Labor’s industrial relations legislation contains a “major flaw” that will apply its “same job, same pay” policy to service contracts, potentially including IT, lawyers and accountants, one of Australia’s foremost academic experts has said.
Prof Andrew Stewart made the comments at the Minerals Council’s conference on Wednesday, siding with employers who have raised similar warnings that a major plank of the Albanese government’s closing loopholes legislation could force up costs beyond its intended application of labour hire.
Stewart also warned about the “potential for disruption” from Labor’s proposal to expand union delegates’ rights to communicate with non-members.
That prompted concern from Jacqui Lambie, likely to be a key crossbencher in Senate negotiations to pass the bill, who noted “we don’t know what rights delegates at that level will have”.
On Wednesday the opposition leader, Peter Dutton, ramped up the Coalition’s attack, warning it is “disingenuous” of Labor to say the bill closes loopholes and arguing it will “undoubtedly damage” the Australian economy.
During months of consultation, the workplace relations minister, Tony Burke, has sought to allay employers’ concern about same job, same pay reform by claiming it applies only to paying labour hire workers the same as employees already on workplace pay deals.
But Stewart said the bill, introduced to parliament on Monday, “doesn’t even use the term labour hire”.
The bill allows workers or unions to apply to the Fair Work Commission for orders that they should receive the same pay if they are in an arrangement to “supply employees to work for a host organisation”.
“Now, the government says that’s not meant to cover … specialist contracting services.
“It’s not what the legislation says. In fact the legislation, as I read it, says the exact opposite. It says specialist contracting services are covered but the commission will have the discretion to not make an order to cover them.”
“I think something’s gone wrong with the drafting.”
Stewart said that a law firm, accounting firm, or IT company providing services is “potentially covered” as the bill currently stands, but he would recommend an amendment to correct the “major flaw” during a Senate inquiry.
Stewart noted the legislation gives workplace delegates, employees of a company who are not union officials but are designated representatives by union rules, rights to represent people “eligible” but not currently union members.
“The rights are to represent members or potential members, including in disputes with the employer,” he said.
“And employers are prohibited from unreasonably failing to deal with a delegate or obstruct them in exercising their rights.”
Stewart said the law meant a union would only need one member in a workplace who would then “have the right to be dealing with you and have access to communication facilities”, such as emails and notice boards.
“I’m expecting this is going to blow up a bit,” he said, in reference to a contentious debate about the reforms before warning there is “potential for disruption there, to the way the business runs” in granting paid leave for delegate training.
A spokesperson for the employment department responded that the Fair Work Commission “must not make an order if it would not be fair and reasonable to do so, including where an arrangement is for the provision of services rather than the supply of labour”.
“A complete carve out for all service contracting would create a loophole – it would allow parties to engineer apparent ‘service contracting’ relationships to avoid this measure entirely, meaning labour hire employees would continue to be paid less and bargained rates would continue to be undercut.
“The Fair Work Commission needs the capacity to look at what’s really going on.”
Earlier, Dutton told the conference the bill “will undermine a core workplace principle: that employees with more experience and skills should be entitled to higher wages than their counterparts with less experience and skills”.
Burke has rejected this, arguing the bill does not require labour hire workers to be paid the same as workers with more experience.
Dutton said Labor wanted “to deny employers the choice to use labour hire workers and independent contractors” in a way that is “jeopardising the viability of many labour-hire businesses and small operators”.
“If these businesses go bust then there’s less workers and service providers in the system, there’s more pressure on supply chains, and consequently, fewer mining projects commencing – and who pays for that? The Australian consumer.”
“The Coalition, and I commit today, will stand against Labor’s nonsense.”
Despite Dutton’s warnings the bill will harm “flexible choice”, the junior Coalition partner, the Nationals, are set to debate a motion that would allow workers even more flexibility at the expense of employers.
According to a motion proposed by the Queensland branch, to be debated at the party’s federal conference on the weekend, the government should “give all workers the right to choose either to be engaged as an employee or as an independent contractor”.
