ACCI calls for Fair Work Review to tighten unfair dismissal rules, stop adverse action claims from becoming a “lawyers picnic”

The Australian Chamber of Commerce and Industry has called for broad changes to Labor’s Fair Work Act, saying it is neither flexible nor adaptable and has contributed to rising costs for small businesses. 

In a wide-ranging submission to the review of the Act, the business body says Australia’s ability to retain jobs is weaker now than it was during the heart of the global financial crisis.

“The case for amendment of the Fair Work system is real and based on actual business experience, not speculation or policy theory,” ACCI says.

“A diverse mix of business owners, business leaders, human resource professionals, industrial practitioners and independent commentators have, over the past year, identified shortcomings requiring amendment.

“Some elements of the system are working satisfactorily. However key elements require significant change. Without change the system will not be durable.”

The ACCI is calling for tighter criteria for unfair dismissal claims for employees to what it sees as the return of “go away money”.

The group has particularly lashed that the general provisions protection provisions of the Fair Work Act state that an employer must not take any “adverse action” against an employee because the employee has exercised or proposes to exercise a “workplace right”.

The ACCI says the general provisions need a significant tightening to prevent misuse by “speculative litigators” and the development of a “de facto unfair dismissal type fiasco and lawyers’ picnic”.

ACCI is also calling for:

• amendments shoring up the small business exemption from redundancy obligation;
• a “merit-based” review of penalty rates and loadings in service industries on an industry by industry basis;
• significant changes to individual flexibility agreements;
• a change back to previous transfer-of-business provisions to encourage an incoming employer to retain former staff when taking over a business;
• a return to former right of entry laws that limited union right of entry to workplaces;
• a reduction in penalties for inadvertent non-compliance with awards or workplace legislation;
• a trade-off to compensate for the proposed increase in superannuation levy to 12% by 2020; and
• the retention of the Australian Building and Construction Commission.

The comments follow calls from the Australian Council of Trade Unions for small business to lose their exemption under unfair dismissal laws, and to introduce the right for workers to request flexible work arrangements for parents of adult children with a disability, workers over 55 and to all carers. 

In its submission, the ACTU said the current unfair dismissal laws are so weak “that they are unlikely to act as a deterrent to hiring, as employers often claim”

“There are a number of practical problems with the current unfair dismissal regime. First, the 14 day deadline for filing claims is too short… the deadline should be extended to 60 days.”

The Business Council of Australia, meanwhile, has warned that employers in non-resource sectors risk losing out to international competitors unless they are able to reduce costs or improve productivity through innovation and investment.

In its submission, the business body says real labour cost rises have exceeded productivity across the economy since mid-2010, and the number of working days lost to industrial disputation has spiked since March 2011.

“Domestically, specific sectors of our economy are experiencing great pressure from the current high terms of trade, and the entire economy is dealing with increasing competitive challenge from around the world.

“The high dollar, together with strong competition for skilled labour, is currently putting considerable pressure on employers in the non-resources sectors. Unless they are able to reduce costs or improve productivity through innovation and investment in new ways of doing business, they risk losing out to international competitors.”

“While international data shows that, by comparison, Australia’s labour market has reasonable flexibility, it has declined since the introduction of the Fair Work Act. This is at odds with international trends and is not conducive to strengthening our competitiveness when we need it most. 

“In short, Australia needs a workplace relations system that reflects the changing nature of our economy, our workers and our workplaces.”’

Recognising that industrial relations are just one part of the productivity picture, the BCA says IR regulation should:

• be simple and efficient;
• create a predictable environment, which eliminates unnecessary uncertainty and risk;
• remove or does not create barriers to job creation;
• promote collaborative, rather than adversarial, relationships and minimise industrial conflict;
• deliver fair remuneration outcomes that reward effort and provide a safety net to prevent exploitation of less-empowered workers; and
• promote safe and healthy workplaces.

The Federal Government has stressed that submissions to its review must be evidenced based and says dispute numbers have been lifted by state Government stoushes with public servants and the Qantas grounding.