‘More flexibility and voluntary bargaining,’ says Ai Group


‘More flexibility and voluntary bargaining,’ says Ai Group

In its submission to the Fair Work Act review, Removing the Barriers to Productivity and Flexibility, Ai Group argues that the Fair Work Act needs to be much better aligned with the need for flexibility and productivity, if Australia is to manage the competitiveness challenges it faces and take advantage of the opportunities ahead.


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In its submission to the Fair Work Act review, Removing the Barriers to Productivity and Flexibility, Ai Group argues that the Fair Work Act 2009 needs to be much better aligned with the need for flexibility and productivity, if Australia is to manage the competitiveness challenges it faces and take advantage of the opportunities ahead.

‘[The Ai Group] has set out a series of amendments designed to make the Act work better in our lopsided economy,’ chief executive Heather Ridout said.

‘Based on the real life experiences of employers trying to implement and work within the Act, the evidence shows that workplaces have become less flexible and industrial disputes have increased markedly since the Act was implemented. This is occurring at a time when Australia has become a high cost economy and flexibility and productivity growth are needed more than ever.’

‘Business is at one on many of the core issues particularly the need to have a workplace relations regulatory framework that supports competitiveness and productivity.’

‘Included with the submission are the results of a survey of Ai Group members which found that the Act is not delivering productivity or flexibility improvements and in fact over 80% of those who reported less flexibility blamed the Fair Work Act.’

‘The unions are calling for more restrictions upon employers, wider arbitration powers for Fair Work Australia and more union powers. The experiences of many European nations which have implemented overly restrictive and unaffordable employment conditions highlight the hazards involved in taking this path. It is vital that these claims are rejected. The unions already have far too much power under the Act.’

‘In many ways the Fair Work bargaining laws have taken us a long way backwards. They are less flexible and unions have much more power in the bargaining process than the laws implemented by the Keating Government in 1993/94 when enterprise bargaining was first introduced into the federal workplace relations legislation. For example, nowadays unions can bargain and take industrial action over a much wider set of claims and the Tribunal has wide powers to make orders during the bargaining process.’

Key recommendations
‘Key amendments to the Act proposed in the Ai Group submission include:
  1. The “permitted matters” for enterprise agreements need to be defined in accordance with the High Court’s decision in the Electrolux case, and agreements must not be able to include any other terms. Along with this, the “unlawful terms” need to be more tightly defined and the list needs to be expanded to include terms which impose restrictions on outsourcing, contractors or on-hire arrangements.
  2. A voluntary bargaining system, as was in operation for 15 years between 1993/94 and 2009 needs to be reintroduced. In such a system, majority support determinations, bargaining orders and scope orders are not necessary.
  3. If the Act is to continue to require that an employer bargain where the majority of employees want an enterprise agreement, the provisions relating to majority support determinations need to be amended to address some key problems which are occurring. Secret ballots should be required to determine majority support, both employer and employee bargaining representatives should be permitted to apply for a determination, and employers should be permitted to re-test the support of the employees for a collective agreement after protracted bargaining.
  4. To improve certainty, consistency and the ability of employers to manage their businesses, the list of areas in the Act which cannot be the subject of an FWA bargaining order should be expanded.
  5. Scope orders should be abolished. The scope of an enterprise agreement is a matter to be bargained over, not a matter to be imposed on the bargaining parties.
  6. The term “genuinely trying to reach an agreement”, which operates as a pre-condition to the taking of industrial action, should be defined to ensure that industrial action is a last resort.
  7. A union should only be covered by an enterprise agreement if the agreement, as voted upon and approved by the majority of employees, specifies that the union is covered by the agreement.
  8. Enterprise agreements between an employer and an individual employee should be allowed. The Fair Work Act stretches the term “enterprise agreement” to include agreements which potentially cover a large number of different enterprises, so the use of the term to cover an agreement between one employer and one employee at a single enterprise is not counterintuitive.
  9. Unions currently have too much power to refuse to enter into a greenfields agreement for a new project unless all their demands are met. To address the power imbalance, greenfields agreements should be allowed between an employer and any union eligible to represent any employees on the project. Employer greenfields agreements should also be reintroduced.
  10. The framework for the making of Individual Flexibility Arrangements (IFAs) under enterprise agreements and modern awards should be set out in the Act so that individual employees have access to flexible work arrangements that suit their needs, by agreement with their employer.
  11. Given the Federal, State and Territory Governments’ lack of progress over the past two years in agreeing upon a national long service leave standard, the Review Panel should recommend the implementation of an appropriate national standard. That standard should be the federal award standard of 13 weeks leave after 15 years of service with pro rata leave available after 10 years. The national standard must override State and Territory long service leave laws. Also, enterprise agreements need to be able to override State and Territory laws.
  12. Some important changes need to be made to the annual leave and personal/carer’s leave provisions of the National Employment Standards to address problems which have been arising and to enable employers to more effectively deal with absenteeism.
  13. The list of matters which are prohibited in awards should be expanded to reduce the risk of unproductive outcomes arising from the 4 yearly reviews of awards. Over time the focus needs to be on reducing the level of regulation not adding to it.
  14. The transfer of business laws are unworkable. They are impeding productivity, competitiveness and the restructuring of Australian businesses. They are also reducing employment and promotion opportunities for Australian workers. A series of important amendments must be made including restoring the High Court’s “character of the business test”.
  15. The General Protections in the Act are poorly drafted and are operating extremely unfairly for employers. These laws need to be substantially revamped to address a raft of problems and to restore balance.’
‘Workplace relations is of course not the only contributor to productivity and competitiveness, but it is a major driver in its own right and integral to the successful adoption of other drivers of productivity. This fact cannot be ignored and it is critical that these amendments are supported by all parties,’ Ridout said.
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