Fair Work Commission ‘not fit to set wage levels’

The Australian, January 24, 2017:

A former Fair Work Commission deputy president has called for the industrial umpire to be carved up and responsibility for the setting of the minimum wage and award standards, including penalty rates, to be invested in a new independent body subject to parliamentary oversight.

Brendan McCarthy, who stepped down from the FWC in December 2014, told The Australian the Fair Work Commission was not the appropriate body and no longer had the best experience to set Australia’s minimum workplace standards.

He made the comments following the shock resignation of FWC vice-president Graeme Watson who wrote to Employment Minister Michaelia Cash warning that the industrial umpire was becoming politically compromised and dysfunctional under the leadership of president Iain Ross.

The warning was seized on by business and industry groups as a rallying call for the government to pursue deeper reforms to the ­industrial relations framework with former prime minister Tony Abbott taking to Twitter to argue the FWC was “pro-union and anti-jobs.”

Former employment minister Eric Abetz also took aim at Justice Ross yesterday, saying that reports that Mr Watson had been sidelined within the commission reflected “poorly on the FWC’s leadership”.

“It also reflects poorly on Bill Shorten who stacked and packed the commission with union ­cronies rather than meritorious and worthy appointments,” Senator Abetz said.

Mr McCarthy told The Australian the work of the FWC was ­increasingly taken up with unfair dismissals and bargaining cases, but that its most important function was the setting of minimum and award standards.

He suggested the operation and experience of the membership of the FWC meant it should no longer perform this task.

Mr McCarthy instead argued for the government to adopt a radical recommendation of the Productivity Commission’s review into the workplace relations system which was released in ­December 2015.

“In my view the commission is not the appropriate body, through the limits on the experience and expertise of its members and the manner in which it operates.

“It is not the appropriate body that should be dealing with establishing standards,” he said.

The Productivity Commission recommended the creation of a new statutorily independent “Workplace Standards Commission” with responsibility for reviewing and varying the national minimum wage and awards.

Mr McCarthy, who was appointed to the Australian Industrial Relations Commission by the Howard government in 2001, said the new body would be charged with setting key award conditions contained in modern awards such penalty rates and hours of work. But he also argued for its rulings to be subjected to parliamentary oversight.

Australian Industry Group chief executive Innes Willox said Mr Watson’s criticism added weight to calls for the government to implement reforms. “The government needs to move without delay to implement its response to the Productivity Commission’s report on Australia’s Workplace Relations Framework,” he said.

Australian Chamber of Commerce and Industry chief executive James Pearson, said the resignation showed the need for the workplace relations reform.