14/07/2011 - 00:00

Employers want changes to Fair Work Act

14/07/2011 - 00:00


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The clamour in the business community is growing louder for he law to be debated

Employers want changes to Fair Work Act

Over recent weeks it appears an increasing proportion of the business community has found its voice when it comes to airing discontent with the federal government’s workplace laws.

For some time now the Australian Mines and Metals Association (AMMA) has been a major proponent of having the relative merits and pitfalls of the Fair Work Act debated and discussed.

As a long-time advocate for change to the Act, the AMMA has welcomed the fact that retailers and other industry associations have found the courage to air their concerns and assist workplaces in having the issue of industrial relations policy enter public debate and discourse.

To mark the two-year anniversary of the full introduction of the Act, the association released a critique of the law in a document entitled Fair for Who? – The rhetoric versus the reality of the Fair Work Act.

The document outlines a series of commitments given to employers in the lead up to the introduction of the Act.

At the time, many of our members, along with numerous other employers, were prepared to give the changes a fair go on the basis of the assurances provided before the introduction of the legislation.

However, it is increasingly apparent that two years on from it’s introduction, the practical realities of the legislation are not measuring up to the undertakings that were provided.

The Fair for Who? document draws the conclusion that many of the industrial relations problems we are experiencing on the ground are a direct result of there being significant flaws in the structure of the Act.

It has led to various tribunal decisions, which are not in line with the stated intent of the politicians who drafted the laws.

Put simply, the business community was promised one set of rules and conditions by the government – but the practical application of the Act in the courts and tribunals is resulting in a different set of rules and conditions being imposed on the day-to-day operations of employers across the country.

This is creating some significant problems for workplaces across Australia.

The main areas in which the AMMA sees there being a breach of undertakings on workplace laws include:

• Union right of entry laws have been significantly altered.

• There is a lack of balance in recent appointments to Fair Work Australia.

• Attempts continue to be made to water down strong compliance within the building and construction industries.

• Common law contracts are nowhere near as flexible as AWAs (Australian Workplace Agreements).

• The requirement for majority support in bargaining is being sidestepped.

• The pursuit of increased productivity is not a requirement under the bargaining framework.

• Unions are seeking to represent workers who would not ordinarily fall under their rules, leading to disputes and confusion among workers.

As a consequence, employers in the resources industry are having to deal with situations such as:

• Unions using protected industrial action as their first weapon in advancing their claims as opposed to initially exhausting a genuine negotiation process.

• Extravagant and inflationary claims being successfully pursued due to employers having no practical alternative to negotiating with unions, particularly for greenfield agreements.

• Fair Work Australia telling third parties that losses of $3.5 million a day being incurred are not significant enough to suspend protected industrial action being taken by employees of other parties, which is affecting their businesses.

• Significant increases in the number of agreements containing clauses tailored to assist unions rather than directly helping workers.

The association believes such a situation is not only eroding the capacity of employers to operate their own business free of union intervention, but undermines overall confidence in the ability of the Act to deliver a stable and predictable workplace regime.

Research commissioned by the AMMA points to a situation in which the more employers are having to engage with the provisions of the Act in managing their business and, the more entrenched the laws become, the more damage they appear to be inflicting on workplaces, leading to a decline in confidence in the system.

The AMMA is concerned such a situation is also resulting in a significant decline in productivity – shifting from more than two-thirds of surveyed employers reporting acceptable productivity rates in April 2010 to just 56.7 per cent in the most recent survey period.

Other findings in the association’s survey on the impact of the laws are:

• 11.5 per cent of respondents reported delays in start-up projects due to the non-availability of a non-union greenfield agreement option since the Act began, with numerous employers raising concerns about upcoming projects requiring greenfield agreements.

• 82.6 per cent of respondents have not been able to negotiate productivity improvements in exchange for wage increases under the Act.

• 29.3 per cent of respondents have already experienced flow-on effects to their enterprise as a result of recent wage and allowance outcomes in the offshore oil and gas industry.

• 72 per cent of respondents say they are spending significantly more time and resources in meetings and negotiations under this Act compared to the Workplace Relations Act.

• Union demarcation issues have increased at 27.8 per cent of respondents’ enterprises.

• 16.2 per cent of respondents have received adverse action claims from former employees since the Act took effect, while 10.8 per cent have received claims from current employees.

The AMMA, along with other members of the business community, are increasingly of the view the government needs to act now to redress the legitimate concerns of employers.

Inaction on the issue will only see an increasing number of employers come to either one of two conclusions:

• The government is prepared to allow Fair Work Australia to interpret legislation in a manner which appears to be at complete odds with many of the undertakings given to employers on its introduction.

• Or, alternatively, the current interpretations of the Act being made are correct and indeed supported by the government.

If the latter is the case, then employers can legitimately claim to have been misled.

It is the AMMA’s strong belief that if changes are not forthcoming soon, restrictive work practices and poor productivity performance will once again become entrenched in workplaces and businesses will once again be poorly placed to respond rapidly to dramatically changed economic circumstances when the commodity cycle turns, once again.

• Steve Knott is chief executive officer of the Australian Mines and Metals Association.



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