Australia: Fair Work Act Review: towards more productive and equitable workplaces

Workplace Relations and Employment Update (Australia)
Last Updated: 8 August 2012
Article by Allan Drake-Brockman and Daniel White

The post-implementation review (Review) of the Fair Work Act 2009 (Cth) (FW Act) was released at the end of last week. The Review was undertaken by an independent panel (Panel) and took into account numerous submissions and consultations with stakeholders across Australia.

Some of the key points made by the Panel include:

  • Current laws are working well and system of enterprise bargaining underpinned by the national employment standards and modern awards is delivering fairness to employers and employees.
  • 53 proposals were made, which consist of alterations (because certain provisions have not operated as envisaged) and suggestions to improve the operation of our labour relations mechanism to develop equitable and productive workplaces.

We have highlighted what we think are some of the key points of interest raised by the Review in relation to the following:


There is concern over the lack of productivity growth under the FW Act, but the Panel was not persuaded that the legislative framework for industrial relations accounts for this productivity slowdown. For example, in regards to the mining workforce, the Review pointed to the workforce's rapid growth to explain the industry's sharp decline in productivity, since the average experience of a miner has been falling.

Due to commodity price increases, while average real wages rose, the rate of increase in the cost of labour was less than the rate of increase in the value of production.

The Review also found that the number of days lost to industrial action under the FW Act remained within the band of historically low levels by taking into account the number of agreements being renegotiated within the period.

In order to enhance productivity, the Review recommends that the institutions created under the FW Act, Fair Work Australia (FWA) and the Fair Work Ombudsman (FWO) extend their role to include actively encouraging more productive workplaces (eg through promoting best practice and developing model productivity clauses for awards and agreements).

Safety net provisions

The Review found that section 90 of the FW Act should be amended to provide that annual leave loading is not payable on termination of employment unless a modern award or enterprise agreement expressly provides to that effect.

The Review also recommends that the Federal Government (Government) consider limiting the number of public holidays under the National Employment Standards (NES) on which penalty rates are payable to a nationally consistent number of 11.

Individual flexibility arrangements

The Review recommends that the better off overall test (BOOT) in s 144(4)(c) and s 203(4) be amended to expressly permit an individual flexibility arrangement (IFA) to confer a non-monetary benefit on an employee in exchange for a monetary benefit, provided the value of the monetary benefit foregone is specified in writing and is relatively insignificant, and the value of the non-monetary benefit is proportionate.

It also found that the FW Act should be amended to require an employer, upon making an IFA, to notify the FWO in writing of the commencement date of the arrangement, the name of the employee and the modern award or enterprise agreement under which the IFA is made.

The FW Act should also be amended to provide a defence to an alleged contravention of a flexibility term under s 145(3) or s 204(3) where an employer has complied with the notification requirements stated above and reasonably believed that all other statutory requirements (including BOOT) had been met.

Enterprise bargaining

The Review found that the FW Act should be amended so that the good faith bargaining (GFB) obligations apply to variations of enterprise agreements and to the negotiation of greenfields agreements, with any necessary modifications . There are currently no GFB requirements for greenfields agreements.

Additionally, s 176 should be amended to prevent an individual union official being a bargaining representative for employees for whom the official's union does not have coverage ( this was the point originally argued successfully by DLA Piper in the watershed case Heath v Gravity Cranes Services Pty Ltd [2010] FWA 7751).

The FW Act should also be amended to include a new provision after s 240, which expressly empowers FWA to intervene on its own motion where it considers that conciliation could assist in resolving a bargaining dispute, including in respect of a greenfields agreement.

Amendments should also be made to prohibit enterprise agreement clauses that permit employees to opt out of the agreement (this issue is currently before an unusual five-member FWA Full Bench in Re Queensland Bulk Handling Pty Ltd).

Employers intending to negotiate a s 172(2)(b) greenfields agreement should be required to take reasonable steps to notify all unions with eligibility to represent relevant employees (s 175 of the FW Act providing for this was omitted by the Government. The Review now suggests a s 175 notification obligation be reincluded in the FW Act. This has significant implications if coupled with GFB requirements for greenfields agreements).

The FW Act should be amended to provide that, when negotiations for a s 172(2)(b) greenfields agreement have reached an impasse, a specified time period has expired and FWA conciliation has failed, FWA may, on its own motion or on application by a party, conduct a limited form of arbitration, including 'last offer' arbitration, to determine the content of the agreement.

Industrial action

The Review found that the FW Act should be amended to provide that an application for a protected action ballot order may only be made when bargaining for a proposed agreement has commenced (either voluntarily or by majority support determination), a move that seeks to resolve the unfortunate outcome provided in JJ Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC53). The FW Act should also expressly provide that bargaining has commenced for this purpose despite any disagreement over the scope of the agreement.

Division 9 of Part 3-3 should be amended to provide that provision of accommodation does not constitute 'payment'. Employers should continue to be required to provide accommodation, even if employees are taking industrial action.

Right of entry

The Review recommends that FWA be given greater power to resolve disputes about frequency of visits to a workplace by permit holders and the location of interviews and discussions in a way that balances the rights of unions to represent their workers and the rights of occupiers and employers to go about their business without undue inconvenience.

Unfair dismissal

The time limit for lodging unfair dismissal claims should be extended to 21 days in order to align with the recommended amended time limit for general protections claims involving a dismissal.

General protections

Division 7 of Part 3-1 should be amended so that the central consideration about the reason for adverse action is the subjective intention of the person taking the alleged adverse action (this seeks to clarify the position currently before the High Court in Board of Bendigo Regional Institute of TAFE v Barclay & Anor).

© DLA Piper

This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.

DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.