Strengths and Weaknesses of the Fair Work Act 2009 - Essay Example

Strengths and Weaknesses of Fair Work Act 2009 Name of the Student: Name of the Instructor: Name of the course: Code of the course: Submission date: Introduction The lead up to the Fair Work Act 2009 in Australia was quite a challenging and politically intense moment. In 2005, the Howard government made amendments to the Workplace Relations Act 1996 in the now infamous Workplace Relations Amendment (Work Choices) Act 2005. The amendment was done hurriedly the Howard administration and it highly favoured the businesspersons and employers through abolition of unfair dismissal and wage restrictions. According to the administration, this was supposed to be an economic incentive to encourage more investments and create more job opportunities. However, it oppressed the employees and led to an aggressive campaign against the Act by Australian Council of Trade Unions (ACTU). These led to labour reforms after the Rudd administration enacted and implemented the Fair Work Act 2009 to replace the Workplace Relations (Work Choices) Act 2005 (Jennifer & Linda, 2010, p. 155). The Fair Work Act introduced the Fair Work Australia institution that replaced former agencies and tribunals, National Employment Standards (NES) that laid the minimum conditions for all employees, an award system commonly referred to as the safety net for employees, good-faith bargaining requirements for unions, re-introduced the unfair dismissal clause, among other specific requirements (Stewart, 2009). It generally increased protection for the Australian employees against unfair practices by their employers. It was considered a fair improvement to the preceding Act however; it still has its share of limitations. This paper will discuss the strengths and weaknesses of the Fair Work Act 2009. Strengths The Fair work Act 2009 introduced the National Employment Standards (NES). These standards provided a work-balance for the employees. It was an improvement from the Work Choices Act that previously required employees to work extra hard for fair wages failure to which the employer would just terminate their employment lawfully. (s 62) lays out the maximum weekly hours and employees are empowered to refuse additional working hours as per the family commitments, health and safety requirements, remuneration, industry working patterns and work hour agreements (Jennifer & Linda, 2010, p. 161). Moreover, the employees can request flexible working hours if the current provided for are not conducive (s 65 and s 66). Employers on the other hand are limited in their reasons to limit such requests. It is expected that this provision will make the employees loyal and reduce the turnover rate thus beneficial to both parties. The right to request flexible working arrangements for employees with under school-age children previously provided for in the former Act was expanded to include children with disabilities up to 18 years (s 65 (1)) (Jeniffer & Linda, 2010, p. 162). (s 81) also gives female employees the right to transfer to another job if the current one has greater risks or hazards without loss of conditions with an exception of six weeks prior to child birth (Jeniffer & Linda, 2010, p. 164). (ss 96, 102) employees are entitled to paid personal or carer’s leave of 10 days and an additional two days unpaid leave. The leave days are accruable for use in times of personal need such as illness or household member care. It also provides for two days compassionate leave if bereaved or a family member is injured. The Act provides minimum wage requirements across all economic sectors. The Minimum Wage Panel of Fair Work Australia was given the mandate to set these requirements and was very fair in listening to all stakeholders. It considered employment growth, productivity, and needs of the low paid workers, business competitiveness, and other social inclusion. Therefore, it was fair for the employees as well as the employers. The minimum wage for an adult is $5 per hour for a 38-hour week standard or $569.90 per week (Healy, 2010, p. 306). The Act also gives provision for annual wage review under (s 284) and (s 134) allows collective bargaining and use of more efficient and productive work practices (Healy, 2010, p. 307). This means that the minimum wage will be subject to changes in consumer price index, social welfare requirements, and economic environment. Therefore, the employees are protected from economic changes beyond their level of influence. In addition, the Minimum Wage panel is open to contributions from interested stakeholders for relevant amendments. (ss 342, 351) of the Fair Work act provide protection from discrimination for employees at the workplace. Previously, the ant-discrimination law was absent in industrial law and aggrieved employees would only seek judicial action. This was quite limiting because the courts may not be able to look into industrial matters with keen because of their general work. It consolidated unlawful termination and anti-union victimisation (Rice & Roles, 2010, p. 14). It currently offers simple laws that are easy to understand under adverse action unlike the previous anti-discrimination laws. The new coverage also broadens the extent of employee grievances therefore giving them security of employment. (s 351) discrimination includes religion, race, carer or family responsibility, colour, sexual preference, pregnancy, mental or physical disability, political affiliation, social or national origin, and marital status (Rice & Roles, 2010, p. 18). (s 595) establishes the Fair Work Australia mandate to resolve general disputes arising at the workplace as authorised under legislation provisions. Such disputes include union right of entry in workplaces, general protections, and collective bargaining (Forsyth, 2012, p. 479). It handles collective bargaining complaints after mutual consent of the aggrieved parties but can handle union’s right of entry despite one party disagreeing. It can also request attendance of either party or witnesses during the proceedings and their provision of any relevant documents. The Act also requires enterprise agreements and modern awards to include dispute resolution arrangements. Any disputes arising can be referred to Fair Work Australia for arbitration. However, employers are required to comply with dispute resolution as outlined in the awards or agreements failure to which they can be subject to civil liability, injunction, or damages to the employee for breach of agreement or award. This implies that Fair Work Australia should be the last resort (Forsyth, 2012, p. 480). This is consistent with the agency theory that advocates for a contract between the principle (employer) and the agent (employee) to solve amicably disputes that may arise in the course of duty. This is a win for the employees as well. In Re Woolworths Ltd trading as Produce and Recycling Distribution Centre, the FWA bench ruled that enterprise agreements should not be the final resort for disputes resolution (Forsyth, 2010, p. 482). This followed an earlier refusal by a commissioner to approve an enterprise agreement that allowed either party to exercise dispute settlement claim irrespective of the other’s consent. The Act gives Fair Work Australia the right to arbitrate over unfair dismissal cases. Unlike the Work Choices that required a conciliation conference and arbitration hearing method, the new Act uses the inquisitorial approach (Forsyth, 2010, p. 482). This was after both employers and employees had complained about the high costs and time consumption that the former method used. It also introduced telephone conciliation to cut on the costs. The Fair Work Ombudsman annual report findings show that the method had a 75% success rate of the 80% dispute cases it handled for the initial nine months since inception (Wilson, 2010, p. 13). This was contrary to earlier complaints that it erased the richness of face-face interactions. In addition, the Act expounds on the disability discrimination law an improvement from the earlier legislation. As protection, part 3-1 states that an employee must have a workplace right, that a prospective employee has the same rights as the current employee, the employee must have suffered adverse action following the discrimination act and related to the employees right (Harpur, French, & Bales, 2012, p. 198). The workplace right covers all persons with disability as long as they are employed and is inclusive of commonwealth, state, territory, and federal statutes on definitions of disability. Adverse action implies any negative act such as injury inclusive of unquantifiable acts and the aggrieved employee is exempt from proving compensable harm caused. The employee only needs to prove that he or she exercised their workplace right and consequently suffered adversely. It removes the burden of proof for employees that the earlier Act required (Harpur, French, & Bales, 2012, p. 203). Weaknesses The Fair Work Act provides for redundancy payment however, it exempts small business owners. Redundancy is the payment given to an employee after termination because the employer has gone bankrupt, the employees work is replaced by new technology with better efficiency, the business is relocated, merged, acquired, or restructured. Employees of small businesses are entitled to the same tax rates as those of big businesses and companies meaning their little wages reduce further. When you add family obligations, they have barely any money left for savings. Therefore, it is quite unfair that they do not receive redundancy pay after employment termination. They have little to fall back on and many such workers feel discriminated against (Zhang, 2010, p. 73). Although the Act has greatly improved the working conditions of employees, the provisions are too many for the regular employee to comprehend. The government should provide thorough education on the Act failure to which the employees will remain in the dark. The employers who are more knowledgeable and have access to lawyers to explain the Act may take advantage of the employees’ innocence. The reason as to why the campaign against Work Choices Amendment Act 2005 was successful is that the public was informed especially through the media. Education should also include the functions of unions and the Fair Work Ombudsman office irrespective of union membership (Zhang, 2010, p. 71). The right to strike in the Act is very limited. The Act under (s 409 (1)) and (s 410 (1)) states that industrial action is only permissible in favour of enterprise level bargaining and restricts protected industrial action favouring multi-enterprise agreements. Anderson 1997 in McCrystal (2010, p. 48) posits that enterprise bargaining for small business entities is costly to organise and even more costly to negotiate for better terms and conditions. Therefore, small entities are not favoured through union representation. The employees are reduced to reliance on the safety net in award system. This is still the law that was in force in 1993 and therefore no improvement. Fair Work Australia also holds the right to terminate or suspend an industrial action if it deemed the action detrimental to either party’s economic state (s 423) (McCrystal, 2010, p.45). This provision undermines the right to collective action, as any industrial must have economic damage because of work stalling. It also undermines the level at which unions and their members can use industrial action and the reasons for the action. (s 172 (1)) expounds the ‘genuinely pertains’ requirement that currently includes the employer-employee and union-employer relationship. This requirement has been there since 1993 and in the period has proved difficult to implement because it has no constitutional rationale and expansion only complicates matters further (McCrystal, 2010, p.46). (s 409 (2)) requires the parties calling for collective action to have a compulsory ballot that shows both the parties are doing their best in finding an agreement. This requirement makes it extremely difficult for a strike to be called and the negotiations may take a long time during which the aggrieved employees would still be in distress. In addition, protected action advocated for in the Act is that of good faith. Acting in good faith requires a cultural change that may not be enforceable in the near future. Zhang (2010, p. 70) reveals the plight of migrant workers who lost their job after refusing to work at their bosses home, work beyond their job description. Others were sacked and some cut their wages after a sports clothing factory was acquired. The restriction of union’s powers is contrary to the International Labour Organisation (ILO) that requires member states to allow their unions and employees a right to strike yet Australia is a member state (McCrystal, 2010, p. 37). The Act gives right of union workers to visit the employees’ workplace. However, this provision is only limited to a union’s employees. Therefore, for the non-union workers, they are left to rely on the government inspectorate. According to the Asian Women at Work, a community based labour organisation, migrant workers fear joining unions for because they will lose their jobs. Some have complained that the bosses treat the union’s local workers harshly, and they it could be worse for them as migrants. Moreover, both the government inspectorate and the union only inspect the records of workers after filing a complaint. Many employees still live in fear of job termination after filing such complains and therefore most still suffer even after the provision. The Act also requires the government inspectorate or union to give the employer prior notice of inspection. Consequently, the employers improve the complainant’s condition or hide some evidence before the due date. The Act should have given the bodies the right to inspect randomly such as in the Textile, Clothing, and Footwear Union (Zhang, 2010, p. 73). (s. 70) the NES provide for unpaid parental leave for birth or adoption of a child for a period of 12 months (Jeniffer & Linda, 2010, p. 163). The employees can further apply for a further 12 months extension. However, the Act does not mandate the employer to discuss such a request with the employee thereby giving the employer a right to deny or accept the request. The unpaid parental leave is also too much and at least 12 months paid leave would be considerate for nursing mothers. It also gives room for removal of pre-existing paid parental leave in enterprise agreements. The Green particularly campaigned against this provision but the government remained adamant. They were successful later in 2011 when the government allowed paid leave for nursing mother for 18 weeks. This is still short of the 12 months they bargained for. The new provision also excludes paternal leave. Furthermore, the qualifying period for unpaid parental leave is 52 weeks that most employees feel is a long time. In the UK where Australia borrows most of its laws is 26 weeks. (s 80) denies the an employee from taking paid personal or carer’s leave or compassionate leave while on an unpaid parental leave (Jeniffer & Linda, 2010, p. 164). Conclusion The Fair Work Act was a relief for the employees after the Workplace Relations Amendment (Work Choices) Act 2005 greatly undermined their rights. The Act has improved the conditions of disabled employees’ condition, and general discrimination, lessened the burden of conflict resolution, set minimum conditions for all employees, and made it difficult for unfair dismissal. However, the Act has several weaknesses. The major one is the limitation of union’s power to call a strike a contrast to the ILO requirements to which the government is a member. The redundancy payment is also discriminatory in that it does not cover small businesses. It also fails to provide substantial paid parental leave, which is hurting for low paid workers, and fails to give education on the Act. In addition, it needs to reform the union’s right of entry to encompass random visits. References Forsyth, A 2012, ‘Workplace conflict resolution in Australia: the dominance of the public dispute resolution framework and the limited role of ADR’, The International Journal of Human Resource Management, vol. 23, no. 3, pp. 476-494. Harpur, French, & Bales 2012, ‘Australia's fair work act and the transformation of workplace disability discrimination law’, Wisconsin International Law Journal, vol. 30, no.1, pp. 190-228. Healy, J 2010, ‘Fair Work Australia’s first minimum mage decision: context, impact and future’, ABL, vol. 36, no. 3, pp. 306-313. Jennifer, W, & Linda, C 2010, ‘The work-life provisions of the Fair Work Act: a compromise of stakeholder preference’, Australian Bulletin of Labour, vol. 36, no. 2, pp. 154-177. McCrystal, S 2010, ‘Protected industrial action and voluntary collective bargaining under the Fair Work Act 2009’, The Economic and Labour relations Review, vol. 21, no. 1, pp. 37-52. Rice, S, & Roles, C 2010, ‘It’s a discrimination law Julia But not as we know it’: part 3-1 of the Fair Work Act’, The Economic and Labour Relations Review,vol. 21, no. 1, pp.13-36. Stewart, A 2009, Preparing for the Fair Work Act, Workplace Insight, viewed 12 August 2013, < http://sites.thomsonreuters.com.au/workplace/2009/04/02/preparing-for-the-fair-work-act/>. Wilson, N 2010, Fair Work Ombudsman annual report 2009-10, Fair Work Ombudsman, viewed 13 August 2013, < http://www.fairwork.gov.au/Publications/Annual%20report/Fair-Work-Ombudsman-Annual-Report-2009-10.pdf>. Zhang, A 2010, ‘Will the Fair Work Act bring improvements for migrant women workers?’, The Economic and Labour Relations Review, Vol. 21, No. 1, pp.69–74. Read More