Kieran Pender and John Wilson | What do major industrial reforms mean for Australian public service

Cumulatively, the legislative package represents perhaps the most significant reform to Australia's federal employment framework since the Rudd government scrapped Work Choices and enacted the Fair Work Act more than a decade ago.

It remains to be seen whether the reform, which has been welcomed by unions but criticised by employer groups, will remain fully intact by the time it becomes law. The 284-page bill is headed for a Senate inquiry, and last Thursday the opposition managed to extend the reporting deadline into next year.

That means the bill is unlikely to become law until February or March, and Labor will need to negotiate with the Greens and Senator David Pocock to secure passage through the Senate. Pocock negotiated amendments to the last major tranche of workplace reform before supporting it, and we may see more of the same.

But given the significance of the Closing Loopholes bill, and the potential impact on the APS, it is worthwhile considering some key aspects of Burke's reform agenda in its current shape.

At the heart of the bill is a fundamental change to the definition of employment. This involves overturning the black letter, legalistic approach adopted by the High Court in recent cases and returning to a practically-focused approach of the past, which involves considering "the real substance, practical reality, and true nature of the relationship."

This will make it easier for workers engaged as independent contractors, but in fact closely integrated in their workplace and not substantively running their own business, to claim that they are in fact employees - with corresponding entitlements. APS agencies using independent contractors will need to be wary to ensure the totality of the relationship matches what is said on paper.

A significant part of the reform is a new definition of casual employment, involving consideration of the totality of the employment relationship. The new regime, if enacted, will provide casual staff greater powers to request conversion to permanent part-time or full-time employment.

These provisions seek to roll back prior amendments by the Coalition government, and High Court jurisprudence.

The ultimate effect will be stronger employment rights for casuals and a requirement for employers that engage casual staff to consider the actual reality of the relationship, not merely a tick-box exercise of how the relationship is described on paper. APS agencies which use casual staff will need to review their arrangements accordingly.

Another important plank of the bill is the "same job, same pay" provisions for labour hire. These will permit the Fair Work Commission to order that labour hire providers pay their staff equivalent pay rates to that received by employees of the host employer where they are performing the same work. It is intended to address the use of non-employment labour to mitigate wage costs. Genuine service contractors are excluded, and there are exceptions for short-term labour hire of less than three months (to allow for "surge" labour) and training arrangements.

The APS has a significant non-public servant component to its workforce. The latest APS Audit of Employment, in May for 2021-22, found that there were more than 50,000 full-time equivalent workers in consultant, contractor or labour hire roles in the APS. This compares to about 144,000 public servants.

Although labour hire has typically been used in the APS for flexibility and to avoid staffing caps, rather than to lower costs, these provisions will continue the pressure on the public service to favour permanent employment arrangements and use contract/labour hire workers only sparingly.

The bill also contains a range of reforms relating to underpayment, including new criminal offences for wage theft. It will remain to be seen how these intersect with state-specific underpayment laws in Queensland and Victoria (the latter of which is currently being challenged in the High Court). The APS is not immune to underpayment scandals - while these changes, focused on intentional underpayment, are unlikely to impact public servants, it is a reminder for agencies to ensure their wage processing systems are accurate.

Also strengthened by the reforms are protections for workers who are experiencing family and domestic violence (FDV) - employers are prohibited from taking adverse action against an employee because they are subject to FDV. The APS has long led on appropriate support for public servants experiencing FDV, which means this is unlikely to have major implications.

These changes are just those with significant APS-intersection - the full package also contains landmark gig economy regulation, giving the Fair Work Commission the power to set workplace conditions for employee-like roles, and changes to bargaining and union rights.

MORE OPINION:

All in all, it is an ambitious suite of reform with implications for many public servants.

While the Closing Loopholes bill is economy-wide, more APS-specific reform may be on the horizon too. Amendments to the Public Service Act, currently before the Senate, have been criticised for lacking ambition and failing to respond adequately to the challenge posed by the robodebt royal commission report. The changes include adding "stewardship" as an APS value, creating an APS purpose statement and provision for regular "capability reviews".

Independent Allegra Spender observed that "this bill, frankly, doesn't go very far," while Paddy Gourley, in these pages, had a one-word summary: "abysmal."

Given the wider institutional challenges raised by the royal commission, and elsewhere, one would expect more significant public sector reform sooner rather than later.

That is the lot of a progressive government - criticised on both flanks. The Closing Loopholes reform is attacked for being too ambitious, and the public sector-specific amendments are said to not go far enough.

The ultimate destination may remain unclear, but there is one certainty: more change awaits public servants and their employment conditions.