A story doing the rounds today in the Business Spectator by Robert Gottliebsen suggests that the first round version of the Fair Work Act devised by Julia Gillard was n0t too bad and that businesses were relatively comforted by Julia’s assurances.
She was then rolled by Greg Combet and other union-affilated ministers to alter certain provisions to reinforce the pro-union aspects of the legislation, plus meeting sundry other union requests. As a result, the business community feels betrayed, as they had been lulled into a false sense of comfort by virtue of their inclusion in the consultation process. I actually think that this has all been known for some time.
So what are the most egegrious provisions of the Fair Work Act?
- Modern awards are increasing labour costs and removing flexibility.
- The Natonal Employment Standards are overkill given modern awards.
- The individual flexibility clauses in the modern awards are a joke (an outcome the unions intended) and there is no semblance of individual arrangements.
- Multi-employer bargaining for the low paid is a worry and is likely to lead to unsustainable hikes in labour costs for industries employing low paid workers, such as in child care, aged care, retail, accommodation, fast food, restaurants, cleaning.
- The current case for a revised form of equal pay for equal worth (gender equity) is another case of overkill and again runs the risk of leading to unsustainable increases in labour costs. It is reminiscent of the profoundly non-market based idea of comparable worth.
- There are problems with the unfair dismissal provisions and the supposed protection for small businesses if they use the Code. The Code has had to be redrafted. The numbers of claims is beginning to climb sharply and we are back to the days of employers paying walk-away money to rid themselves of nuisance employees, even if they have followed the letter of the law.
- It is virtually impossible to have a collective agreement without union involvement, even in cases of extremely low unionisation (this is what they wanted)
- The $26 increase (4.8%) set by the Minimum Wage Panel of Fair Work Australia for the Federal Minimum Wage and all other award pay rates is being used as the (annual increase) base for all new agreement on which to build higher claims. This is not surprising even if the 4.8% was in reality for 18 months.
There is a considerable lag between changing IR legislation and the labour market and economic consequences emerging, in part because there is a degree of grandfathering in relation to AWAs being allowed to continue until their expiry. It will be a case of watch this space.