"Amendments to the Closing Loopholes Bill that the Government has reportedly agreed upon with the Greens would deliver even more unfairness to employers negotiating enterprise agreements," Innes Willox, Chief Executive of the national employer association, Ai Group, said today.

"The reported deal between the Greens and the Government involves amendments to the Closing Loopholes Bill to prevent the Fair Work Commission (FWC) from arbitrating outcomes in intractable bargaining situations that would result in any reduction in existing conditions for employees. If the reports are correct, this deal would load even more unfairness on employers, on top of the unfair bargaining laws that were recently implemented.

"The amendments have clearly been drafted in response to union claims, rather than being based on any unintended consequences that have arisen from the existing intractable bargaining provisions in the Fair Work Act. The Government needs to take a balanced approach in the community’s interests, not simply adopt unbalanced proposals put forward by the unions to further their own interests.

"In June this year, the Government’s new bargaining laws became fully operational. The new laws give unions numerous new rights and strip many previous rights from employers.

"From June, the FWC has had the power to make an intractable bargaining declaration if parties have been unable to reach agreement after at least nine months of bargaining. A declaration can only be made if the FWC decides that there are no reasonable prospects of an agreement being reached and it is reasonable in all the circumstances to make the declaration. Also, a declaration cannot be made unless the FWC has assisted the parties to agree upon an outcome through conciliation. If a declaration is ultimately made, typically a post-declaration negotiating period will be declared by the FWC to give the parties a final opportunity to reach agreement. If agreement is not reached between the bargaining parties at the end of the post-declaration negotiating period, the FWC is required to make an intractable bargaining determination settling the matters not agreed upon between the parties.

"When making an intractable bargaining determination, the FWC is currently required to take into account the following balanced factors in s275 of the Fair Work Act:

  • the merits of the case;
  • the interests of the employers and employees;
  • the significance, to those employers and employees, of any arrangements or benefits in an enterprise agreement that, immediately before the determination is made, applies to any of the employers in respect of any of the employees;
  • the public interest;
  • how productivity might be improved in the enterprise or enterprises concerned;
  • the extent to which the conduct of the bargaining representatives for the proposed enterprise agreement concerned was reasonable during bargaining for the agreement;
  • the extent to which the bargaining representatives for the proposed enterprise agreement concerned have complied with the good faith bargaining requirements;
  • incentives to continue to bargain at a later time.

"Under the reported Greens / Government deal, the fairness and balance that is inherent in the above criteria would effectively be extinguished, with the FWC prevented from arbitrating an outcome that results in any reduction in existing conditions for employees.

"This unbalanced proposal offends fairness and common sense. Companies are often faced with changed circumstances which necessitate new work methods, changed rosters and/or changes to other work arrangements. The enterprise bargaining process is intended to enable these issues to be worked through between employers and employees and, where necessary, with the assistance of the FWC.

"The reported Greens / Government deal would enable unions to refuse to agree on a fair enterprise agreement outcome and simply wait for the FWC to arbitrate after a nine-month period, safe in the knowledge that the arbitration would be a 'one-way street'. The independent umpire's hands would be tied behind its back when deciding upon an outcome.

"The proposed amendments would operate as a major barrier to enterprise bargaining because unions would have a powerful incentive not to reach agreement with employers.

"Given that the intractable bargaining provisions were only introduced in June this year and, to date, the FWC has not made any intractable bargaining determinations, the reported Greens / Government deal is obviously not based on any unintended consequences that have arisen from the existing provisions.

"The Fair Work Act, as its name suggests, is intended to be fair to both employees and employers. This proposal is grossly unfair upon employers. Hopefully, the Government will reconsider its reported support of this unfair, unbalanced and illogical Greens' proposal. If not, it is important that Crossbench Senators strongly oppose the proposal so that it never sees the light of day," Mr Willox said. 

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