Employer and employer association matters in Australia in 2015

Abstract

Employers and their associations were enthusiastic participants in a year of public discussion about the future of industrial relations (IR). Employer associations put forward a set of carefully considered views about their preferred IR policy and regulatory settings in detailed submissions to the major IR Inquiry of the Productivity Commission. They also engaged in an ongoing public relations campaign to support those employers seeking changes to employee entitlements, in particular through penalty rates reforms. As was the case last year however, the realisation of the employers’ IR agenda, many aspects of which are supported by the Coalition Government and the Productivity Commission, remains either stalled in a divided Federal Parliament, or otherwise are reforms that must await the outcome of the forthcoming federal election.

Keywords

Employer associations flexibility industrial relations minimum wage Productivity Commission

Introduction

Employers and their associations spent 2015 carefully positioning themselves for what they see as an upcoming battle about the future of industrial relations (IR). A major review of the IR landscape by the Productivity Commission (hereafter PC), handed down in final form in November (and made publicly available by the Government the following month), has given external legitimacy to the ‘business view’ that IR regulations – both in terms of laws and industrial instruments – must change to suit new workplace realities. However, employers, and indeed all parties, are also mindful of old realities, especially the role of WorkChoices in the downfall of the Howard Government. After illogically pronouncing WorkChoices dead and buried and cremated, then Prime Minister Tony Abbott further indicated that the Government would exercise caution in undertaking any significant industrial relations reform. In February, then Minister of Employment Eric Abetz indicated that he would not be seeking to limit the powers of Fair Work Commission (hereafter FWC or Commission) to determine minimum wages or penalty rates, much to the displeasure of the employer associations (EAs) who wanted the Government to take a stronger position on these matters ahead of the forthcoming election. These pronouncements, however, left the Greens and Labor rather cold. Greens spokesperson Adam Bandt claimed that ‘the attack on penalty rates and the minimum wage isn’t dead but just resting’ (Workplace Express, 2015a).

If employers and their associations felt optimistic that the Turnbull Government would take a bolder stance on IR, the year ended with the Government indicating it would need to consult further on recommendations for IR reform coming out of the PC Inquiry Final Report as well as those of the Royal Commission into Trade Union Governance and Corruption. The year also ended with prominent employers and EA officials rueing ‘missed opportunities’ after having devoted considerable energy to a public relations campaign, as well as lengthy and detailed submissions to the PC Inquiry, that urged for recommendations for extensive IR reform.

The following sections of this review will set out employer and EA initiatives, and their views of the major developments, in 2015. Consistent with previous reviews of employer and EA matters in the Journal of Industrial Relations, the views expressed here are based on various sources of data and information which include extensive analysis of detailed employer and EA submissions to major reviews and inquiries, media reporting on employers and EAs in Workplace Express and various other press, and interviews conducted on a confidential basis with a small sample of EA officials of both peak and industry associations. While documentary analysis and press reporting were the primary basis for compiling the review, the interviews were invaluable in terms of road testing the author’s interpretation of events and sharpening the analysis. Preparing for and responding to the PC Inquiry was the headline employer item for 2015 and is the major focus of this article. Other matters discussed in the following include the role of employers in relation to FWC’s Annual Wage Review, developments in modern awards, and implications for employers and their associations of the change in leadership of the Coalition Government.

Productivity Commission Inquiry

In 2015, the PC conducted its Inquiry into Australia’s workplace relations framework. While Employment Minister Eric Abetz and Treasurer Joe Hockey (2014) saw the Inquiry as appropriate and timely, a more cynical reading of events saw the Inquiry as an attempt to appease employers' concerns about the Fair Work regime (Sydney Morning Herald (SMH), 2015a). Unions and the Federal Labor opposition also suspected the Inquiry might lead to cuts to penalty rates and other employee entitlements, although employer groups dismissed such concerns (Australian Chamber of Commerce and Industry (ACCI), 2015a; SMH, 2015b). The Australian Council of Trade Unions (ACTU) used the release of the FWC’s First Findings Report, and the underpinning data from the Australian Workplace Relations Study, to support its claim that the Inquiry was unnecessary. This data showed employers were buoyant about the business environment with a majority of all enterprises intending to expand operations in the following year, and a majority also reporting that wage and salary costs amounted to less than one-third of income (Workplace Express, 2015b). While the Abbott Government accused Labor and the unions of running a scare campaign, it nevertheless committed to hold off implementing major changes arising out of PC Inquiry recommendation until after the next election, when it would have a mandate from the electorate (News Corp, 2015).

The scope of the PC Inquiry was indicted by its wide ranging terms of reference, many of which were drawn from general employer concerns, including the impact of the workplace relations framework on ‘small businesses, productivity, competitiveness and business investment, the ability for employers to flexibly manage and engage with their employees, red tape and the compliance burden for employers, industrial conflict and days lost due to industrial action’ (Abetz and Hockey, 2014).

EA submissions to the PC Inquiry varied in length and detail, but not greatly in substance. The Australian Mines and Metals Association (AMMA) produced a report of nearly 500 pages, making the Business Council of Australia's (BCA) seem brief by comparison, at less than 80 pages. The submissions contained recommendations based on research complied from commissioned reports, surveys and expert analysis. ACCI’s submission, for example, contained nearly 400 footnotes. AMMA’s submission referenced KPMG consultancy research which made the case for changes to workplace laws in order to enhance productivity in the resources sector. The nature of these submissions is entirely consistent with academic analysis that shows that the enhanced capacity of EAs to produce evidence-based policy research has been a distinctive feature of their ongoing renewal (Barry and Wilkinson, 2011). Overall, the submissions put forward a common set of themes inasmuch as they claimed the workplace laws and bargaining instruments needed to become more flexible and less burdensome for employers, that old realities such as the existing penalty rates system needed to recognise workplaces of the 21st century, and that the union power needed to be curtailed. The following sub-sections take up each of these themes.

Unlocking rigidity

Sheldon and Thornthwaite (2015) previously highlighted how parliamentary gridlock has frustrated employer expectation that the Government would amend objectionable components of Labor’s Fair Work system. Among many objections, employers ardently oppose what they see as a restrictive menu of agreement instruments and the ongoing influence of the award system. The BCA went as far as calling for the collapsing of all 122 awards into one award for each industry. In their PC Inquiry submissions the dominant employer representatives of large, commercial and industrial employers were united in calling for greater decentralisation of agreement making and a broader suite of agreements, including opening up avenues for individual agreement making (ACCI, 2015b; Ai Group 2015a; BCA, 2015a). Taking on board these views, the PC recommended a new type of agreement, known as an ‘enterprise contract’, to occupy the space between individual and collective agreements. The PC saw this type of agreement, which would involve less complexity, as being particularly appealing to small businesses (Workplace Express, 2015c). In its reply submission to the draft PC recommendations, the ACTU was particularly unimpressed, and likened this proposed agreement to Australian Workplace Agreements (AWAs) but without the ‘pretence’ of genuine individual negotiation that it claimed pervaded the former individual agreement regime (Workplace Express, 2015d).

Along with restrictions to types of agreements, employers have long lamented the presence of ‘unproductive contents’ in industrial agreements. For BHP Billiton there was a clear need to ‘restrict the content of enterprise agreements to terms of employment only and “not operational matters that limit productivity improvements”’ (Workplace Express, 2015e). BHP’s view reflected the general concern of resources employers whose submission to PC Inquiry, through AMMA, devoted attention to the need to reduce extraneous content from collective agreements as well as to promote genuine choice in agreement making through non-union and individual streams. In promoting these claims AMMA was continuing a line of advocacy that EAs in resources have used since the 1990s (Barry, 1999; Waring and Barry, 2001), and was seeking to further extend the extraordinary gains that its members have already achieved in the major mining areas of coal and iron ore, albeit with notable examples of resistance (Ellem, 2014) in breaking down unionisation through non-union agreement making and by using contract labour on fly in fly out or drive in drive out arrangements (Bowden and Barry, 2015). Pushing hard, AMMA’s submission also called for a new form of statutory individual agreements that would be offered as a condition of employment, containing only matters that pertain to the employment relationship, with no capacity for industrial action, and subject only to an applicable safety net test (AMMA, 2015a: 73–74).

The key to understanding employer submissions such as those by AMMA and Ai Group on agreement content is that they felt that the Fair Work Act (FWA) had created a zone of uncertainty in agreement making between permitted matters and unlawful content. A particular frustration for employers in unionised sectors has been the influence of unions in the engagement of contractors, casuals and labour hire employees. Employers scored a win with the PC Final Report recommending that there be no restrictions on such employment (PC, 2015b: 37). If legislated, this recommendation would see a return to the application of Electrolux vs AWU where matters that were not pertaining to the ER were not to be included in agreements.

As well as seeking restrictions in agreement content, employers also called for a pared-back safety net of agreement entitlements. There are two components to this. First, as the BCA argued, award entitlements have moved beyond a safety net because they include unnecessary prescriptions. For example, including minimum and maximum working hours and meal breaks is one thing, but stipulating how rosters should be constructed and when meals should be taken is quite another (BCA, 2015a, 2015b). Second, employers argued that the Better Off Overall Test (‘BOOT’) was too generous, and they urged a return to the No-Disadvantage Test (NDT). ACCI went further, suggesting the possible replacement of awards altogether by workplace bargaining underpinned by a safety net of legislated minimum standards (ACCI, 2015b: 88). The Restaurant and Catering Association (RCA) even boldly suggested a ‘Better Off All Together’ test wherein the employer would also be better off under the agreement (Workplace Express, 2015f). In its Final Report the PC accepted the prevailing employer view, and advocated a return to the NDT.

Dismissal provisions

In their PC Inquiry submissions, employer groups contended that IR regulations created uncertainty in termination and when engaging in business restructuring because of the risk of claims of unfair dismissal. Building on the modern awards process (discussed later) which made a concession to a purchaser of an existing business that it is at the purchaser’s discretion as to whether to take on existing employee liabilities, employers sought both a widening of current exemptions and stiffer requirements for unfair dismissal applications.

ACCI’s submission argued for an exemption from unfair dismissal laws for businesses with fewer than 20 employees, while some EAs, such as the RCA, went further in arguing for a reversion to the small business fair dismissal code (Workplace Express, 2015g). Aside from exemptions, EAs also felt that the existing IR framework had become far too permissive of employee claims of unfair dismissal. Ai Group’s submission cited evidence showing an increase in unfair dismissal claims since the introduction of the FWA, and in its view employers typically responded to dismissal applications by making commercial settlements to ‘make it go away’ (Ai Group, 2015a: 59). Employers believe that unfair dismissal claims and commercial settlements are encouraged for a variety of reasons that are adverse to employers. The Act requires that employees establish a prima facia case in general protection matters, and after that employers need to show that a termination of employment does not constitute unfair dismissal. For the BCA the matter was simple: in any instance of an adverse action, the party making a claim should be responsible for proving it (BCA, 2015a: 59). A further concern is that lawyers represent applicants on a contingent fee basis, meaning that they have an incentive to chase a settlement in speculative cases. Ai Group has suggested that lawyers should be subject to penalties for breaching dismissal provisions if they support speculative claims. This submission also sought an increase in the filing fee as another way to discourage speculative applicants. Despite these various concerns the PC found little evidence to support the case that dismissal provisions were a significant burden on employers, and recommended only modest changes such as to filing fees. The PC did, however, recommend scrapping the Dismissal Code for small business, arguing instead for better provision of education and engagement to small business by the regulator.

Penalty rates

The major IR parties have played out the penalty rates debate in an ongoing public relations campaign that has been full of rhetoric, including claims by EAs that unions have tried to ‘silence’ their members in speaking out about the need for penalty rates changes (ACCI, 2015c). Chief spokespersons for ACTU (Ged Kearney) and ACCI (Kate Carnell) faced-off on different occasions to present divergent narratives in support of or opposition to retention of current penalty rates. Clearly articulating the views of small and medium-sized firms, Carnell argued that a distinction existed between some workers, such as nurses and firefighters, who are traditional shift workers appropriately receiving penalty rates, and those workers employed in service industries subject to the new realities of 24/7 production. A more practical distinction between these workers is one between the former who are employees whose terms and conditions are covered by enterprise agreements, and those who are lower paid, often young, employees in retail and hospitality who are subject to minimum award provisions.

Arguments advanced in support of reducing penalty rates were both pragmatic (based on saving labour costs) and ideological (in challenging the sanctity of the traditional working week). Thus, according to Carnell (ABC, 2015):

So many businesses simply can't afford to open on Sundays or public holidays, but would like to open … Now if you're not open, you can't pay anybody. [And] Once upon a time … 44 per cent of people went to church on Sundays. That's gone down to 17 per cent. And of younger people, who often are the ones who work weekends, that's nine per cent of 17 per cent. So … it's hard to see the difference between Saturdays and Sundays.

The PC Inquiry heard from EAs, including those covering employers in the services sector who identified penalty rates as a key impediment of the current IR system. The PC asserted that penalty rates had an important and ongoing role in compensating employees for working ‘unsociable’ hours; however, it accepted the employers’ argument that in hospitality, retailing, restaurants and cafes, Sunday rates needed to be revised downward and brought in line with Saturdays (PC, 2015a: 4).

Countering unions and re-shaping bargaining

As mentioned, employers lamented the delay of the passage of proposed Coalition IR amendments in parliament. EAs saw the FW Amendment (Bargaining Processes) Bill 2014 as a means to tighten bargaining requirements to counter certain union bargaining tactics. With the Bill firmly stalled in Parliament, Ai Group used its submission to the PC Inquiry to reiterate its call for bargaining rules to be amended to require applicants seeking a protected action ballot (PAB) to show that bargaining efforts have been not only genuine but also exhaustive, and that industrial action is a last resort. The submission also sought to prohibit unions from initiating industrial action at the commencement of negotiations, unless by majority support determination (including taking action to compel employers to bargain!).

Concerns about union bargaining rights are widely held by employers, but felt in particular by those in sectors such as manufacturing, construction and resources. Ai Group remains concerned about industry-wide pattern bargaining, a practice Ai Group claimed it does not engage in and should be outlawed. As Ai Group sees it, the award system provides an appropriate (minimum) pattern across industry that is in place to protect vulnerable workers. In its view there should not be an above-award industry standard. Interestingly, Ai Group’s submission placed much of the blame for this practice on state-based EAs who ‘willingly agree’ to pattern agreements, further noting in a revealing comment that industrial action in support of pattern bargaining has not really been an issue in the last decade (Ai Group, 2015a: 53). AMMA also saw as critical the need to place limits on union right of entry provisions and union power in taking protected industrial action. AMMA accepted a right of access for ‘genuine employee needs’, such as to investigate breaches, but challenged an unfettered right of access to hold meetings with employees, particularly for unions that do not have a pre-existing relationship with workers (i.e. union members at the worksite) (AMMA, 2015a: 202–205).

In last year’s employer matters review, Sheldon and Thornthwaite (2015: 387) raised a serious concern about calls by employers for changes to bargaining rules that would allow them to unilaterally decide greenfields agreements. Employers have cited union hold-ups in greenfields negotiations as a major impediment to being able to move projects past the feasibility stage (although AMMA has conceded that other commercial factors are often responsible, such as lower commodity prices) (AMMA, 2015a: 97). The PC agreed that unions can exercise too much bargaining power in greenfields negotiations, especially where contractors may face penalties for project delays. However the PC also accepted that not all (ab)uses of power are on the union side (PC, 2015a: 584). The Final Report settled for a ‘menu’ of greenfields agreements, including the employer agreement which could be granted after three months of unsuccessful negotiations and apply for a maximum of 12 months and be subject only to the NDT. The PC’s recommendations followed extensive debate on this matter in the Senate, where independent senators finally gave a green light to employer greenfields in one of their few concessions to the Government’s long-running attempt to pass the 2014 Fair Work Amendment Bill, albeit with more restrictions than proposed by the PC (Workplace Express, 2015h).

Employer groups’ submissions also sought greater business representation on the FWC. In February, ‘AMMA call[ed] on the Abbott Government to address what it saw as the overrepresentation of ex-trade union and Australian Labor Party (ALP) officials in the national employment tribunal and appoint new members with strong business credentials’ (AMMA, 2015b). The mood of employers could be judged by commentary in their submissions. Ai Group (2015a: 55) cited the decision of the Full Bench to grant a PAB (in Esso Australia Pty Ltd v AMWU and Others [2015] FWCFB 210) while the union was pursuing a matter that was not permitted, as a clear and disturbing reversal of prior FWC interpretation. For its part, the PC recommended greater representation by economists; however, in the first round of FWC appointments after the Draft Report became public the views of employers seemed to have carried greater weight. AMMA had one former official appointed and another promoted from Commissioner to Deputy President. The other two appointees were lawyers (Workplace Express, 2015i).

The PC Final Report was publicly released on 21 December. The immediate reaction of employer representatives was that despite some valuable recommendations, the overall process was an ‘opportunity lost’. Most visible was ACCI’s Carnell, who felt that ‘the PC did not match its own rhetoric for the need for tough IR reform with its final report, and for Australian business, this is not the fix we needed’ (Australian Financial Review (AFR), 2015). ACCI and AMMA publicly rejected the overall finding that Australia’s IR system was not ‘systematically dysfunctional’. For AMMA’s Director of Policy, Barklamb, ‘the PC needed to do more than blithely conclude our overall system is not in need of fundamental repair’ (AFR, 2015).

Employers were also underwhelmed by the Government’s (lack of) response, which hinted at the need for further consultation about ‘sensible’ IR proposals it would take forward, and which offered reservations about adopting contentious recommendations such as stripping powers from the Commission (see later). In October 2015, Ai Group’s Innes Willox urged the new leadership to ‘get on the front foot’ and to ‘jettison the timid, too-cautious approach it has taken post-WorkChoices’ (Workplace Express, 2015j). In December, it appeared that the Turnbull Government remained concerned about electoral support for what might be perceived as radical proposals. Thus, at the end of the year it appeared likely, despite new Government leadership, that significant IR reforms coming from the PC Inquiry remained off the table.

Modern awards review

Last year, the FWC began its regular four-yearly review of all 122 modern awards under s156 of the FWA. Section 134 of the FWA requires the Commission to ensure fairness in this process, particularly for low paid workers as well as for those working overtime and on weekends. However, the objectives also require the Commission to consider the impact of its decisions on business, including on productivity, labour costs and regulatory burden, and on the national economy. In perhaps a telling hint about the challenging nature of the ongoing task, the President of the Commission Justice Ross commented that ‘the overall process had the “impossible parameters” of not increasing costs or disadvantaging anyone’ (Workplace Express, 2015k). The process was expected to be completed in mid-2015 (Sheldon and Thornthwaite, 2015); however, at that point there remained a huge amount to be done.

Employer submissions to the review process emphasised the difficulties that the award system imposed on small businesses. Accordingly, the NSW Business Chamber as well as retail associations argued for introducing a new categorisation for small employers being ‘micro businesses’, which are businesses with fewer than five employees who would be exempt from certain award obligations. The proposed micro business ‘schedule’ would provide ‘user friendly rules’ that would free them from such onerous requirements as having to pay overtime for part-time employees who agree to work extra hours, until they work more than 38 hours per week (Workplace Express, 2015l).

If employers have held some concerns about the modern awards review process, the outcomes did not discriminate against their interests. The FWC agreed to changes sought by employers to allow cashing out of up to two weeks of annual leave, consistent with the provision in a large number of enterprise agreements (although this provision is subject to some employee safeguards) (ACCI, 2015d; Ai Group, 2015b). In addition, employers won the right to direct employees with excessive leave balances to take annual leave. FWC also agreed to vary 51 modern awards to enable employers to pay employees on leave on their usual cycle, instead of requiring up-front payment. Furthermore, FWC agreed that employers could provide leave not yet accrued if employees consented to take such leave. Employer groups sought this change in 48 awards, but the FWC felt that it should be implemented for all awards (Workplace Express, 2015m). These concessions followed a coordinated effort by a number of EAs, led by Ai Group, who jointly surveyed their members to gather evidence to support such claims.

Employers have also benefited from the FWC’s interpretation of differences between the National Employment Standards (NES) and provisions of some modern awards which the Fair Work Ombudsman noted as ‘ambiguous’ (Workplace Express, 2015n). For example, transfer of business provisions in many awards were inconsistent with s91(1) of the Act, which confers a choice on a new non-associated employer, as to whether to assume the liabilities of transferring employees. The Full Bench heard submissions on this matter from the National Farmers’ Federation, Ai Group, ACCI, and Australian Business Industrial (ABI)/New South Wales (NSW) Business Chamber, and found an inconsistency in 11 awards, which it agreed to remove, hence reinforcing the right of the employer in this matter (Workplace Express, 2015o).

Although the review of modern awards process produced a number of favourable outcomes, EAs (and unions) were underwhelmed about the prospect of further reviews. Both sides called for the review process to be discontinued and the PC endorsed this position, recommending a new ‘Workplace Standards Commission’ to directly revise awards (PC, 2015b: 161). Moreover, not all decisions favoured employer interests. For example, the Commission decided that a late wages penalty on employers can be included in a modern award as a provision (FWC, 2015a: 1549). Ai Group’s bid to delete any provision for time-off-in-lieu and make-up pay to be paid at overtime rates was also unsuccessful (FWC, 2015b: 4466).

Fair Work Commission’s annual wage review

EAs predictably submitted that the FWC should be parsimonious when determining the National Minimum Wage (NMW) in 2015. If external factors such as a softening labour market and an increase in the unemployment rate provided some justification for FWC to take this view (FWC, 2015c), ACCI also pointed out that last year’s outcome, if repeated, would be adverse to employment growth (ACCI, 2015e).

A number of EA submissions sought a flat dollar increase of $5.70 per week (including ACCI, Australian Federation of Employers and Industry, Australian Retailers Association, Chamber of Commerce and Industry Queensland, and Victorian Automobile Chamber of Commerce). The Australian National Retailers Association sought a $9 increase. Ai Group proposed a 1.6 % increase (or $10.25 per week in the NMW), while Master Grocers Australia/Liquor Retailers Australia and the National Farmers Federation sought 1.2 and 1.1 % increases, respectively. The ACTU sought an increase of $27 per week to the NMW and award minimum wages up to and including the C10 level. Above this level, ACTU sought a 3.6% increase to all award minimum wages. The ACTU sought to justify this claim on the basis that the NMW had deteriorated over time in comparison to average weekly full-time earnings (FWC, 2015c: 3500). ACCI disputed this logic, and in its submission it referenced the 2005 Safety Net Review Decision of the Australian Industrial Relations Commission (‘AIRC’), that under the safety net process it was inappropriate for movement in average full-time earnings to be considered in determining the NMW (ACCI, 2015f).

FWC decided to increase the NMW by 2.5%. Although higher than what employers sought, the increase came in under last year’s award and the Commission made reference to prevailing economic conditions such as lower inflation, increasing unemployment and higher aggregate wage growth. The FWC decided not to apply a flat dollar increase as it would have the effect of a lower increase in the hourly rate for award-reliant employees (FWC, 2015c: 3500). ACCI’s response to the decision focused on its impact on employment and small business and was predictable:

Most small businesses run on lean margins, operate in a price-sensitive environment and are unable to pass these costs on to consumers. So there is a real prospect it will lead to firms reducing staff numbers or the hours offered (ACCI, 2015e).

The ACTU also sought to have the FWC make a decision on raising the superannuation contribution as part of the NWC and this drew strong criticism from EAs (Ai Group, 2015c), including significant space in ACCI’s Annual Wage Review Reply Submission. The Commission agreed with employer groups’ submissions that the matter should not be heard as part of the Annual Wage Review.

Other developments in 2015

In 2014, the Federal Government accepted the need to review the 457 Visa scheme given ‘ongoing complaints about employer mistreatment of workers and non-compliance with regulations’ (Sheldon and Thornthwaite, 2015: 391). The review panel, which included EA but not union representation, did not find evidence that the scheme was subject to systematic employer abuse (although it did recommend changes to existing provisions to ensure employers could not receive payments by supporting visa applicants). Labor and the Greens were unsatisfied with this finding, and in light of some reported shocking cases of abuse (see e.g. RAM v D&D Indian Fine Food Pty Ltd & Anor), they established a Senate Inquiry into Temporary Work Visa Programs (SMH, 2015c; Workplace Express, 2015p). Employer groups discredited this move as being a wasteful exercise of duplication. Meanwhile the Government announced its support of the Panel’s recommendations, which included fast tracking ‘top tier’ visa applications, relaxing English language testing requirements, extending the Sponsored Occupations list, and introducing measures to reduce the time taken to negotiate labour agreements allowing for the recruitment of groups of migrant workers. Employer groups welcomed the Government’s response (BCA, 2015c). In a softening of the Government’s position, new Employment Minister Michaelia Cash announced she would form a ministerial working group to consider policy options and even possible changes to the FWA to protect such workers.

Employers seemed pleased by the Government’s 2015 Federal budget. Ai Group’s Willox noted ‘the measures to streamline business registration; remove tax barriers to small business restructuring; and allow immediate deductions for certain start-up expenses are sensible initiatives’ (Ai Group, 2015d). A welcome concession to small businesses came with news of a ‘1.5 percentage point company tax cut for incorporated businesses with turnover under $2 million, and a 5 percent tax discount, up to $1,000 a year, for other businesses’ (Industry Update, 2015). Given these outcomes ACCI could well boast its success in raising the profile of small business interests through its ‘Small Business: Too Big to Ignore’ campaign (ACCI, 2015g). EAs also supported the Government’s commitment to enhancing access to child care. The Government’s decision not to impose the paid parental leave levy on large employers also drew support (Ai Group, 2015e). ACCI, Ai Group, ABI/NSW Business, and the Chamber of Commerce and Industry of Western Australia also made submissions to the Senate Inquiry on the Government’s Fairer Paid Parental Leave Bill in September. These submissions stressed that despite changes to the Government’s Paid Parental Leave (PPL) scheme, employers had on the whole not sought to reduce employee entitlements to PPL in employer schemes (Community Affairs Legislation Committee, 2015: 10–12).

The peak EAs were also participants in a National Reform Summit which met in August and brought together business, labour, and community/welfare groups in an effort to break down sectional interests and address continuing policy deadlock. The Summit identified lifting productivity growth and workforce participation as one of four priority areas. Under this heading, the most concrete IR principle agreed was that ‘workplace relations arrangements should be responsive to the changing nature of work and meet the needs of the modern workforce’ (National Reform Summit, 2015).

In October, the Government finally succeeded in passing (in part) its much frustrated Fair Work Amendment Bill. The crossbenchers agreed to greenfields amendments provisions (see earlier) and they also supported changes to PABs that could make it difficult for unions to initiate industrial action in instances where employers refuse to bargain.

Finally, throughout the year employers have been keen onlookers of the work of the Royal Commission into Trade Union Governance and Corruption. The Royal Commission’s investigation has indirectly strengthened the employer case for IR reforms that restrict the power and operation of unions. For the Government, the work of the Royal Commission also provided a welcome distraction from union and Opposition attempts to highlight that the IR reforms contemplated by the PC Inquiry process represented a return to the deeply unpopular WorkChoices framework. The Government also took delight in connections drawn between instances of union corruption highlighted by the Royal Commission and high profile figures in the ALP. For employer groups, public advocacy of the Royal Commission’s work was somewhat less straightforward, as some individual employers were exposed in this process for making payments to union funds in what appear to efforts to secure union cooperation or industrial peace (e.g. Royal Commission, 2014: 25).

Yet if the Commission’s ongoing revelations have come as manna from heaven, the Government also suffered an embarrassing setback when the Opposition sought the removal of the Royal Commissioner, Dyson Heydon, for accepting an invitation to speak at a Liberal Party event. Amid speculation of the fate of Heydon and the Royal Commission itself, the Government’s attempt to reintroduce the Australian Building and Construction Commission (ABCC) through the Building and Construction Industry (Improving Productivity) Bill, which EAs such as Ai Group and the Australian Constructors Association strongly endorsed, failed in a 33/33 Senate stalemate. At this time, the Government also saw its Registered Organisations Amendment Bill narrowly defeated in the Senate. This legislation would have established a Commission to enforce stricter transparency and disclosure rules on union officials. The Building and Construction Industry (Improving Productivity) Bill also contains a powerful tool to assist employers in the form of ‘Building Codes’ which would stipulate conditions of employment allowed (and more importantly not allowed) for building industry participants who undertake Government-funded building work. The final report of the Royal Commission was released at the end of December and predictably called for a reintroduction of the ABCC, and a Registered Organisations Commission with powers to investigate criminal behaviour.

Conclusion

The PC Inquiry was the major focus of EAs’ public advocacy in 2015. The submissions articulated how each association sought to reshape the workplace relations framework to advance the interest of its members. Those who advocated the more radical proposals, such as the removal of most awards altogether (BCA), or a safety net for agreement making (ACCI), were most noticeably disappointed by the Final Report which they labelled ‘piecemeal’ and ‘uncoordinated’. However, despite differences, there was also considerable unity in the employers’ calls for reforms to the IR system to promote what they argue are much needed flexibilities.

Employer groups remained committed to two broad IR outcomes. First, EAs who represent small and medium-sized firms in labour-intensive services industries that are subject to award provisions advocate for a diminution in employee entitlements, such as current penalty rates. EAs who represent industrial employers seek measures to handcuff unions in bargaining and in their capacity to take industrial action. However by the year-end it seemed unlikely that the Turnbull Government would accede to the employers’ desire for substantial change to either the IR rules or the IR regulator. With organised labour promising a marginal seats campaign ahead of the next election, based around workplace relations, the Government appears more likely to prioritise the prescriptions of the Heydon Commission, including the prospect of revamping the ABCC, rather than to advance the more politically contentious IR reforms of the PC Inquiry. If the battle lines are drawn on two fronts, and with an election looming, 2016 shapes as a fascinating year for participants and observers alike.

Footnotes

Acknowledgements

I would like to acknowledge Kevin You who did some research assistance work for the paper, and the JIR referees for their helpful comments.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.

Funding

The author(s) received no financial support for the research, authorship, and/or publication of this article.

Biographical note

Michael Barry is Professor and Head of the Department of Employment Relations and Human Resources at Griffith University, Australia. Michael's main research interests are in the areas of employee voice and engagement, international and comparative employment relations, and employer associations. Michael is currently working on a large funded study of employee–employer relations and workplace challenges in the United States, Australia and the United Kingdom.

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Australian Chamber of Commerce and Industry (ACCI) (2015e) Minimum wage increase will hurt small business and jobseekers. Media Release, 2 June.

13.

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14.

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15.

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16.

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17.

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21.

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22.

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23.

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24.

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27.

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28.

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29.

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30.

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31.

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32.

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33.

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38.

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40.

Workplace Express (2015a) Government’s penalty rates stance disappointing: ACCI, 24 February.

41.

Workplace Express (2015b) Snapshot of Australian workplaces, 30 January.

42.

Workplace Express (2015c) PC floats ‘enterprise contracts’ to fill gap between individual and collective agreements, 4 August.

43.

Workplace Express (2015d) ACTU calls for PC to change tack, 28 September.

44.

Workplace Express (2015e) IR laws too restrictive: BHP Billiton, 17 April.

45.

Workplace Express (2015f) Change Act to open way for penalty rate reduction: Restaurants, 10 April.

46.

Workplace Express (2015g) Return to Pre FW Act Trajectory, 20 March.

47.

Workplace Express (2015h) Senate passes greenfields agreement changes, 13 October.

48.

Workplace Express (2015i) Abetz appoints three new members to FWC, 17 September.

49.

Workplace Express (2015j) Coalition’s challenge is to reassure and explain, rather than ‘Wage War’: PM, 22 September.

50.

Workplace Express (2015k) FWC to explore reduction in complexity of awards: Ross, 26 June.

51.

Workplace Express (2015l) Exempt ‘small businesses’ from key award provisions: Retailers, 14 April; Employers seek simplified conditions for micro businesses, 21 April.

52.

Workplace Express (2015m) FWC to provide award right to cash-out annual leave, 11 June.

53.

Workplace Express (2015n) Award review reveals NES inconsistencies, 21 January.

54.

Workplace Express (2015o) FWC targets transfer of business after NES inconsistencies audit, 15 May.

55.

Workplace Express (2015p) Grotesque Abuse of 457 Visa, 30 May; Senate agrees to another visa inquiry, 25 March.