In a rare joint initiative, employers and unions have written to Minister for Employment Michaelia Cash urging an end to future four yearly award reviews.

Background:

Currently, all modern awards are subject to an automatic review every four years; a mechanism programmed into the Fair Work Act 2009 by then Minister for Workplace Relations, Julia Gillard. The first of these automatic reviews is currently underway, re-examining the 122 modern awards made following the commencement of the Act in mid-2009.

This massive exercise has been ongoing for three years and is set to continue well into 2017, if not beyond. The review has seen a substantial reopening of completely settled and accepted provisions in awards, as well as the making of new claims by both unions and some employer representatives.

The Fair Work Commission has also sought to change awards on its own initiative, even where neither unions nor employers identified any problems with the modern awards created as recently as 2010.

The award review has cost employers, unions and the public dearly, consuming substantial time, energy and financial resources, for what is universally considered little or no gain.

Resource industry implications:

This is has been a challenging process for AREEA and its members.  While the substantial bulk of employment in the resource industry is governed by enterprise agreements rather than awards, these agreements are tested against awards, and in some key areas directly replicate or call up award terms.

The industry spent more than $1 million getting key awards such as the Mining Industry Award, the Hydrocarbons Industry (Upstream) Award and various maritime awards right in the first place, and with neither employers nor unions seeking change, has consistently questioned the need for any review so soon after the modern awards were finalised in 2010.

Unless some action is taken to arrest this flawed process, a second award review will need to start prior to, or very shortly after, the current review being completed. This would be a nonsensical outcome, and would damage all participants, employer, employee and union, not to mention the further waste of time and taxpayers’ money by a Fair Work Commission compelled to undertake a further review.

An agreed solution:

AREEA therefore strongly supports its national peak business body, the Australian Chamber of Commerce and Industry, joining forced with the ACTU and Ai Group to call for future four yearly reviews to be abandoned.

As ACCI chief executive James Pearson has emphasised:

“Under the Fair Work Act as it stands, another four yearly review will commence shortly after the current one concludes,… repeating a continuous cycle of reviews that is unsustainable and would place considerable demands on the resources of the parties and the Fair Work Commission.”

From the union side, ACTU secretary Dave Oliver indicated the four-year award review had become a “very labour intensive process…” and that “(unions are) supportive of ending it on the basis that we’re still we’re still able to maintain and improve awards.”

The joint call comes after the Productivity Commission (PC) recommended the termination of the award review process in its late 2015 recommendations for reform of Australia’s workplace relations framework.  AREEA specifically asked for such a recommendation in its submissions to the PC.

Ending the four yearly reviews will require amendment of the Fair Work Act 2009, which at the time of writing is under consideration by Minister Cash.

For more information on Modern Awards issues, contact AREEA’s policy team via 1800 627 771 or [email protected].