2014 Workplace Trends: The Fair Work Amendment Bill 2014 & the Productivity Commission Review of the Fair Work Act
In line with its 2013 election policy platform, the Coalition Government has set the wheels in motion for reform, with the introduction of the Fair Work Amendment Bill 2014 (the “FW Bill”) as well as the Productivity Commission review (the “PC Review”) of the Fair Work Act 2009 (Cth).
What is the coalition government’s policy for workplace relations?
In an earlier edition of Strateg-Eyes we reported that the Coalition proposed various improvements to the Act with the overriding aim of providing stability and fairness, whilst at the same time protecting the pay and conditions of workers to “restore the balance back to the sensible centre.” The proposed reforms were detailed in the Policy to Improve the Fair Work Laws, released in May 2013 (the “Policy”). The reforms espoused as part of the Policy platform include: improving the Fair Work laws (through changes to greenfields agreements, right of entry, workplace bullying and paid parental leave), the re-establishment of the Australian Building and Construction Commission (ABCC), tightening the rules around registered organisations to hold them to a standard similar to that of corporations, review of the Remuneration Tribunal and implementing recommendations made by the 2012 Fair Work Review Panel report. One major part of this policy platform was also to commission an independent review of workplace laws through the PC Review.
The Fair Work Amendment Bill 2014
On 27 February 2014 the Government introduced the FW Bill into Parliament. The Coalition Government put forward the FW Bill to implement the more pressing workplace relations reforms explicitly raised during their election campaign. The FW Bill is currently subject to second reading debate within the House of Representatives, and is described as implementing elements of the Policy and recommendations from the 2012 Fair Work Review Panel. The First Reading Speech and Explanatory Memorandum accompanying the FW Bill have also been released, providing insight into the nature and scope of the proposed reforms.
FW Bill reforms in response to recommendations made by the Fair Work review panel
- employer not to refuse extended unpaid parental leave request unless reasonable opportunity given to discuss the request;
- annual leave to be paid out on termination in accordance with the terms of the relevant instrument such as an enterprise agreement;
- employees absent from work receiving workers’ compensation payments will not be able to accrue leave under the Act;
- amendments to individual flexibility terms to ensure:
- unilateral termination with 13 weeks’ notice;
- terms in enterprise agreements to deal with when work performed, overtime, penalties, allowances and loadings;
- benefits other than payment of money to be considered in determining if an employee is better off overall;
- defence for employers if they reasonably believe the terms have been complied with;
- a transfer of business situation will not arise where an employee is employed by an associated entity of their former employer where the employee seeks the role on their own initiative;
- restricting the ability to make a protected action ballot order until bargaining has commenced; and
- not requiring the FWC, in certain circumstances, to hold a hearing or conference to determine an unfair dismissal claim
Other proposed reforms in the FW bill consistent with the policy
- creating a more efficient process for the negotiation of greenfields agreements by:
- applying good faith bargaining principles to these negotiations;
- introducing a negotiable three month time period with parties table to approach the Fair Work Commission to resolve the dispute if no agreement reached;
- right of entry reforms including:
- repealing amendments put in force last year which require an employer to fund transport and accommodation arrangements in remote areas;
- new eligibility criteria for premises entry for holding discussions or running interviews;
- repealing amendments made last year and returning to the former position concerning default interview locations;
- extending the scope of the FWC’s powers in dealing with disputes about frequency of visits; and
- ensuring the Fair Work Ombudsman pays interest on any unclaimed monies.
As outlined in the Policy, the PC Review is aimed at reviewing the current Fair Work laws and the impact on the economy, employment and productivity. The Coalition acknowledges these questions as crucial given that workplace relations is central to national interest. Further, it is seen to be a response to the ‘weak’ reforms made to the Act by the Labour Government last year in response to the recommendations made by the 2012 Fair Work Review Panel, which in their view was too narrow and did not consider all relevant issues. Rather, the approach favoured by the Coalition is an extensive review after which it will be open to debate by various stakeholders to ensure a viable solution for all. The Coalition has indicated on various occasions that it does not intend to make further changes to workplace relations laws, save for the fact that it will consider any recommendations made by the PC Review.
The PC Review panel will be independent and its composition is yet to be confirmed. It will be tasked with providing recommendations for change whilst balancing the protection of workers against efficient business operations.
Currently, the draft terms of reference for the PC Review are under review and a formal set of terms is yet to be released. However, at the date of writing, the terms of reference for the review had been leaked. It was reported through various media outlets that the review terms concern:
- economic factors- the impact on employment levels, productivity, responses to economic conditions and investment;
- impact of strike action on employer’s businesses in terms of work days lost;
- scope of bargaining around working hours;
- impacts of the laws on small business; and
- procedural matters.
The guiding parameters for the PC Review as per the draft terms were also noted by media sources to “maintain fair and equitable pay and conditions for employees, including the maintenance of a relevant safety net”.2
repealing amendments put in force last year which require an employer to fund transport and accommodation arrangements in remote areas;new eligibility criteria for premises entry for holding discussions or running interviews;repealing amendments made last year and returning to the former position concerning default interview locations;
Senator Abetz, Employment Minister, responded to media reports of the leaked draft terms of reference by noting that the PC Review will be consistent with the Policy and will constitute a comprehensive and thorough analysis. Further, he stated the Productivity Commission is the best body for this review given it has a reputation for “social sensitivity and economic robustness”.3
A deadline of April 2015 has been flagged for the PC Review report which will mean that it will be sometime before we see any potential reforms implemented, with suggestions by Senator Abetz that they will form part of the Coalition government’s platform for the next federal election which is not scheduled until mid-2016. Until then we will await the passage of the FW Bill within parliament and any ensuing debate. We will keep you up-to-date on the progress of the FW Bill and the PC Review over the coming months.
1 ‘The Coalition’s Policy to Improve the Fair Work Laws’, May 2013.
2 ‘Workplace review to examine penalties’, James Massola, Sydney Morning Herald, 7 March 2014.
3 ‘Sweeping inquiry into Fair Work Act’, AM with Chris Ulman, 7 March 2014