Prime Minister’s focus on complexity of award system is welcome

“The Australian Industry Group (Ai Group) welcomes the Prime Minister’s comments about the complexity of the award system and the potential need for some changes. An obvious first step would be for the Government to release a discussion paper on this topic and seek input from interested parties,” Ai Group Chief Executive, Innes Willox, said today.

“Any proposals for change need to recognise that the award system has been in a constant state of major review for the past 12 years. The major award modernisation process that started in 2008 ran straight in to the 2012 review of awards and this ran straight into the 4 yearly review of awards, which commenced in 2014. The 4 yearly review is about to enter its 7th year with many months of work ahead before the 2014 review is finalised and all of the revised awards are issued.

“One issue that should be considered is whether there are standard clauses in awards that are mostly the same these days and could be readily replaced with legislative provisions, with the award provisions removed. Possible examples are: annual leave, personal/carer’s leave, redundancy pay, notice of termination, consultation, dispute resolution, flexibility agreements and requests for flexible work arrangements. Many of these topics are already mainly dealt with in legislation. No doubt those who oppose this idea will highlight a few existing award entitlements like the additional week of annual leave in the Nurses Award, the annual leave loading provisions in awards, and the industry-specific redundancy scheme in the Construction Award. However, with careful drafting of legislative provisions it should be possible to ensure that neither employers or employees are disadvantaged by any changes to include more entitlements in the Fair Work Act and to simplify the content of awards.

“In the current public debate about wage underpayments, many commentators have argued that awards are much simpler these days than they were. The fact is that there are still over 120 industry and occupational awards, with many complex provisions.

“Maximum penalties for award breaches were increased by 10 times two years ago. If the Government intends to introduce even tougher penalties, fairness dictates that awards are simple and easily complied with.

“The Prime Minister’s comments are very timely and Ai Group looks forward to making a constructive contribution to the consultation process about these important issues,” said Mr Willox.

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