Submission to Senate Inquiry into the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020

by Alison Pennington and Jim Stanford

In December 2020, the Senate of Australia launched an important inquiry into the federal government’s proposed Fair Work Amendment Bill.

Core features of the legislation include clarifying and expanding employer power to hire workers on a casual basis, obtain greater flexibility in the use of permanent part-time workers (adjusting hours up or down without penalty, much like casual workers), and exercise greater unilateral wage-fixing influence in enterprise agreement (EA)-making.

The Centre for Future Work were glad to make a submission to this inquiry. The submission assesses major components of the legislation, and finds measures proposed will result in the expansion of employer power to use insecure labour and low-wage enterprise agreements, placing further downward pressure on already record-low wages.

Alison Pennington presented evidence in-person to the Senate Education and Employment Legislation Committee in Adelaide on February 10th. A transcript of her testimony is attached below.

Read the Centre for Future Work’s opening statement to the Senate Inquiry.

The Fair Work Amendment Bill is introduced in a fragile moment in Australia’s history, with wages decelerating to the slowest sustained pace since the Depression – growing by less than 2% per year since 2015, and now at an utter standstill: growing just 0.1 per cent in the September quarter.

In our judgment, several features of this legislation will enhance the power of employers to hire workers on a just-in-time basis, suppress wages, and undermine terms and conditions. Key measures proposed include:

  • Allowing employers to hire workers on a casual basis in virtually any position ‘deemed’ to be casual, with weak and inaccessible permanency conversion rights enabling long-term casual labour use.
  • Reduction in permanent part-time loadings and hours security, allowing employers to treat permanent workers as if they were casual (with the power to adjust hours up or down without penalty).
  • Exempting enterprise agreements from the ‘Better Off Overall Test’ (BOOT) allowing them to contravene Modern Award standards. This will increase below-Award agreement-making and “repurpose” enterprise bargaining into a mechanism for lowering wages and standards – rather than raising them.
  • Other measures aimed at the Fair Work Commission would accelerate the approval of low-quality enterprise agreements: including 21-day approval timelines, weakening of employer requirements to demonstrate that their staff have genuinely agreed to the EA, and restrictions on the participation of unions in the review process.

Together, these changes would constitute a significant weakening of institutional supports for improving wages and working conditions. This is the opposite outcome to the stronger wage growth many economists (including Governor of the RBA Dr Phillip Lowe) agree is desperately needed to support Australia’s more sustainable and inclusive recovery.

You can download the Centre for Future Work’s full submission to the Senate Inquiry below, authored by Senior Economist Alison Pennington, and Director and Economist Dr Jim Stanford.

Full submission