Fair Work review disappoints business as government says no need for major change

Business is set for disappointment after a review into the Fair Work industrial relations scheme found the legislation is working broadly as intended, and does not recommend any sweeping changes.

However, it does recommend that individual flexibility arrangements be amended to make these types of agreements easier to access, and more attractive to employers.

The review has also rejected some ideas, including that the act be amended to permit easier access to arbitration, or that Fair Work be allowed to terminate prolonged industrial action.

In a statement this afternoon, workplace relations minister Bill Shorten said the review would only include minor, technical changes. The Federal Government’s response is not set to be released for another few weeks.

“I believe it is right to summarise the recommendations as good news about the Fair Work Act,” he said. “The review concludes the act is accomplishing its objectives.”

“I’m heartened that the core conclusions are that laws are working well and as intended.”

The review has found that the legislation has been broadly consistent with the legislative agenda set by the government, and that it is “operating broadly as intended”.

It also found accusations the industrial relations scheme is to blame for a drop in productivity are false, saying it is not persuaded of these arguments. However, it does say that it has looked for ways to minimise “constraints on flexibility”.

It also says it has recommended a number of significant changes in order to improve or make consistent the legislation in certain areas.

While there have been no major shifts for unfair dismissal, the report recommends time limits for unfair dismissal applications be extended to 21 days, and that Fair Work should have the ability to dismiss some applications in certain circumstances.

It also recommends a form of arbitration should be available for greenfield agreements “if the parties are unable to reach agreement within a suitable timeframe”.

And FWA should also be given the ability to start that conciliation when the parties haven’t been able to reach an agreement. 

Some of the recommendations include:

• Extending the role of Fair Work Australia and the Ombudsman to more actively encourage productive workplaces, including promoting best practice through enhancing provisions of agreements, and developing model productivity clauses for awards.
• It also recommends Fair Work Australia and the Ombudsman sponsor training workshops for employers and employees.
• That individual flexibility arrangements be amended to make them easier to access, and more attractive to both employers and employees.
• Greenfield agreement provisions be made consistent with the general enterprise bargaining steam, by applying “good faith” bargaining rules to negotiations.
• The report also recommends that Fair Work be given the power to initiate compulsory conciliation when parties have been unable to reach an agreement.
• That the legislation be amended to require that protected action ballot orders can be issued only after bargaining has commenced.

Several other recommendations include the act be amended to stop enterprise agreement clauses that permit employees to opt out of the agreement, and to prohibit the making of an enterprise agreement with one employee.

It also says the right to seek flexible work arrangements by extended to a wider range of caring and other circumstances – a recommendation that is sure to tick off businesses already frustrated with that ability.

The disappointing release of the Fair Work Act review was anticipated by business, after early reports indicated the review would make only minor, technical changes.

This will be a blow to industry and employer groups including the Australian Chamber of Commerce and Industry, Australian Industry Group and the Council of Small Businesses of Australia, which have all recommended significant reforms to the current regime.

“The obvious area looking for change is the general protection and adverse action provisions,” legal expert Peter Vitale told SmartCompany this morning. “They were screaming out to be reformed.”

Vitale says the release will be an upset to the business community.

“The changes businesses have been looking for have been really well articulated – enterprise bargaining, less focus on arbitration and so on.”

“Many of these areas were key for reforms.”