Strong Case for Fair Work Act

The clamour is growing louder from business organisations and the Liberal Party to roll back key elements of the Fair Work Act. On the Act’s second anniversary, The Lamp looks at the track record of the Federal Government?s key IR legislation.

The employer lobby, backed by key Liberal luminaries past and present such as Tony Abbott, Peter Reith and John Howard, claims that the Fair Work Act has had a negative impact on productivity and the economy in general.

The facts suggest otherwise. The Australian economy proved its robust nature during the Global Financial Crisis and ever since, jobs, wages, profits and productivity are up:

  • Half a million new jobs have been created since the introduction of the Fair Work Act;
  • Wage growth has been solid with little impact on inflation;
  • Productivity is at 1.8%, unchanged from figures prior to the introduction of the Fair Work Act.

The Fair Work Act restored rights for millions of Australian workers by:

  • abolishing AWA individual agreements;
  • creating a strong safety net through the National Employment Standards;
  • establishing collective bargaining rights;
  • establishing protection from unfair dismissal;
  • maintaining a genuinely independent umpire.

Under WorkChoices, the vast majority of AWAs (89%) removed basic Award conditions such as penalty rates, annual leave loading and public holiday pay.

The Fair Work Act protects the rights to overtime, penalty rates, public holiday pay and redundancy.

Under WorkChoices, minimum wages declined in real terms by up to $84 a week. The Howard Government’s Pay Commission even imposed a wage freeze on low-paid workers in 2009.

This year, workers on minimum wages received a 3.4% pay increase.

Under the Fair Work Act, six million workers now have unfair dismissal protection. Unfair dismissals account for only 1% of all dismissals across the workforce, contradicting employer claims that the system is prone to abuse.

The Fair Work Act has strengthened women’s rights at work. Paid parental leave is now available to all working parents, including part-time and casual employees, providing 18 weeks’ government-funded payment at the federal minimum wage.

The Fair Work Act has allowed Australian unions to run a national equal pay case for workers in social and community services.

Since the Act was introduced more workers are covered under collective agreements than before: 43.4% of all employees. Despite the shrill cries by employers to the contrary, there has been a reduction in the number of days lost to industrial disputes since the Fair Work Act took effect.

Liberals target Fair Work Act

The Fair Work Act replaced WorkChoices, which was resoundingly rejected by Australian voters at the 2007 election.

The federal and state Liberal parties conspicuously distance themselves from any association with WorkChoices around election time, but the O’Farrell Government has shown no such reluctance to roll back workers’ rights once in power.

Prominent Liberals and business groups are now openly advocating the roll back of workers rights’ enshrined in the Fair Work Act.

John Howard told the ABC’s 7.30 Report that ‘at some point this country has to wind back the re-regulation of the labour market’.

Tony Abbott endorsed John Howard’s remarks on Melbourne’s Radio 3AW. ‘Essentially he is right. I think there is no doubt that the Fair Work legislation took the pendulum from one side and swung it right back to the other side,’ he said.

‘We want the businesses of Australia … we want them to come to us and tell us how government can make it easier for them to compete and employ.’

This is what business has been asking for:

  • the removal of penalty rates, minimum shifts and loadings from awards (retailers);
  • more flexibility to avoid National Employment Standards (Australian Mines and Metals Association);
  • the return of AWAs that can be imposed on workers and which can be used to put an end to collective bargaining (Australian Mines and Metals Association and Australia Industry Group);
  • an exemption for small business from unfair dismissal laws (Australian Mines and Metals Association and Australian Chamber of Commerce and Industry).