This is an AI Group podcast. It will be a 4.6% increase. You're talking to members about that? Is it added at a level of complexity that they're concerned about?
Well, we will send out and are sending out all of the detailed rates for all of the classifications under the various awards. It's more a matter of implementing those, but the Commission a decade or so, I'll go abandon the idea of flat dollar increases and went to percentage increases, but this year they've got this hybrid approach, which is a significant departure from recent years at least. Is that something you're expecting to continue or might have been a one-off post-COVID or something? It's clearly directed at giving the lower paid employees a relatively larger increase than higher paid employees.
Hopefully this headline inflation figure of 5.1%. Even though the projections are that it's going to increase a bit more yet, the official projections are that it will then fall back to more normal levels. And if that's the case, I think we'll see the Commission awarding a percentage increase again like they have in the past. Among our concerns about the pay increase was the potential for it to spread into enterprise bargaining and appeals by unions for inflationary pay increases past 5% in all the new agreements.
We're starting to see that happen. We are and we warn against this in our submissions in the case, but the Fair Work Commission tends to take the view that because only 23% of the workforce are paid exactly the award rate or the national minimum wage, that those under the bargaining system aren't heavily impacted by the outcome of this case. But I think what has happened since the 15th of June shows that there is a significant impact. It's no sooner did the Commission hand down this decision and the unions were out saying, well, now they want 5%, 6% or even more under enterprise agreements.
So far there's no evidence that they're actually achieving that, but certainly the claims have increased. So the second item we're going to talk about today is the new Labour government in Canberra and what their plans are. So they've announced a relatively lengthy list of workplace relations changes that it tends to introduce as a priority. So it's such a big menu of changes they went all happen at once.
So, and there's also going to be an employment summit, which has been called a school summit, a job summit, an employment summit. I'm not sure if they've said it on a name yet. And that was expected in September and now the thinking might be into October. But can we just go through a few of those changes that will happen possibly fairly on?
Or maybe you could tell us how long they will be away? So one of the first ones to be done is to amend the definition of a casual employee in Section 15A of the Fair Work Act to restore the common law definition. This is something we argued around and thought had settled. So what's going to happen there?
Well, it's very hard to know exactly what's going to happen because it has been so comprehensively dealt with through legislative amendments and award amendments. We now have the certainty that wasn't there for four years or so after the Workpack versus Scheme Federal Court decision and then the Workpack versus Recato Federal Court decision that ultimately went to High Court. But this whole thing around what is a casual employee and someone that works regularly does that then mean they're not a casual anymore? All of that uncertainty or class actions that were being pursued all evaporated when the previous government amended the Fair Work Act to put this definition into Section 15A to define a casual in quite specific terms.
All of the awards have been varied to align with that. And then we had the High Court hand down its decision in the Workpack versus Recato case that in effect largely took the view that the definition in the Fair Work Act is consistent with the common law. So in a casual, you know, Labor's policy about casual employment is to restore the common law definition. But what does that even mean when we've got arguably the definition already in the act?
So I assume that your and others that I are group are talking to the government about this all will be, there'll be some period of consultation. Yes, no doubt, but there's no detail at the moment about exactly how the government will intend to amend that definition in 15A. We won't be really in a rush for it to happen anyway, no doubt. So maybe it can drag along.
So another one is that amend the Objects of the Fair Work Act to include two new objects, improved job security and improved gender pay. Is that likely to happen early and what are the implications of that? I think that will happen quite early because it's such a simple thing to implement, unlike many of the other policy proposals. It's not going to have a direct impact on any particular decisions, but of course in making decisions under the Fair Work Act, whether they be decisions of the Commission or decisions of courts, the objects are important to consider.
So you would assume with these new objects that the intent is to give the Fair Work Commission and courts the direction that they should give more weight to job security. And gender pay equity when they make their decisions about specific other provisions of the Act. Okay, up there with casuals, the government in opposition talked a lot about gig workers and the problems that they saw there. So another one of their commitments is to extend the powers of the Fair Work Commission to include employee-like forms of work to enable the Commission to set minimum standards for contractor platform gig workers.
How will they go about that? There isn't any specific detail on this other than that they do intend giving the power to the Fair Work Commission to set, I guess you would call it industrial instruments for independent contractors of different types. It is very problematic in the sense that we're really talking about wages and conditions being set or prices really and conditions being set for independent contractors. That's not an easy thing to devise given the nature of independent contracting.
But also there's the risk of course of extending far beyond any notion of a gig worker. Where does that start and finish? Even if you look at driving operations on roads, of course everyone is aware of people who ride bicycles and motorbikes delivering meals. But once you start talking about delivery, would that bring in parcels?
Would it bring in the delivery of larger products? You know, it's going to be talking about cars, trucks, it's potentially going to disturb a whole raft of independent contracting arrangements, but there's a lot of detail of course to work through. So one that we spoke long and loud about was trying to retain the Australian Building and Construction Commission that labors committed to getting rid of that and shutting it down. Is that likely to lead to more problems on construction sites?
And is that something that can be done very quickly? It could be done quickly if there is the support in Parliament for it because there is a piece of legislation called the Construction Industry Improving Productivity Act that has the framework for the ABCC, much higher penalties for breaches of the law than what are in the Fair Work Act, for example. And the framework for the Federal Building Code that deals with things like the content of enterprise agreements in the construction industry. So if they repealed that act, it would all disappear unfortunately very quickly.
And there is major concern from AI Group and many other bodies that would mean for industrial relations on building sites. We saw, we've seen over many years, the C of M you in particular face very large fines that they're trying to put them off, but maybe they do, whether it would choose some of the action. So will that sort of thing stop happening? Will the fine storm not happening more with this ABCC?
Well, I think there will be a lot less of that because here we have a regulator that's specifically focused on the construction industry. Without the ABCC, there's still the Fair Work Ombudsman whose job it is to make sure that workplace laws are complied with, but they don't have the focus and the resources on the construction industry that the ABCC's got. And also as I mentioned, the specific piece of legislation has much higher penalties. So even the very high penalties that are being imposed on the C FMEU are not having the required impact.
So if there's suddenly a third of that, then the problem is going to be worse. Okay. So we've also got plans to implement criminal offenses for wage theft as the government calls it. Actually the previous government called it as well.
So how will that work? Is that will that be copying some of the things that have been happening in the States' interrogaries? Yes, we've got so-called wage theft legislation in Victoria at the State level and in Queensland. But there are lots of issues of detail in this area as well.
There's deliberate and intentional acts where a very small number of employers, not reputable employers, deliberately underpay, and those employers deserve to be penalised very harshly. But once you move away from deliberate intent, there's all sorts of other circumstances where people might make a genuine error or they might interpret an award in the case of a non-uniform. So it's not going to be a award in a way that proves to be incorrect. And how these laws end up panning out, it's going to be very important to watch and for a very innocent process.
Yes. I agree with you involved in that. But we've just seen the minimum wage go up in a very complicated way. You can sort of see from that I've had spoken to members myself who say I've got 100 different employees on all on different pay scales and you can just see the frustration of people.
So hopefully it's not going to pick up people like that who just don't accidentally do the wrong thing. Yes. So another one, last one just of these, and you can find them all in the significant issues paper that we put out, implement all 55 recommendations of the Sex Discrimination Commission's Respect at Work report, including the statutory reporting for bi-employers of sexual harassment in their workplaces. So that's one that I mentioned only quickly too, what have big implications for reporters?
Yes. The previous government already moved on quite a few of the recommendations in the Respect at Work report. The one that has been debated most in recent times is whether there should be a positive duty on employers to prevent sexual harassment in the workplace. Our group's view is that's not needed because we have very tough laws at the moment at the federal and state level where employers need to do everything that they reasonably can to avoid sexual harassment in their workplaces.
And if they don't do that, then they are exposed to penalties. So we don't see a need for a new statutory duty, but that is something that the current government is very committed to. Okay. We'll be pushing that no doubt.
So just the final of the three big issues, but also this last one on, it relates to a decision of the full bench of the bill at commission last month. And it was a provision view that all modern awards should be very to include an entitlement to up to 10 days per annum of paid family and domestic violence leave for full-time employees. So I believe that just as we were starting to record this, there have been a change to all of that. What's happening in Canberra?
Yes, we were recording this podcast on the 30th of June. And in fact, just today, there's been a significant development here. As you said, Tony, the full bench of the commission decided that, you know, provisionally decided that there should be 10 days of paid family and domestic violence leave put into all modern awards as an entitlement. Now, what has changed is the new Labor government.
They have a policy of implementing the same entitlement effectively to the Fair Work Act as a national employment standard. The government has written to the commission and advised that they will be introducing legislation to implement this early in the sitting period beginning on the 26th of July. And faced with that announcement by the government, the commission has decided to vacate the directions that he'd issued for the filing of submissions and the finalisation of the case. And await the developments in the parliament on this issue.
Okay, so there's a lot of work to come in with that from Canberra. So I might wrap it up there. Thank you. Stephen Smith, our group, said of National Workplace Relations Policy.
You can find the significant issues briefing on all the significant workplace relations issues at the past month. The member's only at aigroup.com.au. And that's all for now. I'll see you next time.