Initial coverage of the Productivity Commission’s review of the workplace relations framework has focused on recommendations to cut Sunday penalty rates to Saturday levels in industries including hospitality and retail. And fair enough – such a move would cut the take-home pay of hundreds of thousands of workers.
However, employment minister senator Michaelia Cash has said the government’s position remains that the Fair Work Commission should set penalty rates independently. Unless and until that changes, we should be looking for other key recommendations for shifts in our workplace relations system.
Removing limits on contractors, casuals and labour hire
The Productivity Commission recommends enterprise agreements should not be able to restrict employers hiring casuals, contractors or labour hire. Nor should they set terms of employment for contractors or labour hire, eliminating the union practice of insisting they be paid the same as permanent employees.
The effect of this recommendation would be to prevent unions and groups of workers from negotiating deals which protect permanent jobs and grant better pay for less secure ones. Without being able to bargain over limits on hiring less secure workers, permanent jobs will be more easily replaced.
A new form of collective contract
One of the Productivity Commission’s most controversial suggestions in its draft report was to introduce a new “enterprise contract” allowing employers to design collective agreements that change basic award terms. The proposal is contained in the latest report, with the added safeguard that the new contracts cannot replace existing collective agreements. Enterprise contracts also have to pass a “no disadvantage” test.
However, these contracts still have the potential to vary (and therefore possibly undercut) certain award conditions. This will be especially contentious for new employees who can be offered the contracts on a “take it or leave it basis”, which is why unions are quick to compare them to WorkChoices era Australian workplace agreements.
Harder for sacked workers to get their jobs back
Under the recommendations, redress for unfair dismissals would be a lot less generous. Under the current scheme, the Fair Work Commission aims to reinstate unfairly sacked workers back to their old jobs. The Productivity Commission recommends reinstatement no longer be the primary remedy.
Other remedies would be harder to access as well, as the report says no compensation should be given where employers had evidence of misconduct or underperformance or where the cause of “unfairness” in the dismissal was “procedural”.
Economists to set the minimum wage?
The Productivity Commission recommends a new Workplaces Standards Commission – separate from the Fair Work Commission – or a new Minimum Standards Division should set the minimum wage. Appointees will be chosen by people who have not had “significant involvement” in the workplace relations system in the last 10 years, suggesting that more economists may be appointed.
Although the report found the level of the minimum wage is not costing Australia jobs, it suggests tweaking the way it is set. The new commission should consider “economic circumstances on employment” and also to allow employers or even whole industries to plead poor and ask for variations to award minimum wage changes. Both have the capacity to lower minimum wage rises.
Employers win mercy rule over strikes
The report recommends the Fair Work Commission may suspend or terminate protected industrial action where it is causing, or threatening to cause, significant economic harm to the employer or the employees who will be covered by the agreement, rather than harm to both parties (as is currently the case).
Despite recognising power imbalances between employers and employees, the Productivity Commission has given big companies more power to escape the most important form of leverage workers have for better conditions – the disruption of a strike.
Workers to be protected from sham contracts
It’s not all bad news for workers. Under proposed changes, employers who misclassify workers as independent contractors, rather than employees, could be more easily prosecuted. “Sham contracting” will only require that it was “reasonable” for an employer to know the true employment relationship, rather than requiring that they “recklessly” set up such a sham.
Exploited migrants to get legal protections
One very welcome recommendation is that where a migrant worker breaches migration laws, that would not invalidate their employment contract and the Fair Work Act would still apply to them. This would close the loophole whereby migrant workers are being exploited because they cannot complain about abuses like underpayment, since breaches of visa conditions currently render their employer’s obligations to them unenforceable.
