Insights

Monthly Update—Australian Labour & Employment

MESSAGE FROM THE EDITOR

In this edition of the Update, we first report on the decline in labour costs and the Prime Minister's decision not to lift the retirement age. We also highlight the South Australian Government's decision to repeal labour hire licensing laws. We then comment on the introduction of new laws addressing the gender pay gap as well as the recommendations made to introduce new laws that address industrial issues in the gig economy. Finally, we discuss the industrial action planned by NRL referees and a recent decision regarding flexible working arrangements.

IN THE PIPELINE—HIGHLIGHTING CHANGES OF INTEREST TO EMPLOYERS IN AUSTRALIA

Labour Costs in Decline

Australian labour costs have seen an annual decline of 1.2 percent, while gross value in the market sector rose by 0.5 percent in the corresponding period. There has also been a rise in hours worked in the market by 2.1 percent over the year, according to the Australian Bureau of Statistics ("Australian National Accounts: National Income, Expenditure and Product" June Quarter 2018).

Changes to the Retirement Age

Prime Minister Scott Morrison has decided against lifting the retirement age from 67 to 70. The initial proposal to increase the retirement age from 65 to 67 was presented in the 2009 budget. Those changes are being phased in between 2017 and 2023. In 2014, the Commonwealth Government proposed a further increase in the retirement age to 70. However, Mr Morrison has now decided against this further increase, a decision which has been supported by Australia's largest union, the Construction, Forestry, Maritime, Mining and Energy Union ("CFMMEU"), which argues that it is unfair to require manual workers to work until they are 70.

Labour Hire Licensing Laws to be Repealed in South Australia

In our April 2018 Update, we reported on the implementation of the Labour Hire Licensing Bill 2017 (Qld), which requires labour hire businesses to obtain a license to operate. Similar laws were put forward in South Australia and commenced on 1 March 2018. However, after receiving feedback from stakeholders, the South Australian Government now intends to repeal the Labour Hire Licensing Act 2017 by the end of 2018.

New Laws to Force Companies to Reveal the Gender Pay Gap

The Labor Party is currently preparing legislation which will require companies with more than 1,000 employees to reveal their gender pay gap. The Labor Party is also preparing legislation which will require companies to reveal pay differences between managerial and non-managerial staff as well as prevent companies from restricting employees from discussing their pay with each other. The legislation reflects existing legislation in the United Kingdom requiring companies with more than 250 employees to publish their pay data online.

Recommendation for Industrial Laws to Cover the Gig Economy

The Senate recently published a major report following its year-long inquiry into the future of work. One of the key functions of the Senate Committee was to investigate the possibility of introducing new industrial relations laws to deal with new types of working relationships used in the gig economy.

One of the key recommendations in the report was to "broaden the definition of employee to capture gig economy workers". This was in response to submissions made that Australian labour laws designed to protect employees' minimum entitlements are failing to capture many contemporary employment structures. This is due to the expansion of new employment structures, including independent contracting, labour hire, "gig" work, outsourcing and franchising. If this recommendation were adopted, businesses operating in the gig economy could potentially have significant labour obligations toward employees.

The leader of the Senate Committee, Murray Watt, expressed concern that the Commonwealth Government does not have a plan to address the changing nature of work in Australia. Consequently, another recommendation stemming from the report is to establish a central body within government to coordinate the planning of the future of work.

National Rugby League Referees Take Industrial Action in Pursuit of a new Enterprise Agreement

National Rugby League referees have obtained an order from the Fair Work Commission ("FWC") allowing them to seek approval under a protected action ballot for a range of protected industrial action, including work stoppages. The orders state that the referees will not take any action involving a stoppage during the women's premiership matches and interstate cup final.

The orders came into effect on 7 September 2018 and also include non-strike action such as not performing official duties more than one day a week, not wearing the official NRL kit, media bans and wearing campaign material. The notice period generally required under the orders is at least seven working days.

The referees are seeking fairer employment conditions, including job security and a reasonable notice period in their contracts, as previously the referees have been employed on 12-month contracts with little or no notice period. The referees are also seeking salary increases.

HOT OFF THE BENCH—DECISIONS OF INTEREST FROM THE AUSTRALIAN COURTS

The Police Federation of Australia (Victoria Police Branch) T/A The Police Association of Victoria v Victoria Police [2018] FWC 5695

Factual Background. In this case, Detective Senior Constable Gary Emery sought a flexible working arrangement from his employer, the Victoria Police, as he approached retirement. In particular, he sought to work 10 hours per day over four days per week rather than eight hours per day for five days per week. The applicant was 58 years old at the time of the application.

The Victoria Police rejected Mr Emery's request for flexible working hours for the following reasons:

  • Granting a compressed roster of longer days where this is not strictly required, in addition to the possibility of recall on the fifth day, raises occupational health and safety risks associated with fatigue; and
  • Granting the request would impose an unreasonable financial burden on Victoria Police because it would be obliged to pay both Mr Emery's full salary and the commuted overtime allowance in respect of working the same hours, with the result that he would in effect be paid twice for the same work.

Legal Background. The applicable enterprise agreement—the Victoria Police (Police Officers (excluding Commanders), Protective Services Officers, Police Reservists and Police Recruits) Enterprise Agreement 2015 ("EBA")—provided certain employees, including employees over the age of 55, with the "right to request flexible working arrangements". The relevant clause of the EBA provided that the request should be made and considered by the employer in accordance with s 65 of the Fair Work Act 2009 (Cth).

Section 65 of the FW Act provides that the request must be made in writing, setting out the details of the change sought and the reasons for the change. The employer must then give the employee a written response to the request within 21 days, and the employer may refuse the request only on reasonable business grounds.

Decision. Commissioner Wilson found that the "basis of Victoria Police's refusal of the request do not amount to reasonable business grounds and the request should now be approved".

Victoria Police argued that allowing the flexible working arrangement would reduce staff morale and effectiveness. However, Commissioner Wilson found that the evidence put forward in relation to this argument was "no better than thin". Commissioner Wilson considered that the argument put forward by Victoria Police that the flexible working arrangements would create occupational health and safety risks also lacked appropriate evidence.

In relation to the possible restriction in working hours due to the flexible working arrangement, Commissioner Wilson accepted that there could be some restriction, but the restriction was not great enough to be seen as reasonable business grounds to refuse the request.

Commissioner Wilson also commented on the fact that there were only two reasons provided to Mr Emery refusing his request for the flexible arrangement, yet after the matter progressed to the FWC, Victoria Police put forward several other reasons. Commissioner Wilson noted that Victoria Police should be reasonably expected to be constrained to the reasons outlined in its written response 21 days after any request for flexible working hours.

Lawyer Contact

For more information, please contact your principal Jones Day representative or the lawyer below. General email messages may be sent using our "Contact Us" form, which can be found at www.jonesday.com/contactus/.

Adam Salter
Sydney
+61.2.8272.0514
asalter@jonesday.com

We thank law clerk Jacqueline Smith for her assistance in the preparation of this Update.

Jones Day publications should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only and may not be quoted or referred to in any other publication or proceeding without the prior written consent of the Firm, to be given or withheld at our discretion. To request reprint permission for any of our publications, please use our "Contact Us" form, which can be found on our website at www.jonesday.com. The mailing of this publication is not intended to create, and receipt of it does not constitute, an attorney-client relationship. The views set forth herein are the personal views of the authors and do not necessarily reflect those of the Firm.

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