Impact of Fair Work system on business — ACCI’s perspective

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Impact of Fair Work system on business — ACCI’s perspective

The Fair Work industrial relations system commenced on 1 July 2009, and became fully operational on 1 January 2010 with the commencement of the National Employment Standards and Modern Awards — but what impact has this system had on the operation of business?

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The Fair Work industrial relations system commenced on 1 July 2009, and became fully operational on 1 January 2010 with the commencement of the National Employment Standards and Modern Awards — but what impact has this system had on the operation of business?
 
The Australian Chamber of Commerce and Industry (ACCI) provided comment on this issue during the Australian Workplace Conference, which was presented by USYD’s Workplace Research Centre at Citigate Central Sydney, 31 March 2010.
 
A 9-month checklist
 
Speaking at the conference, Peter Anderson (chief executive, ACCI) summarised his assessment of the Act’s impact on business so far, as a ‘9-month checklist’.
 
Using the stated objectives of the Act, his assessment was as follows:
  • Simplicity. Employers require consistent messages across the board. For example, an enquiry about the appropriate rate of pay for an employee should obtain the same answer from each of the possible sources. He noted the use of one-page fact sheets as a useful development. However, it will take a while for Fair Work Australia decisions to achieve some equilibrium, for example, in the area of good faith bargaining.
  • Compliance. The major issue here is the safety net provisions. The NES have to operate across a very diverse range of business types and sizes and employee types. So far, bargaining issues have been mainly confined to the areas in which unions have traditionally been active.
  • Labour costs. The modern award system is two-edged — it is undoubtedly simpler than the old system but, by attempting to combine provisions of many different awards into far fewer ones, it sometimes results in reduced flexibility and increased labour costs.
  • Productivity. The jury is still out on this issue.
  • Flexibility. Business has expressed some concerns about some of the new regulated provisions that deal with flexibility, such as the right of parents and carers to request flexible work arrangements.
  • Fairness and employment levels. The jury is also still out on these two issues, but the system must provide for broader labour market objectives. 
  • Arbitration. There is still a lot of ‘arbitration’ in the new Act, and it includes a lot of regulation above the minimum safety net (NES). For example, the bargaining process is highly regulated and there are other extra obligations such as the flexibility provisions discussed above.
 
Better overall, but not as straightforward
 
Anderson made the overall comment that the system is not as straightforward for businesses as some commentators have claimed, mainly because the commentators do not focus on its small details, many of which are complicated and/or hard to understand.
 
Although he believes the state systems were generally easier to use, he regards the now almost universal federal system as a better model overall.
 
More information
 
Further information about the Australian Workplace Conference, including future conferences, is available online.
 
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