The Albanese government introduced new legislation to parliament last week that angered some employer lobby groups.
But there was a lot going on in the news cycle, so you may have missed it.
Much of the public’s attention was focused on Qantas as the airline endured another one of its public relations nightmare weeks.
It took attention away from the fact that the government’s new industrial relations legislation and Qantas are linked in important ways.
So, let’s have a look how they’re linked, because it’s worth understanding.
What is the legislation?
The legislation we’re talking about is the Closing Loopholes bill.
The Albanese government says the bill is designed to close “loopholes” in industrial relations law that are used by some businesses to pay workers less than they’re worth, and to endure worse conditions.
The bill is a huge one, running to 278 pages. It has a number of goals, including:
- To criminalise wage theft
- Improve the rights of casual employees
- Prevent “sham” arrangements by prohibiting employers from unreasonably misclassifying employees
- Give the Fair Work Commission power to better regulate the gig economy
- Provide equal pay for “labour hire” workers
- Make it easier for first responders suffering PTSD to get workers’ compensation, and;
- Make it easier for union representatives to access worksites to investigate wage underpayments.
Part of the bill is delivering on the Labor government’s pre-election pledge to regulate elements of the “gig economy.”
Specifically, it’s designed to lift the pay and conditions of digital platform workers (linked to food-delivery apps, and rideshare apps) who have very little bargaining power, and are often paid poorly. The government says too many of those workers have died on Australian roads in recent years.
But the legislation covers much more ground than that.
For instance, when it comes to the topic of “labour hire,” the government says there are plenty of appropriate uses for labour hire workers, but in industries where an enterprise agreement has set minimum rates of pay, labour hire shouldn’t be allowed to be used as a device to undercut the agreed wages and conditions of the original workforce.
The government estimates around 67,000 labour hire employees (out of a total 319,900 labour hire employees in the country) could end up being covered by its proposed labour hire crackdown.
Altogether, according to lawyers at Herbert Smith Freehills, the entire Closing Loopholes bill will have a substantial impact on employers, employees, principals, and contractors.
“The bill is a clear indication of the federal government’s continuing robust agenda for industrial relations reform,” the lawyers wrote last week in their 66 page summary of the legislation.
“Make friends with a good IR lawyer — you will need them.”
Why do we have this bill?
But this is where Qantas comes in.
The Albanese government says this new legislation will build on the industrial relations reforms it passed through parliament last year.
It knows this new bill is quite complicated because it’s trying to address a number of problems across multiple industries involving different kinds of workplace contracts.
But on the specific issue of labour hire contracts in this legislation, Qantas’ behaviour has been unintentionally drawing attention to the issue in recent years.
For example, during the 2020 pandemic, Qantas terminated the jobs of almost 1,700 workers at 10 airports and outsourced their jobs.
It said the outsourcing was necessary to save the airline $100 million annually.
But in July 2021, the Federal Court ruled that Qantas had acted against protections in the Fair Work Act when it sacked those workers, and in May 2022 it dismissed Qantas’ appeal of that 2021 ruling.
In May this year, the High Court then heard an appeal by Qantas against those Federal Court rulings, which kept the story in the news.
And also in May, the Australian Council of Trade Unions (ACTU) published a research note detailing how major companies in Australia were using certain labour-hire structures to suppress wages, and it named Qantas.
“Big business is using complex, multi-tiered, opaque outsourcing structures to avoid minimum wages set in Awards or enterprise agreements and pay employees doing the same jobs much lower rates of pay,” the ACTU paper argued.
“The use of cheaper, less secure outsourced labour to undercut decent wages and secure jobs is a form of exploitation and avoidance that will only continue to rise without addressing the loopholes in the system that allow this to occur.
“Many large, listed corporates such as BHP, Qantas, Qube and CIMIC has also established their own internal labour hire subsidiaries that suppress wages,” it said.
Then, in June this year, the ACTU released another report that looked specifically at Qantas’ outsourcing and labour-hire practices, entitled: “How Qantas gamed the system.”
“Did you know that Qantas has split its workforce across 21 external companies and a further 17 subsidiaries?” the report asked.
“One of the tactics used by Qantas — the axing and outsourcing of 1,700 ground staff, baggage handlers and cleaners — has twice been found illegal in the Federal Court.
“Those essential jobs are now dispersed among labour providers, with Qantas able to dictate wages through low-cost contracts rather than enterprise bargaining,” it said.
And since then, Transport Minister Catherine King has acknowledged that Qantas’ treatment of its workforce in recent years provided some inspiration for the government’s new Closing Loopholes legislation.
What’s happening with the legislation?
The legislation was introduced to the House of Representatives on Monday last week.
But it was referred to the Senate’s Education and Employment Legislation Committee to have a look at it, and that committee has been given a little under five months to interrogate it.
The committee has to report its findings by February 1, 2024.
So, the proposed legislation won’t become law immediately. MPs won’t be asked to vote on the bill until next year some time (if at all).
But that doesn’t mean we won’t be hearing about it between now and then.
In coming months, the Senate committee will be holding a number of public hearings with stakeholders around the country, so expect to hear lots of opinions about the legislation from employer groups, unions, lawyers and academics.
Last year, Qantas’s corporate affairs executive, Andrew McGinnes, told a Senate committee that Qantas had “evolved” its labour model over time because it was a “legacy business operating in a highly competitive market and for most legacy carriers that scenario hasn’t ended well.”
“Our legacy terms and conditions are by far the highest in all the markets we operate in and have been grand-fathered for thousands of our people,” he said.
“But if we kept hiring on the same terms and conditions, especially when our competitors are paying just slightly above award rates, Qantas would likely not be here,” he said.
Did the airline act illegally when it “evolved” its labour model in 2020 during the pandemic?
The High Court is expected to hand down its judgement very shortly on Qantas’ appeals against those Federal Court rulings from 2021 and 2022.
And its judgement could have some bearing on peoples’ perceptions of the legitimacy of the Albanese government’s “Closing Loopholes” bill.