Business Toolbox

Since 2022, Australia’s industrial relations system has been undergoing its biggest overhaul in decades and the reality is they are making it increasingly harder for businesses to operate.

From changes to casual employment, fixed-term contracts, underpayments and wage theft to the right to disconnect, enterprise bargaining, labour hire, anti-discrimination and work health and safety – to name a few – the problem is not around one particular new rule; it’s the sheer quantity of change.

This means there would be very few businesses with employees who have not been impacted in some way.

And, as is often the case, small businesses feel it the most. They’re already struggling to cover operating costs and they often don’t have spare funds to seek advice or update processes.

We need a system that is easier to comply with. Before adding more obligations, policymakers should ask how businesses are managing the ones they already have.

Making compliance harder than it needs to be

Each change takes time for employers to understand and implement. They need to review contracts, update processes and policies, and work out what the new requirements mean for their workforce.

Take underpayments and wage theft, for example. Employers need to determine which of the 122 awards applies to their workforce. Each award has many classification levels, differing penalty rates, and often more than one award might appear to cover an employee.

In the modern workplace where employees increasingly want flexibility in how they perform their work, the current industrial relations framework often makes it too difficult for employers to lawfully offer this to employees.

The Federal Government could have extended and clarified the definition of small business and taken steps to simplify the awards system and make it easier for businesses to understand and implement correctly.

Instead of addressing the root cause, it introduced tougher penalties.

At Business Law WA, we’ve seen a huge increase in wage audits. But my concern is that many employers cannot afford to access legal support and are doing their best to navigate this complexity themselves.

The cost of standing still

These pressures have come at a time when businesses are already battling rising operating costs.

I’m noticing a cautious hold. While we haven’t yet seen a major increase in redundancies, there is less appetite from businesses to employ more people.

Uncertainty around engaging casual or fixed-term employees adds to this hesitation. While these arrangements can offer useful flexibility for businesses and employees, employers need confidence that they are using them lawfully.

With budgets under pressure, having to spend money on legal advice may also come at the expense of training or upskilling that a business would have previously funded for employees.

That’s why I see compliance costs as a broader business issue – they influence decisions about hiring and developing people.

A cautionary tale: AI-assisted workplace claims

Alongside legislative change, businesses are also dealing with an increase in general protections and unfair dismissal claims where employees have intentionally misused AI to draft supporting documents.

AI has been found to fabricate supporting evidence and give employees unrealistic expectations on the strength of their claim, and what outcomes they will see if they pursue that claim. Many claims have been found to have no legal basis and we are seeing the Fair Work Commission and Courts start to make costs orders against employees on this basis.

But they are still costly for employers as they have to treat the claim legitimately. This is also a drain on the Fair Work Commission’s resources and it drags out timelines for genuine cases to be heard.

This is an area we’re watching closely. My advice is to seek legal advice early and avoid relying on AI to respond. Otherwise you can just end up with your robot arguing with the employee’s robot.

The same caution applies to drafting contracts and policies. We have reviewed AI-generated documents that miss critical clauses or refer to the wrong laws. An apparent saving can easily become a much bigger cost later.

Get support before a problem grows

Employers need practical help while these pressures continue. Getting advice early can save considerable time and money.

CCIWA members can use the Employee Relations Helpline to clarify award obligations or discuss a complaint early. Get in touch via [email protected] or 08 9365 7660.

Business Law WA can assist with employment contracts, wage audits and disputes. Contact us at [email protected] or 08 9365 7746.

This article is authorised by Business Law WA, an incorporated legal practice and wholly-owned subsidiary of CCIWA. The content of this article is general in nature and is not legal or professional advice and should not be relied upon as such.