No major changes to FW legis for several years: experts

Analysis

No major changes to FW legis for several years: experts

Regardless of the result of this year’s federal election, there are unlikely to be significant changes to the Fair Work Act for several years. This was the consensus from a recently held IR conference.

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Regardless of the result of this year’s federal election, there are unlikely to be significant changes to the Fair Work Act 2009 for several years. This was the consensus from a recently held IR conference.

A panel discussion at the 2013 Annual Workplace and Industrial Relations National Conference, held in Sydney by Informa on 17 and 18 June 2013, drew this conclusion. This consensus arose from a collective opinion that the current Act, despite some concerns, is working reasonably well, combined with the view that the Federal Opposition, if elected, will be very reluctant to make major changes for fear of stirring up another ‘WorkChoices backlash’.

The latter prediction was reinforced by another presentation at the Conference in which the Shadow Minister for Employment and Workplace Relations, Eric Abetz, outlined the Coalition’s recently announced workplace relations policy and repeatedly emphasised that it had ‘learnt its WorkChoices lesson’ and no major changes were intended, at least during the first term of office.

Although some changes to the Act are currently before Parliament, the government, if re-elected, has given no indication that it will make significant changes, although another review of the Act will occur.

The evidence that few changes are needed

The various panel members provided the following comments as evidence that major changes to the Act are both unlikely and unnecessary:

    • Should there be a change of government, various other issues are likely to swamp workplace relations, and it will receive a low priority.
    • In general, inappropriate workplace culture is a bigger source of problems for employers than provisions of the legislation, and employers would be better off focusing on improving culture.
    • There are very few ‘loony stories’ around at present, their absence suggesting that the system usually works well.
    • Decisions, notably one by the High Court, have clarified the onus of proof in adverse action claims and watered down this issue to a large extent.
    • The costs employees incur in pursuing unfair dismissal and adverse action claims mean that the system is not as employee-friendly as some people claim.
    • Claims of unfair dismissal, Australia-wide, have not increased significantly, despite some predictions that they would. The total number of claims in all jurisdictions was about 10,000 in 2005 and 12,000 in 2012. Of the latter, only around 400 proceeded to hearings, and employers were successful in about 75 per cent of them. Note: Abetz’s address did not mention unfair dismissal or adverse action at all, and no changes to either are proposed in the Coalition’s policy.
    • According to one panellist, there is no empirical research that validates the quite regular claim that the unfair dismissal provisions discourage employers from hiring people.

Paid parental leave provisions focus too much on money, not enough on careers

The panellists’ comments about current paid parental leave arrangements were mixed. One HR Manager claimed that availability of paid parental leave had improved productivity and morale, as measured by in-house focus groups and engagement surveys. It was also agreed that paid parental leave offered businesses the significant benefit of improving continuity of employment.

However, the scheme was criticised for focusing mainly on financial compensation for employees and ignoring career maintenance — or as mentioned by some, ‘what happens afterwards’. There is a need to look after and nurture both employees and their children, and the current scheme’s ‘keeping-in-touch’ requirements for employees on leave were considered insufficient. The contact with employees should be highly personalised, not just standardised newsletters, etc. Flexible work options when parents return to work is a big issue for employees, and part-time work provisions and agreements need to become more flexible.

It can be very daunting for employees to return to work after lengthy periods of leave, as everyone else has moved on during that time and the workplace may now be very different and unfamiliar.

Workplace relations funding to decrease?

One panellist predicted that the funding behind the Fair Work Act will be reduced; for example, resulting in fewer inspectors. This could have implications for reduced compliance rates, and is another indicator that few changes are in the pipeline.

Comments on Coalition policy

Abetz’ speech contained various references to ‘keeping and improving the Fair Work laws’, ‘no surprises’, ‘have learnt our lesson’, ‘regain trust and confidence in workplace relations’ and ‘will consider recommendations of Productivity Commission’. These remarks were presumably intended to convey that the Coalition does not plan any major changes in the short term, and in the longer term would be likely to refer significant issues for independent review before reaching a decision.

As noted above, he did not refer to unfair dismissals or adverse action/general protections, but mentioned the following issues:

    • fewer restrictions on Individual Flexibility Arrangements (IFAs) and an extended termination notice period to 13 weeks. He claimed that current IFA provisions were ‘designed to fail’.
    • clarifying the meaning of ‘non-monetary benefits’ when substituted for cash remuneration in agreements and IFAs.
    • establishment of a Registered Organisations Commission, independent of the Fair Work Commission, to deal with union matters — although, later, when responding to an audience question, he declined to guarantee this would happen
    • consideration of an independent appeals jurisdiction — although one panellist described this proposal as vague and unlikely to happen. Abetz said that the Coalition was ‘actively dating, but not wedded to’ the proposal.
    • re-establishment of the Australian Building and Construction Commission
    • despite some pressure from employer organisations, the issue of penalty rates would be left to the Fair Work Commission to determine.

Pressure on Coalition to do more?

The panellists commented that a Coalition Government could be under constant pressure from employer organisations to make bigger changes than its current policy contains, particularly if elected with a big winning margin, and Abetz also acknowledged that this was likely to happen.
 
His general answer was that any other issues would be referred to the Productivity Commission (which will conduct a review of the Act), and changes to policy would be announced but not implemented before the following election. One panellist commented that some people have ‘an ideological objection to other people having rights’. In general, the panel believed that despite the pressure likely to be applied, as noted above major changes to the legislation were unlikely in the foreseeable future and it was likely to enjoy an extended period of relative stability.

Further information
 
The panellists were: 
    • Chris McArdle, Principal Lawyer, McArdle Legal
    • Chris Ronalds, Barrister (Facilitator)
    • Vicki Telfer, Executive Director — NSW Industrial Relations — NSW Treasury
    • Barry Singer, Senior Human Resources Manager, Merck Sharp & Dohme
Further information about the Conference is available from Informa.
 
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