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The HR Cartel

Labor’s new bill, will cost us all up to $9 Billion

The next wave of workplace reforms proposed by the Albanese government is in, and it's expected to cost Australians up to $9B.

September 5, 2023

The next wave of workplace reforms proposed by the Albanese government is in, and it’s expected to cost Australians up to $9B.

The bill, in its current form, is going to place a significant burden on businesses to prove their compliance with the extensive and stringent laws. These changes have drawn criticism from employers who deem them “unworkable” and predict potential price increases as a result.

One of the key elements of these reforms pertains to minimum conditions for gig workers, extending even to online platforms like Airtasker. Additionally, there are new pay regulations targeting labour hire practices, with prominent companies like BHP and Qantas in the crosshairs. Under these proposals, employers, contractors, or digital platforms will be required to engage in legal battles to avoid falling under the new regulations.

The reforms are geared towards focusing on the “practical reality” of the employment relationship, rekindling debates about the true classification of gig workers and other contractors as employees, potentially entitled to backpay.

Businesses are (correctly) viewing this bill, as one of the most radical changes to the workplace system in decades.

Jennifer Westacott, who is the Chief Executive of the Business Council of Australia, explains the proposed amendments well, declaring this bill comprises an intricate set of measures that would necessitate legal expertise to decipher and apply. She raises concerns about a shift in power to a centralised wage-setting model, leading to delays, increased costs, and confusion.

Tania Constable, who is the Chief Executive of the Minerals Council of Australia, goes further, saying these changes are the most extreme and interventionist ever proposed in Australia. She believes employers are set for heavy financial burden and an influx of red tape, legal complexities, and compliance challenges that could have dire consequences for the economy and, ultimately, consumers.

Sally McManus, Secretary of the ACTU, views the legislation as a step towards ensuring that people receive the absolute minimum they deserve. However, she expresses reservations about the exemptions for small businesses and different rules for labor hire or union delegate training, advocating for equal rights for all workers.

In fact, Sally McManus has spoken on behalf of the Union movement, and declared they are dead against any exemptions for small businesses. We should all be very alarmed about that.

The bill’s most contentious aspect revolves around ensuring that labor hire workers receive at least the same pay rates, including base rates, penalties, bonuses, overtime, and allowances, as direct employees of host companies covered by enterprise agreements. While this aims to address wage disparities, the bill introduces a “fair and reasonable test” and offers exemptions for service contractors, albeit on a case-by-case basis.

The legislation also places independent contractors on digital platforms under closer scrutiny, subjecting them to minimum pay and conditions if their compensation is comparable to that of employees performing similar work. Gig workers will gain the ability to negotiate collective agreements for digital platforms.

Furthermore, the bill introduces severe penalties, including hefty fines of up to $7.8M and imprisonment, for employers intentionally underpaying their staff, a move aimed at discouraging wage theft. Union delegates will have expanded rights under the legislation, including paid leave for delegate training and the power to inspect employers’ payroll records.

While some amendments have been made following government consultations, business leaders remain unconvinced and express concerns about the workability of the bill in its current form. They anticipate further upheaval in the already complex industrial relations landscape.

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