CHALLENGES FOR NATIONAL

SYSTEM EMPLOYERS 2014

MATTHEW ROBINSON

PARTNER & SOLICITOR, FCB WORKPLACE LAW

IR LANDSCAPE & PERSPECTIVE

▶ There are no major economic, political or global military crisis effecting the state

of the labour market

▶ Australian GDP has been grown year on year since 1993 unemployment has

been relatively steady

▶ Entire generation of the workforce has little or no regard for IR as an important

social and economic safety net

▶ Discussions surrounding IR, particularly “challenges for employers” needs to be

put into perspective- beware of alarmist claims

CHALLENGES FOR EMPLOYERS- MACRO CONTEXT

IR LANDSCAPE & PERSPECTIVE

▶ There is a growing division within the workforce between skilled and unskilled

sectors.

▶ Skilled workforces tend to be higher paid, higher job portability and lesser

reliance on industrial relations safety net issues- unfair dismissal aside.

▶ Whereas the unskilled to semi skilled workforces tend to have low paying jobs,

low job portability, are more vulnerable to employer IR non compliances and

heavily rely on the industrial relations safety net.

▶ Again caution needs to be exercised when heeding calls for nationwide

changes due to the disparate impacts on the workforces of various industries

MULTI-SPEED LABOUR MARKET

KEY CHALLENGES FOR EMPLOYERS

▶ Greater understanding of Awards and Engagement models

▶ Enterprise Agreement complexities & Bargaining that links productivity gains

▶ Resourcing Human Resourcing

▶ Individual Flexibility Agreements

▶ Redundancy consultation and redeployment

▶ Bullying

▶ Penalty Rates

▶ Legislative opportunities:

• JJ Richards pre bargaining strike to go

• Employer Greenfields unplugged

• Annual leave termination payment clarity

FOCAL POINTS

KEY CHALLENGES FOR EMPLOYERS

▶ FWC did a great job in modernising Awards- we’ve just finished transitioning and already

begun the 4 years review

▶ Need to keep abreast of changes in Awards- general compliance and BOOT

considerations

• Annual leave;

• Flexibility/facilitative provisions

• Casual & part time employment – inhibiting part time engagement

• Public holidays

• Transitional/sunsetting- redundancy, accident pay, district allowances

▶ Award governance model is exposing non compliance risks due to evolving concept of a

“workplace”:

• Rise of smart phone- Overtime? Return to duty?

• “salary” packing- Poletti & Ecob

• IR audit- do line managers understand the industrial obligations?

AWARD RED TAPE

KEY CHALLENGES FOR EMPLOYERS

▶ Enterprise Agreements emerged in the early 1990s as a basis to bolster productivity

improvements against wage increases- this is seldom the underlying motive today

▶ Enterprise Agreements should be a part of the overall industrial relations strategy- it

should align to business strategy and drive a productive & engaged workforce

▶ Re evaluate the bargaining dynamic:

• Bargaining Team training,

• Research industry best practice- national & international

• Call on advisers/consultants

• Encourage creative thought- innovation doesn’t arise from doing things exactly the

same

▶ Develop a clear communication strategy for the process- how and when are employees

going to be informed of bargaining updates?

▶ Thorough planning is essential including financial modelling & productivity forecasting-

without a clear plan how do you know what success looks like?

ENTERPRISE AGREEMENTS & BARGAINING

KEY CHALLENGES FOR EMPLOYERS

▶ Enterprise Agreement making has become increasingly complex and rule driven:

• Details to be sent to employees to start bargaining- no staples!

• Details to be sent for ready access- don’t tell them how to vote!

• Matters pertaining & Building Code Compliance

• BOOT to assess hypothetical employees

▶ Newly released draft Enterprise Bargaining Benchbook- only 185 pages

▶ We’re seeing inconsistency in FWC approvals- hold ups and requests for undertaking-

run an issue to the Full Bench or yield

▶ Inconsistency is leading to forum shopping- lodge approval forms in alternative cities

▶ Complexity is inhibiting uptake by SMEs and draining HR team resourcing

ENTERPRISE AGREEMENTS & BARGAINING

KEY CHALLENGES FOR EMPLOYERS

▶ They are an under utilised instrument due to limitations on when they can be made and

their duration- moved from 28 days to 13 weeks under Modern Awards

▶ The Fair Work Amendment Bill 2014 proposes significant changes:

• Inclusion of an employee genuine needs statement

• Termination under Enterprise agreements extended to 13 weeks

• Legislative notes on how to satisfy the BOOT- includes non monetary benefits- pizza

in lieu of penalty rates

• Defence for employers where BOOT fails and employer believed they “complied

with the requirements, based on the facts and circumstances…at the time of making

the IFA..and was reasonable”

▶ They are unregistered instruments so record keeping is essential

▶ Employers need to exercise caution in using them as a predominant engagement model-

they are not AWAs nor are they pseudo employment contracts

INDIVIDUAL FLEXIBILITY AGREEMENTS

KEY CHALLENGES FOR EMPLOYERS

▶ UFD definition of genuine redundancy requires the exploration of redeployment options

within the company but also associated entities

“Unless there was evidence that some other factor(s) operated so as to render the

employer's failure to redeploy as a reasonable action, the dismissal would be both a

case of non-genuine redundancy and a dismissal that was unreasonable”

▶ In decentralised corporate groups meeting redeployment obligations can be quite

resource intensive and onerous:

• Identify vacancies within the group structure, liaise with alternative HR/recruitment

teams to halt external recruitment- consider Ulan Mines

• Put vacancies to employees facing redundancy & facilitate applications, interviews,

offers and transfers

▶ Consider the time scale for this- where possible use notice period & gardening leave

▶ Consider opt out options- additional severance, acknowledgement that employee is not

willing to relocate

REDUNDANCY & REDEPLOYMENT

KEY CHALLENGES FOR EMPLOYERS

▶ HR Teams have continued to be understaffed since the GFC

▶ The cost cutting measures post GFC have unfortunately coincided with some of the most

technical legal changes in IR in more than 20 years

▶ HR teams are being consumed with employment triage & fire fighting

▶ Not enough resourcing is being provided for medium/long term business success:

• Development and execution of HR strategic plans;

• Talent attraction and development;

▶ Union movement is equally impacted due to declining union membership- placed greater

emphasis on site delegates and hindered constructive dialogue with over stretched

officials

RESOURCING HUMAN RESOURCES

KEY CHALLENGES FOR EMPLOYERS

▶ New bullying laws now allow a worker to apply to the FWC for orders to stop the bullying.

▶ Laws have driven substantial business uptake in investigations and grievance training.

▶ Big uptake by employees using it as a shield against disciplinary action

• follow the process but be flexible- you don’t need a formal investigation all the time

• Isolate/segregate the decision maker of bullying & disciplinary claims; and

• don’t be fearful of “reasonable management action”

BULLYING JURISDICTION

PENALTY RATE PROTECTION IN MODERN AWARDS

▶ Under s134(1)(da) the FWC must now specifically consider providing remuneration to

employees working:

• Overtime

• Unsocial, irregular or unpredictable hours

• Weekends or public holidays

• Shifts when making or amending a modern award.

• Do not anticipate any rapid alteration to this position- lack of political will at present and

highly unlikely to be lead by “interventionist” FWC

▶ Proposes amendments to the Fair Work Act 2009 including:

• Freeing up Greenfields impasses- curious FWC test- consistent with

prevailing pay and conditions within the industry;

• Winding back the ALP's right of entry changes;

• Requiring bargaining before protected action- JJ Richards to go; and

• Clarification of annual leave termination payments

WHAT’S AHEAD IN 2014

FAIR WORK AMENDMENT BILL 2014

MATTHEW ROBINSON

Presented on 8 October 2014

Presented by

PARTNER & SOLICITOR, FCB WORKPLACE LAW