Government deal to pass new IR laws leaves businesses shell-shocked

An agreement with crossbenchers by the federal government to assure passage of its proposed ‘same job, same pay’ laws as soon as next week has left Australian peak business bodies and the construction industry shell-shocked.

The Business Council of Australia (BCA), Master Builders and Australian Chamber of Commerce and Industry (ACCCI) have labelled the deal as a blow for businesses large and small, while they also expressed concerns that the legislation will have unintended consequences for the labour market and ongoing cost-of-living pressures.

The Closing Loopholes Bill has yet to go before the Senate, but an agreement reached with crossbenchers Jacquie Lambie and David Pocock has assured passage of parts of the Bill when it is presented to the upper house next Thursday.

The ‘same job, same pay’ changes to be implemented by the new legislation are aimed at ensuring that if businesses outsource employee positions to labour hire companies, they are paid the same as full-time employees doing the same work in the business.

Unions and the federal government have hailed the move as a major win for millions of Australian workers, with the legislation also set to make deliberate wage theft a criminal offence and provide Fair Work Australia with more powers of prosecution.

Proposed changes to casual and gig economy jobs as part of the Closing Loopholes Bill will be presented to parliament early next year, following the release of a report of a Senate inquiry into the impact of the proposed amendments to the industrial relations legislation.

Australian Council of Trade Unions (ACTU) Secretary Sally McManus has described the deal with crossbenchers as a ‘welcome Christmas present for working people’.

“The Australian public understand that this legislation delivers better rights for workers which deliver better wages during the cost-of-living crisis,” McManus says.

“These changes will make work a safer place to be, as well as give workers a pay boost at a time where they really need it.

“The companies that will be crying loudest about these changes are some of Australia’s biggest and most profitable.

“Mining companies such as Gina Rinehart’s or Qantas, who’s CEOs are receiving huge bonuses, they don’t feel the hardships many Australians are feeling right now. They can well afford these changes, but they fought against them as they don’t want to see their mega profits take the smallest of hits. A small hit for them, a massive difference for working Australians.”

The response from business groups has been swift with the BCA, an organisation whose members comprise the CEOs of more than 100 of Australia’s biggest companies, saying the legislation will hit jobs and drive-up costs.

“Far-reaching union power and significant new changes to labour hire are being pushed through the Senate today by the government without consultation and to avoid scrutiny of the current committee inquiry,” BCA’s CEO Bran Black says.

“This ‘omnibus bill’ will impact every business and every worker in Australia and it is extremely disappointing the government has abandoned proper consultation to claim a Christmas ‘win’.

“We remain extremely concerned that instead of making workers better off, this Bill will cost jobs, drive up prices and make it harder for businesses to operate.”

Master Builders Australia CEO Denita Wawn says the legislation fails to take into consideration ‘how building and construction work is performed’.

“The labour hire changes undermine a range of legitimate arrangements in our industry, including the use of labour hire and specialist service subcontractors,” Wawn says.

“These arrangements are not ‘loopholes’ but are lawful, long-standing, and they are central to how building works are undertaken both domestically and internationally.

“If you’re a subbie like a brickie, a tiler, a sparkie or a plumber, you are now in the firing line. We know they were not the intended target of this change but the government has failed to hear their pleas.”

Master Builders is concerned the changes will hit smaller subcontractors in the residential sector hard.

“It opens the door for this part of the sector to be subject to many of the same practices that have plagued the commercial and civil aspects of construction for decades,” Wawn says.

“For the otherwise vibrant and innovative residential building sector, it simply means more disputes, higher costs, lower productivity and fewer small residential builders, tradies and specialist contractors – all in return for higher construction costs and less new homes for Australians.”

The ACCI’s CEO Andrew McKellar says businesses are concerned the ‘same job, same pay’ laws will add another layer of red tape for businesses while increasing costs for ‘legitimate labour hire arrangements used to deal with busy times or staff shortages’.

“This won’t just impact the mining sector,” McKellar says. “A range of vital industries rely on labour hire including healthcare, construction, manufacturing and hospitality. These expenses will be ultimately passed on to consumers.”

RCSA, the peak body for the recruitment and staffing industry, is concerned the new legislation will add an ‘enormous administrative burden on staffing firms’.

“It will create far more problems than it addresses in terms of administrative and bureaucratic headache for the people who are trying to make it work on the ground,” RCSA’s CEO Charles Cameron says.

“Same job, same pay has huge consequences for job creation in Australia, as well as the cost of living.

“The cost of health will go up, local council rates will rise and it will take longer to find a relief teacher for your child’s class.

“The parliament has cut short the examination of negative impacts and, in doing so, has short-changed everyday Australians.

“Australians are asking how life has become so expensive and difficult.  Well, here’s a prime example of how this is happening, bit by bit.  This deal represents higher cost of living, less responsive services and more pain for everyone.”

The business sector has been lobbying hard to push back on the proposed changes and had been waiting on the findings of a Senate inquiry into their potential impact following public hearings earlier this year.

The report is set to be handed down on 1 February 2024. This is at the core of business anger today over the government’s crossbencher deal as it will push through the legislation next week ahead of the report's release.