Annual Convention of Industrial Relations Society of NSW

  • Parliamentary Secretary for School Education and Workplace Relations

Sebel Harbourside Kiama

10.00 am Friday, 13 May 2011


I acknowledge the traditional owners of the land on which we meet – the Tharawal (pronounced “thorough wool”) People – and, in a spirit of reconciliation, pay my respects to their elders past and present.


Thank you to the Industrial Relations Society of New South Wales for the invitation to participate today.

What I hope to illustrate in my remarks is that our new industrial relations system is working well and has much potential to make an even greater contribution to Australia’s prosperity, as our growth presents both challenges and opportunities to employers and employees.

But firstly, I want to begin with a few reflections on the wider importance of creating positive and harmonious workplaces, including something very obvious that we usually overlook - the human dimension of workplace reform.

As the Prime Minister has recently said, work has a crucial and often overlooked importance in our lives. It forms a big part of our identity. It’s the place where we find friendship and meaning as well as income and a career. We spend around a third of every working day in a workplace so naturally we want our workplaces to promote and uphold civility and rights.

I suspect everyone here today will know from personal experience just how much better life seems at the end of each day when we are working in places where we are respected, valued and treated as equals.

Workplaces cooperation for productivity and jobs

Of course we all know that harmonious and cooperative workplace relations are also the key to productivity increases, which leads to sustainable economic growth and jobs.

More jobs and higher wages must always be our goal. And that’s more crucial than ever given Australia’s current economic conditions. With major investment pouring into the country and demand for labour rising, we have a great opportunity to build on our prosperity.

In the last three years or so Australia has created around 750 000 new jobs, with a further 500 000 jobs expected to be created by June 2013.

This means we have the chance to really set ourselves up for the future - but only if the growth and the jobs we create are economically sustainable. The challenge is for all of us to work together like never before to ensure wages growth is based on productivity increases and that the gains are shared fairly by employers and employees alike.

In other words, we’re going to have to encourage sensible cooperation.

That’s exactly what our new industrial relations system does, and the challenge is to get the best out of our workplaces to improve productivity.

Whether it’s in workplace relations directly, or occupational health and safety harmonisation, or skills development and family-friendly initiatives, Labor, helped by forward-thinking employers and union leaders, has worked hard to reshape, reform and improve workplace performance.

From the beginning, the aim of the Fair Work Act has been to create enterprise-level cooperation.

The new Act followed extensive consultation – with industry, business groups and unions – a process that heralded the most significant reform of workplace laws in this country in more than 100 years.

The big reforms we promised in 2007 and 2010 have now been introduced or are scheduled for introduction in the near future, so the challenge before us now is not to continually revisit every detail of the Act, but to get the Act working to its full capacity.

Our reforms

So let’s look at what we’ve got to work with and how it’s working.

In addition to the introduction of the Fair Work Act, the Labor Government succeeded in delivering a single, national system for about 96 per cent of the private sector - something the previous Coalition Government talked about but failed to deliver.

Almost 4 000 complex, outdated awards have been consolidated into 122 modern instruments. This is a 97 per cent cut in the number of pages of award regulation.

As a result of our changes it is estimated there will be a net benefit to Australian business of about 4.83 billion dollars over the next 10 years.

These changes represent a huge simplification, a huge improvement and a huge saving.

There is plenty of positive evidence that Fair Work Australia is providing information to employers and employees alike. Fair Work Online’s website had 3.65 million hits last financial year, and Fair Work Infoline fielded more than 862 000 calls.

And there’s more positive reform on the way that will boost workplace productivity.

On 1 January next year new harmonised occupational health and safety laws will come into effect. One framework will replace 10 separate pieces of legislation and more than 400 OHS regulations and codes of practice currently in operation across Australia. This means less red tape and an estimated savings to employers of 179 million dollars each year.

Then there is the new Paid Parental Leave program. This new Government-funded scheme provides greater financial support to working families, encourages greater workforce participation by parents and enhances maternal and child health and development.

It will help employers retain skilled staff and boost workforce participation which, given our ageing workforce and resulting labour scarcity, is a major participation and productivity-boosting reform.

These changes will be accompanied by other workforce participation initiatives that have been foreshadowed as part of this year’s Budget.

The same can be said for the improved pay equity provisions of the Fair Work Act, which remove the antiquated test of direct discrimination previously needed to prove pay inequality.

The improved equal remuneration provisions of the Fair Work Act are being tested for the first time for an equal remuneration order covering social and community services workers.

The test case was launched in March 2010 and has been heard before the Full Bench of Fair Work Australia, which is currently considering its decision.

The Gillard Government has recently announced a new national consultative group to examine how to best manage the implications of this historic equal pay test case.

The Community Sector Wages Group, which I will chair, comprises representatives from the federal, state and territory governments, the SACS sector and unions.

The Fair Work Act and Productivity

Given our strong economic conditions, it is time for industry and the union movement to engage in the real debate about improving productivity growth in our strengthening economy.

Improving productivity is one of the key objectives of the Fair Work Act. In fact productivity growth is a consideration in all major sections of the Act including modern awards, enterprise bargaining, minimum wages and the transfer of business.

TheFair Work Act focuses on collective agreement-making at the enterprise level which is designed to promote greater flexibility and deliver improved productivity as well as wages and conditions.

More than 6 000 new agreements covering over 700 000 employees were made in the year to September 2010.

In total we have a record number of enterprise agreements covering more than 2.3 million Australian employees.

Many of the enterprise agreements that have been negotiated under the Fair Work framework contain provisions that are designed to contribute to productivity gains.

For example, almost 95 per cent of Fair Work agreements approved to 30 September 2010 provide for flexible engagement and 73 per cent of agreements provide for flexible working hours.

Some 86 per cent of agreements approved under the Fair Work Act to 30 September 2010 incorporate training provisions that may also contribute to boosting productivity

And of the Fair Work Act agreements analysed to the end of September 2010, 63.8 per cent contain the model flexibility term or better than the model term.

Boosting skills

But of course an industrial relations framework can only be part of the productivity solution.

It needs to be complemented by active measures to boost skills and participation.

This week’s Budget is about ensuring that more Australians get the chance to share in our nation’s prosperity.

At a time when our economy is strengthening and our unemployment rate is 4.9 per cent, too many Australians still find themselves locked out of our success.

The Treasurer announced the Government’s decision to invest 3 billion dollars in skills and training.

Through the Building Australia’s Future Workforce package the Government is:

We are investing in a modern, flexible training system by investing 100 million dollars over four years to Accelerate Australian Apprenticeships, to support training models that allow apprentices to move through their training and advance to the next level of learning and pay, provided quality is met.As well as investing 101 million dollars over four years for an Apprenticeship Mentoring package, helping individuals to choose the right training pathway and supporting them to complete their training.

We will set new benchmarks for improved quality, transparency and outcomes from the states and territories as a condition for the base agreement on vocational education and training, worth 7 billion dollars over five years.We are investing to meet the longer-term needs of the economy through a reform focused National Partnership with States and Territories worth 1.75 billion dollars over five years (from 2012-13)

This Budget provides further support to improve the numeracy and literacy of unemployed and disadvantaged Australians. We will make an additional 263 million dollar investment to expand the Language Literacy and Numeracy Program to assist an addition 30 000 job seekers and provide training to assist single parents and teenage parents to re-enter the workforce.

We are placing industry at the heart of the training effort, with a new 558 million dollar National Workforce Development Fund. To support the new partnership with industry, the Government will also establish a new 25 million dollar National Workforce and Productivity Agency. In partnership with industry we will deliver an estimated 130 000 high quality training places to directly address skills shortages.

  1. Building a new partnership with industry
  2. Reforming the apprenticeship system
  3. Reforming the training system
  4. Increased workforce participation

In conclusion, can I say that the introduction of a new industrial relations system for Australia was timely, given our country’s strong economic growth.

Some employers and unions are still coming to grips with the opportunities provided by good faith bargaining and are yet to fully explore the opportunities the new Act offers.

But I want to leave you today by encouraging employers and unions to exploit those benefits, as so many workplaces have already done.

Failure to achieve productivity gains cannot be blamed on the legislative framework.

In fact, the preoccupation of some with additional and ongoing legislative quick fixes reflects an old way of thinking and old ideological battles that belong to the last decade of industrial relations, not the present or the future.

I want to make clear that the Government will continue to oppose attempts by the Coalition to pursue ideological industrial relations legislative changes.

These are distractions from the priority of making sure the Fair Work system is fully implemented and operating as intended.

Ladies and gentlemen, we have an industrial relations system that is designed to boost productivity, and is doing so successfully. I believe our system will continue to boost Australia’s economic performance if we exploit its potential to the full.

Thank you.

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