'Substantial risk' in Labor's IR policies, says AiG


'Substantial risk' in Labor's IR policies, says AiG

A major employer group has savaged Labor's IR policies, claiming they carry substantial economic risk and will cause uncertainty for businesses.


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A major employer group has savaged Labor's IR policies, claiming they carry substantial economic risk and will cause uncertainty for businesses.

Heather Ridout, Chief Executive of the Australian Industry Group (AiG), said the 'almost exclusive focus on AWAs' in the debate on Labor's workplace policies is ignoring the breadth of concerns business has with them.


'In their current form [they] carry substantial economic risk,' Ridout said.

'Far from resolving the issue, Labor's position on AWAs is creating more uncertainty by raising the prospect of upsetting existing contracts and effectively applying legal retrospectivity,' she said 'This would be a direct challenge to important principles which underpin business certainty.'

Ridout said that apart from AWAs, AiG had four further areas of major concern:

  • Labor's collective bargaining model is flawed and dangerous
  • the Fair Work Australia proposal is ill thought through, unworkable and arguably unconstitutional
  • the prospect of Labor abolishing the construction industry reforms threatens to undo generational change which has delivered unprecedented industrial harmony for the industry, and
  • Labor's unfair dismissal plan has real problems in both scope and implementation

'We disagree with Labor's whole concept of compulsory collective bargaining, the breadth of what can be bargained for under Labor's policy and under what conditions industrial action can be taken and the easy access to arbitration,' she said.

Arbitration has 'dangers'

Ridout said that Labor's proposal for arbitration if agreement is not reached and protracted industrial action occurs which harms either party, is 'dangerous'.

'If a negotiating party is aware that arbitration is available, there is less incentive for the party to make concessions in order to reach agreement,' she said. 'A union would be able to make a series of excessive claims which no company would agree to, organise industrial action in pursuit of those claims and then wait for a "compromise" position to be arbitrated.

'Potentially, this would open the floodgates leading to an escalation of industrial action and a return to the old days of arbitration around ambit claims.'

Ridout said arbitration should only be available in a bargaining system under very limited circumstances such as where a dispute is threatening major damage to the economy.

Fair Work proposal 'ill thought'

She said AiG also has serious concerns about the Fair Work Australia proposal, and the plan to abolish the AIRC and bring together into one new authority the functions of adviser, investigator, prosecutor, mediator and judge 'is ill-thought-through, unworkable and arguably unconstitutional'.

'On unfair dismissals, we have real problems with the scope and process proposed by Labor for dealing with unfair dismissal claims,' Ridout said. 'In relation to the scope, Labor proposes to abolish virtually all of the existing exemptions from the unfair dismissal laws. These include casuals, seasonal workers, fixed term staff and small business.

'For seasonal workers when the fruit is all picked for example, there have been celebrated cases where unfair dismissal compensation was sought by the fruit pickers and compensation awarded. To remove the exemption would be a folly.'

Merit in 'informal' unfair dismissal process

Ridoubt said that while there was merit in the informal process in Labor's unfair dismissal policies, in many cases it would be impossible for a member of an independent tribunal to justly decide at a single conference whether a dismissal is fair.

'Often there are two directly conflicting accounts of the events leading up to the dismissal,' she said. 'It potentially could lead to gross unfairness for both employers and employees if tribunal members were "required" in all cases to determine whether a dismissal is unfair and determine an outcome at a conference, without giving the parties the opportunity to present evidence, cross-examine witnesses, and so on, should they wish to.'

Repudiation of contracts

On the issue of AWAs, Ridout said the transitional plan being considered by Labor would have significant commercial consequences for business.

'Labor has said that it is considering allowing workers to remain on AWAs for their full term (up to five years) if they are "happy" with them.' She said. 'This implies that if workers are not happy they may be able to opt out of their AWAs during their term.

'If Labor decides to change the law to allow opting out of AWAs this would amount to a repudiation of legally binding contracts and would create a huge commercial mess for business.

'Companies that tendered for work, for example, on the basis of certain set wages and flexible conditions face the very real risk of finding themselves in commercial difficulties. Also, companies would be faced with the risk of industrial action and additional claims during the life of settled agreements.'

AiG's full statement on Labor's policies can be found at AiG's website.


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