Labor is warning that a return of the Coalition’s omnibus industrial relations bill will mean changes to the better off overall test, allowing pay cuts.
Scott Morrison has dismissed this as “another scare campaign” following on from Labor’s claims about aged pensioners being put on the cashless debit card.
What is the better off overall test (Boot), and has the government really ruled out changes that could cut pay?
What did the industrial relations bill propose?
After extensive consultation with employers and unions, the Coalition released an industrial relations bill in December 2020 that unions mostly hated.
In particular, they singled out a clause allowing the industrial tribunal to approve pay deals that did not leave workers better off overall if it is “appropriate” to do so, given the impact of Covid-19 on business.
The clause was subject to some safeguards including needing majority support from employees, and that the exception to the better off overall test would be phased out after two years.
But Labor, unions and independent academics warned the change was a recipe for pay cuts, with deals struck in the two-year window to have effect for up to four years, long after the economy had bounced back from the pandemic.
The then-industrial relations minister, Christian Porter, ditched the provision in February 2021. The government later gutted its own bill, removing provisions to criminalise wage theft and passing only minor changes to rules around casual work.
What is the government proposing now?
On Saturday, the prime minster said the industrial relations bill was “absolutely” still its policy and the government expected to put it forward in the new parliament.
On Tuesday Morrison added that a separate bill would lengthen pay deals for new work sites from four to six years.
The industrial relations minister, Michaelia Cash, also revealed the Coalition would aim to double the penalties for breaches of industrial law, in a bid to crack down on the militant construction union.
And on the better off overall test?
The problem the government has created for itself is that Morrison’s support for the industrial relations bill was ambiguous: is it intending to introduce the original version of the bill, or the one with the contentious exception allowing pay cuts removed?
Labor went on the attack, claiming that suspending the operation of the better-off-overall safeguard could mean cuts of $10,000 a year for retail managers, $14,000 for a part-time disability care worker losing penalty rates, or $7,000 for a butcher.
The shadow industrial relations minister, Tony Burke, said Morrison had “made clear that omnibus bill is returning and this is what it says”.
“It allows for a pay cut … Your hourly rate of pay can’t be cut, but every loading, every shift penalty, every overtime rate can be cut.”
On Wednesday, Cash put out a statement that tried to put the issue to bed: “The Morrison government is not changing the better off overall test – full stop.”
But Morrison then muddied the waters, telling reporters in South Australia that “there are no major changes to the Boot at all”.
Asked what changes to the Boot there are if not “major” changes and whether the pandemic exception could apply, Morrison said: “The pandemic has now passed. There are emergency measures that obviously no longer have an application when not in an economic emergency environment.”
On Wednesday evening, Morrison sought to clarify that changes to the better off overall test are “not part of our forward agenda”.
“We said we’d only go forward with the measures that aren’t the emergency pandemic measures,” he said in the Sky News leaders’ debate.
Are there other changes that could cut pay?
The bill clarifies that non-monetary benefits can be considered in the better off overall test, a move that might help fast-food giants trim penalty rates in return for giving employees food.
The bill would also allow part-time employees covered by the 12 awards in the retail, food and accommodation industries to work extra shifts at ordinary rates – without the overtime loading, which unions argue will cut take-home pay of people who should be classed as casuals.
Unions are also concerned that tying pay rises on new work sites to the national minimum wage will cut pay.
Verdict?
Despite Cash’s claim of no change to the better off overall test, Morrison’s comments left open the possibility of legislating an exception that would allow pay deals that cut workers’ pay for four days before he clarified the position on Wednesday evening.
Nevertheless, the other sections may allow Labor to continue to argue there will be an effect on pay.
