Impact of Fair Work Act on
Australian Workplaces
- a practitioner’s perspective
Peter Wilson AM
National President, AHRI
April 2011
Background – the journey since 2007 …
Work Choices
Survey - Aug 07
•
AHRI data 1000+
responses
•
Law changed follow up study
deferred until
2010
Background to AHRI research
• AHRI focus – high performing & equitable workplaces
• AHRI WorkChoices Survey – Aug 07 (1000 replies)
– Survey results very critical – “costly bureaucratic monster”
– “Made the job harder & political criticism much easier”
– “A backward step from 1996 Reith Workplace laws”.
• Fair Work Act introduced July 2009
• Sept 2010 AHRI Fair Work Act survey (970 replies)
• 2007 & 2010 Surveys not strictly comparable – changed laws
Today’s economic environment
• Post-GFC recovery
• No double-dip
• Intense Global
Competition post 2009
• China / India / Aust: “up”
• US, Europe: “sluggish”
• $ appreciates - tougher
competitive environment
• Total factor productivity flat / declining
TFP
$A
2010 AHRI Survey: respondent profile
- 54% from private sector companies
- 17% from publicly listed companies
- 15% from government
- 5% MD/CEO
- 32% executive-level HR
- 38% middle-level & operational HR
2010 AHRI Survey questions covered -
1.
Company & workforce
profile
2.
Fair Work Act & role as
HR professional
3.
Fair Work Act &
organisation
4.
Fair Work Act &
employment contracts
5.
Critical perspectives –
from coal face of
‘implementation’
2010 Key findings – job complexity
57% say FWA makes
their job ‘more
difficult’
66% say FWA requires
‘more time’ on IR
issues
Key findings – formulating contracts
68% FWA requires more time making employment
contracts
30% FWA will require more time making
employment contracts in one year’s time
- but … 47% say ‘no change’ by then …
Key findings – bargaining
Key findings – legal advice
74% say FWA increases
need for legal advice
40% expect FWA will require
increased legal advice
in one year’s time
- 41% expect ‘no change’
Key findings – workplace disputes
30% say managing workplace
disputes is more difficult
54% say ‘no change’
25% expect managing workplace
disputes will still be more
difficult in one year’s time
55% expect ‘no change’
Key findings – cost of IR
53% dealing with IR costs more
- 35% say ‘no change’
37% expect will cost more to deal
with IR in a year’s time
- 43% expect ‘no change’
Key findings – pay and penalty rates
31% say overall remuneration has increased
66% say ‘no change’
25% say penalty rates for overtime have increased
71% say ‘no change’
Key findings – carers’ leave
20% say carers’ leave
days allowed have
increased
76% say ‘no change’
Most acknowledge change is
because of competition for
talent – not the FWA laws
Key findings – union involvement
27% say union involvement in
bargaining has increased
69% say ‘no change’
26% union involvement in
settling disputes has
increased
69% say ‘no change’
Key findings – union visits & disputes
29% say union visits to work
sites have increased
23% say industrial disputes
have increased
Key findings – productivity
13% say productivity has
decreased
78% say ‘no change’
58% say record keeping has
increased
39% say ‘no change’
Key findings – jobs & productivity - 2013
Dual ‘sting in the tail’
results:
37% say FW Act will materially
diminish business
willingness to employ
people 2011-13
53% say FW Act will cause
negative impact on
productivity growth 2011-13
Key findings – unfair dismissal
16% say new UD rules have
increased the number of claims
72% say ‘no change’
26% say new UD rules make
redundancies harder
65% say ‘no change’
Note – AHRI survey of companies
primarily above 100 employees
– i.e. not SMEs
Key findings – flexible arrangements
83% say coy has adopted ‘flexible
working arrangements’
14% say their organisation has not
Most requested are:
- working from home
- flexible start & finish times
- part-time work
“Most acknowledged need to
do this – due to war for talent”
Key findings – transfer of business
41% say impact negative or
very negative
Sample respondent views:
“increased the need for legal advice”
“Staff transferring bring industrial
instruments coy doesnt want”
“Made sale difficult … buyer reluctant
to take the staff on”
“anti-employment provision”
“Employees feel comfortable that they
are not losing anything”
Key findings – most significant FWA changes
Sample respondent views:
- “Additional training needed - business
awareness of entitlements”
- “Adverse action provisions” (expect
these will be invoked more)
- “Providing unions with ‘default’
bargaining status”
- “Document everything so disputes
can be settled based on actual
fact”
- “First line leaders must have
employee relations capability”
Key findings - expected effects of FWA
Sample respondent views:
•
“bogged down in disputes with adversarial
unions”
•
“Increased compliance costs”
•
“More open-minded about flexibility requests”
•
“Increased costs doing business; no increase
prod’ty
Updates - Current Senior Exec HR views
Transfer of Business (Restructurings / Acquisitions):
“businesses forced to acquire a mosaic of EBAs &
employment rules and regulations”
“doing little more than providing a decoration around
increasing bureaucracy and declining productivity, with
major anomalies to employment creation”.
“Simple ‘no disadvantage test’ for critical minimum
benefits should be all that’s required to protect workplace
equity for employees transferred in restructurings”
“Risk of another AMCOR case”
Updates - Current Senior Executive HR views
Bargaining & Agreement making
• “As Prof Ron MacCallum recently noted – reaching useful
end of common law to supervise bargaining outcomes”.
• “Having inconsistent results emanate from the ‘luck of the
draw’ on who you get from the FWA bench must end”.
• “Must move to a system of minimum standards”
• “FWA to convene as full bench to define decisions on
majority basis, to eliminate current risk of rogue outcomes”.
• “Give FWA discretion to approve agreements if fair and
reasonable to do so, despite non-compliance with preapproval steps or procedural requirements - amend s 188”
Updates - Current Senior Executive HR views
•
“JJR v TWU decision - effect of FWA Full Bench
decision is protected action ballot can occur before
bargaining is formally initiated”.
•
“The new FWA sees effective end of non-union
agreements & individual contracts for non executives”.
•
“Right of Entry – this has become an open access
freeway and many instances where it stopped
production dead, for no genuine economic reason”.
• Next AHRI FW Act Survey – late 2011
• AHRI - SHRM 2011 partnership
– “Global Index of Workplace Performance &
Flexibility”
– 50 countries ranked overall by EIU
• Beyond FWA & Workchoices … a “new
way” for fairer & higher performing
workplaces?
AHRI 2011
“HR with Impact”