In December 2018, the Australian Labor Party passed its Platform at the ALP National Conference accompanied by major policy statements from the Shadow Minister for Employment, Brendan O'Connor. Together with submissions put forward by key ALP-affiliated unions to a number of Senate Committees, the battle lines for employment and industrial relations have been clearly drawn ahead of the upcoming Federal election.

Although the ALP's promise to reverse penalty rates cuts is likely to be one of the most visible election issues, other reforms proposed by the ALP have the potential to fundamentally re-write Australia's employment and industrial relations framework. This update summarises the ALP's current policy positions, and the ways in which they may be implemented (if the ALP wins the upcoming Federal election and the Senate cooperates with the ALP's policy agenda).

Employment entitlements

The Labor Platform provides for a range of changes to the Fair Work Act 2009 (Cth) (FW Act) including to:

• provide for 10 days paid domestic violence leave in the National Employment Standards;
• include minimum national standards for long service leave in the National Employment Standards;
• provide the Fair Work Commission (FWC) with the capacity to arbitrate challenges by employees to a decision by their employer not to agree to flexible work requests;
• require the FWC to take equal remuneration considerations into account when approving an enterprise agreement and reviewing modern awards; and
• only allow variations to modern awards where take-home pay is not decreased.

Not surprisingly, the Platform includes a number of initiatives designed to address the gender pay gap, including legislating public disclosure requirements on the gender pay gap for all employers with more than 1000 employees, and prohibiting pay secrecy clauses.

The Platform has a renewed focus on parental leave and identifies the ALP's intention to eliminate pregnancy discrimination by ensuring that parents have access to at least 26 weeks' of paid parental leave and up to two years' of unpaid parental leave. The Government's paid parental leave scheme (which currently provides for 18 weeks' pay at the minimum wage) is therefore likely to be expanded to meet this commitment. Specific tax or other concessions may potentially be introduced to encourage employers to top up the Government scheme. A move by the Government to pay an employee's replacement wage over the period of their parental leave is less likely.

Casual employees

It was expected the ALP would adopt the position advanced by unions in the modern award review process to the effect that all casual employees have the right to convert to part-time or full time employment after six months rather than the 12 months accepted by the FWC (with employers to have very limited scope to deny such conversions). However, this was removed from the Platform in favour of an objective statutory test to assess whether a person is a casual employee. We expect that this test will only be required if the decision in WorkPac Pty Ltd v Skene (which found that an employee who had been receiving a casual loading was actually not a casual employee and was entitled to annual leave for the period of employment) is overturned or not followed.

Security of employment

The ALP has promised to widen the scope of the FW Act and modern awards so that they apply to employees within the 'gig economy'. Other initiatives aimed at addressing job insecurity within the 'gig economy' will include giving independent contractors the capacity to bargain collectively and access union representation, expanding portable long service leave schemes and providing for the portability of other entitlements. The categories of workers who are entitled to receive superannuation contributions are also likely to be expanded.

Labor has also committed to increased regulation of internships by mandating them to be part of accredited training qualifications.

Regulations for fly-in-fly-out (FIFO) arrangements are also expected to be broadened with new restrictions on work patterns and further requirements related to accommodation, mental health support and telecommunications technology.

Labour hire regulation

A national labour hire scheme will be introduced by an ALP government. In doing so, the ALP is likely to include legislative amendments requiring that labour hire employees receive the same terms and conditions of employment as direct employees. The ALP has more recently stepped away from promising rights of conversion to direct employment after a certain period.

Equal access to arbitration

Currently, the FWC may only arbitrate enterprise bargaining disputes in very limited circumstances. The ALP's Platform commits a Labor government to providing 'equal access' to arbitration for 'intractable' enterprise bargaining disputes after conciliation and mediation have failed.

This is in contrast to 'compulsory' arbitration favoured by the unions and discussed in the draft consultation platform. The extent of the practical difference between the two concepts will not be clear for some time. The planned reform is based on the presumption that even the possibility of arbitration may make opposing sides more amenable to making concessions and reaching agreement.

However, concern has also been expressed that the reform may instead result in an increase in ambit claims, and a reluctance by negotiating parties to make concessions until all terms of an enterprise agreement have been agreed, in order to maximise leverage ahead of any arbitration.

Labor has also committed to broadening the FWC's capacity to order negotiating parties to disclose relevant documents to one another in the course of bargaining.

Industry-wide bargaining

The ALP has promised to amend the FW Act to better facilitate multi-employer or industry-wide bargaining. While multi-employer bargaining is currently permitted, it is not common. The ALP has not detailed what these changes would be, however, recent comments point toward focussing industry-wide bargaining mostly in the low-wage sectors of the economy.

The ALP has also been explicit in encouraging multi-agency public sector agreements with a view toward uniform pay levels across all federal government agencies and departments.

In conjunction with more widespread arbitration, private sector industry-wide bargaining may be used to create a new layer of minimum terms and conditions of employment on top of existing modern awards. Over time, this may result in significantly increased complexity and compliance burdens for employers.

Unilateral enterprise agreement terminations to be prohibited

While enterprise agreements that have reached their nominal expiry can currently be terminated by the FWC on the application of an employer, the ALP will amend the FW Act to implement a new threshold test or prohibit the FWC from terminating an enterprise agreement unless the termination has majority employee approval and would not result in employees being worse off.

Such a reform will effectively lock in employers to the terms and conditions that they agree to at a particular part of the economic cycle, and limit their capacity to adjust to changing conditions.

The ALP has also promised to provide an expedited mechanism to terminate historic agreements made under the WorkChoices regime that are still in operation. 

Enforcement options

The ALP plans to increase penalties associated with sham contracting, and further increase penalties for serious wage underpayments to three times the size of the underpayment. It is also possible that the ALP will criminalise serious wage underpayments. The ALP may also implement 'Industrial Manslaughter' laws similar to those recently enacted in Victoria and Queensland.

The ALP also aims to provide additional scope for the Commonwealth and employees to pursue repayment of unpaid wages and redundancy benefits from bankrupt individuals, and insolvent corporations, including through amendments to the Corporations Act 2001 (Cth) (a Bill with that intent is currently before the Senate but may not be passed before the election).

Regulating building and construction

As expected, the final Platform promises to disband the Australian Building and Construction Commission (ABCC) and the Registered Organisations Commission, and to repeal the Building and Construction Industry (Improving Productivity) Act 2016 (Cth).

Other than promising a 'balanced and effective compliance regime' in the construction industry, the ALP's Platform does not give any guidance on what may follow the ABCC. However, it is clear that regulation of registered organisations will again be taken up entirely by the FWC.

Whistleblower changes

On top of the broad changes to the whistleblower regime introduced by the Coalition government, the ALP has indicated it will provide for whistleblowers to receive a percentage of any penalty that eventuates from them having spoken up. This reflects the whistleblower arrangements in the US.

What next?

As the Federal election campaign gathers pace over the coming months, we will continue to monitor developments and keep you informed. We will also be hosting seminars in all our offices about the ALP's Platform and the implications for your organisation – keep an eye out for the invitation.