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What the Australian Industry Group (AIG) wants: Summary

9 September 2011


Background
The AIG is very close to the Labor government through their long time CEO Heather Ridout. The AIG played a major role in the design of the Fair Work Act (FWA). At a recent conference Heather Ridout declared that the FWA has significant problems and needs to be changed.

Changes
The changes Heather Ridout called for include:
  • Independent Contractors: Agreement clauses that restrict or control the engagement of contractors and labour hire workers should be outlawed.
  • Individual Flexibility Agreements: These are not working and should be made effective but underpinned by a no disadvantage test.
  • Strikes: Limit the ability of unions to call strikes and allow non-union agreements.
  • Transfer of Business: Reform the transfer of business provisions.
  • Processes: Improve a range of technical procedural processes.
ICA Comment
Independent Contractors
We completely agree with Heather Ridout's call on the independent contractor issue. Before the FWA, an industrial agreement couldn't have a clause that restricted or controlled the use of independent contractors. This was important because it ensured that independent contractors had equal access to work without hindrance from unions.

The Labor government changed this under the FWA. Clauses preventing or restricting the use of independent contractors are now inserted into agreements, but the FWA says the clauses have 'no effect'. This is a con. In 2007, we received a written undertaking from Julia Gillard, then shadow industrial relations minister that such clauses would be unlawful. http://www.contractworld.com.au/pages/PDFs/ICA-statement-FWA.pdf We were clearly lied to. The call by Heather Ridout to make such clauses unlawful is welcome. We hope Julia Gillard will make such changes and restore some of her credibility in relation to her promises to independent contractors in Australia.

Other issues
The other issues Heather Ridout refers to also makes sense, but they are really issues that affect big business and big government. The FWA is incredibly complex and a minefield for small business people. Because most of the changes she calls for relate to enterprise agreements, there is little of relevance for small business people.

Enterprise agreements involve massively complex legal processes that are too complicated for small business people to handle. Most can't afford the legal fees to do this.

Small Business issues
It has to be remembered that around 7 million of the 11.4 million workers in Australia are either self-employed small business people or work with self-employed small business people. This is clearly the biggest sector of the economy.

Some of the major small business problems under the FWA that need to be fixed include:
  • Lack of clarity under awards as to what actual pay rates are.
  • Inability of the Fair Work Ombudsman to give binding advice to small business people on what pay rates are legal.
  • The near non-functioning of the 'fair dismissal code' for small business.
What must also be stopped is the attack against independent contractors under the tax system.