News Advisor Are the changes to workplace relations a fair act or foul?

Are the changes to workplace relations a fair act or foul?

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The Fair Work Amendment Bill 2014 is still under review by a Senate Committee (which is not expected to report back until June 5), and yet strong reactions have already been heard from both sides of the workplace relations fence.

ACTU president Ged Kearney, responding to the amendments in February, described them as “an attempt to slash take home pays and working conditions”.

“This is a blatant attempt to cut pay and conditions through Individual Contracts,” said Mr Kearney, “and shows the Abbott Government doesn’t understand the concerns of Australian workers.”

Maurice Blackburn Lawyers, which prides itself on defending workers’ rights, also has a dim view of the changes.

This is a blatant attempt to cut pay and conditions through Individual Contracts

Kamal Farouque, principal in employment and industrial law at Maurice Blackburn, said the changes are “a pretty significant concern”, and may foreshadow a creep back towards Work Choices after the next election if the Abbott Government retains power.

In stark contrast, employer groups are describing the amendments in glowing terms.

The Australian Industry Group (AIG) “strongly support” the changes, according to its director of national industrial relations Stephen Smith.

Partner and executive director at FCB Group Charles Cameron, a law firm geared towards employers, said the amendments will simply “recalibrate what the law was ultimately intending to achieve”.

“I don’t think there is anything in there really that is seeking to push workplace laws beyond what would be a relatively sensible amendment,” Mr Charles said.

These divided opinions, split along predictable lines, sound ominous for the average worker. So what will they really mean for the rights of employees?

Greater flexibility?

The changes to Individual Flexibility Agreements (IFAs) are the most relevant to the average worker.

The most important change will allow workers to trade monetary benefits (such as penalty rates) for non-monetary benefits (such as more flexible working hours).

ACTU secretary Dave Oliver said in a press release this will give “the green light to employers to cut people’s pay under the guise of greater flexibility”.

Unions, instinctively wary of any challenge to collective bargaining, have been negotiating IFAs out of agreements, said AIG’s Stephen Smith, which the changes will put a stop to.

But the argument from employer groups is that bosses will be more likely to give the okay to flexible hours if they don’t have to pay penalty rates outside the standard hours of 6am to 6pm.


“There are an increasing number of workers in this day and age who are picking up children or going to the bank or just for work-life flexibility are quite happy to work outside of ordinary hours,” FCB Group’s Charles Cameron said.

The Fair Work Act, in its current form, clearly intends for workers to be able to trade things like penalty rates for more flexible working hours, according to Stephen Smith, but these intentions “clearly have not worked”.

But Kamal Farouque said employers, not workers, want IFAs, and to say otherwise is “completely misconceived”. He said he “hasn’t heard” of employees missing out on flexible working hours because of penalty rates.

Instead of delivering greater flexibility for employees, these changes may “expand the facility for employers to undermine collective rates,” according to Mr Farouque of Maurice Blackburn Lawyers.

Better off or not?

An IFA must pass what is called the ‘Better Off Overall’ test; an agreement that makes an employee worse off would be struck down if brought before the Fair Work Commission or the courts.

This test is watered down by the amendments, Mr Farouque said.

Employers would find it easier to argue that their workers are better off thanks to a new defence of ‘reasonable belief’. Workers would also be obligated to sign an ‘I am better off’ statement before the IFA begins.

“If you produce a signed statement from an employee, in that regard it’s probably more likely to be sustained in the event of any contest,” Mr Farouque said.

Stephen Smith agreed signed statements would make it easier for employers to satisfy the ‘Better Off’ test, but denied the ‘reasonable belief’ defence will be misused.

“Employers would still have to substantiate why they were reasonable in their belief [that the IFA made the employee better off], so they can’t just sit there and come up with a sham belief. You certainly need to be able to substantiate it,” Charles Cameron said.

Greenfields agreements

The changes would also affect Greenfields agreements, which are negotiated prior to a new employer putting on its first wave of employees.

The changes are intended to reduce cost blowouts in the resources and construction sectors by “diminishing the negotiating position of the unions,” Mr Farouque said.

Unions would no longer be able to hold employers to ransom with the threat of looming project deadlines, according to an analysis by law firm Corrs Chambers Westgarth.

I don’t think there is anything in there really that is seeking to push workplace laws beyond what would be a relatively sensible amendment

This might have the effect of reducing wages in the construction and resources sectors, where Greenfields are most frequently used.

Right of entry

The amendments would also restrict the right of entry of union officials to the workplace.

Charles Cameron of FCB Group said he welcomes these restrictions because most workers “simply don’t want to go into a lunchroom and be sold” union memberships.

But the behaviour of union officials when on the worksite is already “well regulated”, said Kamal Farouque, who argued the change would put “the power back in the hands of the employer” to dictate where union meetings occur.

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