On 9 July 2013, the Coalition released its workplace relations policy to ‘improve the Fair Work laws’ (IR Policy) Mr Abbot has said that if elected, the Coalition will seek to implement the changes under the IR Policy within three months of a change of government.

The IR Policy is unsurprising and in many respects is a policy for cautious and minimal change – major change is not on the horizon.  The exception to this will be any recommendation for change made by the Productivity Commission that the Coalition says will be tasked by it to consider how Australian workplace laws can be improved beyond the changes promised under the IR Policy.

While the IR Policy is not a policy for major IR reform, there are some important features of the IR Policy that we think employers should note.

What are the key features of the IR policy?

  • Productivity Commission review of the legislation: The Coalition says that whilst it has no plans to change the Fair Work Act 2009 and associated legislation (Fair Work laws), beyond what is set out in the IR Policy, it will, if elected, task the Productivity Commission to undertake an independent and impartial review of the Fair Work laws and then the Coalition will carefully consider any recommendations and findings made by the Productivity Commission.  Therefore, there is some prospect for greater reform than what is set out in the IR Policy, but any such reform would not be in the immediate future.

  • Paid parental leave:  The Coalition proposes to introduce a paid parental leave scheme that offers a working mother up to six months paid leave at her actual wage (capped at $75,000) or the minimum wage rate, whichever is higher.  Superannuation will also be payable.  This is considerably more generous than the current Government paid parental leave scheme, which offers an entitlement to 18 weeks’ paid leave at the minimum wage rate.   Under the Coalition’s scheme, the payment would be administered through the Family Assistance Office and paid directly to the worker without using the employer as a ‘go between’ for making the payments, as is currently the case.

  • Paring back unions’ right of entry:  Under the IR Policy, unions’ right of entry to the workplace will be curtailed and will be conditional upon having an enterprise agreement or modern award in place at the workplace in which the union is a party.  This is the same position that existed prior to the introduction of the Fair Work laws.   The right to enter when there are no members at the workplace will be subject to the union having a lawful representative role in the workplace and having been requested to present at the workplace.  

    Under its IR Policy, the Coalition has also promised to reverse any of the changes to union right of entry laws currently proposed by the Fair Work Act Amendment Bill 2013 (Amendment Bill) which, if passed, will likely come into effect prior to the election in September.  The changes proposed by the Amendment Bill will, with some limitations, give unions greater rights to meet in lunchrooms and to be provided travel and accommodation by the employer when going to remote areas in which employees are also provided with travel and accommodation.  Under the IR Policy, the Coalition will seek to reverse any such amendments if it is elected to government. 

  • Greater flexibility with IFAs: There will be a relaxing of the rules on the use of individual flexibility arrangements under enterprise agreements but the Coalition promises that this is not a reintroduction of the AWA regime. 

    The changes proposed by the Coalition include allowing IFAs to be agreed with willing employees and to increase the time period for terminating IFAs to 90 days.  This proposed change is in line with a recommendation set out in the report prepared by the Fair Work Review Panel on the outcomes of its review of the Fair Work laws last year.

    There is no suggestion that the Better Off Overall Test (BOOT) will not continue to apply but the IR Policy does commit to giving effect to a recommendation made by the Fair Work Review Panel to improve the application of the BOOT to take into account non-monetary benefits.

  • Improved greenfield agreement regime:  Under the IR Policy,  the Coalition identifies that the problem with the current laws on the making of greenfield agreements is that they lend themselves to abuse by the unions to hold up new projects by engaging in tactics for protracted negotiations.  To address this, the Coalition promises in its IR Policy to give the Fair Work Commission the power to approve greenfield enterprise agreements if agreement negotiations have not completed within 3 months of commencing. 

  • More pre-requisites to be satisfied before protected industrial action can be taken: The IR Policy promises to introduce a further requirement to the protected action provisions in the Fair Work laws requiring that before permitting protected industrial action, the Fair Work Commission is to be satisfied that there has been ‘genuine and meaningful talks’ between workers and businesses at the workplace and that the demands of either party are ‘sensible and realistic’. 

Other proposals for change

In addition to the key changes outlined above, the IR Policy also commits to making the following changes to the Fair Work laws:

  • Tweaking the proposed new bullying laws:  The IR Policy provides provisional support to the Labour Government’s proposed changes to address workplace bullying by the introduction of powers to the Fair Work Commission to respond to bullying complaints.  These changes have been detailed in our update of 11 April 2013. The caveat to the Coalition’s support is that under its IR Policy, it will amend any such laws by expanding unlawful bullying conduct to capture the conduct of union officials towards workers and employers and also to require that before making a claim to the Fair Work Commission an aggrieved worker must have first sought impartial advice from an independent regulatory agency.  We anticipate that this is a requirement that includes first seeking advice and assistance from the workplace health and safety regulator in the worker’s applicable State.
  • Re-establishing the ABCC:  the ABCC will be re-established and will replace the Fair Work Building Construction Unit.  The IR policy also suggests that there will be a new National Building Code and Guidelines to govern industrial relations arrangements for federal Government projects.

  • A union ‘watchdog’:  If elected, the Coalition promises to introduce legislative change to respond to the outcome of the HSU scandal.  This includes creating a Registered Organisations Commission and imposing on union officials similar fiduciary obligations that apply to directors and officers of corporations under the Corporations Act 2001. 

  • More assistance to small business: The IR Policy outlines that there will be greater assistance offered to small businesses to assist with complying with the Fair Work laws, including the prospect of an amnesty for small business on the imposition of penalties for breaches of the Fair Work laws.

  • Support for recommendations of the Fair Work Review Panel:  The Coalition has in its IR Policy given its support to many of the recommendations made by the Fair Work Review Panel and promised to implement those recommendations, including:

    • Amending the transfer of business provisions so as to allow employees at their own initiative to voluntarily transfer to a related entity of the current employer without the current employer’s industrial instruments transferring to the related entity.

    • Inserting provisions in the general protection provisions under the Fair Work Act 2009 which make clear that the central consideration about the reason for the adverse action is the subjective intention of the person taking the alleged adverse action.  This type of amendment would be consistent with the recent outcome of the High Court decision in Barclay v Bendigo Regional Institute of TAFE.

What does the Coalition IR Policy mean for employers?

While the IR policy seems to be about tweaking the current legislative regime rather than making wholesale changes, employers should still turn their minds to how the Coalition IR Policy may impact them. 

In particular, employers should consider how the Coalition IR Policy, if put into effect, may impact on their current industrial strategies particularly in respect of upcoming enterprise bargaining or where new enterprises are considering the negotiation of a greenfields agreement.