Australia: Fact or fiction? The Productivity Commission Workplace Relations Framework Inquiry issues paper

Last Updated: 11 April 2015
Article by Emily Dempster

What is it all about and what do you need to know?

You may be forgiven for being confused over the actual implications of the Productivity Commission (the Commission) Inquiry into the Australian workplace relations framework and what the Commission's recently released 'Issues Paper' actually means for Australian employers.

"We have to fix industrial relations or get poorer" (The Australian)

"Tony Abbott brings Work Choices back from the dead" (The Canberra Times)

"Industrial relations landscape set for shakeup" (The Australian)

"Penalty rates, minimum wage: all bets are off" (Sydney Morning Herald)

"Productivity Commission paper expected to canvas greater flexibility for hiring independent contractors" (Smart Company)

A short assessment of the above headlines may lead some to conclude any of the following:

  1. the Inquiry is paving the way for a return to the WorkChoices era and a slippery slope towards deteriorating the living standards for all Australian workers; or
  2. we are on the border of an employment enlightenment, where employers and employees will all benefit from increased flexibility and improved unemployment rates; or
  3. (for those that are more sceptical) nothing much will change as a result of the Inquiry.

What is the Issues Paper?

The Issues Paper (the Paper) is simply a report setting out the various issues that the Commission will review as part of its Inquiry into the Australian workplace relations framework.

Despite the publicity and speculation, the Paper, at least in its current form, does not actually contain any conclusions or recommendations.

The Paper sets out various options for change in relation to Australia's Fair Work Act 2009 (Cth) (the Act), poses questions for stakeholders to consider and calls for stakeholders to make submissions on a number of issues.

What might change?

The Commission will review Australia's workplace relations framework including wages and awards, enterprise agreement bargaining and industrial disputes, unfair dismissal, bullying and general protections and the effectiveness of the Fair Work Commission and the Fair Work Ombudsman.

Recent speculation has been caused by the Paper's call for an assessment of the following key issues:

Wages, Awards and Penalty Rates

  • Minimum wage: the Commission is exploring whether the Federal minimum wage should be decreased or increased.
  • National Employment Standards (NES): the Commission will review (among other things) the current flexibility arrangements in the NES.
  • Modern Awards: as Modern Awards are reviewed every four years and we are already in the midst of a separate inquiry into them, the Commission does not consider that there will be a vast array of submissions relating to awards. However, the Commission noted that it may make recommendations as to whether the Modern Awards can be further simplified.
  • Penalty rates: the Commission will review the current system which imposes penalty rates for overtime work and work performed outside ordinary hours and whether the impact of deregulation would be positive or negative for the economy.

Unfair dismissal

The Commission intends to explore whether there is a general practice of employers paying "go away" money in circumstances where they have in fact unfairly dismissed an employee. It will also explore the effectiveness of recent changes that extended the Fair Work Commission's powers in relation to costs orders and dismissing applications based on unreasonable employee behaviour.


The Commission will consider the impact and effectiveness of the anti-bullying provisions of the Act from the perspective of both employers and workers and discuss whether there are any unintended consequences of the current anti-bullying provisions.

Will anything actually change?

It is simply too early to speculate on what recommendations the Commission will make and what the ultimate effect of the inquiry will be.

The Government has stated that if it accepts any of the recommendations flowing from the Inquiry, they will be incorporated into the policies that form part of its 2016 election campaign. Essentially, this means that any recommendations will not be implemented until after the election (if at all, depending on the results of the election).

The Government's sustained effort to separate itself from WorkChoices, which was less than popular with voters, makes any changes that can be aligned with the rumoured return to WorkChoices unlikely to make the cut.

In other words, we predict that nothing much will change as a result of the inquiry and we do not think there will be an overhaul of the national employment/industrial relations legislation as a result of this inquiry.

Do I need to do anything to prepare?

As part of the inquiry, the Commission is inviting written submissions from any interested parties (including individuals, employer associations, unions and the like) on any, or all, issues that the Commission is reviewing as part of its inquiry. Submissions can be made here (your industry employer association is another port of call).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances. Madgwicks is a member of Meritas, one of the world's largest law firm alliances.

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