Fair Work Act Review 2012

Workplace Relations Minister Bill Shorten welcomed the panel's report, and said it endorsed the "fundamental operation" of the Fair Work Act. He called on the Coalition, saying it was "time for the Opposition to contribute to the national workplace relations debate by revealing their secret policies for Australian workplaces and participate in this fundamentally important debate for working Australians".


Panel members Professor Ron McCallum, former Federal Court judge Michael Moore and senior economist Dr John Edwards concluded in their 294-page Towards more Productive and Equitable Workplaces Report reported that the effects of the legislation had been "broadly consistent" with the objects set out in s3. However, they recommended 53 changes to "encourage productivity growth", "enhance equity in the workplace" and "correct anomalies that have been revealed in the operation" of the Act". They were not persuaded that IR regulation was responsible for impeding productivity growth.


The panel said that of the four federal legislative frameworks of enterprise bargaining system in place since the 1994 all  had "a good deal in common, including an emphasis on bargaining at the enterprise level, constraints on resort to arbitration, a safety net of minimum conditions, and recognition of a right to strike in pursuit of a collective agreement". The panel concluded that Work Choices was the odd one out. "Its period of effective operation was relatively brief and during that period it was significantly amended. It was widely said to have contributed to the then government losing office in 2007 and it has found no political champion since. The option of returning to Work Choices was not seriously explored by any of the major stakeholders during consultations with the Panel," McCallum, Moore and Edwards said.


Since the release of the panel's report a number of employers/ industry groups seem to be pushing for a return to Work Choices. Furthermore, the Essential poll, published on 23 July 2012, found 53 per cent of voters believed it was likely Mr Abbott would resurrect the Howard government laws, despite him saying they were "dead, buried and cremated".


The panel's significant recommendations include adopting the positions taken by employers in the high profile Federal Court decisions in JJ Richards, this would mean unions could not use protected industrial action to force a reluctant employer to the bargaining table, but would be required to seek a majority support determination first.


The panel recommended the Act be amended to give more weight to the subjective intention of employers in adverse action cases; effectively overturning the reasoning in the Barclay v Bendigo TAFE. The majority in that case held that "the real reason for a person's conduct is not necessarily the reason that the person asserts" in finding an AEU organiser had been adversely treated because of his union activity.


Among other recommendations, the panel recommended:

  • FWA and FWO should have roles in actively encouraging more productive workplaces, including by promoting best-practice agreement clauses and disseminating information in conferences and workshops.
  • FWA should be able to initiate compulsory conciliation where bargaining has stalled, including for greenfields agreements.
  • make individual flexibility arrangements (IFAs) easier to access, including by requiring enterprise agreements to include the model term as a minimum; extending the maximum notice period for terminating an IFA from 28 to 90 days
  • clarifying the measurement of non-monetary benefits under the better off overall test (BOOT)
  • providing a defence to employers who believed on reasonable grounds that the IFA met the BOOT, as long as they have complied with a new requirement to notify FWO they were making one.
  • provide access to arbitration for deadlocked greenfields negotiations, and apply good faith bargaining requirements to the negotiations. The panel did not adopt business calls for a return to employer-only greenfields deals.
  • reduce the time limit for filing general protections claims involving dismissal from 60 to 21 days (but also increase the time limit for unfair dismissal claims to align at 21 days).
  • enhance FWA's powers to deal with unfair dismissal applications informally, and to summarily dismiss them and award costs in certain circumstances.
  • prevent employees accruing annual leave while on workers' compensation, by amending s130.
  • prevent union officials from representing employees outside their union's coverage by amending s176 (Will Tracey case).
  • expand FWA's power to deal with disputes about frequency of union workplace visits
  • limit the application of transfer of business provisions where employees voluntarily move between related companies by amending s311.
  • prohibit "opt out" clauses that allow employees to remove themselves from agreement coverage.
  • expand the right to request flexible work arrangements in a wider range of caring and other circumstances, by amending s65;
  • prohibit making an enterprise agreement with one employee;
  • streamline the protected action ballot process, including by using electronic voting, requiring FWA to act expeditiously and removing hurdles to employees voting and participating in industrial action.
  • narrow defences against sham contracting claims.
  • require employers to lodge bargaining notices with FWA for publication, and not to add extraneous information to them.
  • increase FWA's powers to deal with disputes about the location of union meetings in workplaces.
  • prevent employers from withdrawing accommodation from employees taking industrial action.
  • extend union right of entry to investigate suspected breaches after the relevant worker's employment has ended.
  • The panel also recommended that s660 of the Act be amended to require that the appointment of the general manager by the Governor-General be on the nomination of the President.
  • expedite the development of a national long service leave standard with a view to introducing it by January 1, 2014.
  • tribunal needed a name change, pushing for "Commission" to be returned to the title and "Fair Work" to be removed.
  • Act no longer confer power on the Minister (as s431 does) to terminate protected industrial action.

 The panel found that Act's agreement content rules were "operating in a manner broadly consistent with interpretation of the longstanding 'matters pertaining' formula in recent decades, with the exception of the Work Choices period." Employers will be very disappointed with this finding as AIG in particular, were pushing for the outlawing of provisions in agreements that restrict the engagement of contractors and labour hire workers - such as "job security" clauses that require site rates.


The panel did not support increased access to arbitration of intractable bargaining disputes, except for greenfields negotiation.