Business Council Of Australia’s Proposed Changes To IR

The Business Council of Australia has released a report looking at Australia’s competitiveness. This report traverses, amongst others things, the topic of workplace relations.

The report titled “Building Australia’s Comparative Advantages” has identified particular industries that the Council believes are constrained in Australia due to the industrial relations system. These include:

  1. The mining and energy industry- the Council states that industrial instruments in this industry do not allow employers to control costs and timing risks; and
  2. The retail industry- the Council says that this industry is unable to change work practices in an innovative manner.

More broadly the report sets out that all sectors are limited from restructuring to lower their costs and move to new operations due to the industrial relations system. Further, it highlights that the current framework is resource intensive for all sectors within Australia.

The Council has suggested some short-term and medium-term recommendations to improve the labour market within Australia and therefore, improve Australia’s comparative advantages.

The short-term recommendations include:

  • Amending the Fair Work Act to reduce the range of matters that can be bargained over and restricting this to issues that truly relate to employment relations;
  • Amending the Fair Work Act, so that Greenfields Agreements can be initiated by employers only;
  • A new type of industrial instrument called ‘Major Projects Agreement’, which will allow coverage of new large capital projects; and
  • Amendment of the span of hours and associated pay rates within the retail and hospitality industries.

The medium-term recommendations include;

  • An enterprise focus for industrial instruments;
  • A focus of governance over regulations;
  • A focus solely on employment relations;
  • A system that is protective of employee rights and the safety net; and
  • A system that is responsive to the changes in the economy.