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The legitimacy of Fair Work Australia

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News created: 10 Sep 2010

The current Prime Minister and former Workplace Relations Minister Julia Gillard has argued many times that fairness is central to Labor's industrial relations legislation. Fair Work Australia (FWA) with its enhanced transparency and independence was formed to oversee the Australian industrial relations system and ensure it is fair. 

Before the 2007 election, then opposition leader Kevin Rudd stated, 'I will not stand by and have this body become the agency of ex-trade union officials. People will be appointed on their merit'. Similar comments were made by then Deputy Opposition Leader and current Prime Minister Julia Gillard at the National Press Club in May 2007, 'Our new industrial umpire will be independent of unions, business and government. It will definitely not be a return to the old industrial relations club. Appointments will not favour one side over the other. Labor will remove all perceptions of bias'. 

However, recent decisions and appointments to FWA questions that claim. Of the 11 full-time appointments made by Julia Gillard when she was Workplace Relations Minister 9 have a union background: Deputy President Peter Sams and Donna McKenna (Labor Council of NSW), Ian Cambridge (AWU), Danny Cloghan (WA prison officers), Anne Gooley (MEAA), John Ryan (SDA), Julius Roe (AMWU), Michelle Bissett (ACTU), and Chris Simpson (AWU). 

Of the remaining two members, one is an ex-public servant and one is from AiGroup. While many or all of these appointments may well have the required experience and qualifications, the over-representation of appointees with union backgrounds may point to, real or perceived, a partisan approach which could potentially undermine the authority and legitimacy of FWA. 

While new selection processes were introduced by the Labor Government, it would seem these have not prevented a partisan approach to the appointment process. As AMMA Chief Executive Steve Knott has stated, 'given the increase powers of FWA this may have a profound impact on the Australian industry and the economy'. 

He went on to suggest that Ministers 'can't hide behind a short list' handed to them by public servants when such appointments under FWA rightly rest with the Minister. He suggests the Labor government are 'clearly not engaging in meaningful discussions with other stakeholders, such as the promised consultation with the Shadow Industrial Minister'. 

A number of recent cases have also caused unease in the business community wanting some predictability in IR reform, potentially further undermining business confidence in Labor's IR reform processes and the effectiveness of FWA. 

In a recent decision the same enterprise agreement was accidentally lodged twice, was approved by one Commissioner, but rejected by another giving two separate conflicting and confusing decisions. 

The first application was approved by Commissioner Colin Thatcher without requiring the union and business representatives to appear before the Tribunal. However, the second identical application required three separate hearings and necessitated workplace representatives to attend and appear before the Tribunal. 

At the end of this, Commissioner Donna McKenna (former Legal Officer for the Labor Council of NSW) refused to approve the agreement until the employer had provided "undertakings" after consultation with a union. 

Although the enterprise agreement was eventually approved, employer and employee representatives had endured what was called a 'bungled bureaucratic nightmare'. 

When Howard was in power, the ACTU strongly criticised the Coalition Government of political and employer bias in appointments to the Australian Industrial Relations Commission. It would seem the lessons of the past have not been learnt by this Labor government. 

Importantly, while neither Labor nor the Coalition intends to change the current IR legislation, the next Government will have to appoint a replacement for the president of FWA - a position that since the introduction of Fair Work Act has more power than ever. 

While the three independents contemplate the future of the Australian government, perhaps they should demand from both leaders that fairness, equity, justice and transparency are maintained. Any perceptions of bias and partiality will only lead to loss of faith in the new IR system, not only undermining FWA's integrity and effectiveness but potentially creating further unpredictability in IR reform and jeopardising Australia prosperity and future productivity. 

If Julia Gillard is true to her word about restoring the balance in industrial relations then an ALP or an Abbott-led Coalition Government must ensure the independence and thus the integrity of Fair Work Australia is maintained. 

Let's hope that the future IR policy is not based on the whim of self interest and a truly stable, independent and transparent FWA becomes the norm for Australia's interests. 

Dr Paul J. Gollan is an Associate Professor in the Department of Business at Macquarie University and Visiting Associate Professor in the Department of Management at the London School of Economics. 

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