Rudd claims Fair Work Act is “balanced”: Five reasons why he’s wrong

While newly re-crowned Prime Minister Kevin Rudd has declared the Fair Work Act strikes a good balance for business, industry has rejected his claims wholeheartedly and says there is still more work to be done.

In a speech at the National Press Club yesterday, Rudd said the country’s industrial relations system was working well, and that labour productivity had increased compared to the WorkChoices era.

Rudd commented the Fair Work system “represents a reasonable balance for the future”.

But Peter Strong, the executive director of the Council of Small Businesses of Australia, told SmartCompany groups representing small businesses aren’t so sure.

“The balance is lost because the system is still too complicated,” Strong says.

“I’m looking forward to being able to talk [with Kevin Rudd] about this very issue.”

Rudd said yesterday he had already met with business groups such as the Australian Chamber of Commerce and Industry, and the Business Council of Australia.

For now, though, these groups are still frustrated at Rudd’s comments – they don’t believe the system has struck a balance at all.

So although Rudd might believe everything’s working swimmingly, here are five of the biggest changes businesses want to see within the industrial relations system, as soon as possible:

1. Paymasters

Currently, employers must act as the paymasters for both superannuation and maternity leave payments. Peter Strong says any change to the Fair Work Act needs to fix this setup – as Tony Abbott has promised to do if the Coalition wins government.

“We need something in this area that’s easy to understand and looks after everybody,” Strong says.

2. The working week structure

Retailers and hospitality workers have been calling for changes to the penalty rates regime for a while now. But Russell Zimmerman, executive director of the Australian Retailers Association, says this goes beyond penalty rates –they want the working week structure changed.

“You should be able to work any five days out of a seven day week, and have that constitute a working week. We should not be talking about unsociable hours any longer.”

3. Opening hours

Similarly, opening hours are a huge issue among retailers. Although not strictly under the Fair Work Act’s jurisdiction, Zimmerman says some sort of synchronisation across states should be introduced.

“Shopping hours have changed, and people want to stop later in the evenings. As soon as you get to six, you’re paying another 25% – so who wants to open late then?”

4. Complaints and processes

Many of the complaints about the Fair Work system have to do with the way complaints and hearings are organised. Peter Strong says there has been progress there, but says these still need to be improved.

“The Fair Work Commission has been experimenting with processing complaints around small businesses – in the past if someone made a complaint you had to go to a hearing, but now there is experimentation with essentially triaging complaints.

“That’s a good move, and it’s responding to our needs – there could be more of that.”

5. Penalty rates

It goes without saying business groups are critical of penalty rates. Zimmerman says the entire penalty rate system needs to be given an overhaul, but also says the latest attempt to extend adult wages to teenagers needs to be abandoned.

“This is one of the major problems…and needs to be addressed,” he says.