New body but same old faces

DID you hear the one about the enterprise agreement that was ready for approval by Fair Work Australia?

Unsure of whether the agreement should be lodged on line or by post, the human resource manager decided to send it both ways.

Unaware that the agreement had been sent twice, it was duly handled by two different members of Fair Work Australia.

In one case, the member was quite happy to approve it without amendment. In the other case, all sorts of issues were raised about the agreement and the management was requested to appear before the tribunal to answer questions. Without satisfactory answers, the agreement could not be approved.

This sort of story does not inspire confidence in the new system, the one that was purported to balance fairness with the promotion of productivity.

We were also told by Kevin Rudd, when he was still the prime minister, that he would "not stand by and have this body become the agency of ex-trade union officials". This was confirmed by the relevant minister, Julia Gillard, when she promised that "appointments will not favour one side over the other".

And yet, seven out of the past eight appointments to Fair Work Australia are former trade union officials or persons with backgrounds in the labour movement.

One of these appointees has handed down 10 decisions that have been appealed and subsequently overturned. Clearly this person is running with a curiously eccentric and personal interpretation of the legislation that does not withstand the scrutiny of wiser and more experienced heads.

And then there is the curious case of an application for protected industrial action being granted even though no bargaining had taken place; in fact, no formal log of claims had been sent to the employer apart from a vaguely worded letter. The relevant union took several goes at determining which workers should be covered by the protected action because the company has workers in different locations, including in New Zealand.

The assertion by Gillard in 2007 that "the best thing about Labor's industrial relations plan is that it will be good for productivity" is now looking like a bad joke. We have trade union officials quite openly boasting about the lack of any productivity offsets in the agreements that are being reached. This was the clear message from MUA chief Paddy Crumlin about the agreement reached with Total Marine Services that provided for massive pay rises of up to $50,000 per year for offshore oil and gas workers in Western Australia.

A parallel case is the agreement struck between Australian Air Services and the TWU where substantial pay rises were awarded with no productivity trade-offs. This agreement is explicitly seen as precedent-setting by TWU boss Tony Sheldon.

So-called job security clauses are becoming an increasingly popular demand of the unions as they seek to restrict the use of contractors and on-hire employees by companies; the Qantas negotiations covering engineering and other staff are a case in point. To the extent that contractors are used, unions are demanding information about the contracted companies and the names and addresses of the contractors, who incidentally are less likely to join trade unions. It is hard to reconcile this development with the promotion of productivity.

We always expected a surge in unfair dismissal claims as the exemption for small businesses with fewer than 100 employees that applied under Work Choices was removed by the Fair Work Act. But we were assured by Gillard it would not be a return to the bad old days of sham claims and the payment of "walk away" money.

For small businesses, following the Small Business Fair Dismissal Code would be a complete defence, we were told. But it has not worked out that way, with the requirement for the person being dismissed being accompanied at the time of notification now part of the mix. Payments of between $2000 and $8000 are common, with the telephone-based conciliation service proving unsatisfactory in many cases.

Employers are also now being told that they must take into account the personal circumstances of their employees when thinking of dismissal, even though to do so might involve violating privacy laws. And don't think that refusal by an employee to follow occupational, health and safety laws is a defence for sacking a worker. The Fair Work Act is more important, even though the employer runs the risk of being prosecuted under OH&S laws.

And urinating into a drain in an area in which food is being handled; again, not a reason for sacking an employee. Dismissal in this case was seen as excessive and the employee was granted reinstatement and compensation.

A further alarming trend is the use of adverse action claims under the General Protections provisions which allow employees to make claims where there is a view that an employer has removed benefits from a worker based on prohibited criteria. Loosely worded, this section of the act is now being used in preference to the unfair dismissal provisions.

As the second anniversary of the Fair Work Act approaches, it is now reasonable to assess the impact of the legislation. Certainly, the economy-wide figures on productivity provide absolutely no support for the proposition that the Fair Work Act is good for productivity.

Many employers were prepared to give the legislation the benefit of the doubt; after all, many had misgivings about aspects of Work Choices. But the reality is dawning on them: it is pro-union, complex and uncertain.Judith Sloan is a former commissioner of the Productivity Commission and of the Australian Fair Pay Commission and a company director