The Fair Work Review Panel unsurprisingly suggested that the Fair Work Act is basically operating as intended, at conclusion unlikely to find much support in the building and construction industry.
To be sure, the review panel did not say that everything was perfect. Indeed, the report acknowledged that productivity growth in recent times has been disappointing, though the panel was not convinced this was due to Fair Work legislation.
The report’s authors also recommended a number of key changes aimed at tackling the productivity issue, including strengthening bodies created under the Fair Work Act, restricting time limits for lodging of unfair dismissal claims and supporting good faith bargaining by restricting protected action ballot orders until after bargaining has commenced.
While the report was welcomed by unions, who have called on the business community to ‘stop blaming workplace laws for their failure to lift productivity’, its key finding – that the legislation is achieving its objectives and operating more or less as intended – is not likely to be well received in the business community or by building and construction industry lobby groups.
Indeed, prior to the report’s release, the Australian Industry Group (AIG) detailed what it sees as a raft of problems associated with current industrial relations laws.
As it stands, the AIG says, content which can be included in enterprise agreements is too loosely defined, problems with good faith bargaining need to be addressed, unions have too much power to refuse to enter into greenfield projects, a more effective framework is needed for Individual Flexibility Arrangements (IFAs), rules relating to transfer of business laws were unworkable and general protections in the Act are poorly drafted and are unfair to employers.
Such dissatisfaction extends to the construction industry. Master Builders chief executive Wilhelm Harnisch, for example, has previously complained that Act gives excessive power to unions to disrupt work, interfere with independent contracting and demand unsustainable wage increases.
In fairness, the recommendations of the panel do go some way toward addressing some of the complaints. The panel does, for instance, recommend more flexibility for IFAs, application of ‘good faith’ bargaining rules to greenfield agreements and the amendment of transfer of business provisions to make it clear that when workers transfer to related entities of their current employer of their own free will, they will be subject to the terms and conditions of their new employer.
However, it does not appear to do as much as employers would like to restrict union power in general. Furthermore, it does little to restrict the rights of unions to intervene in independent contracting arrangements and it specifically rejects notions about allowable matters in enterprise agreements being too loosely defined as per the AIG’s complaint.
Not surprisingly, then, the AIG has expressed extreme disappointment with the review’s outcome, saying the report’s recommendations fall short in virtually every key area.
“The biggest problem with the Fair Work Act Review report is that in virtually all of the key areas, the recommended changes fall short of what is necessary to address the big problems with the Act,” AIG chief executive Innes Willox says. “While changes were proposed in most of the key areas, the changes are inadequate to address the big problems which are occurring.”
Attention turns to the government and its response to the panel’s report.
Should the government make ‘the same mistake’ as the panel in its response to the report, the AIG says, productivity will continue to suffer in the years ahead.
Meanwhile, the question as to whether the Fair Work Act is really going well or not depends who one asks.
Unions – and no doubt, many workers – say yes; employer and construction groups say much needs changing.