FW Act ‘not perfect, so it’s time for changes: Ridout

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FW Act ‘not perfect, so it’s time for changes: Ridout

A leading employers’ organisation has urged major changes to the Fair Work legislation, including secret ballots for majority support determinations, no restrictions on the hiring of contractors, and pattern bargaining issues to be determined at the industrial action secret ballot stage.

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A leading employers’ organisation has urged major changes to the Fair Work legislation, including secret ballots for majority support determinations, no restrictions on the hiring of contractors, and pattern bargaining issues to be determined at the industrial action secret ballot stage.
 
Australian Industry Group (Ai Group) chief executive Heather Ridout has told the International Forum on Employment Relations that the Federal Government needs to accept that its Fair Work laws are ‘far from perfect’.
 
Ridout said there were 10 areas of the workplace legislation that needed to be addressed:
 
1 Contractors and on-hire employees
 
Ridout said that as soon as the Act came into operation unions began to pursue clauses that restrict employers’ capacity to engage contractors and on-hire employees.
 
She said that in the construction industry these clauses mean a return to the damaging practices of the past whereby the unions stop all contractors coming on to a site unless they have an enterprise agreement with the relevant union.
 
‘The use of Government purchasing power to drive positive workplace relations behaviour was a central recommendation of the Cole Royal Commission into the Building and Construction Industry and must not be abandoned,’ Ridout said.
 
‘Experience shows that employers will not concede damaging enterprise agreement clauses if they are locked out of Federal or State Government construction work as a consequence.’
 
‘If the Federal Government does not have the appetite to use its purchasing power to protect past construction industry reforms and drive further reform, it is vital that State Governments pick up the baton and start using their substantial purchasing power to protect the reforms which have been so successful.’
 
2 Individual flexibility arrangements
 
Ridout said these have not provided the same flexibility as AWAs did.
 
‘The Fair Work Act prevents employers offering IFAs as a condition of employment and employees can cancel them with four weeks’ notice,’ she said.
 
‘Also, employers have no certainty about whether a particular IFA meets the better off overall test or not. For these reasons, few if any employers see them as a viable alternative to a workplace agreement.’
 
‘Few employers would be prepared to reach an IFA with an employee and pay a wage increase in return for certain flexibilities, when the employee can give four weeks’ notice and cancel the agreement.’
 
‘The Fair Work Act needs to be amended to create a more effective framework for IFAs. Flexibility terms which detract from that framework need to be outlawed.’
 
3 Transfer of business
 
Ridout said these provisions are operating against the interests of both employers and employees, with companies taking over work reluctant to take on existing employees.
 
4 Majority support determinations
 
Ridout said a secret ballot should be required for Majority Support Determinations (which FWA can currently make using any method considered appropriate).
 
She said typically petitions are provided to FWA but employers are not shown them due to privacy considerations.
 
Ridout said if unions are concerned about privacy they should support secret ballots.
 
Ai Group also wants the JJ Richards case (currently on appeal) overturned so that unions have to obtain a majority support determination before getting an order for a secret ballot on industrial action.
 
5 Pattern bargaining
 
Ridout wants pattern bargaining issues sorted out at the time unions seek secret ballots for industrial action.
 
‘It makes no sense to allow employees to authorise industrial action through a secret ballot when the industrial action which they propose to take is unlawful and will be subject to injunctions, stop orders and/or damages, as soon as industrial action is threatened or taken,’ she said.
 
6 General protections
 
‘The General Protections are routinely being used by unions and lawyers to threaten employers with claims, and to drag employers into conciliation proceedings in FWA, often over highly speculative claims,’ Ridout said.
 
‘Many of the claims relate to employees who do not have access to the unfair dismissal laws (eg because they have only been employed for a short period of time, or have not filed an unfair dismissal claim within the required 14 day period).’
 
Ridout said applicants should have to prove that a breach of the law has occurred, and if that was not acceptable, the applicant should first prove the existence of the objective facts that provide the basis of the claim.
 
7 Trade-offs for the Superannuation Guarantee Levy
 
Ridout said that the move from 9% to 12% would be very costly for industry and there should be systematic trade-offs.
 
8 Annual leave loading not payable on termination
Ridout said the government has formed the view that leave loading must be paid on termination of employment, even though many modern awards contain provisions that expressly state leave loading is not payable.
 
‘The Fair Work Act should be amended to leave the issue of whether or not leave loading is payable on termination of employment in a particular industry to the independent umpire — FWA,’ she said.
 
9 National long service leave standard
 
Ridout said no progress had been made on this, and if it was ‘too hard to tackle’ employers need to be given back the right that they had prior to the Fair Work Act, to include long service leave clauses in enterprise agreements which can override State long service leave laws.
 
10 Undertakings
 
Ridout said that where an FWA Member wishes to propose an undertaking on an employer, the Member should be required to make a finding that the agreement would not pass the better off overall test unless the undertaking is given and provide written details of the finding to the parties before an enterprise agreement is rejected. Such finding should be subject to appeal.
 
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