Mr Porter said that in addressing the future of the workplace, “that can’t be attempted without a short consideration of how much IR reform has actually occurred in the last 12 months and how critical it has been to saving jobs.”

“The IR flexibilities that sat alongside JobKeeper mark 1 and 2 were critical for businesses who had to rapidly adapt their operations in response to the pandemic in order to survive,” he said.

“The pandemic has put a spotlight on the inflexibility of our current IR system, which was in many respects found wanting back at the start of this year.

“When we were designing JobKeeper IR flexibilities something as simple as being able to get employees to work from home didn’t fit comfortably with many modern awards.”

Mr Porter addressed the current issue of award complexity in multiple classifications in 121 different awards which is longstanding.

“In our modern award system the various classifications, loadings, breaks, rostering and other entitlements differ markedly across awards and present a complex picture,” he said.

“For example, there are around 2,000 adult award rates of pay across the hundreds of different classifications.”

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Mr Porter said that award complexity impacts compliance and legalities, it impacts on enterprise bargaining via the better off overall test, and it affects the utilisation of alternative work models.

“The award simplification working group has discussed how awards, especially those covering distressed industries such as hospitality, retail and restaurants, can be made simpler and more fit for purpose to better encourage employment and effectively protect employee rights,” he said.

Mr Porter emphasised that practical reforms to modern awards, appropriately balanced against other reforms in the compliance space, could assist businesses to navigate problems within the complexity of the current awards system. Employers now more than ever need more time to focus on growing their business and creating jobs.

Coming compliance changes

With increased cases of wage underpayments and the treatment of migrant workers, Mr Porter addressed that here is a community expectation that “we do something about compliance with, and enforcement of, our workplace laws.”

“This hasn’t just occurred at the small enterprise level, we are all familiar with the recent disclosures by large corporations of some quite significant underpayment,” he said.

“While I acknowledge that the vast majority of businesses do the right thing by their employees – there have been some examples of deliberate, non-compliant behaviour by unscrupulous operators.”

Mr Porter acknowledged robust enforcement measures are effective in deterring and punishing deliberate, unlawful behaviour. 

“On the other side are measures that will help prevent underpayments, and measures that will help recover underpayments,” he said.

“The fundamental philosophy behind these changes is that it should be easy to understand what and how to pay your staff, and when that’s the case there is an obligation to get that right.”

Enterprise agreements allow employers to implement productivity improvements, allow workers to get paid more than the award and avoid some of the complexity of the awards system. But Mr Porter said that counterproductively award-reliant employment has increased from around 15 per cent in 2010 to 21 per cent in 2018.

It is understood that the proportion of employees covered by enterprise agreements has decreased from its historical peak of 43.4 per cent in 2010 to 37.9 per cent in 2018.

Mr Porter said there is general agreement that one contributing factor to the decline of workplace bargaining relates to the complexity of the approval process and the delays which ensue.

“These delays have largely been because the process has become overly technical, proscriptive and tediously theoretical – such that the FWC has increasingly required undertakings to address concerns the members have about non-compliant agreements and the intervention of opponents to agreements has been increasingly able to use the increasing technicality of approval tests to prevent agreements made at the workplace with employees from being approved by the commission,” he said.

Mr Porter’s view on this is that the enterprise bargaining system should focus on productivity, which will best be achieved through reforming laws to better improve cooperative working relationships and interests that employers and employees share, rather than the current rigid, technocratic and process-driven bargaining system.   

“There’s evidence that users of the system experience confusion about where to get advice, assistance and support. Unnecessary layers of frustration make businesses more inclined to disengage with the process,” he said.

“So the job of the agreement making working group has been to interrogate the current process to examine points of tension, and seek opportunities for reform that will reinvigorate the agreement making process, create jobs and deliver higher wages.”