Productivity Commission: Reforms to reinvent Fair Work Commission

Reforms to the Fair Work Commission would address “inconsistencies”, the Productivity Commission said yesterday.

Reforms to the Fair Work Commission would address “inconsistencies” in decisions and ensure an “unbiased and credible” framework, the Productivity Commission said yesterday.

Future senior appointments to the commission would be limited to five-year terms and then subject to merit-based reviews under draft recommendations by the commission designed to transform the industrial umpire into a “renewed institution”.

The changes apply to new judicial appointments to the commission so would not apply to sitting president Iain Ross or vice-president Michael Lawler, who has come under fire for taking several months of sick leave from his role.

However, one IR expert said the recommendations appeared to be taking aim at the so-called “IR club” flavour of the commission.

The commission has also proposed candidates have no “direct” experience as industrial advocates or representatives. An expert panel would provide a shortlist of candidates and the minister would then choose members.

“Both the panel and the relevant minister would need to be satisfied that the person would be widely seen as having an unbiased and credible framework for reaching conclusions and determinations,” the report said.

Non-judicial members already at the commission should also be subject to performance reviews, the report said.

The Productivity Commission also wants to split the Fair Work Commission into a “minimum standards division” that would set wages and awards, distinct from tribunal functions.

“To genuinely improve its ability to set a price for work … the Fair Work Commission needs to become a different kind of body,” PC chairman Peter Harris said.

“A renewed institution is needed for the kind of labour market we will have in the future.”

Stripping commissioners of tenure, alongside the other proposals, “would align governance within the FWC more closely with that observed in many other contemporary decision-making bodies”, such as the Reserve Bank, Mr Harris said.

Labor said it had concerns about the changes.