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Review of the Fair Work legislation – Post-implementation Review – Department of Education, Employment and Workplace Relations

Commencing in 2008, the Government made substantial changes to workplace relations laws. These changes were implemented in the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 and the Fair Work Act 2009. Regulation Impact Statements (RIS) were required for the decisions to introduce the Fair Work Bill 2008 and the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 but were not prepared. However, the then Prime Minister granted an exemption from the RIS requirements based on exceptional circumstances. As a result, a Post-implementation Review (PIR) was required to commence within one to two years of the implementation of the regulation, in line with the Government’s best practice regulation requirements. On 20 December 2011, the Government announced a review of the Fair Work Act 2009 and the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 that would be undertaken by a Review Panel. The Terms of Reference for the Review included that the report would be submitted as a PIR to the Office of Best Practice Regulation for assessment against the best practice regulation requirements.

The PIR provides an overview of the:

  • macroeconomic impacts of the Fair Work legislation;
  • adequacy of the safety net provisions;
  • changes to enterprise bargaining and agreement making;
  • conduct of protected industrial action;
  • rights of employees to be represented in the workplace;
  • protection of employee entitlements upon transfer of business;
  • level of access to unfair dismissal rights;
  • general protections against discrimination and unfair treatment; and
  • operation of Fair Work Australia and the Fair Work Ombudsman.

The PIR makes a number of conclusions on the operation of the Fair Work legislation since it came into force. The panel also makes 53 recommendations on areas where they consider the Fair Work legislation could be improved or may not be operating as intended. Some of the most important recommendations are intended to encourage improvements in productivity, and others to enhance equity in the workplace. Many other recommendations are intended to correct anomalies that have been revealed in the operation of the Fair Work Act, or to remove defects in the machinery of the legislation. The PIR concludes that since the modern industrial relations architecture came into force in the early 1990s, important outcomes such as wages growth, industrial disputes, the responsiveness of wages to supply and demand, the rate of growth of employment and the flexibility of work patterns have been favourable to Australia’s continuing prosperity. However, productivity growth has been disappointing in the Fair Work Act framework and in the two preceding frameworks over the last decade. The Panel did however find that there was no convincing evidence that the Fair Work Act impedes productivity growth. Some of the key conclusions on the operation of the Fair Work Act that were drawn out are that:

  • the safety net provisions established a more comprehensive safety net of employment terms and conditions with some minor recommendations made including extending the right to seek flexible work arrangements to a wider range of caring and other circumstances;
  • the provisions on Individual Flexibility Arrangements in enterprise agreements should be amended to improve their uptake;
  • the good faith bargaining provisions are operating as intended with some minor recommendations made;
  • the role of Fair Work Australia and the Fair Work Ombudsman should be extended to include the active encouragement of more productive workplaces;
  • the provisions enabling greenfields agreements were likely resulting in increased costs for some employers and greater project uncertainty, as such, recommendations were made to apply good faith bargaining requirements to greenfields negotiations and to provide for arbitration in certain circumstances;
  • the operation of certain sections relating to protected industrial action should be clarified;
  • Fair Work Australia should be given greater power to equitably resolve disputes over the right of union officials to make workplace visits;
  • the Fair Work Act succeeds in providing better protection of employee entitlements upon transfer of business. However, some recommendations have been made to clarify voluntary employee transfers;
  • there has been an estimated increase in the number of employees covered by unfair dismissal protections with several recommendations made to improve the operation of the provisions;
  • the Fair Work Act contains sufficient protections against unfair treatment in the workplace but recommendations are included due to uncertainty about the application of the provisions against discrimination and unfair treatment; and
  • the processes of Fair Work Australia are more efficient but some minor recommendations are made to improve the operation of the tribunal.

The Office of Best Practice Regulation assessed the PIR report as meeting the Government’s best practice regulation requirements.