Debate over proposed IR reforms heats up, as Labor pledges to oppose any bill that “cuts pay”

The debate over the Coalition’s industrial relations omnibus bill is escalating, with Labor saying it will oppose reforms which would result in pay cuts for workers.

The Fair Work Amendment Bill, introduced to parliament late last year, proposes a suite of new arrangements including larger penalties on employers who deliberately underpay workers, a new definition of a casual worker, flexibility of award penalty rates for part-time workers, and the suspension of the Better Off Over All Test (BOOT) in certain circumstances.

Federal Labor revealed in parliament on Tuesday that it would oppose the bill in both the Senate and the House of Representatives.

Labor Shadow Minister Tony Burke says Labor will not vote for the bill because it would ultimately lead to lower wages for workers.

“There is no way we will vote for a bill that cuts pay,” Burke tells SmartCompany.

Burke says workers were “the heroes” of the pandemic and are owed a debt of gratitude for working in frontline roles under difficult conditions.

“Before this legislation was introduced we offered a simple test — it had to deliver secure jobs with decent pay, this bill delivers the opposite,” Burke says.

Labor’s main objection to the bill is the suspension of the BOOT, which would enable employers affected by COVID-19 to strike two-year workplace agreements even if they do not comply with the test.

Under the current system, the Fair Work Commission applies the BOOT to make sure employees are not worse off under a new agreement when compared to the relevant industry award.

Labor has vowed to oppose the reforms until the suspension of the BOOT is removed.

Peter Strong, chief executive of the Council of Small Business Organisations Australia (COSBOA), believes it is too early to say whether removing the BOOT for COVID-19 affected businesses would have a negative outcome of workers.

“At the end of two years, then they will know if suspending the BOOT works or not,” Strong tells SmartCompany.

Strong supports the bill in its current form, saying changes to part-time overtime pay and a new definition for casual workers are needed.

“We see it as quite benign in many ways,” he says.

Under the planned changes, employers can offer part-time workers across more than ten industry awards in retail and hospitality overtime hours without paying a higher rate.

“It’s so obvious that if you’re a part-time worker, you are disadvantaged because it’s cheaper for the employer to put on a casual worker than it is to offer a permanent part-time worker overtime,” Strong says.

Strong says the issue will undoubtedly turn political as a federal election approaches at the end of the year.

Industrial Relations Minister Christian Porter responded to Labor’s objections to the bill yesterday, saying they were misguided and made “a totally false claim that workers would lose pay under the government’s proposed IR reforms”.

When the bill was introduced to parliament in December, Porter said the reforms were a balanced response to known problems, and that he welcomed “further submissions to be made by all sides of the debate”.

“The government will be willing to consider any sensible amendments that pass the simple test of being good for job growth,” Porter said.