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.
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  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.
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  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.
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.
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).
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