Employment law reforms may be on the way. Here’s why.

If the skills and labour shortages don’t seem to be affecting your business, you can count yourself lucky. It is tough out there at the moment for employers who are still recovering from effects of COVID-19, disrupted supply chains and global economic uncertainty. The tight labour market is bringing massive challenges for employers while employees are lamenting the slowness of wage increases, their frustration further compounded by rising interest rates and ever-increasing living costs.

Labor’s recent election came with the promise of a summit to bring together changemakers that can explore actionable mechanisms to boost productivity, improve wages and tackle the complex challenges of the labour market. The Jobs & Skills Summit, which was held on the 1st and 2nd of September, covered five broad themes:

• Maintaining full employment and growing productivity.
• Boosting job security and wages.
• Lifting participation and reducing barriers to employment.
• Delivering a high-quality labour force through skills, training and migration.
• Maximising opportunities in the industries of the future.

The summit also promised to have a strong overarching focus on women’s experiences of the labour market and the challenges of ensuring women have equal opportunities and equal pay. It’s long been known that the female workforce, particularly women with children who are not in paid employment because of a lack of access to affordable childcare, could be a rich economic resource. In 2012, the Grattan Institute found that if there were an extra 6 per cent of women in the workforce, we could add up to $25 billion, or approximately 1 per cent, to Australia’s Gross Domestic Product (GDP).¹

An Inclusive Workforce

The unemployment rate is at its lowest level in almost 50 years, but there are still many Australians that face challenges to gaining well-paid employment. Women, First Nations people, people with disability, older Australians, migrants and refugees, and those living in certain regional and remote areas still come up against major barriers when trying to secure fairly paid or secure work. It was acknowledged, yet again, that more must be done to address gender pay equity.

• The gender pay gap in Australia is currently 13.8 per cent, with women in full-time work earning an average of $255.30 per week less than men.
• Women working full time earn less than men working full-time in every industry, even in those that are female-dominated.
• For total earnings, the gap increases to 30.6 per cent, because after age 35, women are more than twice as likely to work part-time than men. Even in households where both partners work full time, women report doing 40 per cent more unpaid work than men.
• Industrial and occupational segregation explains around a quarter of the pay gap among full‑time workers. Over one-third of women are employed in health care and social assistance, and education and training sectors. Average weekly earnings in the health care and social assistance sector are below the national average.²

Improving Job Security & Wages

Lack of wage increases have been a significant complaint from Australian workers, and enterprises should be wary of crying poor when corporate profits were recorded to have increased by 20% through the pandemic, marked as the first time in Australian history where profits have increased, far outstripping wages.³

That’s why employers could see fairer pay and job security play a part in employment legislation reforms. This could mean government-led policies to better ensure employees can negotiate fair pay and conditions above the bare minimum. This will hopefully include more employees covered by enterprise agreements.

Because of income inequality and variability for casual workers, many people have to work multiple jobs. The Jobs and Skills Summit also noted that currently only 2 per cent of workers covered by agreements are employed by small business and bargained outcomes are higher for men than women on average. Plus, the number of Australians working more than one job has increased by 8% per cent since March 2020. It probably comes as no surprise that women are significantly over-represented in casual work. One of the most distressing figures to be highlighted by the summit was that in 2021-22, $532 million was recovered in unpaid wages and entitlements by the Fair Work Ombudsman.

As an employer, it is important that you understand your legal obligations on the structure of your workforce and the impact of the various instruments that may apply to your employees to ensure you are protected. We recommend you seek legal advice when making any significant change in your business with regard to your employees.

Expect more support for training

Employers can expect to be better supported with more funding benchmarked to train and educate workers through skills agreements. It has been highlighted that Australia’s current skills and training system is falling short of the mark to create a dynamic and diverse workforce. There is currently a higher proportion of technician and trade occupations that are facing skills shortages, with completion rates for apprenticeships declining overall, and only 69 per cent of students finishing their undergraduate degree in 2021 starting full-time employment within six months of completion.

The Federal Treasurer Jim Chalmers, along with fellow ministers Julie Collins and Stephen Jones, released details of two tax incentives contained in the March budget of the previous government that had not been legislated. The incentives ​​would mean small businesses with an annual turnover of less than $50m would have access to a bonus 20% deduction for eligible spending on external training of employees by providers registered in Australia until 30 June 2024. They could also apply for a 20% deduction supporting digital technologies uptake until the end of next June.

While it is agreed that governments should do more to improve the skills and training systems, businesses will also be encouraged to invest directly in training their own workforce, especially given the labour shortages and availability of candidates.

Need help with Workplace Relations?

If you need help navigating the current Fair Work Act or need legal assistance with employment-related issues, get in touch with the Coulter Legal Workplace Relations team.

1.Grattan Institute (2012) Game-changers: Economic reform priorities for Australia. https://grattan.edu.au/wp-content/uploads/2014/04/Game_Changers_Web.pdf [accessed 18 April 2017]
2. https://treasury.gov.au/publication/2022-302672
3. https://australiainstitute.org.au/post/low-wage-growth-in-australia-didnt-happen-by-accident-its-the-system-working-as-intended/#:~:text=But%20while%20everyone%20seems%20to,didn’t%20happen%20by%20accident