What the New IR Reform Bill means for Small Business

Wednesday February 10, 2021

In December 2020, the Federal Government introduced a new Bill into Parliament to deliver industrial relations reforms. The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 or “IR Reform Bill” was developed following a series of IR Reform Roundtables held by the Federal Government last year and attended by key stakeholders from industry, employer and employee groups.

The reforms centre around five core areas:

  1. Awards simplification
  2. Casual and fixed-term employees
  3. Compliance and enforcement
  4. Enterprise agreements
  5. Greenfields agreements

What do small businesses need to do?

While the IR Reform Bill is yet to be finalised, small businesses will need to ensure they keep abreast of the Bill’s progress through Parliament so they are ready to act when passed.

With the numerous challenges of running a business, we recommend reaching out to us for advice. By acting now, we have the time to help you prepare for the Bill’s introduction.

What are the core changes for small business that the IR Reform Bill is tabling?

The key changes that will impact small businesses include:

  • Simplifying Awards
  • Changing the definition and rules around casual vs fixed-term employees
  • Changes around compliance and enforcement
  1. Award simplification

Part-time employees covered by Awards within the retail, trade, accommodation and food service industries who work 16+ hours per week, will be allowed to agree to simplified terms with their employer to work additional hours at their standard rate of pay.

Employers will also be able to give employees flexible work duties and location directions for up to two years after the Bill is passed, as long as those directions are needed to help the employer’s business revive.

  1. Changes to the definition of casual and fixed-term employment

The Bill also covers an updated definition of casual employment. This will allow an employer to make a casual employment offer which, if accepted by the employee, can offer ‘no firm advance commitment to continuing and indefinite work according to an agreed pattern of work’. While it sounds complicated, this new definition removes the issue of casual employees being paid casual loading and then being awarded additional entitlements if they claim to have been a permanent employee.

In a practical sense this definition covers employees who work a consistent pattern of hours as a casual and means they cannot be termed a fixed-term or permanent employee after the fact if they agreed to the offer in the first place.

The changes come with a few additional provisions, including offering the employee an opportunity to convert to a permanent employee after 12-months if the work pattern has been consistent.

  1. Compliance and enforcement

While many businesses are trying to do the right thing regarding employee entitlements and payments, the Federal Government is looking to make employee wage theft a criminal offence.

The IR Reform Bill proposes up to four-years imprisonment and fines of up to $5.5 million for employers who are found guilty of carrying out wage theft by dishonestly engaging in a systematic pattern of underpaying employees.

When is the IR Reform Bill expected to pass?

The Federal Government hopes to pass the Bill by March 2021, when the current JobKeeper and JobSeeker programs end.

Support when you need it

Staying abreast of the latest industrial relations developments and managing the intricacies of HR can be challenging at the best of times. However, implementing the proposed new IR changes and remaining compliant will be complicated. But don’t worry. The HR Dept is here to support you with as much or as little help as you need. Contact us to discuss your HR needs.

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