Fair Work Act hinders productivity: employers

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Fair Work Act hinders productivity: employers

The Fair Work Act is more of a hindrance than a help in boosting productivity, says a new report providing insights from 70 business leaders.

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The Fair Work Act 2009 is more of a hindrance than a help in boosting productivity, says a new report providing insights from 70 business leaders.

The report, ‘Productivity and Fair Work’, was prepared by the research group Australian Business Foundation, in collaboration with Deepa Economics and ThinkEvans. Detailed interviews were conducted with 70 business leaders from small, medium and large-sized enterprises about their experiences of the Fair Work system and its impact on the workplace and productivity. The research was commissioned by the NSW Business Chamber.

Constructive rather than adversarial relations
 
The report concludes that a flexible workplace relations system which promotes a constructive rather than adversarial relationship between employer and employee would have a positive influence on improving the nation’s flagging productivity.

Prescriptive approach
 
Key recommendations of the report to improve the productivity performance of the Fair Work system include the elimination of:
  • the presumption of conflict, and the norm of adversarial workplace relations
  • a highly pervasive and prescriptive set of rules that over-regulate for worst cases to the detriment and cost of the majority of employers and employees
  • the lack of tolerance for customised and diverse workplace arrangements that meet community norms of fairness and freedom to operate, rather than a single mandated solution for all.
‘Productivity is an indicator that for some enterprises can be hard to define and measure. However, there can be no doubt that a complex, time consuming and adversarial industrial relations system distracts employers and employees from the task of improving operations, growing the business; and making and sharing profit,’ said Stephen Cartwright, CEO of the NSW Business Chamber.

‘It has been a disappointing outcome that the Fair Work Act has resulted in a huge step back in time to the days of highly prescriptive and centralised awards rather than the modern expectation that every workplace is different and should be allowed to find its own balance. The Fair Work Act is the equivalent of using stone knives and bears skins in a digital, fast-paced world.’

Fair Work Act not living up to predictions
 
Mr Cartwright said the analysis undertaken in the report showed that the Fair Work Act was not living up to the predictions of the Labor Government that created it.
 
‘The Fair Work Act is not delivering its stated objectives of promoting national economic prosperity and social inclusion. The view of employers is that the entire process of implementing the Fair Work system has been a great deal of cost for very little gain. The experience has been cumbersome and, quite frankly in parts, heavy handed.’

Mr Cartwright said the review of the Fair Work Act currently underway by the Federal Government provided the opportunity to correct the faults in the system and resolve the issues raised in the report.

‘There are some constructive and useful criticisms concerning the negative impact that the Fair Work Act is having on Australian workplaces. If the Government wants to live up to its narrative of being a strong economic manager, then it should take these suggestions on board and amend the Fair Work Act, so that it promotes a more balanced relationship between employers and employees.’

The Report can be downloaded from the NSW Business Chamber website.
 
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