Government unveils IR reform package — here’s what it means for SMEs

The Morrison government is set to unveil its industrial relations omnibus bill this week, proposing a suite of changes — including to casual employment — intended to boost employment following the COVID-19 pandemic.

The reform package will overhaul five main areas of industrial relations legislation, after Minister for Industrial Relations Christian Porter led several working groups this year.

The package will reportedly define casual employment and require employers to offer casual staff part- or full-time contracts after 12 months.

It is also expected to simplify awards, amend enterprise agreements, strengthen the compliance framework and amend greenfields agreements.

Casual and fixed-term employees

The reforms would require employers to offer casual staff part- or full-time contracts after 12 months, according to the Australian Financial Review.

To be eligible for a permanent position, casual staff must have worked for a business for 12 months and have worked ‘consistent hours’ for the past six months.

Casual employees can decline the offer. However, they can request a fresh offer after another six months, if they still qualify.

The new measure is designed to stop ‘double dipping’ whereby businesses pay casuals for leave on top of benefits, after the Federal Court ordered a business to pay an employee leave entitlements as well as casual loading because they worked consistent and regular hours.

The legislation would allow employers of permanent part-time staff offer their part-time employees additional hours without paying them overtime, under the proposed reforms.

Speaking to SmartCompany, COSBOA CEO Peter Strong says he supports the government’s plan for part-time staff to work extra hours without overtime pay.

“Part-time workers often want more hours, but at the moment it’s cheaper to employ a casual,” he says.

“The part-time workers will think it’s a good thing because they’re the ones missing out.”

The reforms would establish, for the first time, a statutory definition of casual work in the Fair Work Act.

Award simplification

The legislation will also seek to simplify awards in industries most affected by COVID-19, such as retail, hospitality, restaurants and licensed clubs.

The reforms would allow employers to choose to pay a loaded rate, which is a higher hourly rate, instead of paying penalties such as public holiday rates, according to the AFR.

The change is intended to simplify awards, making it easier for employers in certain industries to navigate varying rates of hourly pay.

Enterprise and greenfield agreements

Finally, changes are set to be made to enterprise agreements.

The Australian reports the Fair Work Commission would have 21 days to approve enterprise agreements under the reforms.

The ‘better off overall’ test (BOOT), used to compare whether an employee is better off under an award or enterprise agreement, is also expected to be made more flexible.

The legislation would amend greenfield agreements which are a form of enterprise agreement used by new enterprises before they recruit any staff. Greenfield agreements are commonly used in project-based industries, such as mining and construction.

Under the legislation, greenfield agreements could be secured for the entire duration of a large project to prevent industrial action mid-way through.