04/02/2009 - 22:00

Fair Work plans don’t work for business

04/02/2009 - 22:00


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Proposed IR changes will have a major effect on businesses across the nation

Fair Work plans don’t work for business

THE year ahead will be a challenging year for Western Australia's small, medium and large businesses. The current economic uncertainty is a significant short-term interruption for businesses.

However, the Chamber of Commerce and Industry Western Australia, the state's peak business organisation, believes the state's long-term economic prospects remain sound, and WA is better placed than most industrialised economies to emerge from the slowdown in a position of strength.

While the global financial crisis, and the daily dose of bad economic news that is dominating the morning newspapers and evening news bulletins, is hitting hard on WA businesses, there is another challenge looming that will continue to affect companies long after the global financial crisis is over.

CCI is concerned the federal government's proposed industrial relations changes will disadvantage small, medium and large businesses across the state.

CCI believes the Fair Work Bill, if enacted as it currently stands, will impose unnecessary and unreasonable requirements on employers, and impede business efficiency and productivity improvement.

The bill is inconsistent with the government's pledge "to provide a balanced framework for cooperative and productive workplace relations."

The 600-page Fair Work Bill signals the start of a new era in which unions will be handed greater control of Australian workplaces. Unions will have unprecedented access to Australian workplaces. Unions will be able to dictate terms on a greater number of workplace issues.

The bill, in its current form, will force employers into collective bargaining whether they want to or not, give unions access to confidential employment records of all workers, and increase the likelihood of disruptive and costly industrial action.

Unions, which only represent around 11 per cent of WA's private sector workforce, will have a seat at the negotiating table even if only one worker is a member. They will also be given greater access to worksites and the employment records of workers.

The changes will deliver to unions a greater foothold in all Australian workplaces.

Unions have an important role in a modern and flexible industrial relations system, and there should be a fair balance between the interests of employers and their workers.

Unfortunately, the Fair Work Bill, in its current form, does not go close to achieving an appropriate balance.

Industrial relations legislation needs to enhance the ability of businesses to respond effectively to changing local, national and global economic circumstances.

It needs to allow flexibility in employment arrangements while safeguarding employers and employees from unfair pressures or unnecessary influences. CCI's analysis shows that the bill will not provide this.

At a time when business growth and investment is needed more than ever to create wealth, prosperity and jobs for the nation, now is not the time to impose additional burdens on business.

CCI believes the Fair Work Bill fails this important test.

Last week, CCI represented WA at a Senate inquiry into the Fair Work Bill. The chamber's submission to the inquiry proposes 48 amendments to the bill to ensure the benefits of a flexible industrial relations system are maintained, and help preserve business and industry's role as a key economic driver for the state and the nation.

CCI has identified a number of key areas of concern with the bill, which if not addressed, could undermine business investment, economic growth, and job creation.

- Greenfields agreements: The proposed changes to greenfields agreements have the potential to cause delays and increase costs for new projects, including the infrastructure promised by state and federal governments. They will create disruption in workplaces due to union demarcation disputes or overlapping coverage, and reduce productivity and flexibility. Under the bill, a project developer will be required to notify every union that has an interest in their sector of the developer's intention to negotiate pay and conditions for a new workforce. CCI would like the provision to be relaxed to allow for more flexibility when negotiating a greenfields agreement for new projects.

- Agreement making: The prohibition on individual agreements, the expanded definition of matters that unions are allowed to raise in negotiations with employers, and the increased power given to unions and to the industrial umpire, Fair Work Australia, in agreement making is inconsistent with delivering the productivity improvements, which are supposed to be a critical objective of agreement bargaining under the bill. Procedures for making agreements will become more bureaucratic and complicated. Due to the emphasis in the bill of facilitating union involvement, even where historically there has been none, the process will be protracted and will involve greater intervention by Fair Work Australia.

- Right of entry: While the government stated that " ... existing right of entry laws will be retained", the fact is that subtle changes to right-of-entry provisions will result in much easier access to worksites for unions. The bill will reduce the current requirements in relation to right of entry for holding discussions. This will allow a union to enter a worksite so long as there are employees eligible to be members. This significantly widens the scope for right of entry. Further, unions will also be able to inspect and make copies of non-union member records, a provision that will cause considerable concern in many workplaces.

- Transfer of business: The bill significantly alters the rules surrounding a 'transfer of business'. These proposed changes were not foreshadowed in the government's election platform and will force a company that takes over another firm to maintain outdated and irrelevant awards and agreements. CCI wants the current provisions for 'transfer of business' to be retained. Given the federal government's desire to improve productivity and jobs in these uncertain times, CCI has called on the government to release modelling showing how the its proposed laws will affect unemployment and economic activity. CCI believes the government should demonstrate how this critical policy change, which has the potential to directly or indirectly affect all of us, will actually encourage business growth and support workplace productivity.

n James Pearson is chief executive of CCIWA.



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