Productivity Commission delivers final report into Australia’s workplace relations framework to Coalition Government

In the days before Christmas the Coalition Government released the Productivity Commissions (PC) final report in relation to the institutions, laws and practices of the Australian workplace relations framework to the public.

The final report marked the PC’s completion of its inquiry into the workplace relations framework in response to a request from the Abbott Government made in late 2014.

The Abbott Governments request had asked for an inquiry into the impact of the workplace relations framework regarding a wide range of matters including:

  • unemployment, underemployment and job creation
  • fair and equitable pay and conditions for employees, including the maintenance of a relevant safety net
  • productivity, competitiveness and business investment
  • the ability of business and the labour market to respond appropriately to changing economic conditions patterns of engagement in the labour market
  • the ability for employers to flexibly manage and engage with their employees
  • barriers to bargaining
  • industrial conflict and days lost due to industrial action
  • appropriate scope for independent contracting.

In its final report the PC confirmed the conclusion reached in its draft report released in August 2015  that the framework was not “dysfunctional” but that there was a need for reform of the workplace relations framework.

A total of about 60 recommendations for reform of the institutions, laws and practices of the workplace relations framework are contained in the PCs final report.

Interestingly it is only the recommendations about the Fair Work Commission (which in particular call for its wage determination function to be performed by a separate body) that propose wholesale change of an aspect of the workplace relations framework.

A recommendation regarding the reduction of Sunday penalty rates[1] provided support for employer groups push for this change which is scheduled to be considered by the Fair Work Commission during 2016.

The PC’s recommendation to reduce Sunday penalty rates also received significant media attention leading to this topic been debated at Christmas lunch around the country.

In local news a recommendation was made that South Australia, along with several other States, take action to address the issue of restrictive shopping hours.

Our list of the PC’s top 10 recommendations of the institutions, laws and practices of the workplace relations framework from the final report are contained in the table below.

Comment

A number of stakeholders and commentators have been critical of the final report some of it reflecting a strong view that the PC wrongly concluded that the workplace relations framework is not “dysfunctional.”

Such criticism, even if justified, should not detract from the merits of the PC’s recommendations many of which address either productivity or practical issues[2] in the current workplace relations framework such that they are worthy of serious consideration.

The new Turnbull Government’s initial response to the PC’s final report has been to indicate that there is a need for further consultation with stakeholders.

Employers will await with interest the outcome of the consultation which is expected to take place during the first quarter of 2016.

The Government’s commitment to workplace reform by adopting any of the workplace reforms recommended by the PC will be tested in the absence of consensus from the proposed consultation.

We will keep you informed of the progress of the response to the PC’s final report including its recommendations in the lead up to the next Federal election.

DW Fox Tucker – Top 10 Recommendations from the Productivity Commission Report

TopicRecommendationSummary
Institutions3.1A new institution, the Workplace Standards Commission, with responsibility for the regulation of minimum wages and Modern Awards.
Repairing Awards8.3A new Modern Awards objective requiring the wage regulator to ensure that the safety net[3] provide for a minimum wage which promotes the overall wellbeing of the community including through the consideration of:a. The need to increase employment and

b. The needs of consumers.

Weekend Penalty Rates15.1The harmonisation of penalty rates for Sunday work with those applying on Saturday for permanent employees in the hospitality, entertainment, retail, restaurant and café industries.
Unfair Dismissal17.5The removal of the emphasis on reinstatement as the primacy goal of the unfair dismissal provisions in the Fair Work Act (Cth) 2009.
Enterprise Contract23.1A new form of employment instrument, the Enterprise Contract, that would allow businesses the flexibility to vary a Modern Award for a class of employees to suit their business operations.
Alternative forms of employment25.2The prohibition of the ability of enterprise agreements to include terms that restrict the engagement of independent contractors or casual workers.
Transfer of Business26.1The amendment to existing transfer of business provisions so as to more easily enable new employers to avoid the transfer of existing arrangements to their business operations.[4]
Industrial Disputes27.5The amendment of the FW Act to enable an employer who has implemented a contingency plan to stand down a group of employees where there is a late withdrawal of their proposed notice of industrial action.
Industrial Disputes27.7The explicit authorisation under the FW Act of more graduated forms of protected industrial action in response to employee industrial action.[5]
Competition Policy31.1Fair Work Building and Construction granted the power to investigate and enforce the secondary boycott provisions of the Competition and Consumer Act (Cth) 2010 in the building and construction industry.[6]

[1] By aligning Sunday penalty rates to those applying on Saturdays.

[2] Such as several of the recommendations regarding Industrial Disputes.

[3] The Modern Awards together with the National Employment Standards.

[4] Including by providing the Fair Work Commission with more discretion to order that an arrangement such as an enterprise agreement does not transfer where that improves the prospect of new employment.

[5] Including the ability to institute limits or bans on overtime.

[6] A shared jurisdiction with the Australian Competition and Consumer Commission.

For more information, please contact:
Ben Duggan

Ben Duggan
Director
p.  +61 8 8124 1881
e.  Email me

This communication provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Should you wish to discuss any matter raised in this article, or what it means for you, your business or your clients' businesses, please feel free to contact us.

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