Workwise - the Coalition's policy to improve the Fair Work Laws

Articles Written by Ruveni Kelleher (Partner), Polina Churilova

On 9 May 2013 the Coalition released its industrial relations policy (Policy). As the title suggests, in the Policy the Coalition has committed to improving the "Fair Work Laws" while largely retaining the existing industrial relations framework. The major areas for the proposed improvements relate to enterprise bargaining, regulation of unions, parental leave, workplace bullying and changes to individual flexibility agreements.

Parental leave

The Coalition proposes to establish a Paid Parental Leave Scheme under which mothers will be provided with 26 weeks of paid parental leave, at full replacement wage (capped at $150,000) or the national minimum wage (whichever is greater) plus superannuation. The paid parental leave will be paid directly to parents by the Government.

Enterprise bargaining

The Coalition proposes to reform the area of enterprise bargaining to curb unreasonable demands by unions and ensure that enterprise bargaining addresses productivity. Under the Policy, the Fair Work Commission (FWC) will only be able to approve protected industrial action applications where it is satisfied that:

  • there have been "genuine and meaningful" discussions between workers and their employers;
  • the claims made by both parties are sensible, fair and reasonable;
  • union claims will not adversely affect productivity; and
  • the parties have considered and discussed productivity improvements when bargaining.

The Coalition will also introduce changes to the regime governing negotiations for enterprise agreements for new projects, where there are no employees yet (Greenfields Agreements). The proposed changes will require "good faith bargaining" for such agreements and that the agreements be reached within 3 months of commencement of negotiations. If no agreement is reached by that time, the employer will be able to apply to the FWC for approval of the proposed Greenfield Agreement.

Individual Flexibility Arrangements

Individual Flexibility Arrangements (IFAs) are used to vary how the conditions specified in an employee award or enterprise agreement apply to a particular employee. IFAs apply in conjunction with the award or agreement.

The Coalition will lift the restrictions on the use of IFA's in enterprise agreements and extend the period of notice required to terminate an IFA from 28 days to 90 days. The "Better Off Overall Test" (BOOT Test) will continue to apply to ensure that employees are not disadvantaged by IFAs. The Coalition also proposes to amend the BOOT Test, in line with the Fair Work Review Panel recommendations, to account for non-monetary benefits.

Regulation of unions

In view of the recent HSU and AWU scandals, the Coalition proposes to tighten the regulation of unions by introducing financial disclosure and reporting rules and penalties for union officials modelled on the Corporations Act 2001 and ASX corporate governance rules. A new body - the Registered Organisations Commission - will also be established to regulate unions.

Workplace bullying

The Coalition supported the Government's recent amendments to the Fair Work Act 2009 (Act),which incorporated provisions dealing with workplace bullying and come into effect on 1 January 2014. However, the Coalition has indicated that it wants to amend these provisions to:

  • ensure a worker has first sought help and advice from an independent regulator prior to making a claim with the FWC; and
  • expand the concept of bullying to include the conduct of union officials towards workers and employees.

Union right of entry

The Coalition has indicated that it will amend the union rights of entry provisions under the Act, which were recently expanded by the Government. These recent changes to the Act require employers to facilitate union transport and accommodation to remote areas and allow meetings in lunch and crib rooms, regardless of employees' wishes.

The Coalition proposes to restrict the current right of entry regime to allow unions to only have a right of entry if:

  • they are covered by an enterprise agreement that applies to the workplace;
  • they are a bargaining representative seeking in good faith to make an agreement; and
  • the union members in the workplace have requested the union's presence.

If a workplace is covered by a modern award or enterprise agreement that does not cover the union, the union will only have a right of entry if:

  • the union can demonstrate they have, or previously had, a lawful representative role at the workplace; and
  • there is evidence that the workers or members have requested the union's attendance.

The Coalition's proposed changes will not impact union right of entry provisions to investigate breaches affecting their members, representing a member in a dispute or investigating health and safety breaches.

The FWC will have the power to resolve disputes regarding frequency of entry visits and enforcement of right of entry rules.

Other proposed changes

The Coalition will also:

  • re-establish the AustralianBuildingand Construction Commission to monitor union conduct and improve productivity on commercial building sites and construction projects and review the Road Safety Remuneration Tribunal;
  • consider establishing an independent appeal jurisdiction for FWC decisions;
  • ensure that interest on underpayments to employees is recoverable by workers and is not retained by the Government; and
  • provide practical assistance measures through the Fair Work Ombudsman to help small business employers and exempt them from civil penalty prosecutions where their conduct is not deliberate and they have sought assistance from the Fair Work Ombudsman.

Further amendments

The Coalition has also announced that it will be delaying the staged increase to compulsory superannuation from 9.5% to 12% by two years.

The Coalition has indicated in the Policy that it will ask the Productivity Commission to review the Act and make recommendations about how it may be improved before making any further significant changes.

The Coalition will not implement any recommendations of the Productivity Commission until after the next election. This is designed to attempt to neutralise industrial relations as an issue in the election.

What should you be doing now?

If the Coalition wins the election this year, it proposes to introduce legislation giving effect to these amendments within the first 3 months of taking office.

Employers should be considering the changes to their industrial relations strategies for enterprise bargaining and dealing with unions, which may be required if the Coalition is successful in the upcoming election.

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