Major players warn Fair Work allows “unreasonable demands”

by 21 Feb 2012

Formal submissions to the Fair Work review from some of Australia’s biggest corporations have called for extensive amendments to the federal workplace laws amid growing concerns of industrial relations action and the power of unions.

BHP Billiton, Rio Tinto, and Qantas are among those that have warned unions are holding projects to ransom to pursue exorbitant claims, causing widespread delays and ultimately inhibiting productivity.

In submissions to the review panel, which consists of an economist, a former federal court judge and an IR expert, Rio Tinto called for an increased capacity to strike direct deals with new employees. Qantas wants previous penalties imposed on workers for strike action to be reinstated. BHP, which is in the midst of a stand-off dispute with coal unions in Queensland, said the current laws foster interference in managerial decision-making. According to the mining giant, the capacity of workers to take industrial action should be limited and unions should not be able to take legal strike action over issues including the use of contractors and staff demarcation. Under its proposal, the workplace regulator would have more limited arbitration powers with stricter time limits in which to make a ruling.

BHP cited a Bass Strait oil and gas production venture in which it claims unions held out for “unreasonable demands for wages and the employment of favoured individuals, banking on the operator ultimately having no practical alternative but to submit”. According to the company, this is a wholly unbalanced situation which is causing huge cost blowouts and great damage to industry.

Rio Tinto also said certain aspects of the current laws limit productivity and competitiveness. The company submitted that employers should be able to have detailed talks with prospective employees about reaching an individual flexibility arrangement that could be offered as an alternative to a collective deal depending on what best meets the needs of the worker.

“Rio Tinto considers that the industrial relations system has to be founded on the need to ensure that the statutory system, the Fair Work Act, does not include barriers for employers directly engaging with their employees, and is compatible with the needs of productive, agile businesses that compete on world markets while ensuring fairness and dignity for employees,” the company said in a statement.

In its submission to the review, Qantas said the key issue it has is not how to use the laws to enhance productivity but how to resist attempts by unions to use the legislation to “control business strategy and obstruct change”.

Workplace relations Minister Bill Shorten said the review is an evidence-based discussion and will take into consideration the submissions it received. The panel will consider the current operation of the legislation, the extent to which its effects have been consistent with the objectives, and where the legislation's operation could be improved.

The panel will report to the government by 31 May 2012.


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