Different employers want different results from FWAct

Analysis

Different employers want different results from FWAct

Different types and sizes of business expect different things from industrial relations legislation.

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Different types and sizes of business expect different things from industrial relations legislation.

The differences were contrasted by three case studies presented to the 2011 IR Summit, conducted by IIR Conferences in Sydney on 16 and 17 May 2011.

Nigel Ward, managing director, Workplace Relations, Australian Business Lawyers and Advisors, summarised the views of managers of three hypothetical companies, claiming that each one was typical of the types of businesses that contacted employer organisations for assistance.

The three case studies are outlined below.

Case study 1:

Small business wants simplicity and consistency


The first case study was the owner-operator of a childcare centre with six full-time staff and a contract cleaner, run by the owner and his wife. The business aimed for a return of 20%. Its biggest challenge was attracting and retaining high-quality employees.

The owner complained of industrial relations ‘change fatigue’, stating that small businesses above all wanted simplicity and consistency from an industrial relations system. The business had problems with the National Employment Standards and award modernisation, because employees were moved from a specialised state award to a much larger federal award. With three rates, and assorted phasing-in formulae and dates, it was now very hard to determine accurate pay rates.

When the business received an unfair dismissal claim, it hired a lawyer to defend it, and ended up settling the matter with a payout offer to the employee. The owner was not opposed to the unfair dismissal jurisdiction — his son had been unfairly dismissed by another employer. However, he would prefer a system whereby fixed payout amounts were paid to employees and lawyers were not involved in the process.

Case study 2:
 
Large business prefers direct engagement and no third parties
 
The second case study was the general manager of a gold mining company, with 1100 local and 3200 worldwide employees, described as ‘doing very well’.
 
The manager described the company’s experience of the Fair Work Act 2009 as ‘little different to WorkChoices’. Its preference was to contact and engage with employees directly, without the outside influence of third parties.

The company has increased its expenditure on legal assistance and trained its line managers to handle industrial relations matters. It described good faith bargaining as ‘only a tactical tool’. Right-of-entry matters were handled strictly according to the Act’s provisions, with no discretion at all allowed.

The company has received an increase in general protection claims, often used as an attempt to stall performance reviews.

Case study 3:

Mid-sized business still values third party involvement
 
The third case study was the owner/CEO of a transport company that employed around 70 drivers and also used around 30 contractors. Its margins were very tight, (between 2% and 11%) which is typical for this industry.

There is heavy union involvement in industrial relations matters, but the manager said that relations with the unions had always been good at the local level.

The company preferred being in the NSW industrial relations system. It had managed to avoid WorkChoices, but negotiated a collective agreement under the Fair Work Act. However, when doing so it had received a standard log of claims for employers in the industry from the union’s head office which showed little interest in and understanding of local issues. It had been taken to Fair Work Australia (FWA) for protection orders.

The CEO commented that drivers on strike could easily obtain casual work with competitors, and that margins in the industry were very tight because it was ultra-competitive.

The company preferred direct engagement with employees and ‘local solutions’, however it welcomed the availability of a third party (FWA) as an umpire and to assist with managing conflict. It believed that FWA should focus on making people behave and act fairly.

Conclusion

Ward said that it was hard to draw definitive conclusions about the impact of the Fair Work Act. The three case studies suggested that it has had a very diverse impact on businesses.
 
Further information

Further information about the IR Summit is available from the IIR website
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