What it means for employers
If you are an employer, particularly a small business owner, you stand to lose time negotiating contracts, pay thousands of dollars in legal costs, and may lose your best staff to big businesses who can afford to offer greater job security. You may also be forced to cut wages and conditions to compete and face more industrial disputes.
- Will my company be able to choose which system to use?
- What impact will individual bargaining have?
- What will the removal of awards mean for my company's ability to compete?
- What does this law mean for unfair dismissal claims?
- How do I determine what laws apply to my business?
- Will the Australian Industrial Relations Commission be able to help resolve industrial disputes?
- Am I likely to see an increase in accidents and workers compensation claims?
- What impact will the new laws have on productivity?
1. Will my company be able to choose which system to use?
Queensland companies are no longer able to choose the industrial relations system that best suits their needs. Prior to WorkChoices, businesses, particularly small ones, overwhelmingly chose the simple, transparent and fair State system. Small businesses employ 70 per cent of Queensland’s employees.
Under WorkChoices, incorporated businesses are forced to cope with the complex legislation and potentially costly Federal system.
All businesses, large and small, will compete in the Federal system on the same terms as large, multi-national businesses with dedicated human resources and industrial relations expertise.
2. What impact will individual bargaining have?
In your negotiations with employees you will need to consider the value of the employee's work and what the market is paying for similar employees.
You will need to ensure that you do not include any prohibited clauses in your agreements, otherwise you may be faced with a $33,000 fine. Small businesses may also face additional costs in tailoring payroll and human resource functions to suit individual agreements.
These negotiations may result in cost savings for big businesses with dedicated industrial relations resources, but it will be costly, complex and time consuming if you are a small business employer.
3. What will the removal of awards mean for my company’s ability to compete?
Previously, all employment agreements, including collective agreements or individual agreements had to pass the 'no-disadvantage test'.
This meant that overall, the agreement could not disadvantage employees in comparison to the relevant award – preventing undercutting on staff costs.
WorkChoices allows unethical employers to undercut wages and conditions by taking advantage of:
- the removal of the 'no-disadvantage test' and
- the lack of scrutiny previously applied to agreement-making
4. What does this law mean for unfair dismissal claims?
The law changes the way employees challenge a dismissal which they feel is unfair or unlawful. Previously employees could lodge an unfair dismissal claim in either the Australian Industrial Relations Commission or in the Queensland Industrial Relations Commission. The claim was heard quickly in an informal conciliation hearing, reducing the costs involved in a lengthy dispute.
- Under WorkChoices, employers are more likely to have to defend claims of unlawful termination because of the restrictions to unfair dismissal applications. This change will particularly affect employers with up to 100 staff.
- If you are defending an unlawful termination claim you will face proceedings in the Federal Court of Australia. These proceedings are formal and costly and will require costly legal representation.
- The Federal Government has announced that it will provide $4,000 in legal assistance to employees who are pursuing an unlawful termination case, encouraging potentially costly speculative claims.
- Recently some unlawful termination cases have taken up to three years to be finalised.
5. How do I determine what laws apply to my business?
With the introduction of WorkChoices you may find yourself confused over what laws apply to your business.
- The Federal law now applies to businesses who are financial or trading corporations.
- Currently almost half of employers in some parts of Queensland are unincorporated.
- Unincorporated employers who are already covered by a Federal award will stay under the Federal system for a five year transitional period.
- After that time, the only way an unincorporated business can be covered by the Federal system is by incorporating.
- Incorporating can be expensive and will take away your choice to set up your business in the way that best suits your needs for tax, superannuation and liability purposes.
- It is estimated that the initial cost of incorporating for a small business is $2,000 with ongoing costs of at least $1,000 annually. Incorporated businesses will also face additional paperwork and red tape compliance requirements.
6. Will the Australian Industrial Relations Commission be able to help resolve industrial disputes?
The Federal laws now encourage employers and employees to try to resolve their disputes without early assistance from a third party such as the Australian Industrial Relations Commission. This is likely to prolong the dispute resolution process and add to the costs of conducting business.
Despite the encouragement to resolve disputes at the workplace, WorkChoices now allows the parties to sue for damages caused by industrial action without first going to the AIRC to resolve the dispute.
In Queensland the Industrial Relations Commission can intervene in disputes and bring the parties together in conciliation and arbitration. This power ensures disputes do not cause economic damage and that business and workers can get on with the job. The QIRC can no longer provide this assistance to employers who are incorporated.
Since 1998, Queensland’s strike rate has been falling compared to the rest of Australia. Our industrial relations system ensures the state continues to experience an historically low level of industrial disputes, with the average quarterly strike rate (the number of working days lost per thousand employees) for the year to December 2006 at 1.1 compared to the Australian average of 3.7
Queensland 's fair and equitable industrial relations system has been a key factor underpinning the state's continuing strong economic performance.
- Its principles of fairness and equity help build a prosperous economy because workers perform better if they are treated fairly at work and their job, wages and conditions of employment are not under threat.
- In 2005-06 Queensland's economic growth rate was 4.4 per cent – 76 per cent higher than the Rest of Australia (2.5 per cent).
- Queensland has also delivered more jobs and low unemployment. Since January 2002, this State has significantly outperformed the other states in employment growth – having an average annual growth rate (3.9 per cent) double that of the Rest of Australia (1.9 per cent).
- This system has provided certainty for all workers and special protection for apprentices and trainees, which helped to attract workers and allow businesses to grow.
7. Am I likely to see an increase in accidents and workers compensation claims?
If businesses want to compete under the new laws they will be under pressure to negotiate away employee conditions such as meal breaks, public holidays and up to two weeks annual leave per year.
The removal of rest and meal break provisions is likely to result in employees who are tired, fatigued or with increased levels of illness.
Fatigued and tired workers pose a health and safety risk in the workplace and are likely to increase the incidence of workplace accidents and compensation claims.
8. What impact will the new laws have on productivity?
The Federal Government has claimed that its new laws will improve productivity, although there is no evidence or research to support this. The evidence actually suggests that these changes are likely to result in a drop in productivity.
During the 1990s New Zealand introduced laws similar to the Federal Government's laws. Between 1990 and 1999 productivity in New Zealand increased by only 5 per cent. In Australia it rose 23 per cent. New Zealand ultimately scrapped the laws because they were so bad for productivity.
Over time, the Federal Government's laws are likely to result in reduced wages and conditions and will encourage businesses to compete on wage costs rather than on quality and innovation.
Quality, innovation and the effective use of technology have been shown to be key factors in improving workplace productivity and competitiveness. The new laws will not encourage investment or competition in these areas.
Productivity is likely to reduce as employees lose their working conditions and job security. In particular, employees who no longer have access to meal breaks, public holidays or half of their annual leave, are likely to become fatigued and be less productive.Last update July 21, 2009
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