Tony Abbott signals IR changes, expert backs move towards improved individual agreements

Opposition Leader Tony Abbott’s move to signal a return to individual workplace agreements has won the support of employer groups and industrial relations experts.

Just days after former Prime Minister John Howard labelled Labour’s Fair Work regime as Prime Minister Julia Gillard’s “biggest mistake”, Abbott has signalled the Coalition will revisit the area of IR.

”I think we ought to be able to trust the businesses and the workers of Australia to come to arrangements which suit themselves. Now, there’s got to be minimums. There’s got to be fairness. But there’s also got to be freedom,” he told 3AW yesterday.

While Abbott backed away from any idea of a return to WorkChoices – the controversial Howard-era policy that the Coalition was so keen to distance itself from in the 2010 election – he says the Opposition recognises the laws need tweaking.

“We’ve got a lot of problems and I want to be a pragmatic problem solver,” he said.

Abbott’s comments were supported by the Australian Mines and Metals Association and the Australian Chamber of Commerce and Industry, both of which want to see a return to individual agreements.

IR expert and lawyer Peter Vitale says Abbott’s political strategy to distance himself from WorkChoices while gradually moving back to confront the issue of IR at the urgings of the business community has been smart.

“I think he’s probably trying to position himself in a way which suggests he is basing his views on the evidence of the way the Fair Work system is operating.

“Politically, I don’t think he had a lot of choice in that sense.”

Vitale expects the Coalition’s new policy will attack “soft targets” first, such as unfair dismissal laws for small business, general protection laws and what can and cannot be introduced in an enterprise bargaining agreement.

“But I don’t think they’ll go as far as having a long list of prohibited content as WorkChoices did,” Vitale says.

But the biggest push will be around a re-introduction of individual workplace agreements.

Vitale says that under Fair Work, the “only avenue” to individual agreement making is an individual flexibility agreement under an award or an enterprise agreement.

But Vitale says the IFAs are not working.

“The difficulties’ are twofold,” he says.

“Firstly, they can be terminated unilaterally by the employee. There is a real disincentive to invest time and money when they can be terminated by the employee with a 28 day process.”

He says the second problem is that enterprise bargaining has meant unions have been able to “severely limit” the range of matters that IFAs can cover.

While the IFAs were designed to allow the employer and employee to come to an agreement over start and finish times, overtime rates, penalty rates, allowances and leave loadings, Vitale says unions have successfully pushed for the IFAs contained in enterprise agreements to have a much narrower scope.

“Typically you will find enterprise agreements limit what individual flexibility agreements can cover, sometimes to the extreme of saying the IFAs can only cover what time morning tea breaks can be taken,” Vitale says.

“I don’t see a lot of movement in the market towards those IFAs simply because the cost/benefit analysis doesn’t stack up.”