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Productivity Commission’s workplace relations final report released

December 22, 2015

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Over the past year, the Productivity Commission, which is an independent research body, has been developing recommendations to improve Australia’s workplace relations. Yesterday, it released its final two volume report, bringing with it a wave of potential changes.

This report generally commends our current workplace relations system, and only proposes minor amendments. The Commission is generally supportive of ideas which reduce confusion, allowing employers and employees to navigate the system easier.

Penalty rates

One of the most controversial recommendations, which you may have heard of, are the proposals about penalty rates. The Commission has suggested that as Sundays are losing their social and religious significance, and that some industries rely heavily on weekend shifts, that Sunday penalty rates should be abolished. Instead, a single penalty rate would apply for the whole weekend, matching the current Saturday rate. This would only apply to the hospitality, entertainment, retailing, restaurant and café sectors, so other industries would keep their current weekend penalty rates.

Enterprise contracts

Perhaps the most significant change suggested is a recommendation to introduce a new form of employment agreement known as “enterprise contracts”. They would be a mixture of Enterprise Agreements and Individual Flexibility Agreements, allowing you to vary Award terms for entire groups or classes of employees, without having to individually negotiate new agreements or go through the lengthy and expensive Enterprise Bargaining process.

Other recommendations

The report, which is over 1,000 pages long, deals with various workplace relations issues. Some of the other key recommendations include:

  • Making Awards easier to read and understand, and reviewing them whenever problems are identified
  • Modifying the National Employment Standards so employers would not have to pay penalty rates for “new” public holidays
  • Removing the Small Business Fair Dismissal Code
  • Changing the “Better Off Overall Test” into a “No-Disadvantage Test”
  • Relaxing procedural requirements to avoid unjust results from tiny procedural errors
  • Allowing employers to take retaliatory industrial action which is proportionate to the action of the employees
  • Increasing penalties for various breaches of legislation including sham contracting, exploitation of migrant workers and unlawful industrial action

So what does this mean for me?

Don’t panic – nothing has happened yet. These recommendations are only suggestions which means nothing has actually changed, so you don’t need to do anything but be prepared for when it does happen.

The Government will decide whether to follow the Commission’s recommendations, and this may take some time. Keep an eye out, and we will update you about any major changes you need to know about.

For more information on the recommendations and what this means for you, clients should contact the HR Assured team. If you’d like more information about the benefits of becoming an HR Assured client contact us today for an informal chat.