Improving workplace productivity requires a flexible,
How we achieve real productivity growth is one of the biggest
economic challenges facing Australia.
But what does productivity actually mean in the context of a
modern workplace? And what exactly is the issue we are trying to
Improving workplace productivity is more complicated than simply
tweaking with or even significantly changing industrial relations
laws. It needs employers, employees, unions and government to agree
on what success looks like, and work together towards that common
goal. That means a flexible, multi-faceted approach that reflects
the realities of the modern economy while also retaining the proper
protections for workers.
A good first step would be for Federal Government to legislate
to prohibit the inclusion in enterprise agreements of clauses that
unreasonably restrict an employer's ability to manage employee
performance and conduct, or engage independent contractors. Some
enterprise agreements contain detailed provisions requiring
employers to give three warnings before taking any disciplinary
action against an employee, who is also entitled to representation
during the entire disciplinary process. These are not rights
enshrined in industrial law. Similarly, many employers are
unreasonably restricted in their ability to use contractors, even
in circumstances where there are sound business reasons.
Such restrictions exist on top of laws such as the new workplace
bullying laws introduced on 1 January 2014. While well intentioned,
these new laws expose employers to claims who have simply been
exercising their legitimate rights to manage an employee's
performance or conduct.
This is not to suggest that employees who lack genuine
bargaining power should not have their legitimate interests
protected by law. What is more difficult to accept is that
employees can effectively hold their employers to ransom to
maintain unreasonably generous employment conditions when the
business is underperforming or on the verge of collapse.
The barriers to productivity are not limited to legislative
restrictions or enterprise agreements. One significant barrier is
the result of employers themselves failing to equip their managers
with the tools and support to effectively manage employee
performance and conduct. Open, transparent and sensitive people and
performance management processes are critical to fostering a
healthy, productive workplace. Productivity is unlikely to be a
feature of a work environment in which poor performance and poor
behaviour goes unchecked.
Wage increases should also be linked to productivity gains. In
the late 1980s, the national wage case and the Hawke / Keating
Wages Accord proved to be a turning point in Australian industrial
relations. If employees/unions and employer could not demonstrate a
4% increase in productivity gains through changes to the
EBA/workplace, the Industrial Relations Commission could not
approve such an agreement. It is time for a return to this
collaborative, co-operative approach with a requirement to actually
demonstrate (not simply discuss) real productivity and efficiency
changes to justify wage increases.
Similarly, the argument for retaining penalty rates makes little
sense when many businesses now trade 7 days a week and many people
want to work flexibly and outside the traditional 9am-5pm, Monday
to Friday working week. This argument is not about cutting working
conditions or wages. Rather, it is adapting working conditions and
hours to reflect the modern work environment.
Australia can no longer afford to be stuck in the past.
Ultimately we will only improve productivity by working towards a
common goal. That means employers, employees, legislators and
unions finding common ground. The country's future depends on
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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