Fair Work Act & key IR changes for FY18/19


Posted By on 16/07/18 at 4:27 PM

As we mark the 9th anniversary of the Fair Work Act, we thought it might be useful to reflect first on the basics for the new financial year.

Minimum wages, unfair dismissal salary cap, civil penalty increases and changes at the FWO

The national minimum wage and award rates increased by 3.5% (say what?!). Where inflation and other wage outcomes are otherwise stagnant, the national minimum wage is now $18.93 an hour or $719.20 a week.  Stay tuned for continuing changes to the Modern Awards as a result of the 4 yearly review process and the plain English drafting process.

The high-income threshold for unfair dismissal applications has been increased to $145,400 per annum (up from $142,000).  No such luck with an equivalent level of tax scale indexation.  The filing fee for unfair dismissal has increased to $71.90.

Civil penalties will remain stable until 1 July 2020 – at which time they will also begin to be indexed in line with CPI annually.  That said, “wage theft” is the new watchword and it would seem the race is on between the Commonwealth and the States to significantly lift penalties and/or impose gaol terms for knowing or reckless underpayments and lack of record keeping.

Ms Natalie James has been replaced as the Fair Work Ombudsman, with Ms Sandra Parker taking on the role for a new 5 year term.  Ms Parker has been elevated from the role of Deputy Secretary of the Department of Jobs and Small Business.  It will be interesting to see whether this means a change in direction, or perhaps more of the same but with a lower profile approach as has seemed to be the case with the new head of the ABCC (Mr Stephen McBurney).

The gig economy – a case for special regulation?

The gig economy has thus far been dealt with in an orthodox fashion – with the Fair Work Commission finding in Pallage v Raiser Australia Pty Ltd [2018] FWC 2579 that a contract driver for Uber was not an employee who could access unfair dismissal.

However, it would seem that change is on the way:

  • The ALP State Governments in Victoria and Queensland, together with the opposition in NSW, are proposing new legislation to bring contracting in the gig economy to heel.  This comes on top of labour hire licensing in Queensland and Victoria, albeit with the new South Australian Government putting its legislation on hold while a review is undertaken.
  • The status of the gig economy is being further tested in the Fair Work Commission in Klooger v Foodora Australia Pty Ltd (U2018/2625).
  • The Fair Work Ombudsman, before she was replaced, had also proposed her own special inquiry into Foodora (with implications for the gig economy generally) so we wait to see whether this will be continued or whether it will herald a new approach.

Enterprise Bargaining

The big question now being asked is whether enterprise bargaining has a future in Australia.

Despite a strong message from the High Court in ALDI v SDA [2017] HCA 53 that one should eschew strained interpretations of the Fair Work Act which preference union bargaining, one remains confronted with a range of issues making enterprise bargaining a less flexible option:

  • Strict NoERR requirements with no room for amendment (no matter how well intentioned)– see SDEA v Beechworth Bakery [2017] FWCFB 1664.
  • An orthodoxy allowing union access to agreement approval documentation and subsequent intervention in enterprise agreement approvals despite not being bargaining representatives for those agreements – see the line of authority since CFMEU v Ron Southon [2016] FWCFB 8413.
  • Great uncertainty as to whether an enterprise agreement has been (or indeed can be) “genuinely agreed” to by employees – see the very recent return to previously discredited concepts of “undermining collective bargaining” by the Full Court of the Federal Court in One Key Workforce v CFMEU [2018] FCAFC 77.
  • “Better Off Overall Test” inflexibility – see the decision just last week in the Loaded Rates Agreement Case [2018] FWCFB 3610 which has picked up and further amplified the issues since Coles had its issues in 2017.

OHS / WHS trends

  • Harmonisation: Victoria could soon be left as the only non-harmonised jurisdiction.  The progress of WA towards harmonisation however still comes with a unique proposal – that is to make WHS consultants, lawyers and occupational hygienists also responsible for WHS breaches.
  • Industrial manslaughter: the Victorian Government and the NSW Opposition have announced new proposals for significant increases in penalties and imprisonment for workplace deaths. For those of you who recall similar, but defeated, proposals back in the mid 2000s, the current debates seem to reflect the “back to the future” regimes now being recommended across the IR/OHS landscape.
  • Prosecution appeals: we are seeing a great number of appeals by the DPP for manifestly inadequate sentencing outcomes. We anticipate this will translate to higher penalties in OHS/WHS and National Heavy Vehicle prosecution sentencing decisions in the summary jurisdiction.
  • Mental health: expect to see more workplace safety regulator investigations and prosecutions for harassment, bullying and exposure to violence risks resulting in psychological injuries/mental health related conditions. The need for psychological risk assessment as part of your safety management framework is now more acute than ever.

We will certainly keep you apprised on updates in these areas.

Chris Gianatti

Chris Gianatti Director

Chris worked for a number of years with Corrs before moving in-house to Telstra as HR Legal Counsel for the “Factory” (covering Telstra’s back of house operations including the field... Read More