ARA challenges closing loopholes bill

The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 will introduce, among other elements, the criminalisation of wage theft, a new definition for ‘casual employees’, and an additional provision that gives legislative pathway to full-time or part-time employment for them, the protection of labour hire wages, minimum standards for gig workers, and further amendments to enterprise bargaining. 

Australian Retailers Association (ARA) CEO Paul Zahra says the group cannot support the bill in its current form and has concerns that these changes will just complicate the system. “We support an equitable and balanced workplace relations system, but this Bill seeks to implement complex regulations without any real productivity benefit, which is amongst the top priorities for businesses,” Zahra said.

“The Government should be simplifying the workplace relations system, not complicating it further. The Bill fails to meet that test, and our key concerns relate to the changes for casual workers and underpayment of wages.”

“This Bill means there is going to be a lot more administrative work for employers without any material change in casual conversion rates,” he said.

“While we support the Government’s decision to limit the wage theft laws to deliberate and intentional conduct, the Government needs to reduce complexity in our workplace relations system to minimise unintentional mistakes.”

There are also concerns that this bill will introduce additional operational costs and the costs would also find their way to consumers. The government estimates that this next wave of workplace changes for labour hire and the gig economy will cost up to $9 billion over the next decade.  The regulalatory impact statement attached to the bill admits, “if subject to a minimum standards order that increases their operating costs, digital platform businesses may pass on some of this cost to consumers and/or third-party businesses (for example, restaurants that use digital platforms to connect with workers to deliver food to consumers).”

Small businesses are offered some exemptions in the bill. Including: exempting small business employers using labour hire from new pay obligations, an extended service period for casual employees at SMBs to access the new pathways to full or part-time employment, a Voluntary Small Business Wage Compliance Code to ensure only intentional wage theft is punished, and a exemption that doesn’t require SMBs to provide access to paid time for workplace delegate training. Tony Burke, Minister for Employment and Workplace Relations said that the bill takes account of the administrative limitations of small businesses and said, “we need to minimise the regulatory burden on small business where we can.”

Minister for Small Business, Julie Collins echoes the sentiment. “We want to ensure our policies are appropriately targeted and provide the support that small businesses need.

“These sensible exemptions will level the playing field, and ensure that small businesses can continue making their valuable contribution to the Australian economy.

“Small business is at the heart of our government’s decision making, and we will continue to deliver our positive agenda for them and the millions of Australians they employ.”

ARA CEO Paul Zahra notes that while the exemptions are understandable, they serve as an admission that the reforms are, ‘overly complex and challenging to implement.’

“The pace and intensity of industrial relations change is a real concern for business, particularly in a uniquely challenging economic landscape,” Zahra said.

“We look forward to working with the Senate Crossbench to advocate for a version of this Bill that drives productivity, create jobs and increase workforce participation because we cannot support the Bill in its current form,” he concluded.