IR reforms: Penalties dropped and casual rules clarified in win for employers

The federal government has ceded ground to employer groups on its contentious industrial relations reform package, agreeing to scrap civil penalties against businesses that misrepresent casual employment and protect the ability of staff who willingly accept regular hours to remain casual workers.

On Monday, Australian Hotels Association CEO Stephen Ferguson said Minister for Employment and Workplace Relations Tony Burke had agreed to change some casual work proposals contained in the Fair Work Legislation Amendment (Closing Loopholes) Bill.

The changes include the removal of civil penalty provisions against businesses that misrepresent casual employment as permanent roles, following fears from business leaders that the provisions would harm employers that erroneously considered an employee as casual.

If enacted, the maximum penalty for misrepresenting a role as casual could have stretched to $469,500 for businesses, and $93,900 for individuals.

Burke has also agreed to amend the bill to ensure workers who choose casual employment, and are happy to maintain regular hours under a casual basis, can do so while still being classified as casual.

That change will reportedly make it so no one factor, such as an individual’s roster, will determine if they are actually a casual employee.

The Australian reports the government still hopes to challenge employers who make deliberate misrepresentations about casual employment, and those who exploit the industrial relations system by making a permanent worker redundant, only to rehire them as a casual.

“The simple fact is many hospitality workers do actually prefer casual employment, given the 25% wage loading and the flexibility to refuse shifts,” Ferguson said.

“Our concern with the original Bill was that employers would no longer be able to provider systemic regular casual employment to those workers who were happy with it.”

While thanking Burke for listening to the industry’s concerns, Ferguson said the tweaks “strike the right balance” between the government’s stated goal of minimising worker exploitation, and the flexibility sought by some workers and employees.

The removal of the civil penalty provision will also mean disputes can be settled by an “independent umpire” in the Fair Work Commission, Ferguson said.

Significant shift in Closing Loopholes package

Employer representatives have long challenged the casual work elements of the Closing Loopholes package, arguing that an updated definition of casual work would impose a compliance nightmare for small businesses that rely on casual rostering.

In its statement to the Senate committee tasked with reviewing the Bill, the Council of Small Business Organisations Australia (COSBOA) argued the consequences of mischaracterising a casual employee could discourage businesses from taking on casual staff at all.

Maximum fines of nearly $100,000 for an individual are “likely to be terminal and could lead to insolvency and job losses”, COSBOA said, with any legal defence available to them “likely to be unaffordable and prohibitively costly for a small business”.

Restaurants and Catering Industry Association Australia had argued that employees and employers will be confused with the mechanics of the legislation, with particularly harsh consequences for early-career workers.

The walk-back is perhaps the largest concession made by the government over the contentious package, which will not be put to a vote before the Senate until 2024.

Small business groups and Senate crossbenchers have also called for the government to split off less-contentious parts of the Bill, so they can be passed before what is likely to be a tough slog through the Senate. However, it is not yet clear if the government will agree to this.