Workplace Watch – 28 April 2025: Labor proposes to remove FWC powers on penalty rates, underpayment updates, Workplace Gender Equality Agency

Welcome to the latest edition of our fortnightly Workplace Watch. In this edition we cover:

• key election updates including the Australian Labor Party’s proposal to remove the Fair Work Commission’s powers to reduce penalty rates in modern awards and the Green’s proposed paid parental leave scheme;
• underpayment updates, including the Fair Work Ombudsman’s ‘Payroll Remediation Program Guide’ and the Victorian Wage Theft Amendment Bill;
• new guidance material published by Workplace Gender Equality Agency regarding gender equality targets for large employers ahead of next year’s lodgement deadline;
• recent updates from the Fair Work Commission, including an initial ruling in the ‘Gender-based undervaluation – priority awards review’, a significant decision regarding the ‘genuinely agreed’ requirement for the approval of enterprise agreements, and a Full Bench decision regarding flexible working arrangements; and
• major safety updates, including findings from the Victorian Coroner in respect of an employee’s death after returning to work and a New South Wales Personal Injury Commission decision in respect of the rebuttable presumption for COVID-related illness.

ELECTION 2025

Labor committed to protecting penalty rates

Minister for Employment and Workplace Relations, Murray Watt MP, has pledged that a re-elected Albanese Government will legislate to protect penalty rates from being reduced in modern awards.

The announcement comes in response to an application by the Australian Retailer’s Association to vary General Retail Industry Award 2020 to facilitate annualised salaries for managerial and higher-level staff.

The Australian Industry Group has criticised the policy announcement by the ALP; with CEO of the Ai Group, Innes Willox, stating in a media release:

“The proposal to tie the hands of what is supposed to be the independent umpire when it comes to determining appropriate penalty rates or wage structures is a sadly predictable sop to unions who remain stuck in a time warp”
…

“Labor in government had trusted the Fair Work Commission with a raft of radical powers to regulate our workplaces and economy during the current term. Now not trusting the Commission to continue to decide when and what penalty rates should apply shows not only blatant hypocrisy but a lack of respect for the judgment of the independent umpire.

Labor should trust the independent umpire it empowered to set fair terms for Awards, not simply change the rules to ensure unions get their way.”

Opposition Leader, Peter Dutton, has confirmed that a Coalition-elected Government would not depart from the existing arrangements.

The policy released by the Australian Labour Party on 19 April 2025 can be found here and the media release by the Australian Industry Group on the same day in response to the ALP’s announcement can be accessed here.

Greens announce plan to increase paid parental leave

The Greens have announced a plan to expand paid parental leave ahead of the upcoming Federal election.

In a policy statement published on 16 April 2025, the Greens unveiled their election plan to:

• increase the length of paid parental leave from 26 to 52 weeks by 2030;
• increase pay rates for replacement wage through government funding up to $100,000 and employers topping up to replacement wage for those earning above $100,000;
• increase the ‘use it or lose it’ component from 4 weeks to 12 weeks for secondary carers;
• expand parental leave eligibility to all PhD students (irrespective of employment status); and
• pay superannuation on 52 weeks of paid parental leave.

The Greens say this initiative is as investment towards women’s equality, would cost $7.7 billion over the forward estimates, and be paid for through the tax contributions of large corporations.

The ability for the Greens to implement these reforms depends on its ability to secure key seats in the upcoming election.

The Greens Policy on paid parental leave can be found here.

WAGE COMPLIANCE & REGULATORY UPDATES

Fair Work Ombudsman releases ‘Payroll Remediation Program Guide’

The Fair Work Ombudsman (FWO) has published a guide regarding the remediation of employee entitlements under the Fair Work Act 2009 (Cth).

The guide “provide[s] employers with a suggested framework for conducting an employee-centred Payroll Remediation Program (PRP, particularly for larger enterprises or where employers have discovered complex issues relating to multiple fair work instruments, or where the quantum of underpayments or number of affected employees is high”.

Amongst other things, the guide covers:

• designing a payroll remediation program;
• common methodology issues;
• finding former employees and dealing with outstanding payments;
• undertaking corrective action to remediate an underpayment issue; and
• reporting issues to the Fair Work Ombudsman and what to expect after notifying of a compliance issue.

A copy of the FWO’s ‘Payroll Remediation Program Guide’ can be found here.

Victorian Wage Theft Amendment Bill

A new Bill has been introduced in the Victorian Legislative Assembly which if passed will allow the renamed regulator, the ‘Workforce Inspectorate Victoria’, to receive and refer complaints and information relating to Victorian public construction projects to other state or federal government agencies or bodies.

Minister for Economic Growth and Jobs, Danny Pearson, introduced the Wage Theft Amendment Bill 2025 to target the construction sector amidst allegations of corruption in the industry.

The Bill would also amend the Wage Theft Act 2020 in order to:

• rename the Wage Inspectorate Victoria to the Workforce Inspectorate Victoria and amend the name of the Wage Theft Act 2020 to the Workforce Inspectorate Victoria Act; and
• repeal Victoria’s wage theft offences, and the regulator’s functions and powers relating to the investigation and enforcement of those offences.

In the second reading speech for the Bill, Minister for Environment, Tourism, Sport, Major Events and Outdoor Recreation, Steve Dimopoulos, made the following statement about Victoria’s construction industry:

“Criminal and unlawful behaviour has no place in Victoria’s construction industry. The Formal Review into Victorian Government Bodies’ Engagement with Construction Companies and Construction Unions, led by Mr Greg Wilson (Wilson Review), has exposed a rotten culture in the construction sector and the Victorian Government is taking strong action to stamp it out.”

The Minister endorsed the increased powers of the Workforce Inspectorate Victoria and went on to say:

“It is preferred that the complaints referral body be established within the Workforce Inspectorate, given its current legislative remit and existing operational capability to receive information from members of the public, refer matters as needed and experience dealing with allegations of criminal conduct.”

The Wage Theft Amendment Bill 2025 can be found here and the statements by Steve Dimopoulos during the Second Reading Speech can be found here.

Fair Work Ombudsman undertakes record-keeping blitz  

Fifty Australian businesses have been hit with significant penalties by the Fair Work Ombudsman for failing to meet their legal obligations to pay workers correct wages and entitlements.

Various FWO site visits took place across a range of sectors throughout Hobart, Adelaide, Melbourne, Sydney, Perth and Cairns after anonymous reports and enquiries were made to the FWO in relation to compliance issues.

The inspections involved Fair Work Inspectors investigating employee payslips and time and wage records. Poorly kept records were a strong indication of businesses not meeting their legal obligations. Non-compliant individual employers faced up to $1,878 per contravention, and bodies corporate up to $9,390 per contravention.

Acting Fair Work Ombudsman, Michael Campbell, had the following to say about businesses properly maintaining employee records:

“Record-keeping is the bedrock of compliance and must be taken seriously.”

“Pay slips provide employees with the clarity they need about their pay, and accurate record-keeping makes it easier to keep track of employee details, identify payroll mistakes and keep a business running efficiently.”

The FWO’s announcement in respect of the record-keeping inspections can be found here.

New guidance material for gender equality targets

The Workforce Gender Equality Agency (WGEA) has published new materials to assist employers in advance of next year’s lodgement deadline. This information will be relevant to employers who directly employ 500 or more employees. They are required to select and commit to achieving three gender equality targets from a menu of numeric and action-oriented targets and then have 3 years to meet or demonstrate improvement on their selected targets.

Further information can be found in new WGEA materials, including the ‘Targets: Frequently Asked Questions’, which can be accessed here, and ‘Guidance on selecting targets, targets menu’, which can be accessed here.

FAIR WORK COMMISSION UPDATES

SDA calls for multi-bargaining for Chemist Warehouse

The Shop, Distributive and Allied Employees Association (SDA) has lodged an application to the Fair Work Commission which, if successful, will authorise multi-bargaining on behalf of approximately 335 employees spanning 16 Chemist Warehouse outlets across Adelaide.

The union claims that this application is the first under the Labor Government’s single interest bargaining stream (first introduced in June 2023) for the retail and pharmacy sectors.

SDA Secretary, Josh Peak, had the following to say in respect of the application:

“We believe the employees of the country’s largest pharmacy conglomerate should be able to bargain together.”

“Pharmacy retail is one of the lowest paid industries and is comprised largely of young and female workers, this application is an opportunity to address this and get their wages moving.”

If the application is successful, the SDA will bargain on behalf of pharmacy assistants, retail assistants and other classifications covered by the Pharmacy Industry Award 2020.

The media release by the Shop, Distributive and Allied Employees Association regarding the application can be found here.

Gender-based undervaluation initial ruling published

A Fair Work Commission Expert Panel for gender pay equity in the care and community sector has issued its initial ruling in the Gender-based undervaluation – Priority Awards Review. This review is aimed at remedying potential gender-based undervaluation by initially focusing on 5 priority and highly feminised awards, namely:

• Pharmacy Industry Award 2020;
• Health Professionals and Support Services Award 2020;
• Social, Community Home Care and Disability Services Industry Award 2010 (SCHADS Award);
• Aboriginal and Torres Strait Islander Health Workers and Practitioners and Aboriginal Community Controlled Health Services Award 2020; and
• Children’s Services Award 2010.

The panel has determined that there is enough compelling evidence to vary the Pharmacy Industry Award 2020 to address gender bias. As a result, workers covered under that Award will receive a 14.1% pay rise to be implemented in three phases from the end of the current financial year, and in 2026 and 2027.

The panel has invited stakeholders to consider the views outlined in this decision for the four remaining Awards and will list conferences after 3 May 2025 to establish the scope and nature of any issues raised.

In respect of the SCHADS Award, the Expert Panel said the preferred course of action is to replace the existing classification structure with a single new classification structure that would provide common minimum wages rates and eliminate the gender-based undervaluation of work.

In respect of the Health Professionals and Support Services Award, the Expert Panel provided its provisional view to increase pay rates by up to 29.91% for physiotherapists and 31.16% for psychologists.

The decision of the Fair Work Commission Expert Panel as part of the Gender-based undervaluation – priority Awards review can be found here.

Deadline for Annual Wage Review Set by FWC

The successful political party at the upcoming May 3 Federal election must make a primary submission to the Fair Work Commission’s Annual Wage Review by 16 May 2025.

Initial submissions have already been made by the Australian Labor Party to the Annual Wage Review, stating the that the increase should be “economically sustainable” and consistent with inflation returning sustainably to the Reserve Bank’s target band of 2% to 3%.

The Fair Work Commission’s major case webpage for the Annual Wage Review 2024-25 can be found here and the most recent Statement from Justice Hatcher can be found here.

SAFETY UPDATES

Coronial inquiry finds employer’s return to work arrangements led to her death

A coronial inquiry has found that a toxic workplace culture at Ballarat Health Services (BHS) was the primary suicide stressor for an employee, and that her return-to-work arrangements should have been reviewed prior to her death.

The employee had previously experienced a significant decline in her mental health following a restructure of her finance team at BHS which resulted in her being placed with a new direct supervisor and manager. After being involved in a verbal altercation with her supervisor; the employee lodged a successful WorkCover claim in respect of bullying and harassment she had experienced.

The employee was cleared for full-time duties on 27 August 2019 following a transitional return-to-work plan while she received medical treatment. On the same day a co-worker disclosed to the Employee Relations Director and a union representative that the employee had been experiencing ‘dark thoughts’. The next day, the employee returned to work for her first day of pre-injury duties was given a highly complex budget reconciliation task.

The worker passed away on 29 August 2019. WorkSafe investigated the death and issued BHS with an improvement notice in 2020, which included a requirement for BHS to engage a qualified person to advise in respect BHS’s organisational culture, work demands and support mechanisms (among other items).

Relevantly, the workplace culture of BHS had previously been examined by external consultants following a 2016 media report regarding a toxic workplace culture and allegations of bullying at BHS.

The employee’s death was investigated by the Coroner as a ‘reportable death’ pursuant to the Coroners Act 2008. In her findings, Deputy State Coroner Antoniadis Spanos found BHS’s return to work arrangements were poorly managed:

111. Ms Jordan’s return to full duties on 27 August 2019 was managed sub-optimally with the allocation of an excessively complex task which overwhelmed Ms Jordan who was an experienced accountant but was somewhat fragile at the time. The fact that this coincided with a report of mental-ill health by a colleague, albeit based on Ms Jordan’s disclosure of ‘dark thoughts’ two weeks prior, represented a missed opportunity to re-evaluate the return-to-work plan and re-integrate Ms Jordan safely into the workplace.
112. It is a matter of concern that workplace culture at BHS was examined by Justitia and Peacemaker ADR in 2016 but that some three years later significant deficiencies persisted in the workplace culture at BHS a evidenced by the investigation of Ms Jordan’s death.
113. I recognise the remediation made by BHS as an employer following Ms Jordan’s death and the resultant WorkCover improvement notice. I encourage, without making a formal recommendation, that Grampians Health (formerly Ballarat Health Services) remain vigilant to its workplace culture and the safety of its employees.

The State Coroner’s Office of Victoria investigates work-related deaths and works with WorkSafe if they have started an investigation. WorkSafe is entitled to make recommendations to workplaces based on the findings of the Coroners Court.

The Finding into Death Without Inquest [COR 2019 004648] published by the Deputy State Coroner can be found here.

People who are feeling overwhelmed or having difficulty coping or staying safe can contact Lifeline Australia on 13 11 14.

NSWPIC finds workplace likely caused COVID death

The New South Wales Personal Injury Commission (NSWPIC) has handed down its decision in Hayes v Secretary (Department of Education) & Ors [2025] NSWPIC 131, finding that   a Bowral-based kindergarten employer failed to prove it was not liable for a worker’s COVID-19 related death as required by the NSW Workers Compensation Act 1987 (the Act),.

Under section 19B of the Act, an employee working in industries such as retail, healthcare or education who contracts COVID-19 is presumed to have contracted the disease in the course of their employment unless the employer establishes the contrary. As a result, the burden of proof rests with the employer to prove its case on the balance of probabilities.

The employer in this case submitted evidence from an immunologist, whose report was of the opinion that it was “more likely than not that [the employee] was infected by the applicant’s father”, rather than at the workplace. The applicant submitted expert evidence that detailed the variability of COVID-19 incubation periods and that this meant it was “impossible” to know for certain whether the employer’s evidence was true.

While acknowledging the employer’s argument that there was a lack of evidence provided on the applicant’s father’s activities and potential exposures to COVID-19, Member Turner said that the applicant reserves the right to rely on the presumption under section 19B of the Act. As a result, Member Turner said he was “not satisfied that it is more than just a possibility that [the employee] contracted the virus from [her husband’s] father. Such a possibility does not satisfy the test of balance of probabilities.’

Member Turner concluded that the employee contracted COVID-19 through the course of her employment and that her employment was the main contributing factor to the contraction of the disease.

Given the finding of Member Turner, the matter is to be re-listed for a preliminary conference in respect the compensation payable under the Act.

The decision of Member Turner in Hayes v Secretary (Department of Education) & Ors [2025] NSWPIC 131 can be found here.

CASE UPDATES

Fair Work Commission rules that Enterprise Agreement not genuinely agreed

The Fair Work Commission has rejected an application for approval of an enterprise agreement made by popular burger chain Grill’d. The Commission found that the employer had not taken all reasonable steps to explain the terms of the Agreement as required by the Fair Work Act 2009 (Cth) and as a result the agreement had not been ‘genuinely agreed’ to by its employees.

In finding that the employer had not adequately explained the terms of the agreement to its employees, Deputy President O’Neill placed significant weight on the high turnover of employees at Grill’d, as well as the fact that the majority of employees were under 21 years of age. Even though the extent of the changes to the existing agreement were limited, the Deputy President said:

“In many instances, this would be a compelling factor in the assessment, as it could be presumed that the employees would have come to understand the current terms, and their effect, over the course of their employment. However, in the circumstances at Grill’d, where the staff turnover rate is in the order of 60-80%, coupled with two-thirds of employees being under 21 years of age, such a presumption cannot soundly be made.”

Consideration was also given to the 17-page presentation made by Grill’d for the purposes of explaining the new Agreement to employees. The Deputy President observed that although extensive, the presentation slides presented a ‘rosy picture’ to employees and failed to set out important details regarding the most common ordinary hours worked by employees which so happened to be significantly lower rates under the Agreement than the Award.

See the full decision by Deputy President O’Neill in Application by Grill’d Pty Ltd [2025] FWC 1097 here.

Employers warned over refusing flexible working arrangements

A Full Bench of Fair Work Commission has ordered an employer to accommodate a flexible working arrangement with an employee, after it was held that inadequate consideration of the consequences of the refusal was given by the employer.

The employee, a teacher at a Pymble-based primary school, initially requested to perform her role as a Religious Education Coordinator three days per week for the first two terms of 2025 for childcare purposes and so she could continue to receive the higher rate of pay for the coordinator role. The employer rejected her request, noting that it had a policy that teachers in executive roles are only able to work full-time, and a part-time change would result in a return to classroom duties.

After a single Fair Work Commission member initially found that the employer had reasonable business grounds to reject the request, the Independent Education Union (IEU) appealed to the Full Bench.

In finding that the employer failed to comply with the requirements of section 65A(3) of the Fair Work Act 2009 (Cth), the Full Bench said:

“[44]… The requirement to consider the consequences of the refusal for an employee is placed on the employer. In the present case, the employer was sufficiently aware of the consequences for [the teacher] of a refusal. In our view, the evidence establishes that the discussions which were held were about alternatives offered by the employer based on its business needs and did not include any consideration of the consequences of refusing the arrangement on [the teacher]. The Commissioner’s conclusions in relation to the lack of evidence of discussions about the consequences of refusal, were in effect a finding that the requirement in s 65A(3)(c) had not been met. We consider that the Commissioner failed to appreciate the significance of that finding and failed to take it into account in resolving the dispute.

[45] Section 65A(3)(c) places a positive obligation on the employer to consider the consequences of a refusal on the employee. It is to be expected that any such consideration will be discussed in the consultations over a request and be included in the written reasons for refusal required by s 65A(1) to be given to the employee within 21 days. The written reasons for refusal in the current matter, dated 12 December 2024, some 82 days after the request was made, make no mention of the consequences for [the teacher], and as we have indicated earlier, the evidence recorded by the Commissioner, given by the individuals involved in the refusal of the request, did not indicate that regard was had to the consequences for [the teacher].”

In regard to requisite detail to be contained in employer refusals to flexible working arrangement applications, the Full Bench held:

“[48] Further, s65A(2)(c) states that where the request for flexible working arrangements is refused, the written response must, subject to subsection (3), state that the employer refuses the request and include the matters required by subsection (6). Subsection (6)(a) requires that the written response must include the details of the reasons for the refusal. This requirement underpins the significance of the obligation placed on the employer by s 65A(3) including in subsection (c). Put simply, not only is a written response to a request required to be given within 21 days, but it is also subject to the requirement that where the request is refused, the employer must provide details of the reasons for refusal. We consider that this includes not only that it has had regard to the consequences of the refusal for the employee but how it has had regard to those matters. In the context of the significance of the right to request flexible working arrangements, the circumstances in which it can be exercised, the focus of the procedural requirements relating to genuinely trying to reach agreement, and the specification of the matters that must be taken into account, the importance of the written response required by s 65A(1) cannot be understated.

[49] In this case the written response provides no reference to the consequences of the refusal for Ms Naden or any details of how regard was had to the consequences for Ms Naden in the respondent deciding to refuse the request. We find that no detail was given because the respondent did not have regard to the consequences for Ms Naden. Consequently, the requirement in s 65A(3)(c) to consider the consequences of the refusal was not met.”

The Full Bench’s decision in Elizabeth Naden v Catholic Schools Broken Bay Limited as Trustee for the Catholic Schools Broken Bay Trust [2025] FWCFB 82 can be found here.

This article was originally written by George Smart, Liana Massouras, Matthew Hamblin and Adam Lambert.

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