Queensland Bar Association
Good afternoon and thank you to Sean for the introduction and to the Queensland Bar Association for inviting me to speak here today in my capacity as Assistant Minister for Industrial Relations.
This past year has been tough on all Australians. Employers and employees alike are facing one of the most challenging business environments in generations.
In 2020 we managed to avoid the worst economic impacts of COVID-19, thanks largely to the Government’s decisive action. But with half of the country currently under lockdown, it’s clear we’re not out of the woods yet.
One thing the pandemic has highlighted is the importance of having a strong economy. This is something Coalition governments have always understood, but witnessing the pandemic has clarified why it is so important.
Having a strong economy is the best way to protect employees and support vulnerable members of our community. Employees will be best paid when businesses are trading and job opportunities are widely available, such that there is labour demand. Providing vulnerable members of our society with the opportunity to work in well-paid jobs not only gives them an income but also the dignity that comes from it.
A strong economy sustains the many government payments and support measures that form the safety net we rightly have in place to support those who in our community who have fallen on hard times or are unable to support themselves financially.
Response to COVID-19
Protecting our economy, and the livelihoods that depend on it, has been a driving force behind the Morrison government’s work over the past year.
In May 2020, just under 860,000 people lost their jobs. From April to June more than two thirds of businesses were making less than usual. In the June quarter GDP fell by 7 per cent and we recorded our first technical recession in 29 years. In July, unemployment was at 7.4 per cent – the highest it had been in 20 years.
However, by September we had reached a turning point, with two consecutive quarters of GDP growth above 3 per cent.
By March 2021, all lost jobs were recovered. And the most recent figures show that unemployment is at 4.6 per cent.
This means that, in less than a year, we have gone from the highest unemployment rate in 20 years, to the lowest rate in a decade.
This incredible recovery is due in large part to the effectiveness of the Government’s economic and IR policy.
The centrepiece of this action was the Jobkeeper scheme – by far the most generous employee support scheme any Australian government has provided in living memory.
Jobkeeper acted as a business and employment lifeboat that extended billions of dollars’ worth of support to over one million eligible business participants and 3.6 million employees. Crucially, it helped maintain existing relationships between employees and employers, enabling a much faster recovery than would have been possible if those relationships were broken.
Jobkeeper ensured that even during the most challenging periods of the pandemic, Australia experienced fewer employment losses than most other developed countries, and we bounced back far more quickly.
But as we all know, the pandemic is not over yet. Much of the country is currently under lockdown, and businesses still face uncertainty – particularly in the hardest hit sectors of travel and tourism, hospitality, as well as the arts and media.
There is still a need for continued short-term and long-term support to sustain our economy and protect employees. While Jobkeeper was fit for its time, changing circumstances have required a change in approach.
So the Government has transitioned to funding and delivering a range of other support measures.
These include the COVID-19 Disaster Payment – a weekly payment to help workers who have lost work due to a COVID-19 state public health order, such as a lockdown or restrictions on movement.
And we are working with state governments to jointly fund support measures that meet the needs of their state. In the case of Queensland, we are providing 50 per cent of the funding for a $600 million support package for Queensland businesses – including sole traders.
Like Jobkeeper, these payments are important. But there were also other aspects of the Morrison Government’s initial response to the COVID-19 pandemic that were just as crucial.
Recognising that tough economic times require a more flexible labour market – and with the backing of both unions and employer groups – we introduced temporary flexibility provisions into Fair Work Act.
They enabled businesses to quickly adapt to changing conditions, while staying connected to their workforce, and ensured businesses were ready to bounce back as soon as conditions improved.
The Government has heard from many employers that the provisions played an essential role in the survival of their business and their ability to keep people in their jobs throughout the pandemic.
An independent review found that an estimated 3 out of 4 eligible employers used the flexibilities under the provisions. It also found that 84 to 98 per cent of employers saw these provisions as ‘important’ or ‘essential’ to maintaining operations throughout the pandemic, while 87 to 98 per cent of employers said the provisions were ‘important’ or ‘essential’ to keeping their staff in work.
This provides one of the core lessons from the pandemic; the need for a workplace relations framework that is robust, but agile.
Protecting employee entitlements is essential. Our workplace relations framework must contain robust protections for workers. But it also needs to be flexible and fit-for-purpose – otherwise reduced business viability robs working people of having a job at all.
Recognising this, the Government proposed reforms to enterprise bargaining, modern awards, and the compliance framework that would have meaningfully boosted the economic activity and investment climate that feeds job opportunities are every level.
One proposal that would have had an important benefit to Queensland was a framework for negotiating EBAs at the commencement of a project that lasted for its length – providing certainty for investors, clarity and stability for working people, and preventing the kind of mid-project tactical industrial action that blows out timelines, is enormously costly and which undermines confidence and reinvestment.
That reform failed to get the numbers in the senate.
Nevertheless, the Government remains committed to pursing balanced reform that helps to create a climate of job creation, improved productivity and sustained wage growth.
As it stands, the modern awards system and the National Employment Standards provide a fair and relevant safety net. But awards can sometimes seem difficult to use and understand, complex, ambiguous and challenging.
One of the proposals in our package of industrial relations reform was to ensure substantial penalties for employers who knowingly underpay their workers. The corollary of such a measure, though, has to be ensuring awards are simple enough to understand, and particularly small businesses are equipped with the tools they need to do the right thing.
Small businesses struggle with award complexity. They are less likely to have the resources or specialist expertise to devote to understanding how awards operate. Too often this means businesses don’t take on new staff or relying on contract employment.
One of the difficulties small businesses report is in understanding the interaction between the National Employment Standards and the more specific terms and conditions of employment in modern awards, with employers often needing to refer to and cross-reference multiple documents to understand their employees’ entitlements.
The Government is currently conducting a review to look at ways of addressing this problem. Because if we can to make life easier for all businesses, but particularly small ones, they can focus on driving economic growth in the post-pandemic world.
The pandemic also highlighted the lack of flexibility in existing awards.
Last year the then Minister for Industrial Relations wrote to the President of the Fair Work Commission asking him to consider initiating an award simplification process.
This process has delivered results, with the Fair Work Commission now having varied the Retail Award and the Restaurant Award, and there is an ongoing matter to vary the hospitality award to allow arrangements for loaded rates for some full-time employees.
These are important changes that will improve outcomes for both employers and employees. Each of the changes has the potential to reduce payroll complexity for employers and increase base rates of pay for employees working under these arrangements.
They should also reduce the risk of inadvertent non-compliance occurring and make it easier for employers to offer permanent employment.
The Morrison Government has also been reducing the burden of red tape for businesses.
As part of the recent Budget, the Government announced a package of measures to make it easier for business, especially small business, to get Australians into jobs. This included an announcement of a $9.9 million package to help employers use technology to comply with modern awards, reduce costs and improve compliance.
Payroll and business software developers will be able to integrate award pay and conditions data into payroll and business products at a lower cost, saving business owners time and giving them greater confidence to hire new employees.
Currently, many small businesses have to manually enter employee pay rates and award updates into their payroll systems – which is time consuming and prone to error. Regulatory technology will save employers time, allowing them to focus on growing their business, while also giving them and their staff greater confidence that they will be paid correctly.
One industrial relations reform of which I’m sure you’re all aware, is the change to the definition of casual employment.
In March this year the Government successfully legislated to resolve the uncertainty and confusion created by recent Federal Court jurisprudence.
We introduced a statutory definition of casual employment in the Fair Work Act, and enshrined a right for employees to convert to permanent employment in the National Employment Standards. To deal with the absurdity of the decision in Workpac v Skene, we specified offset rules where identifiable casual loadings have been paid so that employers do not have to – in effect - pay the entitlements of affected employees twice.
I would suggest the Government’s reforms were recently vindicated for their fairness by the High Court’s unanimous decision in Workpac v Rossato.
Post- Skene, Australians employers faced up to $39 billion in double-dipping claims. It would have undoubtedly led to the collapse of many casual-dependent businesses who had acted in a manner they had believed lawful at the time.
Of course, this room knows casual employees receive a 25 per cent casual loading in lieu of leave entitlements and many people prefer the higher rate of pay in the present to the contingent leave entitlements afforded to permanent employees.
The statutory definition introduced by the Government is consistent with the principles since articulated by the High Court in Rossato. That is, a casual employee is one who, at the time of offer and acceptance of employment, has no firm advance commitment to continuing and indefinite work even when their hours tend to follow a regular schedule.
While there are some groups in our community that are concerned by what they suggest is an increased casualization of the workforce, in fact the proportion of the workforce that is casually employed has been near stable for the last decade. Nevertheless, we’ve acted to reassure and comfort those people who are anxious to increase their job security, by providing a right for casuals to seek conversion to permanent employment after 12 months of service on a regular schedule.
While this doesn’t extend to small businesses, if the employee has worked a regular schedule and the business is able to sustain the position, they are entitled to be offered a permanent position. Critically, it will remain the employee’s choice if they wish to accept.
Protections for Workers
Central in the Morrison Government’s approach to workplace relations is ensuring Australians are not mistreated or underpaid in their jobs. There is zero tolerance for it.
Since 2016 this Government has committed over $160 million in new funding for the Fair Work Ombudsman to improve its advice and education functions and support its enforcement and compliance activities.
- $12.9 million for a new Employer Advisory Service for small business
- $9.2 million for a specialist sham contracting unit, and
- $22.3 for a dedicated Corporate Sector Assurance Team to investigate and respond to non-compliance by large corporates.
We have also expanded the evidence gathering powers of the Fair Work Ombudsman and increased penalties for serious breaches of the Fair Work Act by up to tenfold.
The effectiveness of these actions is clear in the results. As of 2 June 2021, the Fair Work Ombudsman has:
- recovered $122.3 million for almost 60,000 employees
- completed 304 sham contracting and misclassification disputes, and
- filed 68 litigations and entered into 17 enforceable undertakings.
Workers are not only entitled to fair pay, leave, and job security – they are entitled to a fair and safe working environment.
As Assistant Minister for Women, I am especially proud of our action to simplify and enhance protections against sex-based discrimination and harassment in the workplace.
On 24 June 2021 the Government introduced the Respect@Work Bill, which seeks to implement the legislative reforms the Government committed to in its Roadmap for Respect. It will also amend the existing entitlement to compassionate leave to enable an employee to take up to two days of paid compassionate leave in the event that the employee or their partner has a miscarriage.
In order to ensure these changes are put into practice as quickly and effectively as possible, we have committed $20.5 million to the implementation to the Respect@Work Bill.
Again, let me be clear, there is no place for sexual harassment or sex-based discrimination in the workplace.
The Government is also taking action to address identified issues for workers in specific industries, like coal mining. One example is the Coal Mining Industry (Long Service Leave Funding) Corporation – more commonly known as Coal LSL.
On the 1st of June this year, we began an independent review to ensure that the scheme, and the corporation that manages it, is a model for the highest standards of governance of worker entitlements with appropriate and robust safeguards in place.
More than 128,000 employees accrue or have accrued long service leave through the scheme, and in excess of $1.9 billion is under management.
The review will consider potential legislative and non-legislative measures to improve the adequacy and transparency of the scheme and will report to Government later this year – good governance for Coal LSL matters a lot to those workers who depend on it to be a trustworthy custodian of their entitlements.
The best protection for vulnerable is a strong economy. When there is an abundance of jobs being created, projects being started and businesses growing – driving high labour demand – that’s when employees can be most certain of their job security, wage growth and future prospects.
The economic policy and IR approach of the Morrison Government means Australia is poised for success despite the challenges of the pandemic. We have the lowest unemployment rate since 2011, accelerating growth and continued support for workers and businesses.
The Morrison Government’s focus is on safeguarding employees and businesses as we navigate our way through the COVID crisis, while continuing to strengthen our economy to ensure these entitlements are grown and protected in the years to come. This is the motivation behind the Government’s industrial relations policies, and we will continue to pursue by every possible means measures that lead to improved productivity, employment and wages growth.