In its IR policy for the 2013 election, the Coalition promised a “a genuine and independent review” of the Fair Work laws by the Productivity Commission (PC). Draft terms of reference for the review were recently leaked, and they make for interesting reading. While Workplace Minister Eric Abetz says he is still consulting about the terms, the leaked draft suggests the review will:

  • be a “comprehensive” examination of the regime, including considering penalty rates, pay and conditions, unfair dismissal, enterprise bargaining flexibility and union activity; and
  • seek to “identify future options to improve the laws”, including “the need to reduce unnecessary and excessive regulation”.

The process and focus of the PC review is likely to be very different to the Fair Work Act review conducted by the three member panel established by the Labor government in 2012. That panel had the key task of considering whether the Fair Work Act was delivering on the Labor government’s policy goals for industrial relations. The forthcoming PC review will have a broader ranging scope – including considering how the current workplace laws measure up against comparable international regimes and whether the legislation contains roadblocks to increasing productivity and competitiveness.

Perhaps unsurprisingly, the union movement has suggested that the government will use the review to introduce “radical industrial relations change”, with the Opposition’s employment spokesman, Brendan O’Connor, saying that “everything is up for grabs”. Some have queried whether the Productivity Commission is the appropriate body – Professor John Buchanan, director of the Workplace Research Centre at the University of Sydney, has said that “labour law expertise is not something they’ve shown any capacity for in the past”.

The PC process will be public – and interested parties will have the opportunity to participate, including by making submissions.