Can the Senate Save Incompetent IR Practitioners?
17 September 2015
It would appear that Eric Abetz has had some success in convincing the Senate crossbench to accept parts of the Fair Work Amendment Bill 2014, passed by the lower house in August 2014. In particular, the proposed revamp of greenfields agreements has been reported as accepted on 17 September 2015. The Bill proposes that the good faith bargaining provisions (S.228) be applied to greenfields negotiations; and more importantly, that an employer can refer a proposed greenfields agreement to FWC if a satisfactory conclusion is not reached after three months. Provided that the proposed new agreement “considered on an overall basis, provides for pay and conditions that are consistent with the prevailing pay and conditions within the relevant industry for equivalent work” the agreement will be approved.
Greenfield agreements are dominated by the construction industry – to what degree will the proposed changes assist in reducing the Australian construction industry’s abysmal labour productivity performance and reduce our construction costs – currently the highest in the world? Unfortunately one has to conclude that the proposed amendments will be no substitute for competent IR management. For example, ‘prevailing pay and conditions’ in the WA LNG construction sector will be the recent Gorgon settlement (September 2015) – so any employer who wants to significantly depart from those conditions will not be able to use the three month window and then have FWC approve something that departs from those conditions. The 23/10 roster, ‘bed bust’ payments, and overall wage rates that are completely disconnected from the market will remain in place (Refer FWC PR571540). Let’s not even contemplate the ‘prevailing pay and conditions’ in the offshore oil and gas sector.
An astute employer does not go cap in hand to the union and simply ask for a greenfields agreement without any additional leverage – all that results in is the last deal plus whatever the union (and in some cases the relevant employer association) can dream up. Rather, one goes to the union armed with a credible alternative mobilisation strategy and says very clearly to the union “if you want to be part of the project, then these are the conditions we require”. A case in point is Melbourne’s EastLink Project – completed 5 months ahead of schedule in June 2008 with the elimination of all of the restrictive work practices that had characterised civil construction in Victoria until that date. The unions agreed to major improvements in productivity because that was the price of participation.
Effective industrial relations management is not dependent on the legal framework or legislative rescue packages. Strategic industrial relations management must transcend the limitations of the legislation and deliver effective, productive and commercial outcomes to employers. Unfortunately these are skills that appear to be in very short supply.
Stephen Sasse – Stephen.email@example.com
Read his A&A bio here
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