Coalition Government set to implement “Policy to Improve the Fair Work Laws”

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10 September 2013

Following its success in the 7 September federal election, the Liberal/National Coalition is now commencing to implement its industrial relations policy – with proposed legislation to re-establish the Australian Building and Construction Commission, and create a new body overseeing registered organisations likely to emerge fairly quickly.

In this In Brief we take another look at the Coalition’s policy,[1] highlighting the new Government’s key priorities for workplace reform, intended timetable, and prospects of implementation (given the composition of the Senate both before and after 30 June 2014).

In May this year, the Coalition outlined a two-stage reform process:

  1. Minimal changes to the Fair Work Act 2009 (Cth) (FW Act), as set out in the Coalition’s “Policy to Improve the Fair Work Laws”, which it stated would be legislated within three months of being elected to office.
  2. Further changes as recommended by a Productivity Commission review of the FW Act, to be carried out during the Coalition’s first term of government – with those proposals forming part of the policy the Coalition would take to the next election.

The main changes outlined in the Coalition’s industrial relations policy are as follows: 

Current provisions in FW Act and related legislation

Proposed changes set out in Coalition Policy

Protected industrial action:

  • available early in negotiation of agreements (“strike first, talk later”)
  • claims limited only by rules on permitted, mandatory and unlawful terms in agreements

New limits on protected action:

  • must be preceded by genuine and meaningful talks
  • only in support of sensible and realistic claims

Enterprise agreements aimed at improving productivity (but not mandated)

Productivity issues must be considered in agreement negotiations

Greenfields agreements:

  • must be negotiated with unions
  • therefore unless the agreement of the unions is obtained they have a power akin to a veto over important resources/infastructure projects that require secured terms and conditions of employment

Greenfields deals:

  • subject to good faith bargaining rules
  • negotiations must be concluded within 3 months
  • after that, employer can request the Fair Work Commission (FWC) approve the proposed agreement, provided it is consistent with prevailing industry standards

Individual flexibility arrangements (IFAs):

  • available under awards and agreements
  • limited to 5 specific issues, or terms specified in enterprise agreement
  • employer concerns that unions prevent genuine flexibility through IFAs

Easier access to IFAs:

  • removing restrictions on employment conditions that can be subject of IFAs
  • termination by either party on 13 weeks’ notice (currently 4 weeks)

Union right of entry for purposes of investigating breaches of workplace or safety laws, or to hold meetings with members:

  • union needs members, or coverage rights over employees, in workplace

New restrictions on union right of entry, for example members must have requested the union’s presence and the union must have either:

  • agreement coverage or bargaining representative status; or
  • previous history of representation at workplace

Replaced Australian Building and Construction Commission (ABCC) with the Fair Work Building Industry Inspectorate

Re-establish ABCC with full investigative powers, and revisit federal Building Code 2013 and Supporting Guidelines to ensure consistency with state building codes[2]

Established Road Safety Remuneration Tribunal (RSRT) to set “safe rates” for employees and owner-drivers

Review the RSRT to determine if there is a justification for a specialist regulator

New anti-bullying jurisdiction of FWC commencing on 1 January 2014[3]

Require workers to seek assistance from independent agency (e.g. safety regulator) before lodging a bullying claim with the FWC

Expand jurisdiction to include conduct of union officials towards workers and employers

In late July, the Coalition released another policy document, its plan for “Better Transparency and Accountability of Registered Organisations”. This indicated that legislation would be introduced in the first sitting week of Parliament following the election, to establish a Registered Organisations Commission that will ensure compliance with the laws regulating unions and employer organisations.

During the election campaign, the Coalition announced details of its Paid Parental Leave (PPL) Policy. Scheduled to commence on 1 July 2015, the proposed PPL scheme will provide mothers with 26 weeks’ PPL following the birth of a child, at their actual wage (subject to a cap of $150,000 per annum). This is a substantial increase on the minimum entitlements under the former Labor Government’s PPL scheme (i.e. 18 weeks’ PPL at the minimum wage).

Issues and Questions about Implementation of the Coalition’s Policy

There is some doubt as to whether the Coalition will be able to implement the measures proposed in its Policy to Improve the Fair Work Laws by its target date of mid-December 2013.

To begin with, the new Government has indicated that Parliament will not re-convene until late October or early November. When that occurs, bills to repeal the carbon and mining taxes and implement the Coalition’s border security policy are likely to take precedence over the IR changes.

The Coalition must then get its legislative proposals through the Senate, where it will require support from Labor and the Greens until 30 June 2014. That support would not be forthcoming in respect of the Coalition’s top legislative priorities: restoring the ABCC and cracking down on the so-called “dodgy union officials”.

Another question is whether the Coalition will limit its first amending legislation to the proposals in the Policy to Improve the Fair Work Laws. There is a good chance that other amendments to the FW Act may be added to this initial bill, as the Government will be under strong pressure from employer groups to address their concerns about the current IR framework. This could see the Coalition bring forward changes on issues such as award penalty rates, limits on agreement content, and restricting access to unfair dismissal and general protections claims, rather than awaiting the outcome of the Productivity Commission review.

Looking further ahead, the composition of the Senate will change from 1 July 2014. Assuming the support of sitting DLP Senator John Madigan, on present predictions it looks like the Coalition will need support from five of the six newly-elected Senators from the Palmer United Party, Liberal Democratic Party, Australian Sports Party, Motor Enthusiast Party and Family First in order to pass legislation.[4] While the position of some of these minor parties on industrial relations is not known, others are strongly opposed to workplace regulation.[5] Therefore, the new Government has good prospects of obtaining support for more far-reaching workplace reforms from 1 July next year


  [1] See our earlier In Brief here.

  [2] During the election campaign the Coalition highlighted its commitment to re-establish the ABCC, by publishing the report of a working party of Liberal MPs which examined the feasibility of implementing the policy as a matter of priority: Mark Skulley, “ABCC back in 100 days, says Coalition”, Australian Financial Review, 3 September 2013.

  [3] See our Workplace bullying Thinking conversation.

  [4] See the ABC's analysis here.

  [5] The Liberal Democratic Party is strongly opposed to labour market regulation, including the minimum wage which it describes as “the most pernicious feature of industrial relations law”, see here. Similarly, Family First is “committed to removing the barriers to entry to getting a job or working more hours” and addressing “the tragedy of workplace regulation”, see here. The Palmer United Party is vague on industrial relations, but does refer to “encouraging workplace reform … [by] breaking down centralised controls that have held back productivity and sustainable real wage growth”, see here.

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