As the industry prepares for initial amendments to the Fair Work Act to take effect on 1 January 2013, AMMA workplace relations policy adviser Lisa Matthews rounds up the changes and outlines AMMA’s priority areas ahead of the next wave of workplace relations reforms.

THE bulk of provisions under the Fair Work Amendment Act 2012 will take effect on 1 January next year while others relating to default superannuation funds in modern awards will not take effect until 1 January 2014.

As part of the current round of reforms, a Senate inquiry into the Amendment Bill was called and witnesses appeared before the Senate committee on 21 November 2012. AMMA was one of just four organisations invited to appear before the inquiry to give evidence, along with the ACTU, ACCI and the Department of Education, Employment & Workplace Relations (DEEWR).

AMMA raised with the committee its concerns with some of the bill’s provisions but also highlighted its concerns with what was not addressed in the bill.

Asked by the committee if there was anything in the bill that would improve productivity, AMMA responded:

“In relation to productivity improvements, we cannot really see any of the aspects of the bill adding to industry productivity. In particular, there is no provision that would act to make it more difficult to access protected industrial action or make it more accessible for employers to apply to stop that action on productivity and economic grounds. Some of the action that we are seeing in our industry is extremely economically damaging, and this bill will not do anything to curb that.”

AMMA also highlighted that there was nothing in the bill to address union monopoly on greenfield agreement making.

“Unions, in a greenfield setting, currently have a monopoly position. They are the only ones that can make an agreement and that lack of competition in that area has until recently caused, particularly in offshore construction projects, significant cost escalations … the reason for the cost escalation is not skill shortage, it is the monopoly position that is given to one party as a result of the legislation.”

The next wave of reforms to the Fair Work Act, insofar as it addresses areas of protected industrial action and greenfield agreement making, is likely to be far more controversial than the first round of reforms.

The next tranche is expected in the first half of 2013, with a federal election expected any time between March and August next year.

Changes that will take effect on 1 January 2013

The recent amendments to the Fair Work Act that will take effect on 1 January next year are those relating to:

Award variation applications

  • Empowering the Fair Work Commission (the new name for Fair Work Australia) to strike out award variation applications which are not made in accordance with the Act, which are frivolous or vexatious or which have no reasonable prospects of success; and
  • Amending s160 of the Fair Work Act to provide that parties who are entitled to apply to make, vary or revoke a modern award under s158 can also apply to vary a modern award to remove ambiguity or uncertainty.

Scope orders

  • Amending s238(3) to require an applicant for a scope order to only ‘take all reasonable steps’ to notify all other relevant bargaining representatives of the application rather than imposing an absolute duty in cases where it may not be clear who all the bargaining representatives are.

Bargaining notices and representation

  • Amending s174 to restrict bargaining notices to addressing only those matters specified under the section and the regulations made under it; and
  • Amending s176 to prevent an individual union official from being a bargaining representative for employees for whom the official’s union does not have coverage.

Agreement making

  • Prohibiting enterprise agreement clauses which permit employees to opt out of an agreement; and
  • Prohibiting the making of an enterprise agreement with one employee.

Protected action ballots

  • Making amendments relating to the conduct of protected action ballots, including expanding the number of workers that can be included on a roll of voters for a protected action ballot.

Unfair dismissals

  • Extending the time limit for lodging unfair dismissal claims from 14 days to 21;
  • Giving the Fair Work Commission the discretion to dismiss unfair dismissal applications made under s394 where the parties have concluded a settlement agreement, or where an applicant fails to attend a proceeding, or where the applicant fails to comply with tribunal directions or orders;
  • Allowing the Fair Work Commission to make costs orders against parties that unreasonably fail to discontinue proceedings, or unreasonably fail to agree to settlement terms that could have led to discontinuing an application, or that through an unreasonable act or omission caused the other party to incur costs;
  • Amending s401 to allow the Fair Work Commission to make costs orders against lawyers or paid agents whether or not the commission has granted permission for the lawyer or agent to represent a party; and
  • Amending s366 to reduce the time limit from 60 days to 21 days for lodging general protections claims relating to a termination of employment, while leaving the six-year time limit for general protections claims where termination of employment is not involved.

Structure and operations of the commission

  • Changing the name of Fair Work Australia to the Fair Work Commission;
  • Amending s660 to require that the appointment of the General-Manager by the Governor-General follows a nomination by the president of the tribunal;
  • Allowing the president or any deputy president to stay the operation of a decision under appeal or review, whether or not the president or deputy president is a member of the Full Bench hearing the appeal or conducting the review;
  • Extending the current power to appoint acting deputy presidents for specified periods under s648 to the appointment of acting commissioners;
  • Enabling two new full-time vice presidents to be appointed to the commission;
  • Introducing a process to deal with complaints against Fair Work Commission members that is broadly modelled on the Courts Legislation Amendment (Judicial Complaints) Bill 2012 which recently passed through both houses of parliament, giving the president new powers to deal with complaints against members as well as putting in place an independent process to deal with complaints against the president;
  • Clarifying the existing conflict of interest provisions in s640 to require that potential conflicts of interest also be disclosed to parties and others with sufficient interest in proceedings rather than just the president;
  • Allowing parties to proceedings or the minister to refer a matter to a Full Bench on the basis that the matter is important and it is in the public interest for a Full Bench to hear it; and
  • Giving the commission president the power to take over a matter in certain circumstances.

In an October 15 media release, Workplace Relations Minister Bill Shorten said the government would also adopt the review panel’s recommendation for the Fair Work Commission president to consider requiring applicants to provide more information about the circumstances of a dismissal in the initial documentation lodged with the tribunal. However, this recommendation was not included in the amendment bill as it does not require legislative change.

Superannuation

The amendments relating to default superannuation funds in modern awards will take effect on 1 January 2014 and include:

  • Introducing new requirements for modern award terms about default superannuation as well as a process under which the Fair Work Commission will review default fund terms every four years at the same time as the four-yearly review of modern awards (the first review to be conducted after 1 January 2014); and
  • Establishing an expert panel to subsume the functions of the current minimum wage panel and which will include members with the relevant expertise to be appointed to the expert panel to assess default superannuation funds or to the expert panel responsible for the annual minimum wage review.

The next wave of reforms and AMMA’s priorities

It remains to be seen which of the review panel’s other recommendations will be included in the next tranche of reforms to the Fair Work Act.
However, AMMA has identified priority areas that must be addressed in order to achieve meaningful change to Australia’s industrial relations system. AMMA maintains that future reforms must ensure that:

  • Businesses have the capacity to make greenfield agreements without exorbitant wage and condition outcomes or unnecessary project delays;
  • Allowable matters in agreements pertain to the direct relationship between employers and their employees;
  • Protected industrial action during bargaining is a last resort and access to remedies to stop or suspend such action are more accessible on economic/productivity grounds;
  • The location and frequency of union right of entry visits is reasonable and is for the most part left to employers to determine according to their operational needs;
  • Agreement making options are broadened through the reintroduction of a workable individual agreement making option; and
  • Greater rigour is introduced in relation to the general protections/adverse action provisions in order to discourage the plethora of unmeritorious claims being made, all of which employers must defend given the current reverse onus of proof.