Tuesday, July 16, 2013

The Federal Government's rushed Fair Work amendments are a heavy burden on business

RECENT Federal Government amendments to the controversial Fair Work system are a huge disappointment to business.

Australia has witnessed a Government that has pandered to union overreach that could easily be likened to a scorched earth policy or class warfare.

Incredibly, the Government used the last weeks of Parliament to add to the business community's burden. Changes that compound an already unbalanced set of industrial relations laws include:

* Expanded parental leave rights

* Forced consultation on changes to rosters

* Penalty rate principles enshrined in law

* A national bullying jurisdiction

* Expanded union right of entry to lunch rooms and funding union access to remote sites.

It is outrageous that this Government has pushed through laws so close to the federal election and the Chamber of Commerce and Industry Queensland believes enough is enough.

Since the introduction of the Fair Work Act in 2009, Queensland employers have been telling CCIQ that they have experienced real difficulties under the ALP regime.

Increases in minimum wages and the cost of award rates and conditions have been some of the most common observations of the negative effect of the Fair Work Act. Australia now has the highest minimum wage of any OECD country. When coupled with penalty rates, Australia has, in many respects, outpriced itself to the detriment of our financial sustainability and international competitiveness.

Further compounding this is that Australian workplaces have lost the ability to have flexible working arrangements something that has, in turn, eroded our productivity and business profitability.

The ability of employers to put in place flexible arrangements has been one of the greatest casualties of the Fair Work Act. These arrangements are in nearly all instances a win-win to both the employer and the employee, yet are not supported by unions or the Labor Government.

In respect to both unfair dismissal and general protections claims, CCIQ strongly believes more needs to be done to restore the balance between employers and employees, and prevent employers having to go to the time and expense of defending themselves against baseless or vexatious claims.

The capacity to make decisions about staffing arrangements goes to the heart of an employer's ability to run their workplace and decisions should not require the payment of "go away money". There has to be a meaningful small business exemption from unfair dismissal claims of up to 49 employees.

On the same managerial prerogative theme, business is deeply concerned by the increase in union activity in Queensland workplaces. CCIQ supports the right of employees to join unions and to actively participate as union members. However, we do not consider that unions should be seeking to interfere in matters that go beyond the employer-employee relationship, or unnecessarily entering the workplace.

Queensland employers cannot afford continued inaction on workplace relations - and they certainly cannot afford the cost of additional changes that the Federal Government has made in its recent amendments.

Yet at the same time the Coalition's workplace relations policy does little to deliver the tangible changes that businesses are seeking.

The Federal Opposition has recognised that Australia must move away from the inflexibility and overall lack of balance that characterises the current regime, which seeks to protect employees against the worst case of employer - to the detriment of the majority who do the right thing by their workers.

Changes they have flagged around individual flexibility arrangements, union entry and getting rid of minimum engagement periods are a welcome start. However, these changes do not go anywhere near far enough.

The commitment to have a Productivity Commission review of workplace relations policy in 2015, is simply too far away for many employers for whom the increasing cost of wages and conditions is becoming a heavy burden that puts the continuing viability of their business at risk.

What Queensland businesses need now are urgent amendments that ameliorate the significant problems with Australia's workplace relations laws. We are imposing a handbrake on our country's efficiency, confidence and economic activity - yet, astonishingly, we are not doing anything about it for fear of the past or because of pandering to factional interests.


Tony Abbott pours scorn on the concept of an ETS

TONY Abbott has dismissed emissions trading schemes as markets for the "non-delivery of an invisible substance".

The Coalition Leader's criticism of the widely accepted, market-based method of trying to curb carbon emissions came as Labor prepares to switch from a carbon tax to an ETS one year earlier than originally planned.

Treasurer Chris Bowen said today the Rudd government's decision to move early from a fixed to a floating carbon price was a response to changes in the Australian economy and a concession families could do with hip-pocket relief.

But Mr Abbott, who has campaigned against a carbon tax, said the change meant nothing.

“It's more fake change from Kevin Rudd. The one thing he has done is he has admitted that what the Coalition was saying about the carbon tax was right all along,” he told reporters in Sydney.

“This is not a true market, just ask yourself what an ETS is all about, it's a so-called market in the non-delivery of an invisible substance to no-one.”

Under an ETS, companies trade permits allowing the right to discharge emissions. Permit buyers effectively pay a charge for polluting, providing an economic incentive for reducing emissions.

Mr Bowen today conceded the costs of switching to an ETS next year will be “significant”, as he again refused to rule out a cut to industry assistance programs.

However the Treasurer rejected opposition claims the hole punched in the budget by fast-tracking to an ETS would be in the order of $6 billion.

“We are responding to two things, we are responding to the change in the Australian economy, the rapid transition away from the mining boom and the need to stimulate non-mining investment,” Mr Bowen told ABC radio.

“And we are responding to people's concerns about cost of living - it is an acknowledgement families can do with cost of living relief,” he said.

The Treasurer said the cost of making the move to an internationally-linked ETS sooner was “significant”, but rejected Coalition claims of a revenue shortfall $6 billion.

“The opposition doesn't know what it's talking about, we'll be putting out the Treasury figures, the Treasury figures make it very clear what the cost is and how it is going to be paid for,” he said.

“It's obviously a significant cost but it's not what the opposition are suggesting.”

Mr Bowen said the household compensation would remain, but refused to rule out changes to the industry assistance package.

“Yes there are industry assistance measures that are predicated on a certain price, but I am not pre-empting what are going to do in the package,” Mr Bowen told Sky News.

He warned the government had made “tough choices” to find savings to offset the revenue shortfall, but stressed Labor was committed to the schoolkids bonus.

“The schoolkids bonus is a very important measure, it's very important to the government and it will remain very important to the government,” he said.

Mr Abbott said the ETS was “still a tax”.

“He won't admit it but you will keep the carbon tax under Kevin Rudd. If you vote for the Coalition, the carbon tax is gone, lock stock and barrel. Not rebadged, not renamed but abolished,” the Opposition Leader told the Nine Network.

“The best thing to do is to get rid of it altogether. Mr Rudd vindicated everything we have been saying about the carbon tax,” Mr Abbott said.

Greens leader Christine Milne, who negotiated the original carbon pricing package with the Gillard government, warned the Prime Minister against taking the axe to green schemes.

“I am really concerned with where the government is going to get the money it's a $4 billion to $5 billion hit on the budget,” Senator Milne said.

“I want to see the clean technology fund maintained, the biodiversity fund maintained, low carbon communities - enabling people who live in those communities to be more energy efficient - I want to make sure the Climate Change Authority stays,” she said.

“I am really concerned Labor will slash them, they've already taken the knife to the biodiversity fund this year,” Senator Milne said.


Now, Australia tightens work visa to restrict skilled immigration

It isn't just the US that is creating difficulties for skilled immigrants. Australia is, and so is Canada. Australia has tightened its work visa programme that could hurt Indian IT companies, driving up costs for them and compelling local hiring in the near term.

The country's senate late last month made changes to the 457 visa programme (for skilled immigrants) that requires companies to prove that they have considered local hires and advertised in newspapers before sponsoring workers from outside of Australia.

Indian IT companies like Infosys, TCSBSE 2.11 % and Tech MahindraBSE -0.29 % (Satyam) have 8%-9% of their revenues coming from the region. The country's largest software exporter TCS services over 40 clients from Australia and New Zealand, including Telstra, Australian Gas Light Company, Qantas, Foxtel and Lloyds.

Infosys' Australian and New Zealand operations have over 2,000 people to deliver IT-enabled business solutions to clients. Infosys, which also services Telstra, is said to have recently won another small contract from the telecom company. Media reports have said Telstra has moved 170 jobs to Infosys. In 2009, Telstra awarded a $450-million application and development maintenance contract that was shared by InfosysBSE -1.83 % and EDS.

Many changes have been effected to 457 visas effective July 1 following a crackdown on visas issued in areas that don't seem to be experiencing skills shortages.

"While most employers are using the subclass 457 appropriately, there is a concern that certain employers in some industries are sourcing their skilled labour needs outside of Australia without first checking the availability of labour locally. While not unlawful, these actions are not in line with the principles of the subclass 457 program," says the Australia's Department of Immigration and Citizenship website.

"While the UK imposed a bond on Indian visitors, the Australian press has also been alleging the misuse of visa by one of the large Indian IT companies . While we have been expecting protectionist noises to go up given the tough employment scenarios in lot of local markets, this could impact execution ability and cost structures in the near term," wrote Surendra Goyal and Rishi Iyer of Citi Research in a recent note on Indian IT services.

Sajan Poovayya, managing partner in law firm Poovayya & Co, said the medium-term impact might be significant for the large IT players. "The changes proposed in the 457 regime will necessitate increased local hiring that will have a direct impact on costs. For players, who have significant US and Australian presence, a combination of the tight H-1 B and 457 regimes may add further stress to their bottomlines," he said.

Sajai Singh, partner in law firm J Sagar Associates, said the slow economic recovery has put pressure on governments to generate more local jobs. "I think the whole idea of body shopping is under scrutiny as hiring overseas employees had made locals redundant. This may force IT companies to rework their business model and increase their offshoring component," he said.

Canadian government too

The Canadian government too is taking steps to tighten the provisions of their programme to ensure that only genuine skill shortages are being filled by temporary overseas labour. In April, the government announced changes that will require employers to pay temporary foreign workers at the prevailing wage and have a plan to transition to a Canadian workforce over time.

Royal Bank of Canada faced criticisms after media reported on an outsourcing arrangement for technology services that affected some bank employees. Infosys CEO S D Shibulal on Friday said the immigration walls being raised by the US, Australia and Canada will compel Indian IT companies to make changes to deal with them.


Car park operator's tactics face court scrutiny

This is the man whose firm, a simple car park operator, has become one of the most complained about in Sydney.

It is a firm that has stoked so much anxiety through the city that the Department of Fair Trading has had to assign a permanent member of staff to deal with the outrage.

And next week it will face its day in court, with Paul Gyles, and business partner Victor Nudler's Australian National Car Parks to face hearings on charges of harassment over parking fines.

From its office in a street in Annandale, ANCP sends a multitude of letters to people they allege have breached the conditions of the car parks it manages.

It manages these car parks for stores such as for Woolworths and Aldi and, until recently, McDonald's in locations from Cabramatta to Nelson Bay.

And it has won a reputation for voraciousness that has worn down the patience of NSW authorities, who have received almost 4000 enquiries and complaints about the firm over the past three years.

A number of these complaints were from Julie Fehon, who lives in Warriewood on the northern beaches. She was rushing when she pulled into the Peninsula/Bungan Plaza car park in Mona Vale in December 2009.

Mrs Fehon was suffering a severe medical condition and needed to see a specialist. The car park required a displayed ticket, so she bought one and put it on her dashboard before she entered the surgery.

When she came out she found she had a $66 ticket for parking in a disabled bay.

But she did not know it was a disabled bay - there was no sign and no wheelchair symbol on the surface. (Later, she returned to the spot to photograph it as evidence.)

"I would never have parked in a handicapped spot," Mrs Fehon said.  "The space next to it was vacant. It is not a car park where it is ever hard to find a park."

She assumed if she wrote to the company that gave her the ticket it would waive the penalty.

But her first letter to ANCP, the operator of the car park that had given her the ticket, was met with a form response, insisting that if she did not pay within 14 days it had "the right to commence legal action".

A second letter brought a similar form response.  A third triggered a reply from a solicitor, Michael Roper, requesting a total payment of $173 on behalf of his client, ANCP.

More correspondence followed. Mrs Fehon would write specific appeals; she would receive form letters in response.

These form letters included two on official-looking letterhead from a debt company known as Australian Recoveries and Collections. (The letters did not say that ARC's major shareholders were Mr Gyles and Mr Nudler.)

By this stage Mrs Fehon's husband was encouraging her to pay the fine and forgo the stress. But the intransigence of the company had got under her skin.

Fiona Allan, another woman who believed she was wrongly ticketed and ended up in a frustrating back-and-forth with ANCP put it this way: "I have a strong sense of justice and I didn't feel that what had happened was just or fair."

Eventually, offered a $66 settlement by ARC, Mrs Fehon paid up. According to Fair Trading, the department received 1011 complaints and 2328 enquiries about ANCP last year; and has received 410 complaints and 292 enquiries about the company so far this year.

The complaints peaked after ANCP won a court case in May last year allowing it access to the names and addresses of car owners it alleged had breached its terms.

In November, the O'Farrell government passed laws preventing Roads and Maritime Services from handing out personal information to private parking operators.

Next week, ANCP's case on charges of harassment begins in the Parramatta Local Court.

ANCP did not respond for this article. Neither did Aldi, while a spokeswoman for McDonald's said the company no longer contracts out to ANCP. A spokeswoman for Woolworths said: "Woolworths uses ANCP at just a handful of sites and only as a last resort."


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