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  • If passed, the Federal Government’s IR Omnibus Bill will mark the most significant employment law reform in more than a decade.  
  • The IR Omnibus Bill is best understood as a patchwork of measures aimed at improving, rather than replacing, the system put in place by the Fair Work Act.
  • The final form of the Bill remains uncertain, as one of its most contentious proposed provisions has already been withdrawn while other provisions remain the subject of heated stakeholder debate and political opposition.

In the shadows of COVID-19, the Federal Government through June to October last year, undertook a consultation process about the operation of the Fair Work Act 2009 (Cth) (‘FW Act). The outcome was the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2020 (‘IR Omnibus Bill’). 

The IR Omnibus Bill is set against some of the reactive and temporary measures introduced in response to COVID-19, but is directed at addressing employer concerns that have arisen over a number of years about various aspects of the FW Act. Chief among these concerns was the stated ‘broken’ enterprise bargaining system and the uncertainty associated with casual employment.

The Federal Government has positioned the IR Omnibus Bill as assisting Australia’s recovery from COVID-19 by way of evolution, not revolution. The changes in the IR Omnibus Bill are stated to remove inefficiencies in the FW Act and achieve practical wins that benefit both employers and employees. The Government has therefore promoted it as creating certainty and flexibility for employers and employees, and jobs. 

Industrial relations reform, however, is controversial. Aside from the brief bi-partisan response to COVID-19 last year, changes are hard fought. So it is with the IR Omnibus Bill. Labor opposes the IR Omnibus Bill and has used the opportunity to set out its vision for industrial relations reform, and the final form of the legislation appears to be in the hands of the crossbenchers. The Government has already stepped away from one of the more controversial aspects of the IR Omnibus Bill, citing its willingness to listen and work constructively with the crossbench.

This article summarises the key elements of the IR Omnibus Bill as at the date of writing, focussing on the high profile issues of enterprise bargaining and casual employment.

Enterprise agreements

The IR Omnibus Bill makes a number of material changes directed at simplifying and streamlining the making and approval of enterprise agreements (‘EA’). The proposed changes reflect an attempt to address the fall in the number of new EAs being made since the introduction of the FW Act, and tap into a sentiment that effective collective bargaining is ‘broken’ but remains the best way to achieve the FW Act goals of productivity and fairness. The changes seek to address employer criticisms that the current process places excessive weight on an overly technical (and on occasions, hypothetical) application of the ‘Better Off Overall Test’ (‘BOOT’), as compared to the practical realities of what is actually required to deliver overall benefits to employees.

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