AIER Newsletter – 29 August 2013
Employer agendas for post-election changes to the Fair Work Act

In May 2013, the Federal Coalition released its industrial relations policy for the 2013 election. There are a large number of employer associations in Australia. Most supported the Coalition policy with only faint praise and many indicated that the policy did not go far enough in the opinion of their organisation.

Subsequently, a number of major employer associations have released policy documents calling for more extensive change. These include the Business Council of Australia [BCA], the Australian Chamber of Commerce and Industry [ACCI] and the Master Builders Australia [MBA].

Should the Coalition parties win government at the September 7th election, there are a range of changes detailed in the Coalition policy which may be introduced quickly. In other cases, there may well be tension between a Liberal/National Party government and its supporters in the employer community on the need for more radical and more rapid change.

ACCI, for example, has called for a number of changes to the Fair Work Act to occur in the first term of an incoming Coalition Government and for the outcome of an urgent interim Productivity Commission [PC] review of industrial legislation to be completed by mid-2014 in order to inform the first substantial review of modern awards which is due in 2014.

As the table below shows, the employer agenda for change is now more clearly emerging and there is a considerable degree of commonality of concern and policy directions being articulated by major employer organisations. Some employer organisations have detailed and fully articulated agendas for change – others, such as the Australian industry Group [AiG] - have not released extended or detailed reform proposals at this stage.   

Both the BCA and ACCI expressly support the Coalition’s policy for a review of Industrial legislation to be carried out by the Productivity Commission. The Coalition policy does not go into detail as to the terms of reference of any such inquiry, but ACCI has articulated an agenda, including a call for the PC to:

·         conduct a parallel micro-economic inquiry into the operation of modern awards on firms in priority services sectors (retail, restaurants, hospitality and tourism)

     consider how small business, workers and the community are impacted by modern awards in key sectors

·         recommend options to amend provisions that are negatively impacting productivity, the ability for a business to trade at times to suit consumer demand, competitiveness and employment.

The BCA also has proposed terms of reference for the PC inquiry [see table below]. All employer groups are likely to be express their views more fully in submissions to any Productivity Commission inquiry into industrial relations legislation including a more extensive agenda for a first or second term Abbott government.

ACCI is generally alone in calling for measures that would affect the content of modern awards [although the BCA’s agenda for the PC review may have the same effect]. The other major employer organisations have concentrated their attention on issues relating to agreement making. Other smaller employer organisations in sectors more reliant on awards, such as those in retail, tourism and hospitality, can be expected to weigh into the debate for change to penalty rates and other award terms and conditions, both as part of any PC review and as part of the 2014 modern awards review.

ACCI appears to be the only major employer group at the present time to explicitly support the re-introduction of individual statutory employment agreements, although the BCA also wants this matter considered as part of the PC review. Most contemplate relaxation of the rules around individual flexibility agreements provided for in the Fair Work Act.

Other key issues around which the major employer organisations are united are:

·         Industrial action: reverse JJ Richards decision: no “strike first talk later” industrial action; other limitations on when protected action may be taken

·         Employer only greenfields agreements

·         Limiting the content of workplace agreements to employment related matters only

·         Returning right of entry provisions to the pre-Fair Work Act situation

·         Re-introduction of limitations on unfair dismissal claims and limitations on general protections applications

·         Changes to the transfer of business rules, including a 12 month sunset provision

·         Further encouragement of independent contractors

·         Re-establishment of the Australian Building and Construction Commission and its coercive powers

 

Key proposed changes advanced by major employer organisations centre around the issues identified below. In addition, most employer organisations strongly opposed the 2013 amendments to the Fair Work Act and would be expected to press for their immediate repeal by an Abbott Government.

 It is unfortunate that many of the these changes would take the system of industrial relations and law further away from alignment with AIER’s Charter of Employment Rights.

 

Table: specific proposal for change advance by key employer associations in 2013.

[Note: Source documents including hyperlinks are shown at the foot of the table. In most cases, the text is drawn directly from the source documents. This text does not reflect AIER’s view of these issues nor is an endorsement of them by AIER.]

Issue

BCA

ACCI

MBA

AiG

Productivity Commission inquiry into Fair Work Act

Commission the Productivity Commission to conduct an inquiry into the impact

of the workplace relations system on productivity

and competitiveness, including examining:

·         the extent to which the high minimum wage prevents new labour market entrants from gaining initial experience, to inform future wages policy directions

·         the impact of penalty rates on business competitiveness and employment growth, particularly in the retail and hospitality sectors

·         workplace arrangements in the market and nonmarket sectors, and identifying arrangements that increase the take-up of innovative practices that make fuller use of workers’ skills and expertise

·         the issue of individual agreements and their influence on productivity at the firm level.

Commission the Productivity Commission to conduct a comprehensive review of the Fair Work Act 2009 and associated federal laws and to provide an

interim report by mid-2014 on priority areas of urgent reform that should be implemented within the first term of the next Australian Government.

As part of the inquiry, the Productivity Commission should:

• conduct a parallel micro-economic inquiry into the operation of modern awards on firms in priority services sectors (retail, restaurants, hospitality and

tourism)

• consider how small business, workers and the community are impacted by modern awards in key sectors

• recommend options to amend provisions that are negatively impacting productivity, the ability for a business to trade at times to suit consumer

demand, competitiveness and employment.

 

 

Industrial action

Limit access to protected industrial action where there has been unreasonable or capricious use of such action

Prevent unions adopting a strike first, bargain later approach in the pursuit of demands.

Protected industrial action should not be available before bargaining has commenced. Protected industrial action should only occur in support of claims made in bargaining.

Reverse the outcome of the JJ Richards case which allows the unions to sidestep good faith proviso. The Fair Work Act to be amended to make it clear that parties must be acting in good faith in order to take protected industrial actions.

 

Employer only or non-union Greenfields agreements

Provide access to employer-only greenfield agreements.

 

Eliminate the trade union veto and monopoly over the establishment of greenfield agreements for new projects.

Non-union greenfields agreements to be introduced.

Address the greenfields agreement provisions which currently enable unions to hold employers to ransom until their claims are met.

Individual agreements/Individual Flexibility Arrangements (IFAs)

Enhance the capacity to agree to flexibility arrangements with employees including through IFAs.

Restore the pre-WorkChoices version of individual statutory agreements or, at a minimum, ensure that IFAs are able to flexibly deal with all award or enterprise agreement matters and provide certainty by extending the duration of IFAs.

Recommendation 10 and 11 of the [Fair Work Act] Review Panel’s report on IFAs should be introduced into legislation immediately.

Implement a more workable structure for IFAs. The framework for IFAs has enabled unions to block meaningful flexibility in workplaces with enterprise agreements.

Agreement making and content

Reduce the range of matters that can be bargained over to ensure they are directly related to wages and conditions in the employment relationship.

Limit the regulatory system to industrial matters only, so as to not interfere with the decision-making responsibilities of business.
Ensure that enterprise bargaining is truly voluntary by restoring union and non-union enterprise agreement options and removing the ability for unions without a majority of union members in an enterprise to force an employer and non-union workers to bargain for a collective agreement.

 

Narrow the scope of bargaining claims to matters that fall within the employment

Relationship.

Unions can organise industrial action over a broader range of bargaining claims, rather than simply matters pertaining to the employment relationship, and to include an even wider range of matters in enterprise agreements.

 

BOOT

Modify the ‘better off overall test’ to provide for a broadening of matters that may be taken into account in the application of the test.

 

 

 

Right of entry

Limit union entry rights to employer premises.

Restore restrictions on trade union right of entry that were promised by the government in 2007 but which have since been compromised.

Application of real and substantial penalties against unions if they do not comply with strict right of entry laws.

 

Unfair dismissal

 

Eliminate once and for all ‘go away’ money from the unfair dismissal system and the newly created ‘general protections’ scheme.

Provide small business with protection from unnecessary litigation and costs by extending the Fair Dismissal Code to explicitly cover sexual harassment,

workplace bullying and breaches of occupational health and safety laws.

Reintroduction of a true ‘exemption’ where a remedy for alleged unfair dismissal is unavailable where a small business employs fewer than 20 people.

Re-instate the legislation that substantive and valid reasons for termination will be the primary test for fairness. Termination laws must place more emphasis on the employer’s prerogative to manage their business.

Unfair dismissal claimants should bear the onus to demonstrate reasonable grounds for success prior to a matter going to conciliation.

 

General protections

Reduce the scope of the adverse actions provisions.

 

Adverse action provisions of the Fair Work Act abolished or ‘sole or dominant reason’ test reinstated.

Adverse action claims in relation to complaints be limited to those made to competent administrative authorities.

Reverse onus of proof provisions required in adverse action cases be amended to provide an exemption for small business employers.

The test for whether adverse action has occurred to require a comparison of whether the action taken against an employee would have also been taken against other employees in the same circumstances.

Adverse action applicants to show reasonable grounds for their application during conciliation conferences before the FWC. The reverse onus of proof provisions to be amended to provide an exemption for small business employers.

Tighten the General Protections to ensure that they operate fairly for all parties. Unlike the unfair dismissal laws, under the general protections:

• There are no exemptions for short-term employees;

• There is no cap on the amount of compensation that can be awarded; and

• There is a reverse onus of proof with the employer required to prove that the dismissal was lawful.

 

Transfer of business

Amend the transfer of business arrangements to include a sunset clause after 12 months.

Restore pre-existing workplace laws sanctioned by the High Court on the sale or transmission of business.

Reinstatement of sensible transmission of business rules.

Address  problems with the transfer of business laws which are currently inhibiting the restructuring of businesses.

Regulation of independent contractors

Make unlawful clauses that exclude the engagement of contractors or labour hire companies.

Commission a review of the operation of the Independent Contractors Act 2006 and a broader review of all federal laws that may have the potential to

reduce the freedom of individuals to operate their own business on a commercial basis.

Regulation of independent contractors via workplace agreements should be unlawful.

 

Building industry

 

Introduce legislation to restore the former Australian Building and Construction Commission and its full suite of powers as a matter of priority. In

addition:

• reinstate and improve associated federal government procurement guidelines

• commission a taskforce to conduct a public inquiry and establish whether further improvements could be made to assist the building and construction

industry sector or any other industry sector crucial to the national economy.

Reinstate the Australian Building and Construction Commission (ABCC) and fully restore its powers and funding.

 

 

 Source documents:

BCA: Action Plan for Enduring Prosperity:  http://www.bca.com.au/Content/102223.aspx

ACCI: Getting On With Business: Reform Priorities For The Next Australian Government:  http://acci.asn.au/Research-and-Publications/Publications/ACCI-Policy-Blueprint-2013

MBA: INDUSTRIAL RELATIONS POLICIES 2013: Essential Changes to the Fair Work Regime: http://www.strongbuilding.com.au/images/strong_building/CURRENT_-_Industrial_Relations_Policies_2013.pdf

AiG:       1. Smith, S, Speech to 21ST LABOUR LAW CONFERENCE, WORKPLACE RESEARCH CENTRE AND SYDNEY LAW SCHOOL,  SYDNEY, 22 July 2013, http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Publications/Speeches/2013/21st_Labour_Law_Conference_July_2013.pdf

2. Ai Group’s Opening Statement to the House of Representatives Standing Committee on Education and Employment Fair Work Amendment Bill 2013, 24 May 2013: http://www.aigroup.com.au/portal/binary/com.epicentric.contentmanagement.servlet.ContentDeliveryServlet/LIVE_CONTENT/Publications/Speeches/2013/House%2520of%2520Reps%2520Statement_fair%2520work%2520amendment%2520bill%25202013%2520FINAL.pdf
 

 


The Australian Institute of Employment Rights (AIER) is an independent organisation that seeks to ensure fair and decent workplace rights for all.  Informed by an expert panel of industrial relations practitioners, lawyers and academics, AIER works in the areas of legislation, research, education and advocacy to champion the fundamental rights and responsibilities of employers and workers, and to create positive workplaces.
The Australian Institute of Employment Rights (AIER) is an independent organisation that seeks to ensure fair and decent workplace rights for all. Informed by an expert panel of industrial relations practitioners,
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