The Business Council of Australia (BCA) has called on the Fair Work Commission (FWC) to clarify and simplify Australia’s modern awards, which it says are complex and hard to interpret, which leads to errors like underpayments.
In its submission to the FWC for its Modern Awards Review 2023-24 the BCA said that for most employers and employees awards are no easier to use and comply with than they were prior to 2009, when the Fair Work Act was introduced.
The BCA said it is urging the Commission to “not allow this part of the Review to become another protracted, costly but ultimately disappointing exercise which fails to deliver important changes which improve the outcomes for employees and employers”.
The BCA said its submission proceeds on the basis that:
- Core elements of the employment safety net in Australia will continue to be delivered by awards, made by the Commission. However, as we approach the mid-21st century, awards will need to change to be fit for purpose, and do a better job for employees, employers, and the community.
- The effectiveness, clarity and application of modern awards can be improved significantly, ensuring the award safety net is targeted, effective, well-structured, fair, and practical.
- The structure and content of modern awards should change, as they have changed at various times across the past 116 years.
- Changes should be based on a clear plan or vision for awards, setting out guiding principles, the outcomes award reform is working towards, and roadmaps to get there.
In its submission, the BCA said: “Despite the efforts of the Commission, unions, and employer representatives, and what is now the FWO, understanding and applying pay obligations in awards remains a very complex and highly specialised undertaking. Too often this complexity results in errors where those responsible for their application unintentionally misapply the correct requirements, despite their best endeavours.
“A wide range of public and private sector organisations have experienced problems in complying with employment obligations under awards and agreements based on awards. Underpayments occur not just in small businesses with lower HR capacities and less access to advice, but also in major organisations (public, private and charitable sectors) despite making considerable investments in meeting their payment obligations.
“If Australia wants to reduce underpayments, award quality, consistency, complexity, and subjectivity need to be acknowledged and addressed.”
Workplace Relations Minister, Tony Burke, rejected the BCA standpoint, saying there was no excuse for workers being underpaid.
“If everyone treated workplace law as seriously as tax law, health regulations and planning laws, there would be far fewer underpayments,” Minister Burke said.
“These other laws are all far more complex than paying someone properly.”
The Commission is conducting a review of modern awards after receiving a request from Minister Burke. The Modern Awards Review 2023-24 will look at the four priority topics of arts and culture sector, job security, work and care and making the awards easier to use.
You can find out more about the review and making a submission, through the FWC website.