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Forced arbitration is a job killer for the COVID recovery, says AREEA Chief Executive

As the Morrison Government’s multi-faceted Industrial Relations Bill comes under increased scrutiny before a vote by Senate Crossbenchers (see related story), Australian Resources and Energy Group AREEA has expressed disappointment in the trade union movement pushing for extreme new forced arbitration powers to be provided to the Fair Work Commission (FWC).

It follows reports last week that Senator Stirling Griff wants the government to support changes recommended by the Law Council of Australia before supporting the bill, which includes greatly enhanced arbitration powers for the FWC.

AREEA Chief Executive Steve Knott AM said suggestions that changes to Australia’s workplace laws should force employers into new arbitration processes at the FWC are misguided, dangerous and sure to blunt any hope of a swift recovery from the COVID-19 pandemic.

Steve Knott, CEO of Australian Resources and Energy Group AREEA

“The industrial relations reforms before Parliament are designed to remove red-tape, risk, cost and uncertainty for employers,” he said.

“The changes will give businesses confidence to employ and improve on how the Fair Work Commission exercises its existing duties, such as timely approval of enterprise agreements.

“Instead of supporting these modest job-creating improvements, the trade union movement has used this period to push for extreme new forced arbitration powers to be provided to the FWC.

“This would see a taxpayer-funded administrative tribunal, comprised of members with union, employer group, and legal backgrounds, making decisions about business strategy, allocation of capital, workforce composition and management practices, on behalf of Australian employers.

“Employers in every sector of the economy would shudder at the thought of the “IR club” – unions, employer groups and the national workplace tribunal – telling them how to run their businesses.”

Mr Knott said world has moved on from the last century’s failed approach of forced arbitration.

“As we have seen throughout the pandemic, to survive businesses need to be agile and have the capacity to respond to sudden changes in their operating environment and financial circumstances,” he said.

“AREEA urges members of the Senate Crossbench to see forced arbitration proposals for what they are – a campaign to kill-off the government’s IR reform bill, knowing full and well that new forced arbitration processes could not possibly be supported by Australia’s business community.

“Why would an employer take a chance to create jobs knowing the terms of employment for new employees could ultimately be decided by a third-party public administration body?

“How could a global investment consortium approve a multi-billion dollar new resources project in Australia, bringing thousands of new jobs, when there is a live risk that labour costs and employment terms could be changed at the whim of the FWC?”

The Fair Work Amendment Bill currently before Parliament carefully balances the interests of employers and employees in addressing well-known issues in our industrial relations system.

It provides casual employees with new rights to convert to permanency and will require the FWC to approve enterprise agreements within 21 days – an attainable target that will give employees their pay increases sooner. The Bill retains the important notion that all employees must be better off overall.

For the resources sector, which sheltered Australia’s economy from the Global Financial Crisis and is again largely shouldering the load during COVID-19, the Bill will assist the industry in converting $334 billion of potential major project investment into 100,000 possible jobs.

Australia needs these critical industrial relations changes passed at the earliest opportunity to support employment growth and economic recovery in the post-COVID world.


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