The report of HR practitioners’ perceptions of the Fair Work Act 2009, released by the Australian Human Resources Institute (AHRI), paints a generally negative picture of the Act’s impact so far. This article provides some general editorial comments on the report’s findings.
What do the results tell us?
AHRI’s national president, Peter Wilson, made the following comment in a media release announcing the report:
‘The prevailing impression … is that the legislation needs fixing. The findings demonstrate that the people in the workforce with responsibility for implementing its provisions are experiencing difficulties that are costly and negatively affect the capacity of businesses to operate productively for the benefit of all stakeholders. At a time when the global outlook is very uncertain and international competition is extremely tough, the current Act is not serving the Australian workplace very well at all.’
It is likely that these rather scathing remarks will be widely quoted in the general media, and probably used in attempts to score political points. But given that similar surveys have now been conducted in both 2010 and 2011, what trends are apparent?
Taking a very general view of the results, the majority of the 75 questions in the survey produced findings that around 10% of respondents said the Act had improved things, and the remaining 90% were roughly evenly divided between saying things had become worse or the Act had no impact either way.
One possible interpretation of this distribution is that a slight majority of respondents believed the Act had NOT had a negative impact on the issue in question. However, for a majority of questions, the results became slightly more ‘negative’ in 2011 versus 2010.
Few signs of improvement
When the 2010 survey was conducted, the Fair Work Act had been in force for only about one year. Because it contained major changes from the previous WorkChoices legislation, it could be argued that many organisations incurred a heavy workload through needing to make adjustments to comply with the new Act. In that context, complaints about workload, compliance obligations, juggling transitional provisions, etc, could be expected until organisations had embedded new systems and arrangements.
However, the Act had been in force for more than two years when the latest survey occurred, yet there were few signs of improvement, most issues have slightly regressed since 2010 and a few have significantly regressed.
Wilson commented that some respondents’ comments in 2010 conveyed a certain degree of ‘goodwill and optimism’, implying they expected that once they had made adjustments and teething troubles were dealt with, things would improve. But in the 2011 survey, a large proportion of respondents predicted issues such as administrative workloads, bargaining/industrial relations and productivity will become more difficult over the next one to three years.
One general conclusion from the above could be that HR practitioners’ confidence in the Act is waning. While they are finding ways to cope with the various provisions (eg tightening up performance review processes), a large proportion do not see the Act as helping them to implement improvements, and sometimes hindering them.
Better or worse than WorkChoices?
The 2011 report claims comparisons cannot be made between it and a similar study AHRI conducted of the former WorkChoices legislation in 2007. It says the differences between the two Acts are too great for comparisons to be valid. Whether survey participants took the same view is debatable. The 2011 survey’s questions mainly used the wording of ‘what changes have occurred as a result of the Fair Work Act’, so it could be argued that respondents were invited to make a comparison with previous legislation.
Arguably, WorkChoices was even more complex than the Fair Work Act. For one thing it was about 50% longer, very prescriptive in some ways (eg ‘prohibited content’ of agreements) and lawyers at the time claimed it had various drafting errors and contradictions. It contained major changes from the previous Workplace Relations Act, and had a very short lifespan during which it was significantly amended.
It can be argued that these factors made it very difficult to assess its impact, and ‘change fatigue’ was a common complaint from HR practitioners when two major new Acts commenced less than four years apart. The changes organisations made to adapt to WorkChoices would in many cases not have lasted long enough to assess whether they were positive or negative.
The Fair Work Act in the general HR context
Quite a few survey respondents appear to have commented that the Act was of secondary importance to HR management. A supportive organisation culture, good HR practices and effective management will all override the need for legislation and have a far greater impact on its success or failure.
Issues such as turnover, absenteeism and remuneration are influenced by factors other than legislation. As noted above, culture, management style and competence are influential, and so are economic conditions. For instance, the 2010 survey was conducted shortly after the end of the so-called Global Financial Crisis of 2008–09, when it could be argued that employees would be nervous about changing jobs. A year later, many may have felt more confident about doing so and organisations may have become more willing and able to provide pay increases. These issues could also have contributed to the trends identified in the report.
The report is somewhat ambivalent about the effectiveness of the flexible work arrangement provisions of the Act, although noting that various types of flexible work arrangements have become more common. Again, it is arguable that this reflects a general trend occurring independently of legislative change, because other changes such as technology advances, demographic trends and community attitudes will influence it as well.
Download the AHRI report: The Fair Work Act: Its Impact within Australian Workplaces
Mike Toten is a freelance writer and editor who specialises in research and writing about HR best practices, industrial relations, equal employment opportunity and related areas. He is a regular contributor to WorkplaceInfo, where this article was first published. WorkplaceInfo www.workplaceinfo.com.au is a publication of the NSW Business Chamber.