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Existing Fair Work Act must become a coronavirus casualty


The pandemic has wreaked havoc on economies, jobs and workplaces, and serious steps are required to turn around the worst financial conditions since the Great Depression. Industrial relations reform is a priority, argues Morry Bailes.

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There is much speculation about the ‘new normal’, and what that will look like for Australia.

Commentators abound with hypotheses and ideas attempting to make accurate practical predictions about the world of tomorrow.

Will we use an office? Will we ever have an in person appointment? Who is essential, the banker or the ambo?

Law will need to adjust, as it always does when society changes. It cannot predict, but it will respond.

One element that seems indisputable is that austerity is back. Not since the ‘recession we had to have’ of the 1990s have there been such a sense of insecurity.

The millennial generation has awoken to a new reality; suddenly, having a job is everything. Employer shopping is out.

How will this translate into law?

There are comparisons that can be made between the past decade and the financial hedonism of 1980’s, even if Beaujolais was replaced with Champagne.

Differences can be drawn today because we have been visited by a pandemic. However, to borrow from Warren Buffett, ‘only when the tide goes out do you see who is swimming naked’, and our over reliance on borrowed money will give us a Covid-induced economic hangover for a while to come.

What ultimately lifted us out of recession in the 90s was economic reform, and the same can be mooted for Australia today.

When today’s workers are now obliged, by virtue of a Fair Work Commission decision applying the Fair Work Act to start and finish work using the bundy clock (first invented in 1888), it’s not all that difficult to understand why industrial relations is high on the list.

The Federal Fair Work Act 2009 was introduced by the Rudd Government. Successive coalition governments have been too electorally scared to repeal it, although there have been some amendments.

However, things have now changed. Employees realise that flexibility is required so that employers and employees alike can maintain a livelihood, and with both having tasted from the cup of reform, it’s not going back in the cupboard.

Flexibility will be required in the coming months and years to keep Australians employed, and flexibility was exactly what was repealed when the Fair Work Act replaced the Workplace Relations Act.

What is an acceptable industrial relations system to the Australian electorate is yet to be understood. However, it is imperative that we have this discussion because motivated by a mutual sense of self preservation, employers and employees are doing it anyway. It is a classic example of the truism that where society leads the law will ultimately follow.

To protect the current Act is indefensible when the world has already moved on. It was an industrial relations reform made when we thought we could afford it. We can’t, and unless repealed or amended, the Fair Work Act will simply cause our unemployment and under-employment levels to ratchet up, for every day we sit inert.

For those who are now without work this is no doubt a discussion of academics, when what is required are mortgages and bills paid, and food on the table. The 90s were terrifying to live through with unemployment the highest in Australia since the Great Depression and commercial premises sitting empty. One feels deeply for those people who currently have lost jobs.

However it is anything but academic. Flexibility in industrial relations is one of the things that will enable our economy to rejuvenate more quickly. Such reform will help create jobs.

At present, employers are fearful of employing anyone because with it comes a set of rules far too inflexible for current times. If we ultimately climb out of the hole, we may have the luxury of turning back the clock, but right now it is critical to seize the momentum that employers and employees have created through their own dealings, to deliver much needed legal reform.

The modern award system is a nightmare. It was drafted in a hurry in order to meet a 1 January 2010 start date for the Act. Since then the modern awards have been demonstrated time and time again to be altogether ill-considered, and are unquestionably exacerbating our current crisis. It is emblematic of the inflexibility of this piece of legislation. 

Other elements of the Act are hopelessly out of touch with the modern workplaces, particularly as we might imagine them to be in the future. The Act is in many instances vague and ambiguous, such as the stop work and stand down provisions. It is no longer acceptable to expect employers and employees to essentially try to guess and contort their way through the rules – the rules must change.

Whilst it is dreadful for an employee who is now jobless, it is also horrendous for owners of businesses, and they ought to be included at the heart of our concerns.

Australia rises and falls on the success of our small and medium businesses. They in turn rely on their employees. It is foolish to seek to favour one group against another, because it is patently obvious that both are dancing on the edge of the precipice and both need all the help our legislature can give them.

Exploiting employees is reprehensible, but then so is exploitation of employers, and that is currently what we are allowing by leaving the Fair Work Act unamended.

A reworked Act must be fair, balanced and encourage productivity. There is no reason whatsoever that employer and employee alike cannot be beneficiaries of thoughtful reform.

If there is one lesson to be learnt from past financial crises, it is that unemployment outlasts the crisis itself, on occasion for many years, so reform in this area is not just important right now, it will place us in good stead for the years of pain to come.

How a reformed Australian industrial relations system might look like is for Australians to decide upon, however it is a subject that demands a mature and reasoned debate if we are to have a fighting chance of getting things back on an even keel.

Morry Bailes is the managing partner at Tindall Gask Bentley Lawyers, past president of the Law Council of Australia and a past president of the Law Society of South Australia.

Disclosure: The author is a member of the Liberal Party.

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