Big Issues Impacting Workplaces In 2018

by Seyfarth Shaw LLP
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Social, technological and economic forces impacting the workplace will continue to pose challenges for employers, employees, unions, policy makers and regulators in 2018.

Disruption

In 2016 the CEDA reported that 40% of Australia’s workforce could be replaced by automation within the next 10 to 20 years. Of course, automation has been happening since the industrial revolution – but the nature, pace and scale of automation is now being fuelled by digital disruption. These changes are happening now, or their seeds are being sown in many a workplace.

The Government recently established the Senate Select Committee on the Future of Work and Workers. Expect its report in June.

Corporate accountability for workplace breaches

This is one for boardroom ‘risk buckets’. Expect to see increased activity from the Fair Work Ombudsman targeting holding companies and franchisors following the enactment of the Protecting Vulnerable Workers legislation in September 2017. These changes bring home accountability to holding companies and franchisors for certain workplace contraventions by their subsidiaries and franchisees. These changes take individual and corporate responsibility for workplace compliance to a new level.

Wage growth and bargaining

There are mixed views here with economists tipping a return to healthy wage growth. Low wage outcomes have been reflected in collective bargaining. Tight economic conditions have seen many an employer “bunker down” to avoid high wage outcomes – effectively acknowledging the medium to long term impact of high cost outcomes is not worth the short term expediency of buying workplace peace. More than ever, collective bargaining and “workplace strategy” is grabbing the attention of the C-Suite, given their outcomes significantly impact the bottom-line and with compounding effect.

In the area of major project infrastructure, labour shortages will intensify in 2018. This will see a return to high cost “greenfield” agreements to incentivise project stability. Expect higher than average wage outcomes for skilled and semi-skilled labour, at least in some sectors.

Sexual harassment claims

In the wake of high-profile sexual harassment allegations against prominent individuals both here and abroad, expect to see an increase in the number of claims made in 2018. The tolerance for sexual harassment has never been lower and incentive to bring a claim has never been higher.

CFMEU and MUA merger

Make no mistake – the proposed merger of the CFMEU and MUA will be high impact. The construction and mining sectors’ reliance on port services bears this out. In circumstances where massive shipments of infrastructure hit our shores for major project construction, the nationwide impact of greater CFMEU-style control will be tangible.

Litigation funded union claims

Expect to see large union claims backed by litigation funders. These funders, typically from the UK, bankroll large scale litigation punting on a profit from the outcome. For unions, such financial backing facilitates litigation with the aim of extracting large financial settlements. This will encourage claims on a scale rarely seen in Australia, with medium and large employers with “deep pockets” in their sights.

Modern slavery and supply chain reporting

Another issue for the boardroom. Globally, there is a growing commitment to eliminate the exploitative practices of modern slavery which includes forced and child labour. Corporates are reviewing their respective labour supply chains lest they are exposed to allegations of being complicit in slavery. Details can be found in A Modern Slavery Act for Australia.

Change of government?

Federal elections inevitably shine a spotlight on the workplace. Expect the same if an election is held in 2018. The ALP has already expressed its concerns with the current workplace regime – despite it being largely a product of its own making. The “tilt of bargaining power away from workers and to employers has gone too far” according to Shadow Minister for Workplace Relations Brendan O’Connor.

Many an employer would beg to differ. Workplace laws have moved like a pendulum with changes to government in Australia, albeit remaining relatively static under the Abbott /Turnbull Governments. But it seems the pendulum will continue in its current trajectory under Labor. The Government will seek to remain a small target on workplace relations in 2018 as the recent Cabinet changes reflect. For employers, the regulatory environment will only get tougher should we see a Labor Federal Government.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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