Further Radical IR Changes Ahead - Closing the Loopholes Bill
The Albanese Government will be introducing a third tranche of IR legislation on Monday afternoon which Workplace Relations Minister, Tony Burke has referred to as the “Closing Loopholes Bill”.
The Bill will regulate “employee-like” work by defining employment based on the former common law test used when considering whether someone is a contractor or an employee. This test considered all elements of a relationship to determine this question. However, this test was overturned by the well-known case of Jamsek last year - which gave primary consideration to contractual terms rather than arrangements in the workplace.
The definition will contain a “ramp” which provides employees with full rights, gig workers with some rights and independent contractors with limited rights.
It has been said that the legislation will give the Fair Work Commission the power to set minimum standards for gig economy workers performing work through a digital platform, such as minimum pay and being able to challenge being “de-activated” which in effect amounts to dismissal.
In determining whether someone is “employee-like” consideration will be given to whether a worker has low control over their work, is low paid and has low bargaining power.
Tony Burke has said that “eligible parties” will be able to apply to the Fair Work Commission for minimum standards orders for “employee-like” workers that are tailored for the work performed under them. This could include terms on payment, record keeping and insurance, but not terms such as overtime rates, rostering arrangements or other terms that would change how the worker is engaged.
The legislation will also create a no cost small jurisdiction within the Fair Work Commission where independent contractors can have matters under a certain threshold dealt with without having to be legally represented in a costly Federal Court action.
Tony Burke has said that he does not expect the changes to lead to digital platforms exiting the Australian market, but if they did, it would be due to them being “really determined to exploit [platform workers]”.
Tony Burke has also said that they are drafting the legislation to take account of matters raised by resource industry employers concerned that the provisions intended to close the “labour hire loophole” would capture the service contractors the industry relies on. Tony Burke said that the contractors have come to him with a solution in the form of the former common law test mentioned above.
Tony Burke has further said, in relation to mining service contractors who are considering if they will have to restructure to comply with the new rules, that “so long as we get this right – and we’ve been following their advice… - there’s no restructure required of them”.
The changes have come with great scrutiny from a number of parties, including the Business Council of Australia and the Australian Chamber of Commerce & Industry.
BCA chief executive Jennifer Westacott has said, “These changes will create confusion and extra costs for consumers, make it harder to hire casual workers and create uncertainty for employing anyone.”
The Australian Chamber of Commerce & Industry has also responded negatively to the Bill in a media release stating, “the rights of Australians to maximise their pay by being their own boss will be quashed by laws designed to stamp out the long-standing Australian practice of independent contracting”.
We will keep you up to date as further details of the Bill become known.