The New South Wales Liberals are set to adopt an industrial relations policy to water down unfair-dismissal protections and abandon annual wage rises for middle and high income earners on award safety nets.
The policy, to be considered at the state council annual general meeting later in February, is an ambitious blueprint for reforms to the federal Fair Work Act likely to spark a hostile reaction from unions over weakening worker protections.
The Liberals have largely abandoned industrial relations since the 2005 WorkChoices legislation helped bring the Howard government down in 2007, with the policy area treated as a third rail for the conservative side of politics.
The new framework, drafted by the party’s IR policy branch, accepts the need for protections of lower paid and lower skilled workers but argues labour market regulation “should be kept to a minimum” due to “economic and social costs” and “unintended consequences”.
It calls to simplify unfair-dismissal laws, which it says allow employees to win cases due to a lack of procedural fairness and the “harshness” of dismissal “even though the reason for the dismissal was sound”.
The act should be amended “so that the only question to be determined in cases of misconduct would be whether the employer had a valid reason for the dismissal”, it said.
The Fair Work Commission would consider “whether the misconduct occurred” and whether it justified dismissal. “Procedural fairness considerations would only be applicable in relation to performance-based dismissals.”
In 2019 then Queensland Liberal senator, Amanda Stoker, said that employers should be able to sack workers if they are not “the right fit”, sparking controversy that the Coalition was preparing to gut unfair-dismissal laws.
The policy framework also argues that awards should no longer apply to high income earners: “In future awards should no longer apply to employees who receive a certain level of annual remuneration … The cap should be set at the level of full time average weekly earnings (currently $99,216).”
Under the current system all workers on awards, including those on higher incomes, benefit from the FWC’s annual wage review, which results in regular increases in the safety net for minimum-wage workers and those on higher classifications.
The policy proposed that individual flexibility arrangements – which can vary the terms of a collective pay deal – should be able to be “negotiated prior to the commencement of employment and included as part of the employment contract”.
The test for approving a workplace pay deal should be that it does “not disadvantage the employees compared to any relevant award that would otherwise apply” rather than the current more generous better-off-overall test, it said.
Policy motions are not binding on the parliamentary party.
NSW Liberal senator Andrew Bragg said he welcomed “anything that would reduce the influence of the Orwellian Fair Work Commission” as a “necessary reform”.
A senior Liberal told Guardian Australia that industrial relations “is not the third rail of politics – it is the key to unlocking real wage increases through increased productivity” by creating a “system that works for everyone, not just unions”.
“After WorkChoices we vacated the field … We should be out there arguing Australian workers deserve a real wage increase.”
Industrial relations will be a focus when parliament resumes next week. Labor’s closing loopholes bill is under scrutiny with key crossbench senators David Pocock and Jacqui Lambie expressing concerns that gig economy and other reforms go too far.
In a Senate committee report tabled on Thursday, Lambie warned the bill “will have significant economic consequences for businesses and employers”, particularly because of its impact on owner-drivers in the transport industry.
Pocock called for the gig economy provisions to be narrowed, warning it goes beyond “gig platform courier drivers and would impact sectors like personal and aged-care providers”.
