Workplace Regulation

Australia has a workplace relations framework that was designed in a bygone era. It is not appropriate for a modern economy and fails to address the needs of most of the employers it seeks to regulate. It is inefficient, overwhelming and complex and it creates disincentives to employment.

Compliance costs are increased because of the complexity of the law, especially for small business. Policy outcomes must fix these deficiencies.

Australia needs an adaptable, nimble workplace relations framework that reflects the modern workforce. The current workplace relations system limits the ability of businesses and their staff to negotiate arrangements. The complexity of the award system and the strictures it places on employers makes it harder for businesses to hire staff.

The current system also promotes an adversarial approach and works on the assumption that negotiations will take place between employers and unions.

This narrow focus is inconsistent with modern business practices, where employers and employees share a common vision and work together for
mutual benefit.

The workplace relations system should create an environment where wages and conditions are set by workplace agreements that can be negotiated collectively or individually, with or without a union. The expansion of bargaining options to reflect this reality will make businesses more competitive at home and abroad, allowing all parties to share in the benefits of a growing business.

Workplace regulation is a complex web of rules and requirements that many small business owners struggle to navigate without legal assistance. The Fair Work Act has 950 sections and 208,000 words, while there are 122 different modern awards. Many of these awards are prescriptive and daunting, despite a recent effort to make them more accessible through streamlining. But the burden of the complex awards system threatens to intensify with each union claim for further regulation and prescription.

Evidence of this can be seen in the current modern award review proceedings in which unions are seeking new provisions in modern awards that would increase minimum engagement periods, tighten conditions of part-time work and introduce comprehensive rights for casual employees to elect to convert
to permanent employment.

Australia’s economy is in transition and the decline in income generated by sectors characterised by more “traditional” patterns of employment has not yet been offset by equivalent growth in other sectors. Growth in the dynamic service sectors will not be met by only employing permanent employees between 9am and 5pm Monday to Friday under a complex web of regulation. We need to minimise inflexible requirements that create a disincentive to employ or make it harder to offer more work hours at times when a business is expected to trade.

Changes to our workplace relations system are needed to free up businesses to respond to the changing needs of the market and better cater for people outside the system such as the unemployed, especially unemployed youth. The regulatory framework should encourage rather than inhibit investment, growth and job creation and promote the variety of labour forms needed to allow companies maximum opportunity to hire as many people as possible. The system should enable employers and employees to work together cooperatively to negotiate arrangements that meet each other’s needs so that Australia remains competitive in the global, digital marketplace. 

Recommendations:
3.1 Help industries grow through workplace regulation that better responds to their needs.
 
3.2 Create jobs by allowing employers and employees to negotiate workplace arrangements that best meet their needs. This should include an enterprise agreement option that is more appropriate to the needs of small business. Consideration of multiple options is required. These should include enterprise contracts individual statutory agreements, employer-employee enterprise agreements, employer greenfield agreements and bargaining rules which take account of the diversity of business situations.
 
3.3 Lower building costs by bringing back and retaining the Australian Building and Construction Commission. Ensure the Office of the Australian Building and Construction Commissioner has concurrent jurisdiction with the ACCC to investigate and enforce the secondary boycott provisions of the competition laws and breaches should be pursued with increased rigour.
 
3.4 Change the objects of workplace regulation to ensure awards do not exist as a barrier to the efficient structuring of working arrangements and set out standards appropriate to the industries/occupations that they cover.
 
3.5 Allow employers and employees to substitute public holidays for other days by agreement through regulatory change.
 
3.6 Amend workplace relations laws so that procedural errors alone are not sufficient to award compensation or restore employment in what would otherwise be regarded as a valid dismissal.
 
3.7 Reform the general protections laws, which are overly broad, confusing and duplicative.
 
3.8 Strengthen deterrents to the making of claims that are frivolous, vexatious or otherwise without substance.
 
3.9 Restore union and non-union enterprise agreement options and remove the ability for unions without a majority of union members in an enterprise to force an employer and nonunion workers to bargain for a collective agreement, to ensure that enterprise bargaining is truly voluntary.
 
3.10 Provide the Fair Work Commission with discretion to overlook a procedural or technical defect when approving an agreement and allow an enterprise agreement to specify a nominal expiry date that would provide greater industrial stability.
 
3.11 Make unlawful those enterprise agreement terms that restrict the engagement of independent contractors and labour hire workers, or which regulate the terms of their engagement.
 
3.12 Not allow enterprise agreement terms to restrict an employer’s right to choose an employment mix suited to their business — for example by deterring or discouraging the use of casual workers by restricting their hours of work.
 
3.13 Ensure enterprise agreements can only contain terms about matters which pertain to the employment relationship.Workplace relations laws should be amended so that matters pertaining to the relationship between an employer and union cannot be included in an enterprise agreement.
 
3.14 Increase penalties for unlawful industrial action to a level commensurate with the harm associated with that action.
 
3.15 Restore pre-existing workplace laws sanctioned by the High Court on the sale or transmission of business.
 
3.16 Restore the balance that existed prior to the Fair Work Act 2009 in relation to the right of union entry into workplaces.
 
3.17 Generally overhaul workplace regulation by focusing on the removal of red tape. Specifically, remove the red tape requirement for an employer to provide the mandatory onepage Fair Work Information Statement which carries civil penalties for non-compliance.

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