Fair Work Review Panel Delivers Report

posted by Employment Innovations on August 27th, 2012  Posted in News


On 20 December 2011 Bill Shorten, Minister for Employment and Workplace Relations, announced his appointment of a three member panel to review the Fair Work Act 2009 (“FWA”). The panel consisted of Professor Emeritus Ron McCallum AO, the Hon Michael Moore, and Dr. John Edwards. The purpose of the panel was to examine and report the extent to which the Fair Work legislation was operating as intended and to identify where improvements could be made.

The panel lead a four month investigation and presented a report on 15 June 2012. It was concluded that the current system of enterprise bargaining delivers fairness to employers and employees. However, 53 proposals were recommended by the panel. These proposals stem from parts of the Fair Work legislation not operating as expected and from suggestions to further create opportunities for employer/employee relations.

Key Ideas

Enterprise Agreements – in moving from Australian Workplace Agreements (AWAs) to Fair Work Act arrangements, the panel saw benefits for employees and little to no disadvantage to employers. AWAs and statutory individual contracts were not seen as being part of a fair and balanced workplace laws. Instead of these contracts, FWA arrangements utilize individual flexibility arrangements (IFAs). AWAs were shown to disadvantage the employee for multiple reasons. AWAs that underwent fairness tests were still not shown to protect the employee. The transition from AWAs to FWA arrangements was shown to benefit an employee working under the safety net and make the employee less vulnerable to change in working hours and wages. The employer’s disappointment comes from getting rid of AWAs that expanded managerial choices. It also limits the employer from making independent choices by requiring possible consultation with employees and relevant unions. Some employers claim a loss of flexibility. The panel’s report saw employers as still being able to retain flexibility. The panel views the cost of moving away from AWAs to collective agreements or modern awards under the FWA to not disadvantage the employer.

Unfair Dismissal – The FWA extends coverage of unfair dismissal laws. This coverage benefits employees of businesses of fewer than 100 by granting access to unfair dismissal claims. The Small Business Fair Dismissal Code allows Fair Work Australia to dismiss an unfair claim if the employer can demonstrate that he or she complied with the code. Employers should benefit from a clear and concise code. This is an attempt to strike a balance between employees and employers, though many employers still run into senseless claims. The FWA provides the Fair Work Australia with the flexibility to handle unfair dismissal applications. The panel made multiple recommendations regarding dismissal applications. First, that the FWA be amended so that Fair Work Australia may deal with applications by an informal and decisive process. The panel also recommended, to the employers benefit, that Fair Work Australia be able to easily dismiss applications lacking in merit. Lastly, that Fair Work Australia be able to dismiss applications where a settlement has been reached or where the applicant does not comply with full directions. The panel also felt that Fair Work Australia should be able to ask the applicant to provide more information about his or her dismissal. The panel states that these recommendations would reduce the employer’s burden of having to deal with these claims.

Transfer of Business – The FWA states that when a business purchases or takes over another it assumes certain responsibilities and continues the previous workplace relations arrangements. The FWA seeks to expand the situation in which a transfer has occurred and make it easier to determine when this transfer has happened. Uncertainty of a transfer may lead to costly transfer cases because of lost employee conditions. A new test of business transfer is outlined in the FWA. The test consists of: whether employment has been terminated by the old employer and the employee has been hired by the new employer within 3 months, if the work done by the new employee is relatively the same, and lastly if there is a connection between the old and new employer. If a business has been transferred then certain industrial instruments should carry over. The panel reports that some employers saw this policy as being overly ambiguous or deterring of business transfers. The panel also suggested that when the transfer is not done from the employer’s initiative but that of the employee’s than transferrable instruments should not apply. The panel then recommends that when an employee seeks to transfer out of their own initiative the employee should be subject to the terms and conditions of the new employer.

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