Blowing the Whistle on the Fair Work Commission: Is Anyone Listening?

24th January 2017

The resignation of Vice President Graeme Watson, of the Australian Fair Work Commission has well and truly blown the whistle on the dysfunctional and anachronistic ‘Industrial relations umpire’ revived by Labor from it’s death bed in 2009. However, don’t expect Prime Minister Turnbull or his ineffectual Minister for Employment Michaelia Cash to hear its sound. They are deaf to any serious reform that would improve Australian productivity, boost employment and encourage innovative work practices.

Graeme Watson once the second most senior judicial official at the Commission has been a lone and sober voice amongst a sea of superannuates occupying the Fair Work Commission benches. Whilst others have simply enjoyed the perks of semi-retirement on the bench, his views have always been intelligent, genuinely progressive and refreshingly fair. I encourage you to read his dissenting decisions in the Equal Remuneration Case. His contribution to the debate on how modern Australian employment should be regulated is worth hearing. Stunningly he argues the system lead by the President of the Australian Industrial Relations Commission, Justice Ian Ross, actually undermines the objects of the Fair Work Act. Rather, he says the system does not provide a framework for cooperative and productive workplace relations nor does it promote economic prosperity or social inclusion.

The oversight of unfair dismissals, adverse action claims, enterprise bargaining, protected industrial action and the award safety net are five dysfunctional areas of the system identified by him. Your loyal (sometimes angry) correspondent has written ad nauseam on these issues but it is worth echoing Vice President Watson’s views as reported in his letter of resignation, as he considers the combined effect of the operation of these provisions discourages employment and investment in Australia. This is a serious indictment of the competence of the people responsible for the system, which in more rational times, would have been a trigger for a major overhaul of the system.

Every small business owner and HR manager knows unfair dismissal claims are simply an opportunity to squeeze additional money out of the boss on the way out the door. Contrary to popular myth, the eighty per cent of claims that are regularly settled at conciliation is not a measure of the system’s success. The employee is invariably still without a job and the employer is a few (sometimes more) dollars poorer for the experience. The procedure is neither quick, flexible, fair, or emphasising reinstatement as the main remedy. It is simply an additional cost on employment. Adverse action claims are no better, probably worse.

Smart employers avoid enterprise bargaining due to the unduly complex technical requirements and the rigidity of the better off overall test (BOOT). Much simpler to provide a wage increase over and above the minimum rates. There are also hundreds of agreements made during the Work Choices era that will never be replaced as the current system does not provide any scope to retain efficient competitive wage structures negotiated at the time. The Shop Assistants Union and Coles found this out to their regret in the most recent application for approval of a deal for it’s employees.

The old system of mass strikes are a relic of a past era. The Building and Construction union has crafted more effective methods demonstrating with impunity how to apply maximum pressure on employers with minimum stress to its members. The Commission and Federal Court are generally powerless to do anything about it. It remains to be seen whether the revamped Building and Construction Commission will have any impact on restoring law and order to that industry.

Finally, but certainly not least, is the extraordinary spectacle of the never ending review of so called modern awards. The 4-Yearly Review should have taken no more than 6 months to complete, focussed on reducing the number of awards and aimed at establishing a genuinely simple modern safety net of wages and flexible hours of work. Instead the review has extended into its third year, more awards have been created and not a single attempt has been made to modernise the safety net of wages inherited from the last iteration of the wages and incomes accord in the 1990’s.

It is difficult not be cynical about an organisation as dysfunctional as the Fair Work Commission. Nevertheless I can live with the politics of a system that seems perpetually in a state of class warfare. However, it is just sad that a person whose vision and intellect that should have been encouraged and rewarded, was isolated and ultimately sidelined. It happens far too often in public life. I wish Graeme Watson all the best in the next phase of his life.