Changing IFAs will give needed flexibility, says IR expert

Analysis

Changing IFAs will give needed flexibility, says IR expert

A hard-line industrial relations commentator has suggested that changes to the Fair Work Act’s individual flexibility arrangements could help Opposition Leader Tony Abbott resolve his political difficulties over individual workplace agreements.

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A hard-line industrial relations commentator has suggested that changes to the Fair Work Act’s individual flexibility arrangements (IFAs) could help Opposition Leader Tony Abbott resolve his political difficulties over individual workplace agreements.

Industrial relations academic, commentator, and Productivity Commission member Judith Sloan said that while IFAs could never replace Australian Workplace Agreements (AWAs), they could be expanded to increase the flexibility currently available.

Abbott last week absolutely ruled out a return to individual agreements by a future Coalition Government, bringing on attacks from former IR Minister Peter Reith and former Treasurer Peter Costello.

Both favour a return to the AWAs brought in under the Howard Government, though with the retention of a no-disadvantage test. It was the abolition of such a test under WorkChoices that was partially a cause of the defeat of the Howard Government in 2007.

Judith Sloan pointed out in an article in the Australian that Abbott could achieve greater flexibility for employers by making changes to the Fair Work Act.

Limited flexibility
 
She said the problem with IFAs within modern awards is that they can only provide for variations in working hours arrangements, overtime rates, penalty rates, allowances and leave loading.

‘This leaves a large range of issues that cannot be contained in IFAs, including those related to leave, industrial action and unfair dismissal,’ Sloan said.

She said the terms of an IFA must be decided when an enterprise agreement is being negotiated, but union objections to IFAs has been so strong that there is broad agreement that the IFAs have achieved virtually nothing and bear little resemblance to AWAs.

Primary weaknesses
 
Sloan said there are a number of primary weaknesses of IFAs that would need to be remedied through legislative change.

These included:
  • Employees are able to withdraw from an IFA by giving 28 days notice.
  • IFAs can only cover a limited number of issues in the case of modern awards or are confined to those agreed to as part of the negotiation of an enterprise agreement.
  • IFAs cannot be made a condition of employment; only after an employee has commenced work can negotiations for an IFA commence.
‘The bottom line is that the IFA route could provide some scope for greater workplace flexibility by tailoring employment arrangements to suit the individual employee and employer,’ Sloan said.

‘But this would require change to the legislation. Without such amendments, IFAs will continue to promise much, but deliver little.

Never fully replace AWAs
 
‘They will never fully replace AWAs, which were a much more direct means of providing for individual contracting and acting in competition to the collective route.’

‘For many small businesses, however, more effective IFAs would hold some appeal, particularly if preferred hours clauses were permitted (employees would nominate preferred hours of work during the week and would be paid ordinary time rates of pay during those times).’
 
‘Even for big business, there would be some gains, in terms of achieving arrangements that are conducive to workplace flexibility and enabling one-on-one contact between workers and management.’

Sloan’s views were backed by Opposition climate action spokesman Greg Hunt in a TV interview yesterday.

‘Contract with middle Australia’

Asked if he was comfortable with a policy that rules out individual contracts as a Liberal, Hunt said:
‘Yes. The reason why is this: that we heard the Australian people and we are consciously, deliberately building a contract with middle Australia. And what they want from us is a guarantee that their standard of living will not be eroded.

… what we won’t do is cut away at living standards and wages.

What Tony [Abbott] has said stands. We are not going to remove the [Fair Work] Act. We will work within the Act and we will look at better pay for better work but we are not about to change what Tony has said in terms of individual contracts and we are not going to try to be tricky about that.’
 
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