The Fair Work Act 2009
Learning outcome:-
UL01- Explain the legal rights of employees and legal obligations placed on employers during enterprise bargaining processes.
UL02- Critically select and prioritise competing criticisms of the Fair Work Act 2009 with respect to enterprise bargaining processes
UL03- Critically examine the validity of competing arguments pertaining to enterprise bargaining under the regulatory regime of the Fair Work Act 2009.
Solution
The Fair Work Act 2009
The Fair Work Act (FWA) 2009 focuses on establishing effective working environments, with consideration of the rights and wellbeing of employees. Its application in facilitating effective enterprise agreement between an employer(s) and employees ensures the consideration of the rights and needs of each party. The FW Act enables effective single, multi-enterprise or Greenfield enterprise agreement and allows the inclusion of the interests of the parties in good faith in accordance with their agreements. The application of the FWA 2009 continues to have a major influence on employment and relations in Australia. Currently, approximately 43 percent of Australian employees work under a form of an agreement reached in accordance with the FWA 2009. The Act considers the rights of the employees and gives the employer(s) legal obligations. However, it continues to receive criticism for its impact on employment and employer-employee relations. This essay discusses the legal processes governing enterprise bargaining with specific emphasis on the legal rights of the employees, the obligation the FWA bestows on the employer(s) and offers a critical analysis of the criticisms.
Legal Processes Governing Enterprise Bargaining
Employee Rights
The FWA 2009 allows a collective bargaining between the employer and the employee. The parties must show good faith in the process. However, of greater importance is the consideration of the legal rights and the interests of each party. The FWA 2009 entitles employees to specific rights when engaged in enterprise bargaining (Wright, 2012; Hor & Keats, 2009; Lamp, 2011). The discussion of the rights shows the possible influence of the Act on enterprise bargaining, employment, and employment relations. These rights influence employee-employer relations and influence engagement, employee performance, productivity, and efficiency.
The Act includes unfair dismissal rights that protect employees. The protection of the right of the employees to job security ensures that employees who enter an enterprise agreement with their employer are protected from being unfairly dismissed. The FWA 2009 integrates previous rules under the Workplace Relations Act of 1996 but enhances their understanding through simple and easier to understand modifications (Australian Government, 2017). It protects employees from wrongful and unlawful termination but allows dismissal on the ground of honest redundancy. The Act gives an employee working for a company of fewer than 100 employees the right to a hearing by Fair Work Australia in accordance with their employment period. According to Warhurst (2013), the Act protects employees working for small businesses (<15 employees) and other businesses who have worked for twelve and six months from unfair dismissal. The inclusion of this right continues to promote workers’ rights while giving the employer the right to terminate employment on basis of redundancy protects the employers’ interests (Australian Government, 2017).
Additionally, the FWA 2009 promotes workplace rights and protects workers’ rights. CCH Australia (2010) describes workplace rights as range of the rights accorded to an employee including the right to join and participate in a union, engagement in industrial action, and making complaints in cases of unfair mistreatment or engagement. The protection of the workers’ rights allowed by integrating and promoting the workplace rights ensures that an employer cannot terminate a worker’s employment contract unlawfully or because of registration in a union, engagement in industrial action, or because of making an inquiry or complaint against the employer (Pagura, 2011). Most importantly, the inclusion of the general protections in the Act ensures that employers cannot take unjust actions against the workers for discriminatory reasons such as sexual orientation, gender, race, political affiliation, nationality or temporary and honest absence from work due to an injury or illness. The inclusion of these rights in the FWA ensures their integration in the processes of collective bargaining agreements to avoid the utilization of the CBA to manipulate or infringe on employee rights (Capuano, 2016).
Employees are entitled to the right to fair representation and membership. The Act protects the rights of the employees to proper and effective representation by proposing against misrepresentations. It clearly states that a person should not mislead an employee about representation (Australian Government, 2017). This clause protects the employees from misrepresentation and being misled on issues concerning engagement in industrial activity. Nurses’ Paycheck (2012) states that the law prevents employers or any other third parties from misleading employees. The employee is entitled to accurate information concerning the job, the employer, and the terms of employment. The employer must disclose beforehand whether or not s/he is a member of an industrial association or whether engages or does not engage in an industrial activity (Australian Government, 2017). Provision of misleading information breaches the Act making the employer liable. The enjoyment of these rights improves the effectiveness of the work environment by creating trust between the employer and employee.
The FW Act 2009 protects employees against discrimination at the workplace. The Act entitles the employee to fair treatment regardless of a person’s race, gender, sexual orientation, disability (physical or mental), ethnicity, religion, or political affiliation among any other distinguishing features (Pagura, 2011). It prevents the employer from engaging or taking adverse measures against the employee or a prospective employee on the basis of the highlighted features among others. Additionally, the Act protects employees against discrimination based on marital status, pregnancy, age, and national extraction among other differences that form the workforce. It promotes and facilitates the consideration of the different anti-discrimination laws established and implemented in the country (Creighton, 2014; Dransfield, 2012). For instance, protection from discrimination ensures the implementation of the Age Discrimination Act of 2004, the Sex Discrimination Act 1984, Equal Opportunity Act, and the Disability, Racial, and Discrimination Acts of 1984, 1992, 1975, and 1991 respectively. Therefore, the implementation of the FW Act 2009 protects diverse rights and ensure that employees enjoy the rights without discrimination.
The FW Act 2009 entitles employees to temporary absence. An employee suffering from an injury or an illness is entitled to temporary absence from work. The Act protects employees who fail to show up temporarily from adverse action by the employer. According to the Act, an employer should not dismiss a person for temporary absenteeism caused by an illness or injury (Australian Government, 2017). In the development of an enterprise agreement, all parties must consider the clause to ensure inclusion into work regulations. According to Wheelwright (2013), employees are entitled to temporary unintentional lateness or absence without repercussions if the lateness/absenteeism is as a result of injury or illness. However, employees must also adhere to the law and ensure efficiency, high performance, and productivity thus the need to avoid pretentious illness/injury-motivated absenteeism. Evidence of pretence entitles the employer to take action in accordance with the prescribed regulations during bargaining or under the job rules and regulations (Warhurst, 2013).
The employee is entitled to free bargaining services during the enterprise bargaining. Enterprise bargaining or any form of bargaining involving industrial association for the improvement of compensation, working conditions, or relations between the employer and the employee is the employee’s right (MacDermott & Riley, 2011). Therefore, the payment of bargaining services fees in the process of negotiating through enterprise agreement goes against the law. An industrial association, member, or an officer of the association should not demand, imply, or show any actions that would be interpreted as a demand for or influence the employee to paying bargaining services fees. The provision of services on behalf of an employee in an enterprise agreement should not be paid to the industrial association unless it is clearly provided for in a contract. Wright (2012) states that most employees continue to fall victims of members of associations because of lacking sufficient knowledge of the law regarding enterprise agreement.
Legal Obligations Placed on Employers
The FWA 2009 mandates the employer to ensure the protection of employees through the application of workplace rights. According to Blake (2011) and Hubbard (2012), the workplace rights’ protection in the Act instructs the employer to desist from violating any workplace rights. In the course of the bargaining, the parties must integrate the mandate of the law by considering and incorporating workplace rights into the agreement. The Act states that the employer should not take adverse actions against an employee for practising or not practising his/her workplace right or proposing or not proposing the exercise of a certain right in accordance with the employee rights (Macdonald & Charlesworth, 2013). The FW Act bestows this mandate and requires the employer to adhere to it in the course of engaging in an enterprise agreement and in the workplace. Most importantly, the Act requires employers to set an effective working environment that allows employees to enjoy their rights. The FW Act ensures that the employer does not prevent employees from exercising workplace rights (ALRC, 2017). The protection of the workplace rights mandates the employer to protect and uphold the rights.
Additionally, the FW Act requires the employer to refrain from exerting undue pressure or influence on the employee based on a decision s/he made. The inclusion of this clause in the Act makes it the duty of the employer to focus on engaging the employee(s) in ways that do not exert pressure. According to ALRC (2017), while the National Employment Standards set guidelines for employment, the FW Act prevents the employer from pressuring the employee unnecessary on the basis of making or not making an arrangement under the NES. Additionally, the law requires employers to desist from breaching influencing employees unduly for making or not making an agreement in accordance with the enterprise agreement or the modern award, flexibility arrangement, or accepting an annual earnings guarantee (Giudice, 2012). These provisions give the employer the mandate to protect the employee from undue influence. CCH Australia (2010) asserts that the FW Act continues to play a fundamental role in influencing how employers engage employees and in promoting the employer’s role in promoting employee rights.
Additionally, the employer must honour the terms of the enterprise bargaining mainly concerning compensation and wages. The FWA 2009 requires employers to implement any agreement reached between them and the employees. According to Pagura (2011), the law requires employers to offer fair and correct wages for the performance of the duties and responsibilities assigned. Business.gov.au (2016) supports Pagura (2011) and states that payment of the negotiated wages in accordance with the agreement must be paid without discrimination whatsoever. Moreover, the provision of pay slips to employees and the accurate inclusion of all information required. The information must have accurate, precise, and understandable information that ensures that the employee comprehends such information (Warhurst, 2013). Most importantly, in the delivery of the payslip and wages, Business.gov.au (2016) asserts that the employer is obligated to ensure security and confidentiality. The different aspects of pay and compensation highlighted in the FW Act 2009 enhance the relationship between the employer and employee(s) and promotes productivity and efficiency by motivating the latter.
Criticism of Enterprise Bargaining Under FW Act 2009
The creation and implementation of the FW Act 2009 continues to impact enterprise bargaining significantly. According to ALRC (2017), the Act influences the process of enterprise bargaining in different ways. Lamp (2011) argues that the FW Act works towards improving effectiveness, productivity, and performance. The integration of the FW Act 2009 in the enterprise bargaining ensures the consideration of the aspects of safety, fairness, and working conditions. These components work concurrently to promote efficiency in the workplace, which boosts performance and productivity (Wright, 2012). The provision of the relations laws guiding the interactions in the workplace enhances business flexibility and contributes largely towards the enhancement of productivity and Australia’s economic growth. The ABC identifies the increasing influence of the Act in increasing the number of enterprise agreements under the FW Act 2009. The increase is attributable to the narrowing of the Work Choices legislation. Moreover, relatively low industrial action level and modest wage growth in Australia shows the influence of incorporating the FW Act 2009 in enterprise agreement (ALRC, 2017). These contribute largely towards the development of workplace relations and the enhancement of productivity, efficiency, and performance in the workplace. However, different authors and statistics support and refute the effectiveness of the FWA 2009.
Wright (2012) and Hubbard (2012) counters the argument that the integration of the FW Act 2009 contributes to the development of workplace efficiency, productivity, and performance by positing that the Act promotes unfairness, causes a growth in wages, and promotes business inflexibility. The FW Act 2009, states that “ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages and conditions can no longer be undermined by the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system” (Australian Government, 2017). In the quest to achieve its objectives, however, the question of fairness and contribution towards productivity and efficiency arise. CCH Australia (2010) asserts that wage growth has increased since the implementation of the Act, which also bestows more legal obligations on the employer making its impact damaging to business. Moreover, the protection employees receive from the incorporation of the Act into enterprise agreement ascertains their safety and job security but uncovers the employer for exploitation by employees (Warhurst, 2013).
To start with, Blake (2011) argues that the Act does not emphasize the Australian Workplace Agreements and disregards the development of individual employment agreements as unfair. The Act perpetuates the rights of the employee but seems inconsiderate to the needs and concerns of the employer. Most importantly, the integration of the FW Act 2009 in enterprise bargaining works against workplace productivity, efficiency, and performance by encouraging day offs during working hours (CCH Australia, 2010). That the Act protects the employees from unfair dismissal and especially where an employee reports having an injury or illness encourages inefficiency. According to the ABC (2016), despite the implementation of the FW Act in 1996, an increase of the days lost was recorded, showing the possible ineffectiveness of the approach the FW Act took. The ABC cited that the percentage of the working days lost increased by 26 percent (160 000) in 2011. Additionally, the number of disputes continue to increase. For instance, there was an increase from 16 to 53 disputes between the March and June quarters. That the disputes are high-profile results with significant implications that pinpoint the negative impact of the (Sloan, 2011).
Further, Wright (2012) sites industrial disputations as a major concern by citing the AMMA, stating that implementation of the FW Act 2009 would increase industrial action. AMMA 2010 posits that changing the rights of unions such as the reinstatement of such laws as unfair dismissal, entry into premises, and the opportunity for taking protected industrial action before considering bargaining would cause increased industrial action (Wright, 2012). There was an increase in the number of working days lost in 2011 as an effect of industrial action. For instance, in the September quarter, 101, 300 days were lost (Wright, 2012). Middlemis (2011) supports the argument that the Act causes an increase in industrial disputations in connection to unfair dismissal. The author asserts that the implementation of the FW Act increased the number of unfair dismissal claims to 15% between 2010 and 2011. There were 7, 994 cases of people reporting to have been dismissed unfairly in 2009. The number increased to 13 054 and 14 897 between June 2010 and June 2017 (Middlemis, 2011). These numbers show the influence of the Act on the employers and business in the country.
Wheelwright (2013) argues that the inclusion of the Act in enterprise agreement has resulted in increased industrial action, causing losses for business. The author cites increased strikes since 2009, for instance between 2010 and 2012, and argues for the development and implementation of strategies that ensure the protection of the employer. However, Wright (2012) attributed the increased industrial action partly to the high expiry of collective agreements in 2011, where 8,335 expired as compared to the 5,113 expired agreements in 2010. However, what Wright did not consider is that the number of new collective agreements recorded in 2011 was equally higher as compared to the previous year’s percentage. The author argues that employers are against the FW Act because it protects the employee, even when its implementation does not affect operations and profitability negatively. The sentiments are supported by Lamp (2011) research which states that business only wants the removal of the safety net, including issues such as shift length, doing away with penalty rates, and the exemption of small business workers from unfair dismissal (Lamp, 2011).
Conclusion
The FW Act 2009 influences enterprise bargaining, employment, and employee-employer relations significantly. Since its inception hitherto, the Act has shaped enterprise bargaining leading to an increasing number of employees under some form of an enterprise agreement. Its implementation in reaching enterprise agreement influences the development of effective working environments. The Act emphasizes the consideration of the rights and concerns of each party representing the employer and the employee(s) during an enterprise bargaining. The implementation of the FW Act 2009 entitles the employees to various rights and places legal obligations on the employers. Some of the rights employees enjoy when the Act is integrated into enterprise agreement include the right to effective working environment, the free bargaining services, fair representation and prevention from being misled, protection against discrimination, protected workplace rights, and protection from unfair dismissal. On the other hand, the Act requires employers to consider the rights of the employees, provide safe and effective working environments, honour the terms of the enterprise agreement, and engage fairly by avoiding exertion of undue pressure. These rights and obligations have enhanced the relation between employers and employees significantly.
However, numerous
criticisms for and against the FW Act 2009 continue to raise debate concerning
its application and impact on employment, employees, and the employer. They
show the strengths and negative influence of the Act through its impact on
enterprise agreements, employments, employees and employers’ needs. Criticism
is greatly directed towards its effectiveness in influencing business productivity
and flexibility, influence on industrial action, and impact on good faith
bargaining. While most critics argue that the Act has influenced the
development of business flexibility and productivity, others feel that its
implementation leads to reduced efficacy. The Act continues to influence
increased enterprise agreements, decrease the level of industrial action, and triggers
moderate wage growth. However, citing the rising number of lost working days to
industrial action, moderately to above average increase in wages, and non-significant
influence on good faith bargaining, opponents state that the FW Act 2009 seems
unfair to employers. The undeniable fact is that the Act continues to impact
enterprise bargaining significantly.
References
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