Fair Work Act receives good clean bill of health

A distinguished panel of three experts delivered its assessment on the Fair Work Act, on 2 August 2012.  By and large, it was the panel's opinion that the Act has a good bill of health.  Some tinkering here and there is recommended but no drastic changes.

There is no doubt that some employers and unions (and political parties) will seek a second opinion.  On the evening of the release of the report, a number of union officials attending the Ron McCallum Debate 2012 questioned him on some findings of the panel, including its decision to not endorse compulsory arbitration.  Employers no doubt want more reform on industrial action and unfair dismissal laws.

In this bulletin we examine some of the main recommendations of interest to employers.

Diagnosis and prescription

The panel’s report makes 53 recommendations for changes to the current system, drawing on some 250 submissions, one of which came from Bartier Perry.  Some recommendations of the panel include:

• employees should not accrue annual leave when receiving workers’ compensation payments;

• annual leave loading should not be paid on termination unless there is an express provision in the employment agreement or award to that effect;

• the Federal and State governments should attempt to introduce a national long service leave standard by 1 January 2015;

• employers be required to hold meetings to discuss requests for extended parental leave and flexible working arrangements;

• the number of public holidays for which penalties are payable should be a capped to 11;

• unions and employees should not have access to protected industrial action to coerce employers to bargain with them – they first need to obtain a majority support determination before taking steps towards industrial action;

• the time limit for lodging unfair dismissal applications should be extended, and the time limit for filing general protections claims involving dismissal reduced, so both align at 21 days;

• there be clarity that employees are to be taken to have been ‘dismissed’, despite being on a contracts for a specified period, fixed task or seasonal work, if the main purpose of the contract was to avoid the unfair dismissal jurisdiction;

• Fair Work Australia should be allowed to make costs orders against a party that has unreasonably failed to discontinue proceedings or agree to terms of settlement, or have caused the other party to incur unnecessary costs;

• the central consideration in determining adverse actions claims should be the subjective rather than imputed intention of the person making the decision;  and significantly,

• productivity should be encouraged and enhanced through best practice model provisions on productivity included in agreements, with an educative and promotion role given to Fair Work Australia in this regard.

Prognosis

It must not be forgotten that the review of the Fair Work Act had at its central focus fostering national productivity rather than addressing the age old battle between employer and union.  At the end of the day, drastic modifications are unlikely as both the Workplace Relations Minister Bill Shorten and the panel have stated they are disinclined to change the existing system.

Productivity is more than just flexibility in industrial relations or cost savings.  No doubt some of the recommendations are about flexibility for businesses and more equity.  However, productivity requires consideration of matters other than just industrial relations, such as employee relations and good management, education, knowledge and training, and investment. That is the challenge for all – especially the government and the opposition.

Author James Mattson