Workplace relations regulation has become too rigid and is hurting Australia’s competitiveness. The workplace relations system has an important role in ensuring workers’ rights, pay and conditions are fair and appropriate. At the same time, businesses need the flexibility to adapt and seize new opportunities and workers must be free to negotiate working arrangements that suit their personal ambitions and circumstances. The Australian economy continues to adapt and change as the world changes and our workplace relations system must do the same, otherwise our businesses and workers will be left behind. The Government is committed to returning the workplace relations system to the sensible centre.
The Fair Work Act 2009 provides the legislative framework underpinning the national workplace relations system, which covers the majority of Australian workplaces. The Government is committed to keeping the Fair Work framework, but we want to ensure it helps build a more stable, fair and prosperous future for Australia’s workforce, businesses and the economy. To this end, the Government has promised that the Productivity Commission will be asked to undertake a comprehensive review of the workplace relations framework, including the Fair Work laws. This will include an assessment of the impact of the framework on productivity, how it could be improved to promote more jobs, better wages and living standards, make workplaces operate better and reduce red tape. The Commission’s recommendations will inform any workplace relations policy the Government takes to the next election.
In the meantime, consistent with our pre-election commitments, we have a significant agenda we are advancing in this term of government.
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First, Australia’s crucial building and construction sector has been hampered by the abolition of the Australian Building and Construction Commission (ABCC) in 2012. The sector employs more than 1 million people and accounts for around 8 per cent of GDP (ABS, 2012). The sector needs an effective regulator, yet the previous Government replaced the ABCC with Fair Work Building and Construction (FWBC), which has fewer powers and a 30 per cent smaller budget. On FWBC’s watch there have been a number of productivity-sapping disputes marred by violence and intimidation, including those relating to the Myer Emporium site in August 2012, the Little Creatures brewery site in Geelong in late 2012, and City West Water.
The Government has introduced legislation to re-establish the ABCC. As noted by the Productivity Commission (2014d), the performance of the building and construction sector improved following the establishment of the ABCC, with reduced days lost to industrial disputes, greater productivity in key parts of the industry and better management-worker relations. The new ABCC and higher penalties for unlawful conduct will again ensure work is carried out fairly, efficiently and productively.
Second, the Government introduced legislation to deliver better protection for members of Australia’s trade unions and employer organisations by better aligning the responsibilities of, and penalties for, the officers of Registered Organisations with those of company directors. A Registered Organisations Commission will be established to improve oversight, with investigative and information-gathering powers modelled on those available to the Australian Securities and Investments Commission. The Registered Organisations Commission will have the power to commence legal proceedings and refer possible offences to prosecutors and law enforcement agencies.
Third, several problems are being addressed through our Fair Work Amendment Bill 2014, which aims to restore balance to the workplace relations system by:
• Removing the capacity of unions to frustrate greenfields agreements bargaining through unsustainable claims and delays — Negotiations for greenfields agreements (for new projects) have been exempted from the good faith bargaining rules that apply to existing workplaces. Submissions to the 2012 Fair Work Act Review showed some unions have exploited this exemption for greenfield agreements to pursue excessive wage claims and delay the commencement of projects, creating doubt over whether a project will proceed (McCallum, Moore, & Edwards, 2012). The Bill extends good faith bargaining rules to greenfields agreements. Further, where a greenfield agreement is unable to be reached within three months, the employer will, subject to appropriate safeguards, be able to have the Fair Work Commission approve the agreement.
• Restoring union workplace access rules and reducing excessive right-of-entry visits by union officials — The current right of entry provisions are broader than under previous workplace relations legislation. Under the Fair Work Act, union officials with an entry permit have
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a right to access workplaces including those that do not have any members. The 2012Fair Work Act Review found this has led to frequent use of entry rights by some unions. The Review notes that during the construction phase of BHP Billiton’s Worsley Alumina plant, visits by union officials increased from zero in 2007 to 792 visits in 2010 (McCallum et al, 2012). The Bill provides that a union is entitled to enter a workplace for discussion purposes only if it is covered by an enterprise agreement, or it has been invited. Further, the Bill ensures the Fair Work Commission can properly deal with excessive right of entry visits – for example, by suspending, revoking or imposing conditions on an entry permit. • Improving workplace flexibility by enhancing the scope for employees to make individual
flexibility arrangements that meet their genuine needs — Under the Fair Work Act employees and employers should be able to achieve flexibility in the workplace through individual flexibility arrangements (IFAs). However, the Fair Work Act currently allows enterprise agreements to restrict the use of IFAs. This means that employees covered by an enterprise agreement may be denied the opportunity for more suitable workplace arrangements even if their employer agrees. The Bill provides workers with fair flexibility by ensuring IFAs can be made in relation to a minimum of five key conditions.
• Closing the ‘strike first, talk later’ loophole in the good faith bargaining rules — The Fair Work laws enable industrial action in support of claims for a new enterprise agreement before bargaining has commenced. The Bill ensures industrial action cannot be the first step in the bargaining process.
The Government will further amend the Fair Work legislation to ensure that protected industrial action can only happen after there have been genuine and meaningful talks between workers and business during enterprise bargaining and only in support of claims that are not manifestly excessive and would not have a manifestly adverse impact on workplace productivity. We will also require employees and employers to consider productivity improvements when bargaining for an enterprise agreement.