementing modest changes to the FW Act in its first term of office. The Government now has the following five workplace reform Bills before federal Parliament:

• Fair Work Amendment Bill – making the processes for entering into greenfields project agreements, and individual flexibility arrangements, more workable for employers. The Bill will also limit union rights of entry to workplaces for discussion and recruitment purposes.
• Fair Work (Registered Organisations) Bill – increasing standards of financial accountability and reporting for office-holders in trade unions and employer organisations. Further, the Bill will establish a new Registered Organisations Commission to oversee the governance and accountability of unions and employer bodies and to provide assistance to members of these organisations in cases of impropriety or non-compliance with rules.
• Building and Construction Industry (Improving Productivity) Bill – re-establishing a specialist regulator, the Australian Building and Construction Commission, to maintain the rule of law on building sites and ensure that unions comply with applicable laws relating particularly to industrial action and entry onto sites (see further at point 5 below).
• Fair Entitlements Guarantee Amendment Bill – reducing maximum redundancy payments under the General Employee Entitlements and Redundancy Scheme (GEERS) to 16 weeks' pay, depending on the employees' length of service.
• Fair Work Amendment (Bargaining Processes) Bill – requiring discussions over workplace productivity as a condition of FWC approval of enterprise agreements; and limiting rights to take protected industrial action in support of bargaining claims through two new requirements (i.e. that efforts have first been made to negotiate an agreement; and that the claims put forward are not excessive and will not adversely affect productivity).² A Senate Committee is scheduled to report on this Bill by 25 March 2015.

In the past six months, support from cross-bench Senators for the Government's overall legislative program has been limited. As a result, there is a considerable backlog of proposed legislation, and the volatile situation in the Senate means that it is by no means certain that any of the five workplace reform Bills will be passed by Parliament in 2015.

3. PM ABANDONS PAID PARENTAL LEAVE SCHEME

Responding to significant pressure from the public and internally within the Government, the Prime Minister today announced that he will abandon his proposed expansion of the Paid Parental Leave (PPL) scheme.

This decision resolves an area of considerable uncertainty for employers over the last 18 months. The current PPL scheme, introduced by the former Labor Government, will remain in place – operating in conjunction with the PPL policies adopted by many Australian businesses and public sector bodies.

4. UPCOMING BARGAINING ROUNDS

The year ahead will also see plenty of action on the bargaining front, with agreements up for renegotiation at key employers across the public and private sectors:

• Agreement negotiations are ongoing at DP World following protected industrial action by employees and a lockout by the employer last December.
• Protected action by Jetstar pilots may be imminent, in light of a proposed pay freeze across the Qantas Group. Qantas ground staff will be voting soon on a proposed new agreement including an 18-month pay freeze.
• The long running negotiations between the Maritime Union of Australia and vessel operators and manning agents, regarding offshore oil and gas maritime workers, may escalate into industrial action and further litigation. The current agreements expired in 2013 and negotiations have been ongoing for more than a year.
• Agreements will also be renegotiated in 2015 covering major employers in sectors including retail (Woolworths, Coles, David Jones), finance/insurance (CBA, Westpac, QBE, Medibank) and communications (Telstra, Optus, Seven Network).³
• Industrial action is likely in the federal public sector, as the Government maintains a hard line in agreement negotiations with below-CPI pay increases on offer. Some forms of protected action were taken late last year by staff in the Department of Human Services, including Centrelink and Medicare offices. Department of Veterans' Affairs employees have also approved protected action in a secret ballot held in December.
• Bargaining in the Victorian public service should be less contentious than at the federal level, although the new Andrews Labor Government faces significant challenges in delivering on promises made to public sector unions. As well as resolving the long-running firefighters dispute, the Government must reach new agreements for the police force, health workers, VicRoads, Yarra Trams and Metro trains.⁴ These negotiations will take place in the context of a recent Full Federal Court decision⁵ affirming that enterprise agreements made under the FW Act are not subject to the implied constitutional limitations set down in the High Court's Re AEU decision.⁶ This opens the way for state public sector agreements to include provisions dealing with termination of employment, redundancy, consultation and related issues.

5. CONSTRUCTION INDUSTRY CODES

In addition to the Building and Construction Industry (Improving Productivity) Bill (see point 2 above), the future shape of regulation in the construction sector depends greatly on whether – and when – the proposed new federal building code takes effect.

The draft Building and Construction Industry (Fair and Lawful Building Sites) Code was released in April last year. Once in force, its proposed restrictions on agreement content will apply to agreements made from 24 April 2014. Amendments to the draft Code, announced by the Government in late November, would have the effect that the agreement content limits would also apply to agreement variations.

The uncertainty surrounding the proposed new Code, and its enabling legislation, creates a complex environment for the negotiation of new agreements in the building industry.

The Andrews Government in Victoria has already moved to abolish that state's construction code,⁷which was amended last October to impose similar limits on agreement content to those now being pursued by the Abbott Government federally.

6. MAJOR CASES AND DECISIONS

Four-yearly modern awards review

FWC proceedings in the four-yearly review process for modern awards will continue throughout the coming year. This will involve consideration of – and potentially changes to – several key aspects of award regulation, including:

• penalty rates across at least nine awards;
• annual leave;
• public holidays;
• award flexibility;
• casual "conversion" provisions; and
• the interaction between award and NES entitlements.⁸

Agreement termination "test case"

A decision is expected from a Full Bench of the FWC following hearings late last year on Aurizon's application to terminate 14 enterprise agreements covering its Queensland workforce, amid failed efforts to negotiate a new agreement for train drivers and other operational employees.⁹

The decision affecting the rail freight operator will carry important implications for the capacity of employers to seek termination of expired agreements, particularly in the context of deadlocked negotiations for a new agreement.

CFMEU industrial action cases

The High Court will consider two separate CFMEU applications for special leave to appeal against decisions of the Victorian Court of Appeal:

• the decision in CFMEU v Grocon Constructors (Victoria) Pty Ltd and Others [2014] VSCA 261, upholding findings of criminal contempt against the union and the imposition of $1.25 million in fines; and
• the recent decision in CFMEU v Boral Resources (Vic) Pty Ltd and Others [2014] VSCA 348, in which the Court of Appeal upheld an earlier finding that the tort of intimidation forms part of Australian law.

7. TRADE UNIONS ROYAL COMMISSION (TURC)

The TURC's public hearings will continue from April, with Commissioner Heydon's final report and recommendations to be completed by 31 December 2015.

The Commissioner's rationale for requesting the Government to extend the TURC process by 12 months included the need for further investigation into possible criminal conduct by unions/union officials, such as "physical and verbal violence, cartel conduct, secondary boycotts, contempt of court and other institutional orders and the encouragement of others to commit these contempts".¹⁰

It will be very interesting to see the directions in which those investigations are focused over the course of the coming year.

8. FWC APPEALS JURISDICTION

It should become clear this year whether the Government is serious about implementing its proposal to create a separate appeals jurisdiction for the FWC.

The Australian Mines and Metals Association has strongly advocated the need for a separate appeals body due to inconsistencies in FWC single member decisions, while the Law Council of Australia opposes the change as potentially undermining the Commission's independence.

The Government will need to provide far more detail about this proposal, and a much clearer indication of the case for change, than has emerged to date.

9. MIGRATION LAW CHANGES

In response to last year's review of laws applying to skilled migration, the Government is proposing to introduce a new category of "short-term mobility" visas which would enable employers to bypass the subclass 457 visa scheme for certain types of foreign workers. The new visas would not be subject to language or skills requirements, and employers would not have to show that there is no Australian worker who could fill the relevant position.¹¹

This proposal would form part of a broader package of changes to make the 457 visa regime easier for employers to use, although the Government is yet to announce details of its response to the September 2014 review report.

10. WORKPLACE HEALTH AND SAFETY

National Transport Commission focus for 2015

Almost two-thirds of workplace deaths between 2012 and 2014 involved a vehicle.

Over the 10 years to 2012, 472 workers in the road transport sector were killed while at work and in 2012, the road transport fatality rate was 12 times the national average.

Road transport also has an injury rate significantly above other sectors with the most serious claims from body stressing and falls, which commonly cause sprains and strains of joints and muscles and fractures.

In 2015 the National Transport Commission (NTC) will focus on programs to help improve productivity growth in Australia's transport freight sector, and improve safety on the network. The NTC and Regulators will continue their focus on road freight transport industries with a goal to reduce the numbers of fatalities and injuries in 2015.

2015 will also see further WHS legislative developments, including:

• clarification of the proposed Work Health and Safety Bill in Western Australia following a consultation period which concluded at the end of January;
• the South Australian Government's response to last year's review of that state's model WHS legislation;
• the likely direction of WHS reform in Victoria under the Andrews Labor Government, including whether Victoria will implement the national model WHS legislation and the future role of the Victorian WorkCover Authority.

Footnotes

¹See here.

² The question whether putting forward 'sham' or non-genuine proposals involves a breach of good faith bargaining obligations under the current FW Act provisions is under consideration in an appeal against Senior Deputy President Hamberger's decision in APESMA v Peabody Energy Australia Coal Pty Ltd [2014] FWC 6061 (4 September 2014).

³ Mathew Dunkley, "Call to keep lid on wage claims", The Australian Financial Review, 9 January 2015.

⁴ Richard Willingham, "Major EBAs loom for Andrews government in 2015", The Age, 8 January 2015.

⁵ United Firefighters' Union v Country Fire Authority [2015] FCAFC 1 (8 January 2015).

⁶ Re Australian Education Union, Ex Parte Victoria (1995) 184 CLR 188.

⁷ "Vic govt scraps state building code", Workforce, No. 19465, 22 January 2015.

⁸ Four-Yearly Review of Modern Awards [2014] FWCFB 9412 (23 December 2014).

⁹A separate agreement covering Aurizon staff was approved recently, against objections by relevant unions, in Aurizon Operations Limited and Aurizon Network Pty Ltd [2015] FWCA 550 (21 January 2015).

¹⁰Letter from Commissioner Heydon to Attorney-General George Brandis, quoted here.

¹¹ Joanna Mather, "Easy entry for skilled foreigners", The Australian Financial Review, 7 January 2015.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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