IR Laws to be tweaked, not overhauled, in Albanese Government’s second term

Following its comfortable win in the recent Federal election, coupled with a strong contingent of Greens Senators represented in the Upper House, the Albanese Government stands well placed to continue seeking significant IR reform during its second term, though initial signs point to legislative change being more limited than what has been witnessed since it was first elected to power in 2022.

Former Workplace Relations Minister, Senator Murray Watt, has been replaced by Amanda Rishworth, who was previously the social services and NDIS Minister during the Albanese Government’s first term. Ms Rishworth reports having experienced “the hard edge” of the Howard Government’s 1996 IR changes when she was no longer offered work after refusing to sign an AWA when she was a teenager, but there seems little appetite to pursue significant changes, with the most substantial element of IR reform currently on the agenda being the proposed prohibition of non-compete clauses for certain workers.

The initiative flagged earlier this year by Treasury, which flowed from the March Budget, will prohibit non-compete clauses for workers on incomes below the high income threshold (currently, $175,000 a year), from 2027 (see our related article). The prospective operative date is intended “to give businesses and workers time to adjust”, though it is appropriate to acknowledge that non-compete/restraint clauses are notoriously difficult to enforce in any event. Treasurer, Jim Chalmers, recently indicated the Government would also consider extending the restrictions on non-compete clauses to workers earning higher incomes, and will debate curbing non-solicitation clauses for clients, as an example.

Filing its submission to the Minimum Wage Panel of the Fair Work Commission (FWC) as part of the 2024-25 Annual Wage Review is of immediate interest to the re-elected Government (due 16 May), with Prime Minister Albanese previously confirming the Government would support an “economically sustainable real wage increase” (see our next article for more detail). In addition, in response to an employer-driven application to the FWC to drastically overhaul the Modern Retail Award by seeking to bargain away conditions such as penalty rates and paid/unpaid breaks, Labor has pledged to “legislate to protect penalty rates in awards” to ensure “wages of around three million workers do not go backwards”. An upcoming review of the Government’s ‘Closing Loopholes’ legislation may also identify opportunities for further refinement.

Separately, a shifting in the balance of power in the Senate has the potential to embolden the Greens to pursue its IR agenda, with doubling of paid parental leave to 52 weeks, implementation of a four-day working week, and the introduction of 12 days paid reproductive leave as a minimum standard among the party’s desired objectives.