fair work australia: how prepared is your organisation for ...€¦ · research report 3 page...

HRpulse Sponsor

RESEARCH REPORT

Fair Work Australia: How prepared is your organisation for the new IR laws?

EXECpulse Sponsor

ForewordThe Rudd Government came to power in November 2007 with a determination supported by its election promise to change the Work Choices industrial relations framework of the Howard Government.

Under Deputy Prime Minister Julia Gillard, the present federal government has conducted a professional and comprehensive consultation with business and unions that has now culminated in a new piece of workplace relations legislation, the Fair Work Act 2009.

One of the benefits of thorough consultation is that it allows debate on contestable positions which in turn enable professionals, such as HR practitioners, to build a knowledge base as the laws are developed. The 1002 HR professionals who are respondents to this study report that they have been attending seminars and workshops, informing themselves on government websites and following discussions in the press.

The consultation involved key players such as the major employer and employee groups, together with legal and academic input. Notwithstanding that, the new laws are being introduced against a very different economic setting compared to that under which the Government was elected in 2007.

Today the economy is no longer in growth, nor is there a seemingly unlimited access to capital and employers have cut back on labour through downsizing and increasing the number of part-time employees.

At a time when many Australian businesses are struggling to remain competitive, this study reports that two-thirds of respondents (66%) have formed the early view that the Fair Work Act will favour employees, compared with only 4% who think it will favour employers.

A very significant proportion of the respondents (85%) believe the new laws will involve either more spending on legal advice or the same as under the previous Work Choices legislation. And a whopping 98% believe record keeping requirements will be either more onerous or the same as under Work Choices.

It’s early days of course, with the Fair Work Act now in its infancy, but these are the expressed views of business professionals at the pointy end of IR implementation who have very recent memories of the flaws within Work Choices.

That said, there are equally promising signs among the findings, with more than 80% of respondents saying their organisation has taken steps to prepare for the introduction of the National Employment Standards (NES), for example. Also 71% of respondents are confident that the NES will not significantly affect employee terms and conditions in their organisation.

And despite alarm expressed in many quarters, around three out of four respondents do not believe the new unfair dismissal laws will deter their organisation from either employing or retrenching staff if those decisions are called for by business imperatives.

The strengthened role of unions in bargaining combined with the introduction of good-faith bargaining rules, are causing mixed responses. The fact that nearly half the respondents to this study (47%) believe good-faith bargaining will force both employers and employees to behave well, is a good sign. On the other hand, around a third of respondents (31%) believe that the new bargaining regime will result in employers being held to ransom. Not such a good sign. In addition, more than half the respondents (56%) believe pattern bargaining will increase and 44% believe there will be an increase in union demarcation disputes.

The survey that gave rise to the findings in this report is not intended to do more than capture the initial mood and preparedness of professionals on the ground during the transition from Work Choices to Fair Work Australia. In the latter part of 2010 AHRI will resume the detailed research it commissioned with Deakin University in 2007 on the actual impact of the legislation in Australian workplaces after the Fair Work Act has had time to be experienced by our profession more fully. It will be interesting to look with hindsight at these 2009 findings when the results of that later research come to hand.

Peter Wilson AM National President Australian Human Resources Institute

In embarking on this research survey on the introduction of the Fair Work Act 2009, AHRI was aware that the legislation has not yet had any real impact within workplaces. However, the draft legislation and the Fair Work Bill had undergone a lengthy period of public debate and discussion, and been the subject of contested exchanges within both houses of Parliament. There has been pressure on the Government in the media and elsewhere to get it right in the wake of its flawed predecessor, and HR professionals will be at the coal face of its implementation. So we thought it appropriate to ask them about their understanding, their preparedness and their attitudes.

Not surprisingly, given the immediate past on the industrial relations landscape, where the 1002 official respondents to this survey have been optimistic, it has been optimism cautiously expressed, and in a number of cases the findings are simply expressions of pessimism. The largely negative attitudes of many respondents on the likely impact of the new laws on harmony in the workplace, productivity, restructuring and employment opportunities are a salutary reminder that there is still much to be done with respect to education and creating a conducive environment within which the detailed provisions of the Fair Work Act can be fairly put into practice and tested.

This survey is a part of the quarterly HRpulse series based on the AHRI member database but it is also part of the new EXECpulse series which samples a senior executive list of respondents. The report brings together the findings from both databases with comments on the differences where they emerge.

The study has the benefit of advice from the distinguished members of the EXECpulse advisory panel, and I thank them for the value they brought to the framing of questions. I once again thank the 1002 HR professionals who gave their time and made the effort to participate in the survey.

Serge Sardo Chief Executive Officer Australian Human Resources Institute

AcknowledgementsProject director: Serge Sardo Research coordinator: Anne-Marie Dolan Report authors: Serge Sardo, Paul Begley Sponsors: Bridge Consulting, Taleo

Advisory panel for EXECpulseProfessor Wayne Cascio, Robert H Reynolds Chair of Global Leadership, University of Colorado Denver Professor Peter Dowling, School of Management, La Trobe University Professor Malcolm Rimmer, Regional School of Business, La Trobe University Dr Peter Saul, Consultant, Researcher, Writer and Speaker Mr Peter Wilson, National President, Australian Human Resources Institute Ms Danah Zohar, Physicist, Philosopher, Author and Management Thought Leader

Volume 1, Number 2 (EXECpulse) Volume 3, Number 3 (HRpulse) © Australian Human Resources Institute, August 2009

This report combines the data from surveys of AHRI’s EXECpulse and general HRpulse databases. The two research series involve conducting quarterly surveys of sample groups of senior-level HR practitioners and business leaders (EXECpulse) and members of the Australian Human Resources Institute (HRpulse) respectively on pressing issues of the day.

Research Report 1page

SURVEY OVERVIEWThe aim of this survey was to determine the level of understanding and organisational preparedness, as well as to gauge the general expectations of the sample groups with respect to the introduction of the Fair Work Act 2009, the first part of which came into effect on 1 July 2009 with the rest of the legislation due to be effective on 1 January 2010.

The views of two professional sample groups were sought by online surveys during the last two weeks of July 2009, and consisted of approximately 130 executive-level respondents and 870 respondents with HR involvement from across the spectrum of the business.

The sample groups responded to the same survey questions. This report is a combined report of those survey findings, noting marked differences between the full sample of approximately 1000 respondents and the executive-level segment of approximately 130 respondents within it, as appropriate.

DEmOgRAphICSA total of 1002 professionals in total responded to the survey. None of the questions asked was mandatory.

Of those, as indicated in Figure 1, a total of nearly seven out of 10 respondents (68.73%) describe themselves as operating in roles as HR advisor (14.72%), HR manager (31.37%), senior HR manager (14.82%) or HR director or general manager (7.82%).

Figure 2 shows that of the smaller executive-level group contained within the total sample, nearly nine out of 10 (89.82%) describe themselves as either HR director/general manager (58.78%) or director, general manager or CEO (31.3%). The remainder are senior academics.

Figure 1. What is your position in the organisation (total sample group)?

0%

5%

10%

15%

20%

25%

30%

35%

(985 responses)

HR

Ad

ministrato

r

3.55%

HR

Ad

visor

14.72%

HR

Manag

er

31.37%

Senior H

R M

anager

14.82%

HR

Directo

r/CM

7.82%

Co

nsultant

6.40%

Supervisor/Team Leader

0.91%

Manag

er

2.44%

Senior M

anager

3.96%

Directo

r/CM

/CE

O

4.16%

Acad

emic

1.32%

Acco

untant/Finance

0.61%

Ad

ministrato

r

0.61%

Barrister/So

licitor

0.71%

Recruiter

0.91%

Other, p

lease specify

5.69%


Figure 2. What is your position in the organisation (executive-level sample group)?

Figure 3 shows that approximately six out of 10 respondents are from either privately owned companies, ASX listed corporations or global subsidiaries. The remainder are from government or not-for-profit organisations. The proportions are similar for the executive sample group.

Figure 3. Which sector does your organisation operate in?

Figure 4 shows that nearly a third of respondents (30.08%) work for organisations with more than 1000 employees, while around two thirds are employed by organisations with fewer than 1000 employees. Of the general sample, only 6.34% employ 15 employees or less.

Among the executive sample group, 13.74% of organisations employ 15 employees or less with the other overall proportions being similar to the general sample.

0%

50%

100%

(131 responses)

HR Director/GM

58.78%

Director/GM/CEO

31.30%

Academic

9.92%

0%

50%

100%

(993 responses)

ASX listed

11.68%

Privately owned

39.27%

Public

20.34%

Not-for-profit

18.63%

Global subsidiary

10.07%


Figure 4. What size organisation do you work for?

Figure 5 shows that approximately three quarters of the total respondents (75.15% and 70.23% of the executive sample) are HR practitioners with IR responsibilities. Nearly one in 10 is either an IR specialist on the staff of an Australian organisation (7.34%) or an IR specialist consulting to an Australian organisation (2.41%). Approximately 12% of respondents are non-HR professionals with an active involvement or interest in industrial relations.

The proportions are similar for the executive sample group.

Figure 5. What is your industrial relations role in the organisation?

0%

25%

50%

(994 responses)

15 or less 16-100 101-250 251-500 501-1000 1001-2500 Greater than 2500

6.34%

18.41% 18.21%

15.09%11.87% 10.97%

19.11%

0%

50%

100%

(994 responses)

I am an IRspecialist

working withinan Australianorganisation

I am an IRspecialist

consulting toan Australianorganisation

I am an HRpractitioner

with IRresponsibilities

I am a linemanager withan interest orresponsibilityfor IR matters

I am a non-HRemployee withan interest orresponsibilityfor IR matters

I have no IRresponsibilitiesbut an activeinterest in HR

I have no IRresponsibilities

but someinterest in HR

7.34%2.41%

75.15%

5.33%1.91%

4.73% 3.12%


KEY FINDINgS AT A gLANCEIn summary, the following key findings emerged from the survey:

Approximately 80% of respondents report their organisation has taken steps to prepare for the National Employment Standards.

Two-thirds of respondents (65.99%) believe the Fair Work Act (FWA) will favour employees, while only 4.04% believe it will favour employers.

More than 80% of respondents think their organisation will spend either more (54.42%) on legal advice under FWA or the same (31.27%) as under the previous legislation.

The new dismissal provisions under FWA will not affect any current or pending decisions on redundancies or dismissals in 62.91% of respondent organisations.

Nearly eight out of 10 respondents (77.65%) believe the new unfair dismissal laws will not deter their organisation from employing people.

Nearly three quarters of respondents (73.41%) believe the new dismissal laws will not deter their organisation from restructuring.

Nearly half of respondents (47.51%) believe their organisation will enter into single-enterprise agreements under the new FWA legislation.

Nearly half of respondents (48.62%) believe the union right to be a bargaining party will affect the capacity to negotiate a non-union agreement, and 44.43% believe it will lead to demarcation disputes

A total of approximately 98% of respondents believe onerous record keeping requirements will either increase (49.74%) or remain the same (48.21%) under the new legislation.

Nearly half of respondents (47.13%) believe that good-faith bargaining will force both employers and employees to behave properly in bargaining, though 31.74% believe employers will be held to ransom.

More than half (56.89%) of respondents believe the new legislation will be likely or very likely to lead to pattern bargaining.

A total of approximately 80% of respondents expect more employees in their workforce (24.41%) or about the same number (56.75%) to be award-regulated under the new legislation.

More than seven out of 10 respondents (71.58%) believe the introduction of the National Employment Standards will not result in significant improvements to employee terms and conditions in their organisation.

DETAILED FINDINgS Understanding of and preparedness for Fair Work AustraliaThe survey respondents were asked to rate their understanding of a number of elements of the new IR laws as comprehensive, basic or very limited.

As displayed in Table 1, on the two matters of the new unfair dismissal rules and the National Employment Standards (NES), approximately 90% of both sample groups expressed either a basic or comprehensive understanding, with the NES recording the strongest figure on comprehensive understanding at 44.15%. Unfair dismissal was next best, with 37.6% of respondents reporting a comprehensive understanding.

A total of approximately three-quarters of respondents expressed either a basic or comprehensive understanding of enterprise agreements, with 24.15% reporting a very limited understanding. More than one-third of respondents (35.99%) reported having a very limited understanding of the rules relating to transfer of business.


Table 1. Understanding of the Fair Work Act

On the matter of organisational preparedness, Table 2 looks at the same issues as Table 1 but asks respondents to indicate whether their organisation has made considerable preparation, taken some steps to prepare or done very little. Table 2 shows that most preparation has been made with respect to the National Employment Standards (NES) with more than eight out of ten respondents indicating they have made considerable preparation (30.95%) or some attempts to prepare (48.89%). Less than a fifth (19.96%) of all respondents report taking few steps to prepare for the NES (15.5% for executives).

Nearly nine out of 10 of the executive sample group, as set out in Table 3, report considerable (31.78%) or moderate (55.04%) preparations with respect to the new unfair dismissal rules, and only 13.18% report having made very little preparation. By contrast, the full sample group (see Table 2) indicates that a quarter of organisations (25.4%) have taken very few steps to prepare for the unfair dismissal changes with roughly the same proportion having made considerable preparation.

The proportions of the total sample reporting very little preparation for enterprise bargaining (40.02%) and enterprise agreements (38.1%) are relatively high, though marginally lower for the executive sample.

Fewer executives report strong numbers on having made very little preparation for the introduction of modern awards (19.38%) than the full sample group (26.61%).

Neither sample group reports strong numbers on having taken considerable steps to prepare for the rules relating to transfer of business, with the executive sample reporting 13.95% and the full sample group only 10.79%.

Table 2. How prepared is your organisation for Fair Work Australia (total sample group)?

Very limited understanding

Basic understanding

Comprehensive understanding

New rules affecting unfair dismissal 63 (6.35%) 556 (56.05%) 373 (37.60%)

Rules relating to enterprise bargaining 232 (23.39%) 527 (53.13%) 232 (23.39%)

Enterprise agreements 240 (24.19%) 521 (52.52%) 227 (22.88%)

Rules relating to transfer of business 357 (35.99%) 489 (49.29%) 141 (14.21%)

The operation of Fair Work Australia and the Fair Work Ombudsman

138 (13.91%) 604 (60.89%) 247 (24.90%)

National Employment Standards (from 1 January 2010)

104 (10.48%) 449 (45.26%) 438 (44.15%)

Modern awards (from 1 January 2010) 183 (18.45%) 545 (54.94%) 263 (26.51%)

(992 responses)

Very fewsteps havebeen taken

Some attempts have been made to prepare for

the changes and their impact

Considerable preparation

has been taken to be ready for







338 (34.07%) 467 (47.08%) 182 (18.35%)


198 (19.96%) 485 (48.89%) 307 (30.95%)


(992 responses)


Table 3. How prepared is your organisation for Fair Work Australia? (executive-level sample group)

The most common ways respondents have informed themselves about the new IR laws is shown in Figure 6. Attendance at legal and industry seminars with more than three-quarters of the full sample of respondents (76.72%) reporting participation in those services and offerings of legal firms and industry bodies, is the most popular.

Nearly seven out of 10 (69.03%) report going directly to the source of the legislation to inform themselves and almost two-thirds (63.87%) report following discussions in the media. Considerably fewer consulted internal or external IR specialists (40.28%) or enrolled in courses (31.98%).

The executive group report a similar order of preferences.

Figure 6. How did you gain an understanding of the FWA?

Note: Survey respondents were able to select more than one response in this question

As indicated in Figure 7, the HR team is the most active group in most organisations with respect to preparation for the new laws with 63.13% of the full sample of respondents selecting that option (70.31% for the executive sample). The next most active group in preparing for the FWA is the CEO and management team (35.94% and 40.63% for the full sample and executive groups respectively).

0%

50%

100%

(988 responses)

Consulted withinternal or

outsourced IRspecialists for

my organisation

40.28%

Attendedlegal/industry

seminars/presentations

on thenew laws

76.72%

Completedtraining/

workshopson the new

laws andhow theyare to be

implemented

31.98%

Followeddiscussion

on thechanges inthe press

63.87%

Read thelegislation

and governmentwebsites/materials

regarding thelegislation

69.03%

Other,pleasespecify

6.88%

Very fewsteps havebeen taken

Some attempts have been made to prepare for


Considerable preparation

has been taken to be ready for







28 (21.71%) 67 (51.94%) 31 (24.03%)


20 (15.50%) 61 (47.29%) 48 (37.21%)


(129 responses)


Figure 7. Who has been involved in preparations for the new IR laws in your organisation?

Note: Survey respondents were able to select more than one response in this question

general ExpectationsThis section of the survey asked respondents to indicate their expectations with respect to the introduction of the new Fair Work Act.

Figure 8 sets out the responses to a question on whether the Fair Work Act is likely to favour employers or employees. It was generally agreed in the Australian electorate that the previous IR legislation, Work Choices, had not got that balance right. Would the Fair Work Act correct the balance?

Nearly two-thirds of the survey respondents appear to believe that the FWA will over-correct with 65.99% reporting that they think it will favour employees (71.54% of the executive sample hold the same view).

A sizeable minority of 29.97% of all respondents believe the FWA will favour neither employers nor employees (26.15% of executives). A negligible proportion of both sample groups believe the new laws will favour employers.

Figure 8. Do you think the Fair Work Act will favour employers or employees?

On a scale of 1-5 respondents were asked whether the FWA would lead to:

• more or less harmony in the workplace• more or less productive workplaces• facilitation of or impediments to workplace restructuring • growth in or inhibiting of employment opportunities.

Figures 9-12 set out the responses to those questions from the full sample group. The majority of responses centre on the middle of the scale with a distinct bias towards the negative in each case. The negative responses are most apparent in the answers to the questions on workplace harmony and workplace restructuring. It seems many respondents see the laws giving rise to workplace disputes caused by strengthened unions that could impede restructuring initiatives.

Around one in 10 respondents expect the new laws to facilitate circumstances that result in workplace improvements in each area.

The executive sample group reported similar responses.

0%

50%

100%

(991 responses)

Employers

4.04%

Employees

65.99%

Neither

29.97%

0%

10%

20%

30%

40%

50%

60%

70%

(971 responses)

The CEO/managingdirector/executive

team

35.94%

TheHR

director

43.67%

TheHR

team

63.13%

Thefinanceteam

7.00%

IRspecialists(internal)

25.44%

IRspecialists(external)

20.19%

Employees

11.02%

Unions

12.56%

Employergroups

13.08%

Other,pleasespecify

5.15%


Figure 9. Will the FWA create less or more harmony in the workplace?

Figure 10. Will the FWA result in less or more productive workplaces?

Figure 11. Will the FWA result in impediments to workplace restructuring or facilitate them?

0%

10%

20%

30%

40%

50%

(988 responses)

1Less harmonious

15.18%

2

34.31%

3

37.75%

4

11.13%

5More harmonious

1.62%

0%

10%

20%

30%

40%

50%

60%

(986 responses)

1Less productive

7.40%

2

24.75%

3

54.87%

4

11.66%

5More productive

1.32%

0%

10%

20%

30%

40%

50%

(985 responses)

1Impediments to

restructuring

16.55%

2

37.87%

3

36.75%

4

7.72%

5Restructure quickly

and effectively

1.12%


Figure 12. Will the FWA result in a growth in or an inhibition of employment opportunities?

Figure 13 indicates respondent expectations on the issue of legal advice, with a little more than half (54.42%) believing that their organisation will spend more under FWA. Around a third (31.27%) believe there will be no change and 12.28% reserve their judgement, with a miniscule 2.03% believing their organisation will spend less.

While that expectation may appear unduly negative, it is an issue that may well apply only to the transition stage of the legislation when organisations are coming to terms with how the law impacts on their business.

Figure 13. Will the FWA result in more or less spending on legal advice?

The final two questions about general respondent expectations sought views on two matters:

• how the FWA might benefit their organisation

• whether the impacts on the organisation would be positive or negative.

Table 4 indicates that a majority believe there will be no benefits to their organisation from the new rules on unfair dismissal (66.36%), enterprise bargaining (57.07%) and enterprise agreements (54.55%). However, nearly one in five respondents believes there will be benefits to their organisation on each of those issues.

A considerably larger proportion of respondents believe there will be benefits to their organisation from the introduction of the National Employment Standards (38.99%) and the modern awards (34.44%) when they are introduced in January 2010.

0%

10%

20%

30%

40%

50%

60%

(977 responses)

1Inhibiting employment

opportunities

9.01%

2

28.45%

3

51.89%

4

9.11%

5Growth of employment

opportunities

1.54%

0%

20%

40%

60%

(985 responses)

More

54.42%

Less

2.03%

No Change

31.27%

Don’t know

12.28%


Table 4. Will the following aspects of FWA benefit your organisation?

The results reported in Table 5 indicate that the majority of respondents on each issue see the impacts as neither positive nor negative. The strongest negative responses were on profitability (28.8%), growth opportunities (24.34%), employee engagement (22.52%). At the same time, 20.69% of respondents believe the benefits for employee engagement will be positive.

Table 5. How do you see the FWA impacting on your organisation in the following areas?

Yes No Don’t know






232 (23.43%) 384 (38.79%) 373 (37.68%)


386 (38.99%) 393 (39.70%) 211 (21.31%)


(990 responses)

Negative impact

1 2

Neither negative nor

positive 3 4

Positive impact

5 Don’t know

Productivity of employees 37 (3.75%) 144 (14.60%) 675 (68.46%) 75 (7.61%) 7 (0.71%) 48 (4.87%)

Growth opportunities for the organisation 50 (5.07%) 190 (19.27%) 592 (60.04%) 79 (8.01%) 11 (1.12%) 59 (5.98%)

Development of leadership within the organisation 25 (2.54%) 76 (7.71%) 680 (68.97%) 126 (12.78%) 22 (2.23%) 54 (5.48%)

Customer satisfaction 30 (3.04%) 103 (10.45%) 713 (72.31%) 54 (5.48%) 16 (1.62%) 66 (6.69%)

Innovation in products/services/delivery 35 (3.55%) 112 (11.36%) 688 (69.78%) 67 (6.80%) 9 (0.91%) 68 (6.90%)

Employee engagement 42 (4.26%) 180 (18.26%) 503 (51.01%) 173 (17.55%) 31 (3.14%) 56 (5.68%)

Profitability of the organisation 57 (5.78%) 227 (23.02%) 557 (56.49%) 52 (5.27%) 6 (0.61%) 83 (8.42%)

(986 responses)


The LegislationA section of the survey asked respondents to report on a number of parts of the new laws:

• Dismissal provisions

• Enterprise bargaining

• Good faith bargaining

• The role of Fair Work Australia and the Fair Work Ombudsman

• Industrial action

• Union right of entry.

DISmISSAL pROVISIONSFigure 14 indicates that three out of four respondents (74.59%) believe that their organisation will be revising their dismissal and redundancy policies as a result of the new provisions on dismissal in the Fair Work Act. A smaller majority (55.24%) report there will be an increase in management training. A small minority (13.51%) see a greater use of labour hire and short-term casual employment resulting from the dismissal provisions, suggesting that there may not be a significant reduction in permanent employment opportunities as a result of the new laws.

The executive-level sample group reported in similar proportions.

Figure 14. Will the dismissal provisions of the FWA result in changes in your organisation?

Figure 15 indicates that nearly two out of three (62.91%) respondents believe their organisation will not be impacted by the FWA with respect to current or pending decisions on dismissal or redundancies. Around one in 10 believe their organisation will be impacted and around one in five (22.15%) don’t know whether there will be an impact or not.

A question on current or pending decisions with respect to replacing or creating positions within the organisation elicited a similar response rate, as did the executive-level sample on both questions.

0%

25%

50%

75%

100%

(925 responses)

Increasedmanagement

training

55.24%

Revisions todismissal/

redundancyprocedures and

guidelines

74.59%

Increased useof labour hire,temporary or

short-termcasual labour

13.51%

Other –please specify

5.62%


Figure 15. Will the FWA impact on current or pending decisions on dismissals or redundancies in your organisation?

On the issue of employer obligations under the unfair dismissal provisions, Figure 16 indicates that a substantial 77.65% of respondents from the full sample do not believe those provisions will deter the organisation from employing people. One in 10 respondents (10.92%) report they will do so. The question refers to obligations relating to offering redeployment options and consultation on awards and enterprise agreements.

As indicated in Figure 17, executive-level sample group also reported a strong ‘no’ to the same question but with a lower rate (68.5%) but a higher rate of one in five respondents (20.47%) who report that they believe the unfair dismissal provisions will deter the organisation from employing people.

Figure 16. Will the FWA unfair dismissal obligations on employers deter your organisation from employing people? (total sample group)

0%

50%

100%

(984 responses)

No

62.91%

Don’t Know

22.15%

Yes (pleasespecify in what ways)

14.94%

0%

25%

50%

75%

100%

(989 responses)

Yes

10.92%

No

77.65%

Don’t know

8.59%

Not applicable –my organisation has

less than 15 employees

2.83%


Figure 17. Will the FWA unfair dismissal obligations on employers deter your organisation from employing people? (executive-level sample group)

To a similar question on whether the FWA unfair dismissal provisions will deter the organisation from engaging in necessary restructuring, Figure 18 indicates that a substantial 73.41% of respondents from the full sample believe it will not do so.

That response rate is stronger for the executive level-group with 80.47% of respondents reporting that the FWA provisions will not deter restructuring in the organisation. (see Figure 19)

It would appear from the responses set out in Figures 16–19 that the unfair dismissal provisions hold relatively few fears for organisations with respect to either employing or laying off staff when required.

Figure 18. Will the FWA unfair dismissal obligations deter your organisation from embarking on genuine and extensive restructuring to meet business objectives? (total sample group)

0%

25%

50%

75%

100%

(989 responses)

Yes

12.84%

No

73.41%

Don’t know

11.73%



2.02%

0%

50%

100%

(127 responses)

No

64.57%

Don’t Know

17.32%

Yes (pleasespecify in what ways)

18.11%


Figure 19. Will the FWA unfair dismissal obligations on employers deter your organisation from embarking on genuine and extensive restructuring to meet business objectives? (executive-level sample group)

ENTERpRISE BARgAININgRespondents were asked whether their organisation had a current collective agreement. Figure 20 indicates that a third of respondents report having a union collective agreement (36.08%) and nearly a fifth report a non-union collective agreement (18.6%), with 42.78% reporting no collective agreement operating.

The executive-level sample group reported similar proportions.

Figure 20. Does your organisation have a current collective agreement?

0%

20%

40%

60%

(984 responses)

a. Yes – anon-unioncollective

agreement

18.60%

b. Yes – a unioncollective

agreement

36.08%

c. No

42.78%

d. Don’t know

2.54%

0%

25%

20%

75%

100%

(128 responses)

Yes

10.94%

No

80.47%

Don’t know

7.03%



1.56%


Of the 183 respondents whose organisations have a non-union agreement, nearly half (48.63%) report that they will be renegotiating the agreement rather than allowing it to become obsolete with time, as indicated in Figure 21, with a third (36.61%) reporting the agreement will be allowed to run its course until it expires.


Figure 21. Will the FWA result in your organisation renegotiating the agreement in preference to letting it become obsolete over time?

Of the 108 respondents whose organisations will renegotiate an agreement, Figure 22 shows that the numbers are evenly divided between those who will renegotiate a union agreement (40.74%) and those who will renegotiate a non-union agreement (39.81%). Nearly a fifth (19.44%) report not knowing what the organisation will do.

The executive-level sample group report similar evenly divided proportions.

Figure 22. If you intend renegotiating an agreement, do you expect it to be renegotiated with a union?

Of the 355 respondents who reported that their organisation will renegotiate an agreement with a union, Figure 23 shows that nearly half (46.76%) expect changes to the process, and a little more than a third (38.59%) expect no change.

The executive-level sample group responses to this question reveal that slightly fewer (46%) expect a change in the process to those expecting no change (48%) and only 6% of executives say they don’t know.

0%

50%

100%

(183 responses)

Yes

48.63%

No

36.61%

Don’t know

14.75%

0%

50%

100%

(108 responses)

Yes

40.74%

No

39.81%

Don’t know

19.44%


Figure 23. If you are renegotiating a union agreement do you expect changes in that process?

SAmpLE RESpONDENT COmmENTSA number of respondents answering the question referred to in Figure 23, offered written comments on how they see the negotiating process changing. The following is a sample of comments.

“Greater analysis will need to be undertaken behind closed doors before anything is debated with union representatives. ‘Marketing’ the benefits of what management is trying to implement to employees will become more important to ensure their support”

“We have traditionally had a difficult working relationship with the union, but we are using the new legislation, particularly the good faith bargaining provisions, as a basis for establishing new ground rules”

“More disclosure required , more delay by unions to commit to outcomes as they insist on more information while declining to provide any information in return”

“It has changed already more bureaucratic, slower, more time consuming, union agendas”

“Our Agreement has only just been ratified and has a term of 3 years. The introduction of the Fair Work Act will be bedded down and we will be aware of the impact. This may have an impact on the manner in which we negotiate the next Agreement”

“More uncertainty about the transition period and what can and can’t be included in the new EA”

“Stronger union involvement, less employee involvement”

“More concentration on process for good faith requirements”

“A more professional approach will be required and we are looking at professional development of our managers who will be involved in that process”

“Unsure what impact new laws will have with regard to employees being able to negotiate for themselves”

“Easier access to the workplace for the union which was previously prohibited under Work Choices”

“More unions will now be eligible to sit at the negotiation table which we envisage will slow down the process and quite probably “muddy” the waters as unions who don’t know or understand our business or industry become involved to support political agendas rather than employee rights”

0%

50%

100%

(355 responses)

Yes

46.76%

No

38.59%

Don’t know

14.65%


“We are anticipating a much more lengthy negotiation period, hence will need to start earlier”

“Taking the time to communicate with employees and training them in the whole process. If you are open, trustworthy, transparent and respectful then that will also be felt by the majority and that makes things much easier overall”

“Everything will need to be documented clearly, in easy to read terms, and be easily accessible for reference if required”

“Have concerns that a greater number of unions might enter the picture where previously we have only had to deal with one union. This will complicate things unnecessarily and has the potential to create disharmony where previously there has been none”

“Award modernisation process has resulted in us being aligned with classifications, rates of pay and penalty rates from unrelated amusement and recreation industry / employers. Our conditions agreed over 21 years of negotiations with single enterprise union will be jeopardised due to a totally unrelated safety net being imposed for the BOOT test and possible Eastern States Union involvement”

“Our organisation has a number of union-collective agreements, non-union collective agreements, ITEAs and award/agreement free employees. The IR strategy we undertake will not change dramatically, as we have key principles which we work with and the legislation can be seen as principle based law. Many of potential issues for organisations could be with the relationships they have with the unions involved and whether their style in dealing with those relationships will be conducive under this legislation”

“Not clear exactly what as yet, but would anticipate that there will be testing of the water from all parties”

“Fairness is now a mandate rather than an option”

“Bargaining in good faith may be positive for the company”

“A lot more people at the table, making the bargaining process extended, convoluted and unnecessary”

“We will start to see requests for “transparency” in the good faith bargaining provisions. This will mean laying open the company’s financial position, budgets, P&L accounts etc There will be greater emphasis on new claims for extended paid parental leave, security of potential redundancy benefits in third party accounts etc etc etc”

“Demarcation disputes amongst a greater number of unions, and unions having greater negotiating powers to try to demand inclusion of non-employment condition type clauses relating to business operations which if raised will bog down the process”

“Complete documentation of the steps taken in each negotiation to ensure that the good faith bargaining aspects are adhered to by both parties”

“We will no longer be able to simply tell the unions we don’t have a capacity to pay higher wage Increases. We will now have to demonstrate via the open “good faith” bargaining principles and could be asked to provide financial details.”

Of the 42.78% of respondents whose organisations do not have a collective agreement operating at present (see Figure 18), Figure 24 shows that seven out of ten (70.07%) do not anticipate entering a collective agreement under the FWA, with 15.2% not knowing whether they will or not.

The executive sample group is marginally less sure with a ‘no’ response rate of 66.67%, and a similar proportion unsure.

Of the 14.73% (68 respondents) who report they expect to enter a collective agreement under the new laws, 70.59% believe they will do so as a response to the introduction of modern awards,19.12% because of employee demands and 8.82% because of union demands.


Figure 24. Do you anticipate making a collective agreement under the new legislation?

AgREEmENT mAKINgThere is some uncertainty about what type of enterprise agreement respondent organisations are going to enter with Figure 25 showing that 30.48% of respondents report that they don’t know.

Approximately half, however, intend to enter single enterprise agreements with the remainder looking at multi-enterprise agreements (10.2%) and a combination (10.85%).


Only 20.1% of respondents report that their organisation entered into a agreement during the last 3-4 months in order to be covered under the transitional bill until arriving at a new agreement.

Figure 25. What type of enterprise agreements will your organisation be entering under the FWA?

Respondents are mixed in their attitudes to the provision under FWA that allows a union to become a bargaining party with one member in the workplace (see Figure 26). While nearly half (48.62% think that will affect the capacity of the organisation to create non-union agreements, a third (33.33%) believe it will not have that effect. Nearly one in five doesn’t know (18.05%).

The executive sample group who believe it will affect the capacity of the organisation to create non-union agreements are more certain of that than the full sample (55.12%) and fewer respondents report not knowing (11.81%). See Figure 27.

0%

50%

100%

(421 responses)

Yes

14.73%

No

70.07%

Don’t know

15.20%

0%

25%

50%

(922 responses)

Single-enterpriseagreements

47.51%

Multi-enterpriseagreements

10.20%

Greenfieldsagreements

0.98%

A combination

10.85%

Don’t know

30.48%


Figure 26. Only one member in a workplace needs to be a union member for the union to become a bargaining party under FWA. Will that provision affect the capacity of your organisation to create non-union agreements? (full sample group)

Figure 27. Only one member in a workplace needs to be a union member for the union to become a bargaining party under FWA. Will that provision affect the capacity of your organisation to create non-union agreements? (executive-level sample group)

Referring to the same provision, respondents were asked whether if would lead to an increase in union demarcation disputes in cases where members of more than one union were employed in a workplace. A quarter of respondents (24.85%) reported not knowing, a third (30.72%) reported it would not lead to demarcation disputes and nearly a half (44.43%) reported that it would (see Figure 28).

A marginally smaller proportion of executive-level sample group respondents were unsure (19.05%) while a greater proportion were sure it would not lead to demarcation disputes (34.13%).

0%

25%

50%

(975 responses)

Yes

48.62%

No

33.33%

Don’t know

18.05%

0%

50%

100%

(127 responses)

Yes

55.12%

No

33.07%

Don’t Know

11.81%


Figure 28. Do you think the union provision will lead to an increase in demarcation disputes?

RECORD KEEpINgAHRI’s 2007 research findings on this question revealed it to be, along with the need for legal advice, one of the most burdensome and costly aspects of the previous legislation (Work Choices). It appears from Figure 29 that respondents are expecting no relief from onerous record keeping with only a miniscule 2.05% believing the demands will be less than under Work Choices.

The sample group is evenly divided between nearly half (49.74%) believing FWA will lead to more onerous record keeping and 48.21% seeing no change. Neither of those expectations can be taken as optimistic.

The executive-level sample group reported in similar proportions with a slightly greater proportion believing FWA will mean more onerous record keeping (55.91%) and 43.31% no change.

That response could be a result of the perceived requirements under the FWA for documentation and disclosure with respect to good faith bargaining.

Figure 29. Do you think record keeping requirements will be materially more or less onerous under the new legislation than previously?

0%

25%

50%

(977 responses)

More

49.74%

Less

2.05%

No change

48.21%

0%

25%

50%

(970 responses)

Yes

44.43%

No

30.72%

Don’t know

24.85%


gOOD-FAITh BARgAININgRespondents were reminded that Fair Work Australia can determine by any method it chooses what amounts to good-faith bargaining, and that all parties are now required to bargain, and to do so in accordance with good-faith rules.

Figure 30 indicates that nearly half the sample group (47.13%) believe the good-faith requirement will force employers and employees to behave properly when bargaining. A substantial minority of 31.74%, however, believe that unions will hold employers to ransom by dragging out negotiations to get a better deal for employees. Only 9.02% believe that unions will be under pressure to act in good faith or risk a judgement against them.

As indicated in Figure 31, only 40.16% of the executive-level sample group believe the good-faith requirement will force employers and employees to behave properly when bargaining, with the exact same proportion (40.16%) believing unions will hold employers to ransom by dragging out negotiations to get a better deal for employees.

While these findings show a strong reservoir of confidence exists among respondents in the notion of ‘good faith’ bargaining, there is a significant proportion that remains to be convinced it will work as intended by the FWA.

Figure 30. What impact do you think the good-faith bargaining provisions will have in your organisation? (total sample group)

Figure 31. What impact do you think the good-faith bargaining provisions will have in your organisation? (executive-level sample group)

0%

10%

20%

30%

40%

50%

(942 responses)

Both employersand employees

will be forced to behave properly

in bargaining

47.13%

Employers will be heldto ransom by

employees whodrag out bargainingto get a better dealthrough their union

31.74%

Unions will be underpressure to showthey are actingin good faith orrisk a judgement

against them

9.02%

Other – pleasespecify

12.10%

0%

25%

50%

(122 responses)

Both employersand employeeswill be forced

to behave properlyin bargaining

40.16%

Employers will beheld to ransom by

employees who drag outbargaining to get

a better deal throughtheir union

40.16%

Unions will be under pressure to

show theyare acting in

good faith or riska judgementagainst them

5.74%

Other – pleasespecify

13.93%


pATTERN BARgAININgRespondents were reminded that it has been claimed in some quarters that the FWA will lead to pattern bargaining (i.e. getting an entitlement from a ‘soft’ employer and using that to win gains by precedent from other employers). While the practice was prohibited under Work Choices, the Government does not believe the FWA will lead to pattern bargaining and a specific prohibition is not required.

Figure 32 indicates that on a scale of 1 to 5, a total of 56.89% of respondents believe pattern bargaining is either likely (30.67%) or very likely (26.22%). One in five (19.38%) sees pattern bargain as neither likely nor unlikely, and a total of only one in 10 sees is as unlikely (6.84%) or very unlikely (3.21%).

Almost two-thirds of the executive-level sample group report a slightly stronger view that pattern bargaining is either likely (31.5%) or very likely (33.86%) under the FWA.

Figure 32. Will the FWA lead to pattern bargaining?

FAIR WORK AUSTRALIARespondents were reminded that Fair Work Australia has been characterised in some quarters as a return of the old ‘industrial relations club’. By contrast the Government describes Fair Work Australia as a new one-stop-shop with an umpire able to provide employers and employees with timely and efficient decisions, judgements and advice.

Figure 33 indicates that more than a third of respondents (38.2%) believe Fair Work Australia will use its strength to stifle enterprise and increase bureaucracy. However, closer to half (43.35%) believe that the new body will become an umpire respected across the board for the consistency and certainty it provides to business.

The executive-level sample group report a more pessimistic response rate of nearly half (44.17%) believing Fair Work Australia will use its strength to stifle enterprise and increase bureaucracy, with only 32.5% believing it will become an umpire respected across the board for the consistency and certainty it provides to business.

0%

25%

50%

(965 responses)

1Very unlikely

3.21%

2

6.84%

3Neither likelynor unlikely

19.38%

4

30.67%

5Very likely

26.22%

Don’t know

13.68%


Figure 33. Will Fair Work Australia become a widely respected umpire or stifle enterprise and increase bureaucracy?

FAIR WORK OmBUDSmANRespondents were reminded of reports in the press that the Fair Work Ombudsman has greater powers under the FWA to investigate claims of workplace discrimination (e.g. dismissal of a woman while on maternity leave). The powers include reverse onus of proof so that accused parties need to disprove allegations against them. Some employer groups have warned the powers will lead to a floodgate of claims. The Ombudsman, on the other hand, has said he will be proceeding with caution in undertaking investigations.

Figure 34 indicates that a substantial minority of respondents (38.37%) believe the powers will lead to a rash of bogus employee claims, while around one in five respondents (20.13%) believe the powers will enable an increase in the number of genuine employee claims.

More than a quarter (29.82%) believe the powers will lead to more responsible behaviour by employers, while 17.41% believe they will lead to employers seeking legal loopholes to avoid detection following poor behaviour.

As shown in figure 35, the executive-level sample group take a more pessimistic view on employee behaviour, with more than half (51.2%) believing the powers will lead to a rash of bogus employee claims, while less than one in five (18.4%) believe the powers will enable an increase in the number of genuine employee claims.

Only one in five executive respondents (20.8%) believe the powers will lead to more responsible behaviour by employers, though only 11.2% believe they will lead to employers seeking legal loopholes to avoid detection following poor behaviour.

Figure 34. Do you think the investigation of workplace discrimination claims by the Workplace Ombudsman will lead to ... (full sample group)

0%

25%

50%

(959 responses)

more responsiblebehaviour byemployers?

29.82%

employersseeking legalloopholes to

avoid detection?

17.41%

an increase inthe numberof genuineemployee

claims?

20.13%

a rash ofbogus claims

by employees?

38.37%

no change?

22.52%

0%

25%

50%

(932 responses)

An umpire respectedacross the board for theconsistency and certainty

it provides to business

43.35%

An all-powerful umpire thatuses its strength to stifle

enterprise in business andincrease unecessary bureacracy

38.20%

Other – please specify

18.45%


Figure 35. Do you think the investigation of workplace discrimination claims by the Workplace Ombudsman will lead to … (executive-level sample group)

mODERN AWARDSFigure 36 indicates that more than half the respondents (56.75%) believe that about the same proportion of workers now under awards will remains so, while a quarter believe more employees will be covered by awards in 2010.

The executive-level sample is similar.

Figure 36. Will the commencement of modern awards in January 2010 change the proportion of the workforce in your organisation that is award-regulated?

There appears some uncertainty, as indicated in Figure 37, about how the modification and exclusion mechanisms under modern awards might be used (e.g. award flexibility agreements, guarantee of earnings or making enterprise agreements) with roughly equal proportions of respondents indicating whether they will (29.74%) or will not (39.38%) be seeking to use such mechanisms, and 30.88% indicating they don’t know.

The executive-level sample is similar, with a slightly larger proportion (36.51%) indicating they will use them.

0%

20%

40%

60%

(971 responses)

More employeesin my organisation

will be coveredby awards

24.41%

Less employeesin my organisation

will be coveredby awards

4.33%

About the same

56.75%

Don’t know

14.52%

0%

20%

40%

60%

80%

100%

(125 responses)


20.80%


avoid detection?

11.20%

an increase in thenumber of genuineemployee claims?

18.40%

a rash ofbogus claims

by employees?

51.20%

no change?

18.40%


Figure 37. Will the commencement of modern awards be likely to result in your organisation using the mechanisms available to modify or exclude the application of awards?

NATIONAL EmpLOYmENT STANDARDS (NES)Figure 38 indicates that seven out of 10 respondents do not believe the introduction of the NES will result in a significant improvement in the terms and conditions of employment for the workforce in their organisation. Only 17.2% believe the NES will cause a significant improvement to workers’ terms and conditions.


Figure 38. Do you see the introduction of the NES in January 2010 resulting in your organisation significantly improving the terms and conditions of employment for employees?

Respondents were reminded that under the FWA remedies can be sought against employers found knowingly or recklessly making false or misleading representations to employees about statutory entitlements (e.g. annual leave) or workplace rights (e.g. to seek promotion). Reverse onus of proof applies.

Figure 39 indicates that the largest response to that question was from 30.28% of respondents who said it would result in no change in their organisation.

0%

50%

100%

(971 responses)

Yes

17.20%

No

71.58%

Don’t know

11.23%

0%

25%

50%

(965 responses)

Yes

29.74%

No

39.38%

Don’t know

30.88%


A fifth (20.61%) believe the provisions will lead to a rash of bogus employee claims, while only 8.32% believe they will enable an increase in the number of genuine employee claims.

More than a quarter (28.82%) believe the provisions will lead to more responsible behaviour by employers, while only 7.8% believe they will lead to employers seeking legal loopholes to avoid detection following poor behaviour.

As shown in Figure 40, the executive-level sample group take a more pessimistic view on employee and employer behaviour, with nearly a third (30.95%) believing the powers will lead to a rash of bogus employee claims, and a smaller proportion (15.07%) believing the provisions will lead to more responsible employer behaviour.

Figure 39. Will the remedies available to employees against employers that make false or misleading representations head to ... (full sample group)

Figure 40. Will the remedies available to employees against employers that make false or misleading representations lead to … (executive-level sample group)

0%

25%

50%

(961 responses)


28.82%


avoid detection?

7.80%

an increasein the number

of genuineemployee

claims?

8.32%

a rash ofbogus

claims byemployees?

20.01%

no change?

30.28%

Other,please

specify?

3.95%

0%

20%

40%

(126 responses)

more responsiblea behaviour

by employers?

15.07%

employersseeking legal

loopholesto avoid

detection?

8.73%

an increasein the number

of genuineemployee

claims?

11.11%

a rashof bogusclaims by

employees?

30.95%

no change?

26.19%

Other,please

specify?

7.14%


UNION RIghT OF ENTRYThe high ‘don’t know’ response (36.61%) to a question on union right to enter and hold discussions with employees, suggests a degree of uncertainty among respondents. That is supported by the one-third who believe the provision will not be used responsibly by unions compared with a similar proportion who believe it will (29.58%). See Figure 41.


Figure 41. Do you think unions will be responsible in their use of the notice requirements to enter workplaces to investigate breaches of the Act or industrial instruments?

Respondents were reminded that unions can apply to Fair Work Australia for an exemption from giving notice to enter workplaces in cases where they wish to investigate suspected breaches that might be destroyed, concealed or altered were notice given. .

Figure 42 indicates that nearly half the respondents (47.48%) express no view on that question. The other half are evenly divided into believing that reliable calls will be made on exemptions (27.5%) and the opposite (25.03%)


Figure 42. Will Fair Work Australia make reliable calls on issuing union exemptions from giving notice to enter workplaces?

0%

25%

50%

(971 responses)

Yes

27.50%

No

25.03%

Don’t know

47.48%

0%

25%

50%

(967 responses)

Yes

29.58%

No

33.82%

Don’t know

36.61%

Australian Human Resources Institute LimitedABN 44 120 687 149 Level 10, 601 Bourke Street melbourne Victoria 3000 T (+613) 9918 9200 F (+613) 9918 9201www.ahri.com.au

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