Employers push for some change to FWA


Employers push for some change to FWA

Some areas of the Fair Work Act require amendments, the Australian Industry Group has said in urging both parties to ‘keep an open mind’ on the new IR system.


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Some areas of the Fair Work Act require amendments, the Australian Industry Group (Ai Group) has said in urging both parties to ‘keep an open mind’ on the new IR system.
Ai Group CEO Heather Ridout said while she is not seeking ‘wholesale changes’, the next government will need to consider amending the Act in a number of areas, including:
  • transfer of business
  • SG versus company tax rate
  • flexibility in agreements.
Transfer of business
According to Ridout, the transfer of business laws are operating ‘against the interests of employers and employees’ and some ‘sensible’ changes are needed.
These should include restoring the High Court’s ‘character of the business’ test, which was extinguished by the Fair Work Act.
‘After 12 months of operation, it is very clear that the laws are acting to deter employers who take on outsourced work from employing any employees of their client,’ she said.
‘This is not sensible when in many cases the new employer, the old employer and the employee all want the employee to transfer. The laws are creating a lose–lose–lose scenario.’
SG versus company tax rate
Ridout criticised the government's 2010 Federal Budget announcement increasing the superannuation guarantee from 9% to 12%, but upping the proposed cut to company tax rate from 28% to 29% (it now stands at 30%).
‘The Government’s decision to halve the announced decrease in the company tax rate (29%) but proceed with the SG increases will result in a big bill for industry,’ Ridout said.
She said decision makes it ‘imperative’ that a systematic trade-off be implemented for the SG increase through the following changes to the Fair Work Act:
  • During each Annual Wage Review between 2013 and 2020 (ie the period of time over which the SG increase will be phased in through 0.25% instalments), Fair Work Australia should be required to determine the level of wage increase that is appropriate and then discount that increase by 0.25%.
  • The Fair Work Act should state that in working out whether an employee bargaining representative is ‘genuinely trying to reach agreement’ a relevant factor is whether the bargaining representative is demonstrating a preparedness to take into account the SG increases which the employer will be required to pay before the nominal expiry date of the proposed agreement.
Flexibility in agreements
Flexibility terms in enterprise agreements are currently not achieving the apparent policy intent of the government, Ridout said.
‘Individual flexibility arrangements need to give individual employees and employers a genuine opportunity to agree on arrangements which depart from the relevant enterprise agreement, subject to the employee being better off overall,’ she said.
‘Unions are routinely refusing to sign agreements unless the flexibility term allows little or no flexibility.’
To address this problem, Ridout wants a specific flexibility term to be set out in the Act and deemed to be a term of all enterprise agreements.
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