A closer look at what the government is doing to “confront the mess that is workplace relations”: Peter Strong

Peter-Strong

COSBOA chief Peter Strong. Source: supplied.

It is good we are finally doing something to confront the mess that is workplace relations.

The mistake would be to try and fix all the issues in one go, creating a war between the government, business groups and the unions.

In the current situation, it is best to create change incrementally.

Change that is needed to deal with the current crisis. Change that helps people keep jobs, and change that gives employers confidence there is less risk in hiring new people.

We all then need to show that the changes have worked, or not. Then we create better change where needed, or, where successful, move onto the next change.

The end-point will be a system that can be easily understood by everyone involved, not just the experts.

The current changes relevant to small businesses are:

  • A definition of what a casual is;
  • A universal need to offer a permanent job to casuals who have worked for 12 months and have completed routine, predictable work shifts for over 12 months (unless the business has genuine business grounds for rejecting conversion);
  • Changes to make part-time work more flexible; and
  • The continuation of the flexibility provided during COVID-19 in regards to determining hours and work shifts.

A clear definition of casual

We hear a lot about ‘the casualisation of the workforce’. The reality is the rate of casualisation has been the same since the 1990s.

The feedback I hear from COSBOA members is that when businesses offer casuals permanent work, the take-up rate of the offer is very low.

These casual employees are making informed and intelligent decisions, and to argue they are being taken advantage of and are not making a conscious choice is not logical.

However, we do need a clear definition.

A clear definition would reduce the fear of accidentally making a mistake and facing legal challenges.

This concern comes from the outcomes of a few court cases (Workpac vs Skene and Workpac vs Rossato) where the court ruled some casuals were actually permanent and the employer had to backpay them all entitlements even though a 25% loading had already been paid in lieu.

Many employers were worried their long-term casuals could be redefined as permanent and this double-dipping would happen to them.

There is still discussion about whether the 25% loading will be taken off the amount of backpay owed to any so-called ‘misclassified’ casuals.

A clear definition of casual employment will take some of the hysteria out of this conversation.

Ability to give part-time workers more hours without paying overtime

One of the proposed changes is an ability to give part-time workers more hours – if they want them – at their normal pay rate instead of paying overtime.

Here is an example of how the current system works:

A business has four workers: the owner, two permanent staff, and a part-time worker who works from 10am to 3pm every Monday, Tuesday and Wednesday.

Everyone is happy. The part-time worker is able to share childcare with his partner, so it is all good.

But if the employer asks the part-time worker if he wants to work on Thursday and the part-timer says yes, then the employer has to pay penalty rates (time-and-a-half). That’s penalty rates for working from 10am to 3pm. Is that not odd?

The part-timer might want to work extra hours as his partner has taken leave and can care for the kids, but it is cheaper for the employer to take on a casual instead of giving the part-timer more hours. How stupid is that?

It gets more perverse as Woolworths, for example, has negotiated with the retail union so it doesn’t have to pay penalty rates to part-timers who work extra hours. Once again we have two different rules: one for big business and one for small business.

Logic says penalty rates and overtime are for when people work outside of normal business hours or more than a full-time workweek. It is for when an employee is directed to work outside of when they are happy to work.

It should not be difficult for an employer and employee to agree that normal pay can be paid for picking up additional normal hours that the employee wants to work and that the business has available.

The proposed change will encourage employers to use permanent part-time staff rather than employing casuals.

It is also about flexibility for the worker and allowing a business to be efficient.

The extension of the JobKeeper IR provisions 

Finally, the bill is proposing to extend the JobKeeper IR provisions to all industries hardest hit by COVID-19.

The changes are not about lowering wages but are about speeding up the reaction of decision-making by businesses.

As businesses are forced to ‘pivot’ to stay profitable, they need to be able to tell their staff to do different things at work to what they’d normally do, and work in different locations to where they would normally work.

We are currently in an economic crisis caused by a pandemic. The crisis is not over and won’t be for some time.

JobKeeper was introduced to help keep employers and employees connected by a wage subsidy, and it also changed workplace relations conditions to keep people employed.

Many businesses may no longer need the subsidy, but they do need to maintain flexible conditions so that they can to stay open and keep employing people.

Simplicity is key

So what do we want in the future? Overall, we want is simplicity.

The ongoing debate about workplace relations should be based on one thing: making the system easy to understand.

This is for the worker who wants to know what conditions and pay are applicable to their job, and also for the employer who wants to do the right thing and get back to running the business.

The Fair Work Act is over 214,000 words long — longer than the Oxford dictionary and Crime and Punishment.

We want an average person to be able to read the Fair Work Act in a reasonable amount of time and understand what it says.

The reality is, 99% of employers and employees don’t have law degrees specialising in employment law, which is what you need to fully understand the Fair Work Act.

We want the average small business operator who perhaps didn’t go to uni at all and might not speak English as their first language to be confident that they know what their obligations are under the Fair Work Act.

And we want the average small business employee to understand what the rules are too.

We also must remember we have national employment standards to provide workers with minimum rights and pay.

Let’s confront this one step at a time, show that the changes work and are better for employees, employers and jobs.

Then we will have more jobs. Simple.