Employers voice dismay as review finds in favour of Fair Work regime

A review into the Fair Work industrial relations scheme has been branded “bitterly disappointing” by employers, after an independent panel decided against recommending any major reforms of workplace laws.


The review found that wages growth, flexibility and employment have been healthy since the introduction of the Fair Work Act.


The one major exception to this, productivity, was not due to Labor’s workplace regime, according to the panel.


The review dismissed ideas such as amending the law to permit easier access to arbitration or that Fair Work Australia be allowed to terminate prolonged industrial action.


However, it does recommend that individual flexibility arrangements be amended to make these types of agreements easier to access and more attractive to employers.


Business groups have reacted with dismay at the results of the review, with Peter Anderson, chief executive of the Australian Chamber of Commerce and Industry, calling the outcome “bitterly disappointing.”


“The fair work industrial relations review displays an alarming indifference to the economy’s need for better workplace regulation to support productivity, competiveness and a softening labour market,” he said.


“The economy and flagging productivity don’t wait for bad regulations to catch up or for courts to fix them. The price for waiting is weaker businesses and weaker job security.”


“It takes a Pollyanna view of the industrial relations system, especially its hope that union problems experienced by employers will cure themselves. History tells us they don’t and won’t.”


“The claim that poor productivity isn’t badly enough impaired by the fair work system to make changes is reckless.


“Labour productivity growth has fallen badly under the Fair Work laws, compared to long-term averages. They’re not solely responsible, but rules that govern work affect the productivity of work.”


Meanwhile, Workplace Relations Minister Bill Shorten said the Federal Government will release its response in the coming weeks.


“I believe it is right to summarise the recommendations as good news about the Fair Work Act,” he said. “The review concludes the act is accomplishing its objectives.”


“I’m heartened that the core conclusions are that laws are working well and as intended.”


The review has found that the legislation has been broadly consistent with the legislative agenda set by the government, and that it is “operating broadly as intended”.


It also says it has recommended a number of significant changes in order to improve or make consistent the legislation in certain areas.


Some of the recommendations include:

  • Extending the role of Fair Work Australia and the Ombudsman to more actively encourage productive workplaces, including promoting best practice through enhancing provisions of agreements, and developing model productivity clauses for awards.
  • It also recommends Fair Work Australia and the Ombudsman sponsor training workshops for employers and employees.
  • That individual flexibility arrangements be amended to make them easier to access, and more attractive to both employers and employees.
  • Greenfield agreement provisions be made consistent with the general enterprise bargaining steam, by applying “good faith” bargaining rules to negotiations.
  • The report also recommends that Fair Work Australia be given the power to initiate compulsory conciliation when parties have been unable to reach an agreement.
  • That the legislation be amended to require that protected action ballot orders can be issued only after bargaining has commenced.

Several other recommendations include the act be amended to stop enterprise agreement clauses that permit employees to opt out of the agreement, and to prohibit the making of an enterprise agreement with one employee.


It also says the right to seek flexible work arrangements be extended to a wider range of caring and other circumstances – a recommendation that is sure to rile businesses already frustrated with that clause.


Industrial relations legal expert Peter Vitale suggests the do-nothing approach would be “disappointing” for businesses.


“The obvious area looking for change is the general protection and adverse action provisions,” he told SmartCompany this morning. “They were screaming out to be reformed.”


Vitale says the release will be an upset to the business community.


“The changes businesses have been looking for have been really well articulated – enterprise bargaining, less focus on arbitration and so on.”


“Many of these areas were key for reforms.”


The review was conducted by Reserve Bank board member Dr John Edwards, industrial law academic Professor Emeritus Ron McCallum, and retired Federal Court judge, the Honourable Michael Moore.


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