Employment developments

Employee or contractor? “Employment” in the sharing economy

Non-traditional working arrangements and the casualisation of labour in Australia are likely to continue in 2017. Organisations will be looking to the sharing economy for clues about how they might transform their own traditional workforce to one better suited for the changes ahead. 

By contrast, employees and unions are likely to rely on well-established law regarding independent contractors and employees to seek the protection of an employment relationship, to replicate wins achieved overseas (such as those against Uber in the US and the UK). Employee representatives and unions have publicly indicated that they are preparing to bring an Australian test case on the legal framework of the contractor relationship in the sharing economy.  

While legislative intervention could bring an appropriate balance between innovation, flexibility and workers’ rights, that legislative intervention is unlikely to be on the Federal Government’s agenda in 2017. 

Although regulating the changing nature of work may not itself be on the legislative reform agenda, the regulation of contractors will continue to be an issue of national importance, especially as the states are likely to seek national reform in the regulation of labour hire companies through COAG.  

Last year, Queensland, Victoria and South Australia all conducted parliamentary inquiries into labour hire, with all inquiries recommending COAG meetings to contemplate national reform. The inquiries in both Victoria and South Australia separately made recommendations that there be a national licensing regime for labour hire contractors to be established through COAG.  

The increased state-based focus on this issue correlates with the Federal Government’s interest in increasing the powers of the Fair Work Ombudsman (FWO) to protect vulnerable workers, who may be incorrectly classified as contractors when they are in fact employees.   

457 visas – scrutiny over foreign workers

Following substantial media coverage of the 7-Eleven scandal, the FWO commenced a number of proceedings in 2016 against individual franchise holders (many of whose employees are foreign) with respect to underpayments.  Franchisees who reverse calculated payslips to hide underpayments were given penalties as large as $150,000. 

Against this backdrop, unions have called for changes to the 457 visa system to tighten eligibility criteria (including market testing requirements) and require employers who employ 457 visa holders to demonstrate their contribution to local employment. In November 2016, Opposition Leader Bill Shorten introduced a private member’s bill (the Migration Amendment (Putting Local Workers First) Bill 2016), designed to give effect to some of these proposals. The Bill remains before the House of Representatives.  

Employers who employ foreign workers are likely to face continued scrutiny in 2017 as the FWO and unions continue to scrutinise the possible exploitation of foreign workers. The start of the new year is a good time to confirm compliance with entitlements, particularly where any legislative or award changes have recently commenced.

Penalty rates review 

The review of penalty rates by the Fair Work Commission as part of its four yearly modern award review is expected to be handed down in 2017. It is unclear how the FWC will decide, or how the Federal Government will respond to the decision, especially after the Productivity Commission’s Inquiry Report in December 2015 described Sunday rates as “inconsistent” and “anachronistic”.

Domestic violence leave 

Domestic and family violence remain on the agenda in 2017. In 2016 the FWC heard the ACTU’s claim, as part of the four yearly modern award review process, for an entitlement to ten days’ paid, and two days’ unpaid, family and domestic violence leave to be included in the majority of modern awards. It is likely that a decision on that claim will be handed down in early 2017. In conjunction with its claims for paid family and domestic violence leave, the ACTU is seeking the inclusion of a “family friendly” work arrangements clause dealing with requests for family friendly work arrangements, rights to return to work and leave to attend pregnancy, ante-natal and/or adoption related appointments.

Whatever the outcome of the modern award proceedings before the FWC, an increasing number of employers are likely to be called upon during 2017 to introduce family and domestic violence policies and/or include family and domestic violence leave entitlements in enterprise agreements.

The Queensland Government has also included domestic and family violence leave for those employees covered by the new Queensland legislation. This is the first government in Australia to do so. See our separate article. 

Paid parental leave 

Parental leave and “double dipping” has been in the headlines since 2014 and we expect it to be reviewed again in 2017. The Fairer Paid Parental Leave Bill 2016 was introduced into the Federal Parliament in October 2016 (and is a revised version of a similar bill introduced in June 2015). The Bill relates to removing “double dipping” and would provide that parents under the scheme can only take a maximum of 18 weeks of Federal Government-funded parental leave. Access to Government-paid parental leave will be limited by the entitlement the parent has to employer-paid parental leave.

Testing the boundaries – FW Act protections

Throughout 2017 employers are likely to continue to test the boundaries of FW Act protections and powers. 2016 saw an increase in the novel use of these provisions, particularly with respect to the conduct of non-employees such as union organisers. These cases demonstrate that individual rights regimes, such as general protections and anti-bullying, are broader than they seem.

Of particular note was the making of anti-bullying orders against the officers, employees and members of two unions as part of the Carlton & United Breweries dispute. The orders prohibited certain conduct at the picket line, including the use of offensive words (such as “scab”) and provided protection to the whole of the CUB workforce.

The availability of these regimes provides an alternative avenue for employers to deal with conduct that was once only dealt with by remedies such as injunctions or through liaison with police. Employees and unions are also likely to continue the trend of naming managers, colleagues and HR representatives as respondents to individual rights cases before the FWC and courts, placing significant pressure on managerial employees named as accessories.

Employers should remain cognisant of the accessorial liability provisions and take steps to minimise the risk of any such claims succeeding (for example, by ensuring that managers and HR officers understand the accessorial liability and general protections provisions). Employers should also review their insurance arrangements to check whether employees who might be the subject of accessorial liability claims will be covered.

Author: Karen Mitra, Lawyer