Abbott toughens up on industrial relations – changes to Fair Work Act on the way?

Opposition Leader Tony Abbott has told his party room he wants to make changes to the Fair Work Act, with a focus on “fixing problems” rather than pursuing “blind ideology”.

Until now, Abbott has studiously shied away from discussing industrial relations, given the toxicity of Work Choices and the damage it did to the Liberal brand.

However, recent events have given Abbott political cover, namely the damage the Health Services Union scandal has done to the image of unions and the torrent of complaints from small business about the operation of the Fair Work Act, which is being amplified by the review of the Act currently taking place.

Abbott said that it is “very clear we have a flexibility problem, we have a militancy problem and we have a productivity problem” in Australia, and promised “careful, cautious, responsible change” if elected.  He indicated that he wanted to move the industrial relations pendulum back to the middle ground.

Key changes being canvassed by the Coalition are making individual flexibility clauses in awards easier to use and allowing a greater ability to trade conditions such as penalty rates for other enticements.

Abbott has also stared down hardliners within his own ranks, indicating that there will be “no return to Work Choices” – the safety net within the award structure will be retained, which will underpin individual contracts to ensure no one is left worse off.

In submissions to the review of the Fair Work Act, business has highlighted the negative impact of penalty rates and has called for greater scope to make individual agreements.  Objections have also been raised to clauses in the Act that give unions more scope to take industrial action and allow unions to interfere with management prerogatives, such as the employment of contractors.

A procession of business leaders have industry groups lined up to attack the Fair Work Act, with Infrastructure Australia Chairman Sir Rod Eddington and BHP Billiton Chairman Jac Nasser recently describing Australia’s industrial relations system as restrictive and acting as a brake on productivity.