How COVID-19 is Impacting Australia’s Industrial Relations System

4 min read ·  

With new jail sentences in Victoria and changes to Modern Awards rushed through, COVID-19 is set to shake up industrial relations and employment laws.

Despite industrial relations being federalised over 10 years ago, Victoria has legislated their own jail penalties for business owners and directors. Individuals who are convicted under the new Victorian Wage Theft Act 2020, which criminalises underpayments, face a maximum of 10 years imprisonment the federal government has also indicated intentions to criminalise wage theft.

This move parallels some of the most rapid industrial relations reforms in Australia’s history seeing changes to Awards rushed in a matter of days. Meanwhile, Prime Minister Scott Morrison has vowed to overhaul Australia’s Industrial Relations system at a federal level, in a move to prioritise getting Australian’s back to work. The COVID-19 pandemic has already left permanent marks on Australia’s employment laws, proving significant changes to modern awards can be rushed. Not only has the cost of non-compliance increased, but the ever-shifting goalposts for employers have created a higher level of uncertainty in the rules.

Case Study

The Fair Work Ombudsman v Priority Matters Pty Ltd & Anor case decided that Directors who displayed wilful blindness were found to be personally liable for unpaid wages. This landmark court decision sets a new precedent for further fines to be handed down against directors of non-compliant operators. The Victorian Parliament passed the Wage Theft Act 2020, which criminalises underpayments with a maximum of 10 years imprisonment.2 With Victoria making the first step, it is expected that other states will follow suit as these types of larger reforms often make their way across the country through harmonisation. State-based labour-hire legislation is a suitable example where legislation written by the State Government in Queensland was adopted in a similar form by the Victorian and South Australian governments shortly after. Federally, the Attorney-General Christian Porter has indicated the federal government will be taking a strong stance on wage theft as well.

What’s next?

With the entitlements of modern awards becoming increasingly complex and goal posts shifting at an unprecedented rate, many Australian businesses have found themselves unable to keep up. 

Pay calculators and award compliance software have become the new industry standard. 

Within Tanda, our award engine automatically adds compliant pay rates to your rosters and timesheets, including base rates, overtime, allowances, and higher duties. All managed awards, including the hospitality award, have built-in base rates that sync with payroll and update when Fair Work mandates change. This means that award rates are updated in accordance with all future Fair Work changes and birthdate rollovers for employees, keeping businesses compliant without constantly monitoring Fair Work’s site for updates to complex rule sets.

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