The old law of Work Choices is under attack again. This is another suggested charge to the Workplace landscape that was not heralded before the election and dramatically interferes with business’s capacity to act flexibly in a recession environment. We will all be the losers.
Work Choices made the acquisition of floundering businesses that were burdened by cumbersome wage entitlements commercially viable. The old employers’ collective agreements were preserved for only a year and could be negotiated out prior to that year expiring. In the absence of negotiation the old agreement fell away after the one year and the transferring employees became subject to the purchasrs collective agreement. Unless expressly agreed, transferring employees came across and were subject to qualifying periods. This permitted employers to suck it and see – but ultimately save the old business, keep most of the employees and develop new economies of scale to help all profit.
Now, the collective agreements will transfer for the life of the agreement. In effect, you will have two agreements with possibly two unions.
Under Forward with Fairness – if you outsource expensive and unprofitable areas of work to a third party, and the third party picks up your staff – the third party also picks up your agreement. No savings there.
What will employers do under Forward with Fairness?
- Not take transferring employees and capitalise the cost in the buy out;
- Outsource to third parties who will not employ your employees.
The result:
- Greater unemployment;
- More vigorous attempts by employers to use third parties to save cost in uneconomic or administrative parts of the business and reduce the labour component (but not pick up your employees).
The losers:
- Employees in target companies and employees subject to outsourcing;
- Business and business flexibility in a difficult economic environment.
Has the government thought through the ramifications of such legislation in the climate? The people who will be punished are their own electoral base and major taxpayers/employers. It is hard to imagine why they would change a regime that protects both groups under Work Choices and is uniquely drafted to accommodate recession times.