Thousands of businesses will incur cost blowouts and productivity losses if the Federal Government adopts unfair proposed amendments to industrial relations laws.  

The Federal Parliament is working through amendments to the Closing the Loopholes Bill. A late Greens amendment to arbitration laws was approved today and has passed the Lower House. 

The amendment means that discretion will be removed from the Fair Work Commission to arbitrate bargaining disputes based on merit.

Instead the FWC will be required to ensure that all conditions are ratcheted upwards, even where restrictive or archaic work practices are involved.

Business NSW CEO Daniel Hunter said these retrograde steps would be unnecessarily adversarial, hurt business, increase costs and drive up inflation.

“These changes will inevitably force additional cost burdens on businesses which will ultimately flow through to consumers via higher prices,” Mr Hunter said.  

“Arbitration via independent umpire the Fair Work Commission based on merit is by and large a sensible approach to industrial disputes that avoids relying on strikes and lock outs. The amendment means that there will not be any arbitration based on merit.

“The proposed Greens amendment would take the ‘fair’ out of the Fair Work Commission, making arbitration one sided in favour of unions and heavily restrict the Commission’s ability to judge the merit of any bargaining dispute.”

Under the proposed reform, if an employer has an existing enterprise agreement and needs to change something in it to run efficiently, the only way to achieve this will be either convincing the workforce or by buying the change out. 

“Once unions understand the one-sided nature of any arbitration, the price to buy out such conditions will also likely escalate,” Mr Hunter said.

“These proposed changes are the last thing employers need, especially when they are dealing with 13 interest rate rises since May 2022 and escalating insurance, energy and tax costs.

“Manipulating the arbitration system will only bake in additional home-grown inflation; this is bad for business, as well as anyone with a mortgage, renters and aspiring homeowners.”