Employers ‘uneasy’ about effect of FWA system


Employers ‘uneasy’ about effect of FWA system

Employer groups have declared a mixed response to the first year of the FWA industrial relations system, but on the whole are negative about its effects on businesses so far.


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Employer groups have declared a mixed response to the first year of the FWA industrial relations system, but on the whole are negative about its effects on businesses so far.
Today (1 July) marks the anniversary of the Fair Work Act 2009 coming into operation and Heather Ridout, chief executive of the Ai Group, said the new IR system is ‘still evolving and far from settled’.
‘Many employers are uneasy about the law and ongoing union attempts to stretch its boundaries, while they are also finding compliance very challenging,’ she said.
‘As well, a very large number of decisions have been made by FWA under the new laws and it has been necessary for Ai Group to intervene in a large number of Full Bench cases dealing with critical principles to ensure that the laws work as intended, for example, limiting union right of entry.’
‘Today also marks the date when businesses will need to begin phasing in changed penalties, loadings and wage rates in modern awards, and the date when the annual wage review decision of FWA takes effect.’
‘Many employers tell us that they have a long way to go in becoming fully compliant with the Fair Work Act and modern awards. It is also clear from surveying our members that employers are unconvinced that the bargaining laws promote productivity and flexibility.’
Increase in ballots
‘Ai Group has seen a significant recent increase in applications to FWA for ballots to authorise industrial action and this is cause for concern.’
Ridout said the bargaining process is proving to be challenging with:
  • unions attempting to stretch the boundaries of what can be lawfully included in enterprise agreements
  • union claims for restrictive provisions that would impede competitiveness and efficiency (eg restrictions on the engagement of contractors and labour hire) rather than provisions that would improve productivity
  • the refusal by unions to allow individual flexibility arrangements that provide meaningful flexibility to individual employees and employers to be made
  • rising wage expectations of employees and unions.
ACCI said that while it is clear that a reduction in awards from approximately 4000 state and federal awards to 122 is a good thing in the longer term, the content of these awards has increased labour costs in the name of simplified regulation.
‘The impact will be felt by shops, cafes, restaurants, pharmacies and factories even before the national wage increase is applied,’ said ACCI chief executive Peter Anderson.
Anderson said that:
  • café owners in south-east Queensland now have to pay Sunday penalty rates
  • restaurants in Brisbane are hit with evening wage loadings and a wider group of staff eligible for superannuation
  • shopkeepers in South Australia and New South Wales face higher Sunday penalties and higher casual wages
  • factories in Western Australia face increased wage rates for apprentices
  • changes to the allowed spread of hours and weekend penalties add extra costs for the wine industry.
Anderson said that while some industries are happy with the new awards because little has changed, the government has been unable to keep its 2007 promise that the new awards ‘were not intended to impose additional costs upon employers or disadvantage employees’.
‘These new award rules have legal status and their complexity means that even the most well intentioned employer can face fines of up to $33,000 per employee per pay period for an inadvertent breach,’ he said.
‘With a small army of workplace inspectors set the task of educating and then enforcing compliance this is a daunting development for hundreds of thousands of small businesses.’
Opposition IR spokesman Eric Abetz said that feedback from workplaces all over Australia, particularly small workplaces, is that most will need to cut back on staff and hours just to accommodate the massive increase in operating costs as a direct result of the new laws.
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