Fix Fair Work Act to improve productivity, professor urges


Fix Fair Work Act to improve productivity, professor urges

The Fair Work Act needs to be amended on flexibility, workplace culture and dispute resolution to improve the nation’s productivity, according to a leading IR academic.


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The Fair Work Act 2009 needs to be amended on flexibility, workplace culture and dispute resolution to improve the nation’s productivity, according to a leading IR academic.

Macquarie University professor Paul Gollan has told the AMMA national conference that key reforms around productivity improvements and the pre-conditions for taking protected industrial action should be considered by Workplace Relations Minister Bill Shorten.

The results of a review of the Act will be released by Shorten at the end of May or early June.

Economic future
Prof Gollan said enterprise agreements should have a focus on productivity to boost Australia’s economic future and living standards.

‘A relatively high Australian dollar and greater competition in the international market have crystallised the importance for Australia to reconsider the real economic and workplace issues associated with increasing our productivity,’ he said.

‘There are two ways that the Fair Work Act can provide a basis for productivity improvements.’
‘First, it can eliminate inefficient and wasteful use of labour and capital. Greater flexibility in hours, more productive shift patterns, and lean production strategies are examples.’

Positive workplace culture
‘Much harder is the second point, which is adding value to the production process. For this to occur, a positive workplace culture must be in place, which gives all employees a voice and allows good ideas to be heard and implemented.’

Prof Gollan said recent increase in strike action and the use of lockouts by employers have highlighted the adversarial nature of the Fair Work Act.

‘Unions have also resisted calls for a way forward in linking productivity with wage increases,’ he said.
‘This urgently requires government action.’

He told the AMMA conference that the Fair Work review process should consider fixed term durations for individual flexibility arrangements and apply good faith bargaining principles to greenfield agreements.

Pre-conditions on industrial action
He also recommended the legislation place greater pre-conditions on the ability of unions to take protected industrial action.

‘Business and industrial groups have reported concerns about the increased power of unions: they can bargain and take industrial action over a much wider set of claims, whereas FWA intervention can only take place at extremities,’ Prof Gollan said.

‘In fact, there has been only one instance to date of FWA initiating intervention and halting protected industrial protection under these provisions, which was the determination settling the Qantas dispute.’

‘The damaging deadlock demonstrated by the Qantas case exposes the inherent flaws in the Fair Work Act and highlights the need for its refinement.’

‘In particular, the lack of a procedure to encourage and help the parties in dispute resolution is a critical gap.’
Smoke and mirrors
‘If we pass the smoke and mirrors of this dispute, the real issues are around competitiveness and how much influence unions have over management’s right to manage the business.’

‘The Qantas dispute showed the need for changes to IR legislation to ensure good faith bargaining and to assist both sides as Fair Work Australia’s ability to resolve bargaining disputes by arbitration is rather limited.’
‘A system is required to provide a process for negotiations and a means to resolve protracted disputes such as this.’

Prof Gollan was the co-author of a submission to the Fair Work Act review panel which called for greater workplace consultation and information arrangements to facilitate innovative and productive workplace cultures.
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