Business Council chief executive Bran Black has criticized the Australian government’s Fair Work Legislation Amendment (Closing Loopholes) Bill, stating that the impact of the proposed changes on Australian businesses cannot be accurately determined due to outdated and flawed data and analysis.
Mr. Black pointed out that the explanatory memorandum for the Bill, which is 521 pages long, contains admissions that the data used to justify the changes is either outdated, limited, or unavailable. Additionally, some of the assumptions made by the government for its cost-benefit assessment, such as estimating that it would take employers just 15 minutes to apply the new multi-layered test for casual employees, were unrealistic.
Key issues identified in the data and analysis include:
- Heavy reliance on previous inquiries’ findings, including dissenting reports from Senators.
- High uncertainty regarding calculations related to the labor hire workforce due to significant limitations in available data.
- Lack of explicit alignment between the statutory provisions in the Bill and the data used to estimate the impact on casual employees.
- Inability to estimate the cost to businesses of disputes based on the new casuals test.
- Qualitative interviews with a limited number of casual employees and employers informing the legislative settings.
Mr. Black expressed concern about the 15-minute estimate for employers to determine whether their casual employees meet the criteria for permanent roles under the new pathway for conversion after six months. The explanatory memorandum revealed that this estimate was derived by arbitrarily adding 5 minutes to the existing 10-minute estimate, even though the new test involves considering up to 12 different criteria.
The government estimated the total annual cost to businesses for implementing the new test at just $593,055 for all Australian businesses employing casual workers.
Mr. Black emphasized that the analysis in the explanatory memorandum does not stand up, and the proposed changes will have significantly higher and wider-ranging cost impacts on employers, employees, and consumers than claimed. He recommended that the government reevaluate the proposed reforms.