Employers cautious about IR changes

by 30 Sep 2008

EMPLOYER GROUPS recently warned that the Australian Government’s process of creating new industrial awards to regulate workplace matters risks losing the confidence of the business community if labour cost increases and added regulation contained in recently released draft legislation are reflected in final outcomes.

Under the proposed changes, modern awards will set mandatory wages and conditions across industries from 2010. Unlike current law, new businesses will be forced to comply with this expanded award system, as well as the government’s new universal employment standards.

Furthermore, the Australian Industrial Relations Commission (AIRC) is being asked to make too many far-reaching changes to the award system, in too short a space of time, and with competing and conflicting goals, the Australian Chamber of Commerce and Industry (ACCI) said.

Specifically, the ACCI was concerned about imposing compulsory redundancy pay on small business, despite Government policy to exempt businesses of less than 15 employees.

The ACCI also expressed concern about dual regulation of employment conditions in areas where government is already intending to legislate on the same topic

Heather Ridout, CEO of The Australian Industry Group, also said the Government’s proposals regarding access to compulsory arbitration of disputes remain, on the face of it, too broad.

“This is a major concern for industry. If this is not appropriately resolved there is a potential for arbitrated outcomes to flow on across industries,” she said.

“There is a lack of clarity about which workers will be included for the purposes of good faith bargaining rights and obligation: for example, will blue-collar unions be able to obtain bargaining rights for professional and administrative staff if they obtain the support of the majority of the total number of employees in an enterprise?”

Ridout said that the Government’s desire to have in place the unfair dismissals and bargaining arrangements by the middle of 2009 appears very ambitious. “This is particularly so given that Fair Work Australia and the new award system will not be in place and that the proposed reforms will require a massive education effort for business and industry.”

However, Ridout noted a number of positives for employers in the draft legislation, including:

• Restrictions will remain on the content of bargaining claims, rather than being totally unfettered – as sought by the unions;

• Good faith bargaining obligations will be procedural in nature and the new body, Fair Work Australia, will not have the power to force a party to make concessions;

• There will be no right to take industrial action or access compulsory arbitration for multiple-business agreements;

• The ability to vary awards outside of four-yearly reviews will be very limited;

• A Minimum Wage Panel will be established within Fair Work Australia, drawing on the best elements of the past wage-setting approaches of the Australian Industrial Relations Commission and the Australian Fair Pay Commission; and

• The Fair Dismissal Code for small businesses will be short and easily applied.

There were mixed responses from unions to the draft legislation, with the ACTU claiming there were still significant areas of concern.

“A strong and independent umpire is essential for collective bargaining to work,” said ACTU president Sharan Burrow.

“Unless the new industrial umpire, Fair Work Australia, has enough power to settle disputes, employers will be able to frustrate negotiations and prevent workers from achieving a result.

“Extra power for the umpire to settle disputes will be particularly important to help workers in low-paid industries, including many women who have previously been disadvantaged by their limited access to multi-employer collective bargaining.”

Burrow said the new IR laws need to create a framework for collective bargaining that is relevant to the modern economy.

“It would be unfortunate if Labor were to prevent workers from negotiating innovative solutions to workplace issues and added to red tape on business by artificially limiting what managers and employees can agree in employment arrangements,” she said.

However, Burrow welcomed proposals for greater protection from discrimination for workers who stand up for their rights in the workplace or who represent their work colleagues as a union.

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