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Impact of Fair Work Act on Australian Workplaces - a practitioner ’ s perspective Peter Wilson AM National President, AHRI April 2011

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Impact of Fair Work Act on Australian Workplaces - a practitioner ’ s perspective Peter Wilson AM National President, AHRI April 2011. Background – the journey since 2007 …. Work Choices Survey - Aug 07 AHRI data 1000+ responses Law changed - follow up study deferred until 2010.

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slide1

Impact of Fair Work Act on

Australian Workplaces

- a practitioner’s perspective

Peter Wilson AM

National President, AHRI

April 2011

background the journey since 2007
Background – the journey since 2007 …

Work Choices Survey - Aug 07

AHRI data 1000+ responses

Law changed - follow up study deferred until 2010

background to ahri research
Background to AHRI research

AHRI focus – high performing & equitable workplaces

AHRI WorkChoices Survey– Aug 07 (1000 replies)

Survey results very critical – “costly bureaucratic monster”

“Made the job harder & political criticism much easier”

“A backward step from 1996 Reith Workplace laws”.

Fair Work Act introduced July 2009

Sept 2010 AHRI Fair Work Act survey (970 replies)

2007 & 2010 Surveys not strictly comparable – changed laws

today s economic environment
Today’s economic environment

Post-GFC recovery

No double-dip

Intense Global Competition post 2009

China / India / Aust: “up”

US, Europe: “sluggish”

$ appreciates - tougher competitive environment

Total factor productivity - flat / declining

TFP

$A

2010 ahri survey respondent profile
2010 AHRI Survey: respondent profile
  • 54% from private sector companies
  • 17% from publicly listed companies
  • 15% from government
  • 5% MD/CEO
  • 32% executive-level HR
  • 38% middle-level & operational HR

.

2010 ahri survey questions covered
2010 AHRI Survey questions covered -

1. Company & workforce profile

2. Fair Work Act & role as HR professional

3. Fair Work Act & organisation

4. Fair Work Act & employment contracts

5. Critical perspectives – from coal face of ‘implementation’

.

2010 key findings job complexity
2010 Key findings – job complexity

57% say FWA makes their job ‘more difficult’

66% say FWA requires ‘more time’ on IR issues

.

key findings formulating contracts
Key findings – formulating contracts
  • 68% FWA requires more time making employment contracts
  • 30% FWA will require more time making employment contracts in one year’s time
    • - but … 47% say ‘no change’ by then …

.

key findings legal advice
Key findings – legal advice

74% say FWA increases need for legal advice

40% expect FWA will require increased legal advice in one year’s time

- 41% expect ‘no change’

.

key findings workplace disputes
Key findings – workplace disputes

30% say managing workplace disputes is more difficult

54% say ‘no change’

25% expect managing workplace disputes will still be more difficult in one year’s time

55% expect ‘no change’

.

key findings cost of ir
Key findings – cost of IR

53% dealing with IR costs more

- 35% say ‘no change’

37% expect will cost more to deal with IR in a year’s time

- 43% expect ‘no change’

.

key findings pay and penalty rates
Key findings – pay and penalty rates

31% say overall remuneration has increased

66% say ‘no change’

25% say penalty rates for overtime have increased

71% say ‘no change’

.

key findings carers leave
Key findings – carers’ leave

20% say carers’ leave days allowed have increased

76% say ‘no change’

Most acknowledge change is

because of competition for

talent – not the FWA laws

.

key findings union involvement
Key findings – union involvement

27% say union involvement in bargaining has increased

69% say ‘no change’

26% union involvement in settling disputes has increased

69% say ‘no change’

.

key findings union visits disputes
Key findings – union visits & disputes

29% say union visits to work sites have increased

23% say industrial disputes have increased

.

key findings productivity
Key findings – productivity

13% say productivity has decreased

78% say ‘no change’

58% say record keeping has increased

39% say ‘no change’

.

key findings jobs productivity 2013
Key findings – jobs & productivity - 2013

Dual ‘sting in the tail’results:

37%say FW Act will materially diminish business willingness to employ people 2011-13

53%say FW Act will cause negative impact on productivity growth 2011-13

.

key findings unfair dismissal
Key findings – unfair dismissal

16% say new UD rules have increased the number of claims

72% say ‘no change’

26% say new UD rules make redundancies harder

65% say ‘no change’

Note – AHRI survey of companies primarily above 100 employees – i.e. not SMEs

.

key findings flexible arrangements
Key findings – flexible arrangements

83% say coy has adopted ‘flexible working arrangements’

14% say their organisation has not

Most requested are:

- working from home

- flexible start & finish times

- part-time work

“Most acknowledged need to do this – due to war for talent”

.

key findings transfer of business
Key findings – transfer of business

41%say impact negative or very negative

Sample respondent views:

“increased the need for legal advice”

“Staff transferring bring industrial instruments coy doesnt want”

“Made sale difficult … buyer reluctant to take the staff on”

“anti-employment provision”

“Employees feel comfortable that they are not losing anything”

.

key findings most significant fwa changes
Key findings – most significant FWA changes

Sample respondent views:

- “Additional training needed - business awareness of entitlements”

- “Adverse action provisions” (expect these will be invoked more)

- “Providing unions with ‘default’ bargaining status”

- “Document everything so disputes can be settled based on actual fact”

- “First line leaders must have employee relations capability”

.

key findings expected effects of fwa
Key findings - expected effects of FWA
  • Sample respondent views:
  • “bogged down in disputes with adversarial unions”
  • “Increased compliance costs”
  • “More open-minded about flexibility requests”
  • “Increased costs doing business; no increase prod’ty

.

updates current senior exec hr views
Updates - Current Senior Exec HR views
  • Transfer of Business (Restructurings / Acquisitions):
    • “businesses forced to acquire a mosaic of EBAs & employment rules and regulations”
    • “doing little more than providing a decoration around increasing bureaucracy and declining productivity, with major anomalies to employment creation”.
    • “Simple ‘no disadvantage test’ for critical minimum benefits should be all that’s required to protect workplace equity for employees transferred in restructurings”
    • “Risk of another AMCOR case”

.

updates current senior executive hr views
Updates - Current Senior Executive HR views
  • Bargaining & Agreement making
    • “As Prof Ron MacCallum recently noted – reaching useful end of common law to supervise bargaining outcomes”.
    • “Having inconsistent results emanate from the ‘luck of the draw’ on who you get from the FWA bench must end”.
    • “Must move to a system of minimum standards”
    • “FWA to convene as full bench to define decisions on majority basis, to eliminate current risk of rogue outcomes”.
    • “Give FWA discretion to approve agreements if fair and reasonable to do so, despite non-compliance with pre-approval steps or procedural requirements - amend s 188”

.

updates current senior executive hr views1
Updates - Current Senior Executive HR views
  • “JJR v TWU decision - effect of FWA Full Bench decision is protected action ballot can occur before bargaining is formally initiated”.
  • “The new FWA sees effective end of non-union agreements & individual contracts for non executives”.
  • “Right of Entry – this has become an open access freeway and many instances where it stopped production dead, for no genuine economic reason”.

.

slide27
Next AHRI FW Act Survey – late 2011
  • AHRI - SHRM 2011 partnership
    • “Global Index of Workplace Performance & Flexibility”
    • 50 countries ranked overall by EIU
  • Beyond FWA & Workchoices … a “new way” for fairer & higher performing workplaces?
slide28
AHRI 2011

“HR with Impact”

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