Lawyer RICHARD CALVER is a specialist in industrial relations. Here he outlines some fundamental misgivings around Labor’s so-called “Closing Loopholes” bill. He has a word for it… 

THERE’S a bill before federal parliament that is summed up in one word: egregious, meaning extraordinary in a bad way.

I’m referring to the government’s proposed changes to workplace relations legislation – the so-called “Closing Loopholes” bill.

More on the title later, but in my opinion, the Senate committee examining the bill should recommend it be withdrawn and reconsidered (except for the worthwhile provision that would enhance protections against discrimination for workers who have been subject to family and domestic violence). 

Why do I have such a strong view? It’s not because I’m on an ideological mission. It’s because the bill represents bad policy and bad law. 

At one level, I shouldn’t complain because the provisions create a picnic for employment lawyers. But at a more fundamental level, bad laws punish employers, employees and the country. 

Here are just a few of the reasons why I’ve reached this viewpoint.

1. The bill comes hard on the heels of the passage in December of one of the most complex pieces of workplace relations legislation ever introduced, particularly the bargaining provisions. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 passed the Parliament with its provisions being rolled out over the course of this year and the final tranche coming into effect this December. The workplace relations system is so complex already that the government department administering these laws, the Department of Employment & Workplace Relations, has itself admitted to underpaying staff for more than a year. Greater simplicity, not more complexity, is needed.
2. The name is deeply Orwellian: there are no loopholes being closed or problematic technicalities rectified. Instead, the reforms are fundamental, including turning on their head’s laws established by the High Court that have brought certainty to the topics of who is or is not a casual employee and to the issue of who is an employee compared with a contractor. The bill’s provisions will create uncertainty. Uncertainty about labour costs deters investment. 
3. How much the bill will cost the economy, you and me in reality, is a mystery. The Regulatory Impact Statement is inadequate to do this, a matter that is admitted in the terms of the RIS. There are very large areas of uncertainty that would be created especially because in some areas, the final impact would not be known until the Fair Work Commission makes a decision. This is especially the case where the commission is provided with new powers to regulate independent contracting and the commercial arrangements that operate across the supply chains that use road transport services. That is not a useful model when seeking to assess costs.
4. The provisions will severely harm the labour-hire industry and add to complexity. I use this area to illustrate how the bill throws a spanner into arrangements that are working well now. The commission would be given new powers to make orders about the supply of labour between businesses. If subject to a commission order, the host business must ensure that the employee engaged via a labour hire or contract arrangement is provided with no less than a “protected rate of pay” or the full rate of pay that would be payable to a worker employed directly by the host business under an enterprise agreement or similar. But the affected employees are those of the labour hire company and may not have the skills or the experience of the workers who negotiated the enterprise agreement with “the host”. These employees could also be subject to a number of commission orders where they work at different host places of work. Plus, these arrangements could apply to a whole raft of subbies in the building and construction industry, for example, where as part of their usual business they supply their labour to a “host” employer. It’s difficult to conceive that this was intended. The running of a labour-hire business will become very difficult and the bill would discourage use of this form of engagement. 
5. Workplace delegates are currently protected by workplace laws. But this bill would extend that protection ad absurdum by giving union delegates a range of new rights. For example, employers must give delegates access to “workplace facilities” that could include access to a business’ email system, inclusive of communication with non-members. There is an uncalled for incursion on the rights of independent contractors.
6. The provisions go well beyond protecting vulnerable food delivery drivers and others in that sector. The bill gives the commission the power to set minimum standards orders for “employee like workers” and “road transport contractors”, the latter being far too close to the disastrous consequences that flowed when there was last an attempt to regulate owner drivers federally through a tribunal system.

When you consider the many consequences of the bill it quickly becomes apparent that significant damage could follow. 

So keep in mind the words of former US President Theodore Roosevelt: “It is difficult to make our material condition better by the best law, but it is easy enough to ruin it by bad laws.”