The Productivity Commission’s final report on Australia’s workplace relations framework, as tabled by Senator the Honourable Michaelia Cash on 21 December 2015, contains modest recommendations for the reform of Australia’s current workplace relations framework.

The report, which has been broadly welcomed by industry, recommends changes to the Fair Work Act 2009 (Cth) to address a range of deficiencies in the current system. Notably, a number of proposed changes mooted in the interim report have not ultimately been embraced in the final report.

If adopted by the Coalition, the recommendations are likely to form a mandate for workplace reform for the Federal Government in the upcoming 2016 Federal election.

Key proposed changes include:

  • three-fold increase to penalties for unlawful industrial action
  • changes to secret ballot process and strike pay rules
  • option for employer retaliatory action to include overtime bans
  • new ‘enterprise contracts’ which provide for variation of awards
  • overhauling of the unfair dismissal provisions to ensure ‘procedural’ errors do not result in reinstatement or compensation
  • clarifying the definition of the ‘complaint’ trigger for protection of a workplace right
  • capacity to order costs for vexatious adverse action claims
  • reducing the red tape for approval of enterprise bargaining agreements
  • introducing a new ‘no-disadvantage’ test in lieu of the ‘better off overall test’
  • changes to transfer of business arrangements so that instruments do not move
  • reducing the threshold test for sham contracting.

The report also calls for significant reform to the current structure and operation of the Fair Work Commission, including the establishment of an independent ‘Workplace Standards Commission’ (to review the national minimum wage and modern awards), and a revised process for appointing Fair Work Commission members (including a capped term of five years).

The report contains some important recommendations to address key challenges in the current system. Senator Cash has indicated that the Government will now consider the case for change, including whether there is a need to ‘seek a mandate from the Australian people’.