“The bill will ensure that no category of Western Australian employee is excluded from state employment protections…” [and] “will significantly increase pecuniary penalties for noncompliance with state employment laws and introduce tough penalties for employers who engage in wage theft.”
The Honourable Bill Johnston MLA (Minister for Mines and Petroleum) – Second Reading Speech – Industrial Relations Legislation Amendment Bill 2021 (20 October 2021).
General Overview
In his 20 October 2021 media release concerning the Amendment Bill, the Honourable Stephen Dawson (Minister for Mental Health, Aboriginal Affairs and Industrial Relations) identified the Amendment Bill will:
- create an additional Easter Sunday public holiday from 2022;
- create a state minimum condition of five days unpaid family and domestic violence each year;
- provide avenues for workers to obtain stop-bullying and sexual harassment orders from the WA Industrial Relations Commission (WAIRC);
- establish an equal remuneration jurisdiction for the WAIRC;
- ensure domestic and support employees employed by WA householders are covered by WA minimum conditions of employment;
- prohibit cash backs (i.e. forcing an employee to pay back part of their wages);
- introduce penalties for non-compliance;
- change key provisions of the Long Service Leave Act 1958;
- permit suitably qualified WAIRC commissioners to be appointed as Industrial Magistrates; and
- take steps to make all WA local governments state-system employers to address the lack of certainty about whether they are national-system employers.
In addition to the changes announced by the Minister, the Explanatory Memorandum to the Amendment Bill identifies a substantial list of other changes.
- Person’s remunerated wholly by commission, percentage reward or piece rates (and other categories of employees) will no longer be excluded from the operation of the Minimum Conditions of Employment Act 1993.
- The WAIRC will be directed to vary the scope of WA private sector awards to ensure they are truly “common rule” awards covering entire industries.
- Additional record keeping and pay slip requirements will be introduced with penalties for non-compliance.
- Industrial organisations will have greater scope to apply for an exemption from legislation relating to the election of officers.
- Local governments will be declared to be state-employers and transitional arrangements will apply to transition most local government employers back to the state industrial relations system without affecting employee entitlements.
- Legislation will allow future declarations to be made removing employers from the national industrial relations system.
- Industrial inspectors will be given new tools to enforce workplace laws without bringing an employer to court. Their powers of entry and investigation are also broadened.
- Penalties for breaching awards and legislation will be substantially increased (e.g. from $500 to $13,000 and from $2,000 to $65,000) and orders may be made against the person who contravenes the award or legislation and other persons involved the contravention.
- Penalties up to $650,000 may be ordered for serious contraventions by corporations.
- Provisions prohibiting damaging action against employees who make certain workplace enquiries or complaints (similar to adverse action provisions that benefit national system employees).
- Prohibitions on sham contracting.
- Various clarifying amendments are made to the Long Service Leave Act 1958.
- New Long Service Leave Act 1958 transfer of business provisions that clarify employees rehired by a new employer within 3 months of the business transfer event will have service recognised with the previous employer for long service leave purposes.
- Unreasonable requirements for an employee to spend money are prohibited.
- Unreasonable requirements for an employee to pay an amount of money to their employer or a party related to the employer are prohibited.
- Agreements that allow an employer to make unreasonable payroll deductions are unenforceable.
Long Service Leave
Many of the changes to the Long Service Leave Act 1958 are aimed at modernising the Act, simplifying language and clarifying existing terms. For example, the Amendment Bill clarifies that the minimum equivalent benefit in lieu of long service leave is payment of the employee’s ordinary pay the employee would have received if they had taken leave (provided that the employer and employee cannot reach an agreement to pay out long service leave until the employee has accrued their entitlement to take long service leave).
Some changes however may have a material impact on particular groups of employees and employers.
The Amendment Bill recognises that casual and seasonal employees may be entitled to long service leave if they reach qualifying periods of service and makes provision for counting service including the treatment of seasonal and other breaks in employment.
Some foreign states and consulates are recognised as employers, as are related bodies corporate where the employer is a corporation.
Transfer of business provisions are substantially amended including recognising numerous ways an old and new employer may have a connection that entitles the employee to have their service with the old employer recognised by their new employer. Employees who are re-hired by the new employer within 3 months of ending employment with the old employer, will have service with the old employer recognised for long service leave purposes even if they were not employed at the time the business transfer occurred.
Local Government changes
Though the WA government acknowledges that most WA local governments operate in the national industrial relations system, their strong view is that local governments should be regulated by state industrial laws rather than federal laws.
Accordingly, the Amendment Bill proposes to move industrial arrangements from the national system to the state system and to preserve individual employee entitlements when local government employees move to the state system.
Whilst the Amendment Bill’s savings provisions will help to smooth the transition to the state industrial relations system, we anticipate there will be a period of adjustment as employers and employees get used to operating within the new system. In particular, enterprise bargaining within the state system will require many local government employers to familiarise themselves with substantially new rules.
Persons remunerated wholly by commission and percentage reward
Currently, persons remunerated wholly by commission and percentage reward are excluded from the operation of the Minimum Conditions of Employment Act 1993 and its terms including paid leave, hours of work, minimum wages and redundancy. After the Amendment Bill is passed these employees will have entitlements to paid leave and other minimum entitlements.
Additionally, the Amendment Bill is currently drafted in such a way that paid leave entitlements may be calculated using an employee’s total years of service (including service prior to the Amendment Bill passing into law). For example, an employee with 10 years service prior to the Amendment Bill becoming law, may be automatically credited with 100 days of paid personal / carer’s leave and 200 days of paid annual leave upon the Amendment Bill passing into law.
Accordingly, unless changes are made in the final legislation, there are obvious cost implications for some groups of employers and substantially increased penalties if the new minimum conditions of employment are not met.
State system bullying and sexual harassment orders
We anticipate that the new avenues to seek orders from the WAIRC with respect to workplace bullying and sexual harassment may be well used by state-system employees previously locked out of similar provisions under the (federal) Fair Work Act 2009.
Conclusion
The changes proposed by the Amendment Bill include a mix of reforms, some of which are likely to have a significant impact on current state-system employers and employees and on local government employers and employees proposed to be dragged back within the state industrial relations system.
In particular, some employers will find themselves bound by new compliance obligations and the risk of substantially increased penalties if they don’t comply.
For existing state-system employees, the introduction of new protections based on protections that have previously existed within the federal industrial relations system may provide opportunities to address workplace behaviours such as bullying, sexual harassment and adverse action quickly and effectively.
Our employment and workplace relations team at Panetta McGrath Lawyers are available on (08) 9321 0522 to offer practical advice with respect to the pending state-system changes.
