THE Federal Government can no longer afford to ignore the growing evidence from business groups, academics and industrial relations professionals that Australia’s lagging productivity can only be turned around with meaningful workplace relations reform.
In a presentation delivered today at the APPEA Workforce Development and Productivity Conference, AREEA executive director industry Minna Knight highlighted the impacts of the Fair Work Act 2009 on productivity in resources workplaces.
With more than $500 billion dollars worth of projects in Australia’s pipeline and 90,000 new jobs forecasted by 2016, she said the resource industry has a ‘great opportunity to get Australia’s productivity back on track’, but only if government policy facilitates it to do so.
“These economic benefits are not a given and we must ensure the underlying determinants of workplace productivity are enabling, not constraining, the ability of our resources employers to deliver them,” Ms Knight said.
“Despite the detriments of the MRRT and Carbon Tax, the most significant threats to our industry in delivering these projects are workforce issues.
“Some challenges we can overcome through effective management, forward planning and innovation. But in one of the most capital and labour intensive industries in the country, uncertainty and risk in our IR environment is a serious constraint to productivity.”
In her presentation to APPEA’s conference delegates, Ms Knight said the impacts of the Fair Work Act reach far beyond workplace relations and affect many factors in the economic, political and social environments of the industry.
“One of the most damaging aspects of the Fair Work Act to productivity is the exorbitant levels of wage and conditions claims being experienced in the resource industry. Such claims are seeing laundry hands on offshore projects being paid $300,000 a year,” she said.
“But productivity is no longer a simple measure of the level of output per head. Productivity is about an organisation’s ability to innovate, diversify, capture cross-functional strategic-fits and reinvest in research and development.
“How can our employers expect to develop and implement forward-thinking, engaging and dynamic workforce strategies when our current adversarial IR system pits labour against capital and allows third parties to interfere in managerial decisions?
“For this reason government cannot disregard the underlying influence of industrial regulation and policy settings which have powerful constraining or enabling effects as to whether a business owner can pursue new opportunities and innovation.”
Ms Knight’s presentation analyses four fundamental flaws in the Fair Work Act as identified by the Australian Business Foundation (ABF). These include the presumption of conflict in the workplace; the dismissal of managerial competency; the impacts on innovation and competitiveness; and the ignorance of the modern patterns of working life.
“It is clear that the philosophy of the Fair Work Act is severely impeding productivity growth, not only in our resource operations but in all Australian workplaces,” Ms Knight says.
“Results from AREEA’s most recent report of the Workplace Relations Research Project show a great deterioration in how our employers perceive the productivity of their workplaces.
“The government needs to take action to fix the problems with Australia’s IR laws, and the Fair Work Act review is the perfect opportunity to make meaningful change.”
CLICK HERE for a copy of Minna Knight’s presentation to the 2012 APPEA Workforce Development and Productivity Conference: “Productivity at work – challenges and opportunities under the Fair Work regime”.
