Business Council calls for sweeping overhaul of awards system

by Chloe Taylor19 Aug 2015
The Business Council of Australia (BCA) has warned it will not accept the Productivity Commission’s review of workplace relations reform without question, claiming that Australia needs a sweeping overhaul of its awards system and enterprise bargaining processes.

Jennifer Westacott, the BCA’s chief executive, said the country’s biggest businesses would push for a range of changes to the national system of awards, arguing that they “should be stripped back to their core purpose”.

She added that this is something the Productivity Commission “seems to have put into the too-hard basket”.

In a speech at Sydney University on Thursday evening, Westacott argued that the Fair Work Commission (FWC) should abolish Australia’s complex network of penalty rates for different industries and businesses in favour of economy-wide rates for casual, overtime, penalty and shift work.

Westacott said that these new rates should be part of the Minimum Wage Order as opposed to being contained in awards, and added that businesses should have the option to add a further “premium rate” for employees working on weekends at the employer’s discretion.

The impact of technology

According to Westacott, a recent visit to the USA’s Silicon Valley caused her to realise how heavily technology and digitisation is set to disrupt the Australian economy.
Because of this, she said, the Productivity Commission's draft review of the workplace relations reform would not provide an adequate model for the national economy to adapt rapidly enough to changing workplaces.

The draft review

Initially, the BCA welcomes the Commission’s draft review, claiming that the Productivity Commission should be “congratulated” for recognising that the current system was not working as well as it should be.

The BCA also said the report had made sensible and practical changes to improve workplace agility, reflecting the changing nature of the economy.

On Thursday, however, Westacott said the Commission had not gone far enough with its recommendations – particularly in regards to the awards system and the enterprise bargaining process.

“To tell companies ... that to reorient their business models to stay profitable and keep people in jobs they have to work around an overly complex, conflict driven system is simply not a modern, forward looking proposition,” she said.

“The idea that we can't deal with it because we can't predict the future is precisely why we should be tackling this. The more rigid the system, the less capacity we have to adjust to the unknown.

“My call to action tonight is for each of you to think about how we tackle this important conversation over the next six months.”

Last week, Productivity Commission chairman Peter Harris said he had found Australia’s workplace relations system to generally be in working order.
“We need to repair it,” he said. “We don’t need to replace it.”

Harris’ report recommended a number of small changes, including reducing the Sunday penalty rates in the hospitality, retail and similar industries to match Saturday rates.
 
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