Business votes with its feet on fairness test

Too much red tape for very little return may be the reason up to 4000 employers have failed to meet requests for more information required to pass the AWA fairness test, a leading business group says.

SmartCompany reported earlier this week that the Workplace Authority has given 4000 employers 14 days to provide further information on up to 30,000 workplace agreements so the Authority could assess them against the fairness test.

Without the further info, many of the agreements will fail the fairness test, leaving employers liable to provide potentially thousands of dollars in back-pay to employees under old employment conditions.

But why have so many employers decided not to provide the information requested by the Workplace Authority? The answer may be simply that it failed the cost/benefit analysis to do so, according to National Retail Association spokesman Gary Black.

“The amount of work that often has to be invested in providing that information is significant, and the administrative burden on very busy employers could be so severe that they could simply decide not to bother,” Black says.

The diminished advantage AWAs provide employers since the introduction of the fairness test could also be a factor, Black says.

“The fairness test does in itself make agreement-making less attractive because it limits flexibility and it might well be the gain to the employer isn’t worth the extra effort involved, so perhaps they are just walking away,” he says.

A key task for the Government and business groups will now become informing affected business owners of their obligation to provide back-pay to workers where their workplace agreements have failed the fairness test.

Groups such as the New South Wales Business Chamber have already been active in informing their members of their rights and duties under the fairness test laws, a task that is expected to increase in the months ahead.

Workplace agreements that fail the fairness test will be referred to the Workplace Ombudsman, which plans to conduct random audits to ensure back-pay obligations are being complied with.

Businesses will be able to make back-payments to employees in instalments if making single lump sum payments threatens their viability.