David Alexander | IR changes make government the co-managers of Australian businesses

Much attention has been on the prospect of making sector-wide strike action possible, but there is another aspect of the changes with serious implications for Australian business and the wider economy. This change will apply no matter what size the business.

Up until now, businesses in Australia have had the ability to set critical work arrangements for employees such as work, hours, and location.

Employees have the right to ask for changes, and employers are obliged to properly consider and respond to requests, but employers have always had the final say.

The proposed legislation removes this final say from business owners. Employees whose requests are rejected by employers will now be granted the ability to have their request heard by the industrial arbiter, the Fair Work Commission, where the final decision will be made.

The removal of the final say from employers represents a serious diminution of the ability of a business to conduct its affairs as it sees fit. It represents a switch from businesses deciding what work arrangements work best to having such arrangements constantly subject to final approval by an external state body.

Let's take an example. An accountant has previously said no to an employee's request to work from home after 2pm each day, based on their experience that their business works best with everyone in the office.

After these legislative changes, that accountant no longer has the last word, because the employee can have the Fair Work Commission decide the case.

For an employer, being forced to appear at the Fair Work Commission will be a predictably terrible experience - lawyers will need to retained, considerable time set aside, and arrangements made for being away from work. This costs money and takes people out of the business.

Perhaps the accountant wins the case, and that can contain the costs and disruption of such an ordeal. But perhaps the accountant loses, in which case their work model is destroyed.

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A similar overruling might happen for a request for unusual work hours, or particular days off, or any number of variations of work arrangements.

A fair question to ask is: how can civil servants, completely remote from businesses located all over Australia, possibly decide the appropriate work arrangements for potentially millions of Australian workers all wanting tailor-made work patterns and work locations? These are decisions that are best made as they always have been - at the enterprise, with the employer who knows the business having the final say.

The government describes these changes as flexible work, but the actual impact is inflexible work for employers who shift from autonomy and agency to having their arrangements dictated by government.

Let's take a step back and consider the radical nature of what is being proposed.

The long-standing principle that a business owner has the right to determine the work arrangements that best suit the business will have been lost.

Businesses that have long maintained work arrangements with certainty will now face the permanent uncertainty of having key decisions taken out of their hands.

This would be a fundamental change to the nature of economic activity in Australia - key business managerial decisions now effectively co-managed by the state.

The Australian Chamber of Commerce and Industry believes that this co-management proposal is fundamentally misguided, and we hope that the Minister will reconsider the legislation.

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