National IR system would save business millions, ABL chief says

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National IR system would save business millions, ABL chief says

The introduction of a single national industrial relations system would save $120 million in State costs - $40 million in NSW alone - Australian Business Ltd (ABL) chief executive Mark Bethwaite has told a Sydney conference today.

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The introduction of a single national industrial relations system would save $120 million in State costs - $40 million in NSW alone - Australian Business Ltd (ABL) chief executive Mark Bethwaite has told a Sydney conference today.

Speaking at the 'Fair Go or Anything Goes' conference, Bethwaite said that while this was serious money, ‘this is small change compared to the savings by businesses through the improved efficiency of working within a single national system’.

He said one of ABL’s members who operates in every State recently spent more than $1 million on a new payroll system to accommodate 17 different State and Federal awards covering similar employees in various States.  

‘The multiple IR systems now in place made what should have been a simple task for this company difficult and expensive,’ Bethwaite told the conference on IR reform.

‘On efficiency grounds, there is a strong case for one national workplace system.’

Unnecessary confusion

Bethwaite said it costs over $270 million for State and Federal Governments to administer workplace relations in Australia.  Of this, the Federal system costs $140 million per annum – the five other State systems cost $120 million. In NSW alone, the cost is $40 million per annum.

‘This $40 million covers the cost of a Minister, relevant parts of his Department, the courts and tribunals, the judges, clerks, other staff and premises required to run a system which at best duplicates and at worst confuses the efficient conduct of workplace relations in this State.

‘The existing six State and Federal systems lead to unnecessary confusion, compliance and direct costs for all businesses and employees,' he said.

Bethwaite said that until people had worked in businesses where both State and Federal awards cover different employees working side by side, ‘the confusion and inefficiency of dual systems are not apparent’. 

‘For example, an employee under a Federal award automatically qualifies for choice in superannuation but his mate under a State award has no right to choose,’ he said.

Bethwaite said the six separate systems have given rise to 4,200 awards and 26,000 classifications - one for every 79 employees in Australia. 

‘Those numbers alone make the case for change,’ he said. ‘A major cost to business is the need for HR specialists and management to learn and practise in multiple IR jurisdictions.’

‘In a recent ABL State-wide survey, over 92% of businesses responding want a single national system of workplace relations,’ he said.

Scaremongering

Bethwaite said there had been a campaign of ‘scaremongering’ about the Government’s proposed IR changes.

‘Should any employer seek to reduce the pay and benefits of their employees they will lose respect, loyalty and staff,’ he said.

‘In fact shortages of skilled and other staff will encourage employers to improve benefits for employees to ensure that their business will continue to grow and prosper.’

Change needed on unfair dismissals

Bethwaite also said business supports moving away from the current unfair dismissal regime because: 

  • the current system leads to unacceptable outcomes and speculative claims; and

  • it is costly and time consuming for businesses.

‘Put simply, the system is broken and must be fixed,’ he said.

Bethwaite said the cost to employers of defending an unfair dismissal was $5,000 to $50,000 'and that is before the opportunity cost of the lost working hours’.

‘For a small to medium business, unfair dismissal claims are not worth defending,’ he said.

Inequity in unfair dismissal system

Bethwaite pointed the conference towards the front page of the Daily Telegraph on Monday 4 July, which told the story of the NSW Department of Education ‘frozen like a rabbit in headlights, unprepared to sack a teacher who had been convicted for possessing over 600 images of child pornography, because the Department feared being hit with yet another unfair dismissal case’. 

‘Why?  Because the Department has recently had to pay out $28,000 to a teacher it sacked for an affair with a pupil,’ Bethwaite said.

‘Across ABL’s membership, there are hundreds of war stories of outrageous unfair dismissal payouts,’ he said.

‘Many relate to employees sacked for crimes against their employer, theft in particular. 

‘It is simply unacceptable that the court should require employers to make unfair dismissal payouts to such employees because the required termination process (such as three written warnings) was not followed to the letter.’

Bethwaite said that for over 12 years, ‘the angry, the vexatious and the legal profession have had their way on unfair dismissal’. 

'Talk to a small business person and they will tell you the greatest impediment to taking on staff is the fear they will be on the wrong end of an unfair dismissal action,’ he said.

Unlawful dismissals continue

Bethwaite said there was one area of this debate he resented: ‘The claim that employers will be able to sack women because they are pregnant, or people of different racial backgrounds, or because of their religion, union membership or sexuality, and that they will have no redress’.

‘Unlawful dismissals will still be unlawful,’ he said.

Related 

Federal IR changes 2005


 

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