Analysis: What's Inside the Government's Fair Work Omnibus Bill?

Earlier this month Attorney General Christian Porter introduced the Fair Work Amendment (Supporting Australia’s Economic Recovery) Bill 2020 to parliament. This comes as part of the Morrison government’s supposed attempts to help aid recovery from COVID-19, with the coalition arguing the amendments will provide an opportunity for businesses to recover from a pandemic-induced economic crisis and ensure the creation of new jobs. Unsurprisingly, these business-friendly measures pose a significant attack on workers rights and seek to overturn a number of the limited protections and rights currently provided by the Fair Work Act. The amendments included in this Omnibus Bill will make it easier for employers to use the current crisis to drive down conditions in order to boost profits.

The Bill seeks to retrospectively unwind the WorkPak vs Rossato decision regarding the entitlement of workers who have been designated by their employer as casual. The decision made it clear that an employer labelling a worker as ‘casual’ did not remove that workers’ entitlement to leave, as provided by the National Employment Standards within the FWA. Previously, the Morrison government has actively opposed this decision, including participating in employer’s appeals against it.

This attack involves broadening the legal definition of casual employment, and would mean that a worker who demonstrates that they were not a casual employee by law (and thus have earned a raft of entitlement payments) would have their entitlements reduced by the equivalent of the casual loading payable under the relevant award agreement. These entitlements include:

•Paid annual leave

•Paid personal/carer’s leave

•Paid compassionate leave

•Payment for absence on a public holiday

•Payment in lieu of notice of termination

•Redundancy pay

The bill also seeks to make it easier for employers to make changes to workers’ hours of work, location of work and duties if they are covered by an award. Employers already have the power to make such changes, but existing provisions require greater consultation with workers. Currently, when part-time workers have their hours increased, this would either result in a long-term variation of their contract or would entitle them to overtime for any hours worked above their contracted house. The Bill would remove the right to penalty rates unless the additional hours worked occur outside the Award’s ordinary span of hours.

“Employers don’t increase employment based on reduced labour costs. Employers increase employment if there is an increase in work to be performed.”

The bill would provide for Greenfields Agreements (first-time agreements in a workplace) on large projects. Here, ‘large’ is defined as having a value of more than $500 million including constructions costs, however costs can go as low as $250 million if the Minister declares it to be a major project. If the FWC is satisfied that the work to be performed under the agreement relates only to the construction of a ‘major project’, the maximum term of the agreement can be up to eight years. This would mean that workers on these sites would have no opportunity to negotiate their wages and conditions during the life of that agreement. This will provide the companies running these projects, which tend to be large resource and construction multinationals, a major reduction in the costs, and thus a boost to their profits, at a cost to the wages and conditions of workers.

The Bill weakens the Better Off Overall Test (BOOT) which requires that in order for an agreement to be approved by the Fair Work Commission, all workers employed under the agreement must be better off overall under each of the provisions as compared to the relevant Award. It is this provision which led to the Retail and Fast Food Workers Union’s successful decertification of the Coles and Woolworths agreements for undermining pay for casual workers who were primarily working on weekends and in the evenings. By ‘temporarily’ removing the BOOT as a test for certifying agreements, the legislation would massively incentivise employers currently paying the Award rate to seek to pressure workers into ‘agreements’ which undercut the Award, just as happened in the wake of the passing of WorkChoices in 2005.

In determining whether to approve an agreement or a variation of an existing agreement, the FWC would be limited to the following considerations:

• Patterns of work for employees and prospective employees which are ‘reasonably foreseeable by the employer’ at the test time. 

• The ‘overall benefits’ (including non-monetary benefits) that the employee would receive under the agreement compared with the award 

• “Substantial weight” must be given to the views of agreement-covered employers, award-covered employees, and any bargaining representatives (not objecting unions who are not bargaining reps); with a note providing that an example of the views of employees is the outcome of the vote (consistent with the employers push to give primacy to the views of the parties).

An important factor in assessing the third criteria is that the amendments in the Bill narrow which casuals are entitled to vote on an agreement to only those workers who worked hours during the access period (where workers are provided with information on the agreement prior to voting on it). The employer’s obligation to provide information is also reduced from taking ‘all reasonable steps’ to just ‘reasonable steps’.
These provisions, and any aspects that are below the BOOT, are automatically terminated on July 1, 2022.

The central justification of the legislation is that it will enable businesses to maintain and expand employment in the wake of the COVID pandemic. While this sounds nice, it is just an attempt to make a brutal attack on workers in the name of boosting profits sounds like it is about protecting workers. Employers don’t increase employment based on reduced labour costs. Employers increase employment if there is an increase in work to be performed. We know from experience that the reduction in penalty rates within Awards by the current government (which were also promoted as necessary for job creation) did not deliver any new employment.

Importantly, none of the new provisions provide any real protections to ensure that a company is facing serious financial difficulties when they seek to make use of the Act.They essentially just need to assert that they are necessary. This should not come as a surprise: every action that Morrison’s government has taken in response to COVID-19 has been aimed primarily at protecting company profits. JobKeeper, which did more to keep workers in work than the new legislation is likely to, was primarily aimed at boosting profits, hence the raft of companies who were receiving Jobkeeper while paying out massive bonuses to senior managers and dividends to shareholders.

Working people should not be made to pay the price of economic recovery. This will require not just lobbying of crossbenchers, but building on-the-ground pressure on both employers and the government to pull back from this attack.