This is an AI Group podcast. Hello, EOS Podcast. We'll be discussing the most significant workplace relations issues for the period, February to March, 2025. This podcast is referring to our member-only report, our significant issues, workplace relations report, which is available on our website at AIgroup.com.au In the news section, under reports and policies.
On that page, you need to select workplace relations. With me today is Brent Ferguson. Hi, Brent. Hi, you're this.
Brent is AI Group's head of National Workplace Relations Policy. I'm your next Blackmore, a principal advisor in Brent's team. The significant workplace relations issues report, again, which we're talking about today, covers a raft of material for members. But in this podcast, we are focusing on three issues of note.
These are the third work commissions, working-from-home proceedings, model-term proceedings, and the annual wage review. Then we'll look at the passing of the workplace gender equality amendment at BILL, and then we'll talk about restraints of trade. So Brent, first off, we're recording this at the beginning of April with an election now called for 3rd of May, and working-from-home is an election issue and relevant for many of our members. Can you tell us about the work-from-home case and what might be the implications of business?
Yeah, happy to do this. This is a major set of proceedings that has been brought on by the Commission of its own motion. Largely, it will be by full bench with President Hatcher presiding. It's looking at what changes need to be made to awards to effectively facilitate working-from-home arrangements, being implemented by employers and employees, and what needs to be done to remove award-derived barriers implementing working-from-home arrangements.
Now, it's looking at the prism of the Clark's private sector award, and it's really looking at the potential development of a working-from-home clause that could ultimately be used as a template and put into other awards, but these proceedings are looking at the Clark's award in particular. Now, within that context, I think it's pretty clear that the union movement, particularly the ASU and the ACTU, will press for new rights to request the right to work-from-home, and also likely an absolute right for workers to work-from-home. Now, we will oppose the imposition of that kind of right. From our perspective, we'll be pushing for changes to be made to the award to remove some of the obvious barriers to employees and employers, and planning working arrangements that suit working-from-home.
I won't take you through all of it, but we think there are a number of sensible changes that should obviously be made to bring the award up-to-date with current working arrangements. Now, one classic example is that there should be an ability for workers to take time off if they want during the middle of the day, if their employer agrees, if they need to deal with personal arrangements, picking up the kids, dropping off the kids, and they should be able to make those hours up outside their normal re-hours. That might be in the evening or early in the morning. In order to suit their circumstances, now, we think the award should permit that.
We're both parties want it to occur. Another obvious element of the award that needs fixing is the really archaic requirement that people have to work all their ordinary hours in a row. Why are the award works now is you need to work your hours continuously so you start work, and then you have to work the full day and only take the death of that breaks under the award. Now, that might have made a lot of sense when people were travelling to an office, but it doesn't make much sense when people are working from home.
It doesn't reflect the way people choose to work nowadays. So we're going to propose an affluxability that allows some great choices to be made by employees and employees around these sorts of issues. It's got a fair way to go, these proceedings in S. At the moment, there's been work being undertaken by the Commission to develop a survey that's going to be undertaken of employers and employees to identify what kind of issues they're grappling with.
We've been working hard to get that survey to operate in a sensible way. And then this Friday, we've got a conference before the Commission, where we're going to see whether we can reach some sort of agreement with the unions around what a model clause might look like. Now, if we don't reach total agreement, they'll be arbitrated, contested proceedings, if you will, conducted over the second half of this year. That's really interesting, Brent.
So it seems to be more about situations where people are agreeing to working from home arrangement and making the award work and ensure that employers can be compliant with those more flexible arrangements. From our perspective, what we're wanting to see is changes to the award that enable arrangements that people are able to be implemented. We're both sides are happy to accommodate flexibility. We think the award should allow that.
And it really is time, as far as we say, to sort of update the award so that it reflects the practicalities of the way people are actually working and the way people want to work. Where employers can agree to it. That's great. Thanks, Brent.
And so, since we're in the talking about industrial instruments here, I know that there's been a decision from the Fair Work Commission about the model terms for enterprise agreements. I was wondering if you could talk to that, please. Happy to speak to that as well. These are changes to the model terms that are specified under the or previously specified under the Fair Work Act dealing with dispute resolution, consultation and individual flexibility arrangements.
These are terms that are, well, at least in relation to flexibility arrangements and consultation, taken to be a part of an agreement and a depise agreement. If you don't implement a clause that you draft yourself in the agreement, the model disputes clause is there just as a template to sort of inform bargaining. Now, previously, these model clauses were set out under the legislation, but as part of the closing loopholes reforms that were implemented, the Fair Work Commission was charged with effectively reviewing and potentially redrafting these terms. Now, as a result, following the passage of that legislation, there were some fairly hurriedly convened proceedings where the Full Bench Convened Conference and a hearing of the major parties, including ourselves, to argue about what changes should be made to these model terms.
Now, the ACTU advanced a very ambitious raft of proposals for changes to the award. Now, we strongly oppose many of those claims and ourselves, obviously, for the maintenance of the status quo. Now, we've had a decision, just recently handed down by and large the Full Bench rejected most of the ACTU's proposals, but they did make some changes to those model terms that people should be aware of. And we set out a member advice that details what all of those changes are.
The thing I would flag though is that really the big fight was around the consultation clause. Now, more specifically, the fight was about the element of the clause that said where an employer is implementing a definite decision that it has made to implement significant changes or changes that would have a significant adverse effect on employees, they need to be consultation with the workers and the representatives. Now, what the ACTU has proposed is that the trigger point for that consultation isn't the making of a definite decision, but just where the employee is proposing a change. Now, that would be quite a magical shift from the way the award currently operates.
And we strongly opposed that change. Now, ultimately, the Full Bench wasn't persuaded to adopt the ACTU proposal, but what they have said is that effectively, you know, they had some sympathy for the arguments that the ACTU proposing and they're going to convene further proceedings later this year to look at that again. And so we can better like those issues in further detail, but at the moment, sort of our arguments carried the day, but we'll have to revisit that later this year. Yes.
Sounds like a good win there, Brent. And I guess we'll be keeping a close eye on involvement on that later this year should proceed. So then, you know, difficult business times at the moment, and we're coming up to mid-year with the annual wait review decision. Any insight on that?
Well, just at that time of year again, in S, where we have to advance our initial submissions in relation to the annual wait review, there due to this coming Friday on the 4th, and we're sort of visily finalizing those at the moment. And, you know, from our perspective, we'll point to a raft of moderating factors that the expert panel should take into account when they're trying to land on a number this year without taking you through all them. Obviously, what should we imagine in the expert panel's mind from our perspective is the reality that we have moved to a lower inflationary environment so that cost of living pressures have decreased. At the same time, we're seeing, you know, frankly, very difficult economic environment.
If you look at the pandemic aside, we're looking at some of the most difficult economic circumstances we've facing almost 30 years, really going back to the recessions of the early 90s. So we've got that headwind of the industry's facing, and it's particularly pronounced in some sectors where there are a lot of water lines, so the retail sector, the manufacturing sector. On top of that, we do have a weakening of the labor market, at least in the private sector, and as well as that, there is, of course, the superannuation increase that is going to be operating from July, and that the commission has consistently accepted the moderating factor on what sort of level of increase it would grant. So, early days, we'll see where the commission lands, but from our perspective, you know, we would say that there is a need for a moderate approach compared to what's taken over the last few years.
And one of the further really significant moderating factors that we will point to is, frankly, the persistently poor productivity performance of the Australian economy. We still have this ongoing problem of very low levels of growth in our level of productivity, and that we will emphasize must be a key moderating factor on the quantum of increase that the commission can award and that industry can sustainably accommodate. That's great. I think that comes to our next topic that we thought would be good to discuss today, and that's around the workplace gender equality and internet.
Are you able to take us through those changes, Enes? Yeah, sure. So, just so everyone knows, I'll just call it the WIGI Act by way of acronym. It's create, creates obligations for certain employers around gender equality in the workplace.
If employers who need to report to WIGI do not do what is required under the Act, they're non-compliant, and that can impact on their ability to participate in federal government procurement for a value of above 80,000. So recently, the government, in its continuing commitment on gender equality measures has passed these changes to the Act that require large employers, approximately 500 or more employees, to actually set three targets and achieve those targets over three years. So one of those can be American, the other action targets. Now, the time of setting these targets has been delayed by 12 months.
However, in the current reporting period, this will be the baseline. So employers just need to have a think about what their baseline is going to look like, because it will potentially impact on what targets they might select next year. The big thing here is, obviously, it'll be measured over this three-year period, but if an employer has a reasonable excuse for not meeting their targets or achieving sufficient progress, we can do can decide to excuse that. So the big thing to look to here then is what is a reasonable excuse.
And we're liaising with WIGI and we encourage employers to approach WIGI and to find some more information about reasonable excuse. And that's pretty much it on that Act, Brent. Did you have anything else you wanted to add? No, I think that really comes at you, yes.
But I think we did push very hard during the passage of that bill for greater clarity around how that reasonable excuse concept will be defined. We didn't get that through the passage of the legislation, so now really we will shift to pushing with G to provide further guidance as to what it will accept in that regard. But we'll have to see how we go with that. We're very keen to get any feedback members to have around the operation of this new legislation.
Members should reach out to the team and we're more than happy to help them on this. And really, that is the point we'd say, in relation to all of these issues, we're very keen to talk to any members who have questions around these or any of the other issues coming in the significant issues report. And we're very keen to get feedback on how we should advocate for their engagement with government commission or other bodies. Yeah, that's exactly right.
So circling around then, we've covered a couple of things here. But I see the government has made some commitments out of its review on the restraints of trade. Can you tell us a bit about that, Brent? Well, this was a bit of a surprise that this was done during the budget, but it wasn't any shock that this was going to be on the Labor government's agenda.
We've been looking at a review over the last year or two that was being conducted by Treasury in relation to the use of what I'll just call the risk rate of trade type provisions in employment contracts. And these are causes that restrict employees from moving to a competitor post-determination of their engagement, or potentially causes that restrict the use of confidential information about an employer, or even that restricted employee from soliciting clients away from an employer after they've resigned from their employment. Now, Treasury has been undertaking this review. It's been quite clear that this was on the Labor Party's agenda.
What we saw in the budget was an announcement that they would act if reelected to restrict the use of these sorts of Australian trade contracts, or employees that are earning below the high income threshold if they were reelected. We yet to say the precise parameters around which sorts of restrictions will be prohibited, so there's still some detail to find out. But that's a clear new commitment that the Labor Party has made as part of this election campaign. Yeah, and I think also for those people who aren't aware that the high income thresholds are actually around 175,000 just for those who weren't aware of that.
If there was a little more detail to, I think, in the budget that the government actually might think of taking this a little bit further, it's going to look at considering and consulting on the non-solicitation clauses, and even perhaps tinkering around with the availability of non-compete clauses for high income workers. If they did do this, as far as they're saying in the budget, anyhow, I think they're thinking from like 2027 with a prospective application, but I guess it's what happens. There's some way to go. We've been in that engagement with Treasury.
We've been advocating for the legitimate ability of employers to utilize these clauses, but in sensible circumstances, and I think we'll continue to press for the importance of these sorts of provisions in specific context going forward. But we'll have to see how the election unfolds. Then, as always, we'll be looking to engage with the government, if it's a Labor government that's returned around the development of the detail around all of this. Yeah, like we've certainly recognized that the importance of keeping confidential information, confidential and business goodwill, so we're very much behind members in this regard.
And also, as he said, Brent, there is a way to go on this issue, or we've seen so far as a reference in the budget statements that there's no draft legislation or as far as we are aware, any report from the competition task force. And I really would like to take this moment to reiterate, it continues to be AI groups' position that misguided or heavy-handed limits like what's proposed on non-compete clauses or other restraints would really be a backwards step, and would give rise to a raft of unintended consequences for industry, for employees and our economy. These clauses are only used when they are reasonable and necessary to protect and employ as legitimate business interests. We will be making this clear to whoever is in the next government in no uncertain terms.
So, I guess, Brent, we've covered a few issues here, but the report covers a raft of additional issues, doesn't it? As always, it goes through the full range of workplace relations developments that are implied at the moment. It is detailed, but I'll just point out for members, at the start, there is a succinct executive summary that really gives you a snapshot of the raft of workplace relations issues that will be on people's radar at the moment. Great.
So, I'll wrap it up there, Brent. Thank you very much. Brent Ferguson, our head of National Workplace Relations Policy. For members, you can find the significant workplace relations issues report on all the significant workplace relations issues for the past two months at AIgroup.com.au.
And that's all for now, so see you next time. Thanks for that, you guys. Thanks everyone.