New Fair Work powers puts the onus back on corporations like Qantas

As Alan Joyce, the Marie Antoinette of corporate Australia, heads for the departure gate only halfway through his self-arranged national tickertape parade, the Albanese government is left managing the public perception that it’s been playing willing handmaiden to the airline that one of its own members, Senator Tony Sheldon, described as “a brand synonymous with low pay, insecure work, illegal sackings and consumer rip-offs”.

It’s been a long fall for Qantas from beloved national icon to one of our least trusted brands, but that shouldn’t be much of a surprise given the business practices that marked Joyce’s tenure. Among other indicators, as Sheldon noted, is the fact that Qantas’ workforce is these days split across 38 different companies.

Given the stench, it’s happily timely for the employment minister Tony Burke to try to put Labor back on the front foot with his omnibus Fair Work Legislation (Closing Loopholes) Bill 2023, described by him as a frontal assault on “loopholes that allow pay and conditions to be undercut”.

Here are the highlights.

Labour-hire crackdown

Burke points the finger squarely at Qantas as an expert exploiter of the legal gap that allows companies to employ workers via labour-hire businesses and then pay them less than regular employees.

The bill would give the Fair Work Commission (FWC) new powers to order a company to pay its labour-hire workers at least the minimum rates applicable under its enterprise agreement. There are a lot of exceptions (including that it doesn’t apply at all to small businesses), and the government says it will affect only about 67,000 workers at a total annual cost of $510 million.

The Uber delivery guy might not starve to death

Another $400 million is the estimated wage cost of a change that will create a new class of workers who aren’t permanent or casual employees: “employee-like” workers. These are the shadow toilers of the gig economy, who the law currently treats mostly as independent contractors with none of the rights that employees get, such as base pay, paid leave and penalty rates.

The FWC will gain power to declare who joins the new class, and set minimum conditions for them, as well as ensure they get the protection of insurance — not a small matter, since at least 13 gig workers have died in accidents in recent years, leaving their dependents with nothing.

Burke argues that this is a better reform than legislating to make gig workers employees because the rigid form of legislated employee entitlements isn’t fit for the purpose of irregular work. 

Employers are wincing at this one, claiming it will push prices up. There’s no doubt about that, which is really just a reflection of the fact that we’ve all been enjoying the benefits of cheap labour at the expense of the poor, powerless sods providing it.

Wage theft is now a crime

In polite circles it’s called “underpayment”, but paying your employees less than their legal entitlement is no different in substance from reaching into their pockets and removing the cash; you’ve just cut out the middleman.

Of course, not all underpayment is intentional theft, but the sheer scale and spread of this practice right across all industries tells us that a lot of it must be. And it’s funny how nobody ever seems to be inadvertently overpaid.

The government’s answer is, in part, to quintuple the maximum civil penalty (when the underpayment has not been prosecuted as a crime) to $4.7 million or three times the total amount of the underpayment. As an example of what this could look like, 7-Eleven ultimately copped to $173 million worth of underpayments.

On top of that will be a new criminal offence of intentional wage theft, with the same maximum fines available but also up to 10-year jail sentences for individuals such as a CEO who thinks stealing from his employees is just good business practice.

Who’s a casual?

In 2021, the High Court blew up the widely held understanding of how to determine whether an employee is casual or permanent part-time: that one looks to the substance of the employment arrangement, rather than what the formal contract says. No, said the court, it’s the other way around. Contract is still king, after all.

That created a bit of mayhem, and the government is moving to return the goalposts back to their old position by altering the statutory definition of a casual. It imports a new test that reinstates substance as the key, and empowers employees who aren’t meeting the casual test to notify their employer that they wish to be converted to permanent (or they can stay casual if they prefer).

The government reckons most employees who gain this option won’t take it up, because remaining casual — with its loadings and flexibility — will suit them better. I’m not so sure.

Good/bad/indifferent?

Employer groups are giving mixed reviews, but as you’d expect are not generally on board with the whole package. In a surprise to nobody, the Coalition is opposing all of it.

In the wide sweep of industrial history, this is pretty modest stuff from a Labor government. Some of it will impact some industries significantly; none of it will cause real drama, except to wage thieves.

And none of it would have changed Alan Joyce’s attitude to his workers, nor theirs to him.

Will the new powers be enough to keep dodgy employers honest? Will the laws hurt small business affect cost of living? Let us know your thoughts by writing to letters@crikey.com.au. Please include your full name to be considered for publication. We reserve the right to edit for length and clarity.