Who wants what from Porter’s ‘IR review’
The Coalition government has announced a review of the industrial relations system. The Australian has described this as a ‘surprise review’, although we are not sure who is supposed to be surprised, given that within a fortnight of the May federal election, the Australian Mines and Metals Association (AMMA) was tasking the government with undertaking significant industrial relations reform.
On June 24, Prime Minister Scott Morrison told the West Australian Chamber of Commerce and Industry that he had asked Christian Porter, now the Minister for Industrial Relations (and Attorney General), to ‘take a fresh look at how the system is operating and where there may be impediments to shared gains for employers and employees’.
During that address, Morrison also called on business groups “to build the evidence for change” to the IR system.
A few days later Porter provided some more detail on the planned review: it would take between 6 and 9 months, involve government issued discussion papers, and stakeholder consultation. Specific reforms under consideration by Porter are: the Small Business Fair Dismissal Code, whole-of-life greenfield agreements for projects, reviews to the building code, an investigation of the ‘unintended consequence(s)’ of the Skene court ruling, criminalising the systemic and deliberate underpayment of migrant workers, and the introduction of a national labour hire registration regime.
Employer groups have already started publishing their lists of demands, summarising their long standing policies to reform the IR system to strengthen employer power and weaken worker and trade union power.
So far, the most vocal employer groups are The Australian Industry Group (Ai Group) and the Australian Mines and Metals Association (AMMA). Ai Group lobbies on behalf of McDonald’s Australia, Hungry Jacks, AGL Energy, BlueScope Steel and Boral. AMMA lobbies on behalf of its member companies in the resources and energy industry, including WorkPac group, Adani, ExxonMobil, Chevron, Peabody and Fortescue.
Ai Group chief executive Innes Willox and AMMA chief executive Steve Knott published a joint article in The Australian, outlining their six demands for IR reform (this was followed by an editorial by The Australian, which argued that ‘the changes advocated by Mr Willox and Mr Knott are primarily functional and practical’).
AMMA have also published a copy of a longer briefing note which they sent to Porter, listing the same six demands and outlining the ‘business case’ for each one.
Below is a summary of the main IR-related issues which employer groups are lobbying the government on at the moment.
Union busting bills and CFMMEU deregistration
The Fair Work (Registered Organisations) Amendment (Ensuring Integrity) Bill 2017 (“Ensuring Integrity Bill”) bill was first introduced by the Liberal Party in 2017, but failed to gain the support of the senate. Porter says that passing the bill is “is absolute priority №1 in the IR portfolio in the early stages of this government”.
Passing the Ensuring Integrity bill is one of Ai Group and AMMA’s key demands. AMMA have been calling for the deregistration of the CFMEU (and the MUA) for years, and they see the Ensuring Integrity bill as an opportunity to achieve this.
In their note to Porter, AMMA argue that employers are concerned about the ‘cost impact of continuing and expanding lawlessness’. They note that the bill would have made it more difficult for the CFMEU to merge with the MUA and TCFUA — something AMMA tried and failed to prevent through the courts. The new amalgamated CFMMEU, says AMMA, ‘wields unprecedented power for a private sector trade union in Australia’, and has the ability to take coordinated strike action across the resources supply chain.
Casuals
Employer groups are very stressed about the Federal Court’s decision in WorkPac Pty Ltd v Skene 2018 last August, which found that FIFO labour hire worker Paul Skene was an employee entitled to annual leave payments under the National Employment Standards (NES).
Employers immediately panicked about casuals ‘double dipping’ their leave entitlements. Ai Group described the ruling as ‘unworkable’, and urged parliament to ‘(act) quickly to protect businesses, employees and the community from the huge potential cost impacts’. Their talk of ‘double dipping” failed to mention that labour-hire workers are often employed on different agreements to directly employed staff. Credit Suisse (among others) calculate that on average, labour-hire employees are on 30% less than permanently employed workers even taking into account their casual loadings.
In their note to Porter, AMMA say they are pleased that the Fair Work Amendment (Casual Loading Offset) Regulations 2018, passed last December, had ‘partially’ addressed some of their concerns over Skene. But they want the government to do more. One of AMMA and Ai Group’s key demands, post election, is that the government amend the National Employment Standards to define a casual employee as one that has been ‘engaged and paid as such’. There is a stronger ‘business case’ for this definition, AMMA say, than there is for the federal court’s interpretation — which ‘emphasised the employment characteristics as the primary determinant of an employee’s status’.
Enterprise agreement reform
While the AMMA would like enterprise agreement making to be ‘retained as a preferred mechanism to facilitate the employment relationship’ (as would the Business Council of Australia), they have asked the government to make several changes to the enterprise agreement making process, which they say is ‘absurdly complex’. They want the government to: replace the Better Off Overall Test (BOOT) for enterprise agreements with a ‘no advantage test’, fast track approvals for certain agreements, allow additional discretion for agreement approvals, reinstate ‘prohibited content’ in bargaining that existed under the Workplace Relations Act 1996, and reduce the threshold of consultation required to achieve ‘genuinely agreed’ status under section 180(5) of the Fair Work Act.
Ai Group and AMMA also want the government to amend the Fair Work Act to allow for ‘life-of-project’ greenfields enterprise agreements. The maximum term of an agreement is four years (at which point it must be renegotiated). AMMA argue that ‘it is disruptive for bargaining over wages and conditions’ to occur at some point during the construction of lengthy projects.
Adverse Action reforms
AMMA says that the Adverse Action provisions in the Fair Work Act ‘are creating serious and escalating challenges for employers’ — they are a ‘vast and unjustified extension of employee protections’ with ‘no economic or social purpose’. They outline specific recommendations for reform in their note to Porter (remove the onus of proof for Adverse Action claims, introduce a ‘genuine reasons’ defence for employers).
AMMA also want Porter to instruct the Fair Work Commission President to only allocate Adverse Action matters to ‘appropriately qualified statutory-appointed tribunal members’, and to resolve them all at the FWC level instead of referring anything to the ‘Court jurisdiction’. Due to recent Coalition appointments to the FWC, the majority of tribunal members are Coalition-appointed, with employer group backgrounds. One recent appointment is Amanda Mansini, AMMA’s director of workplace relations.
Relax unfair dismissal laws
Ai Group and AMMA want the government to review unfair dismissal laws so that:
…employers who have a valid reason to terminate an employee should be able to have confidence their decision will not be overturned by the Fair Work Commission, or leave them open to potentially crippling compensation claims.
AMMA have a few suggestions for Porter about how to amend the unfair dismissal provisions in the Fair Work Act: increase application and hearing fees, allow terminations to stand where a ‘valid reason’ exists, exclude employee circumstances (e.g. age, length of tenure) in unfair dismissal assessments, exempt claims in cases of ‘serious offences and misconduct’, and ‘provide that where a valid reason for termination exists, the termination should stand’.
Proper Use of Worker Benefits Bill
Ai Group and AMMA have been vocal in their support of the Proper Use of Worker Benefits Bill. The bill was first introduced by the Liberal Party in 2017, but failed to gain the support of the Senate.
The bill seeks greater control over worker entitlement funds. These funds provide workers with redundancy, training and sickness benefits, and are recognised in many awards and enterprise agreements. They are based on contributions from employers to help them satisfy their obligations when employees leave their employment.
The legislation was tabled again following the 2019 federal election, with the government believing it now faces a Senate that is less hostile to reform. Reintroduction of the bill was one of the six joint demands put forward by Ai Group and AMMA.
