In commenting on the Fair Work Act Review Australian Industry Group Chief Executive Heather Ridout said:

"This is a most important review and employers are looking for real outcomes that will support the competitiveness of their businesses over the next few years in what promise to be volatile and difficult economic times. Indeed, consistent with this challenge, the test of the Review will be the extent to which its outcomes support increased productivity and flexibility, reduce red tape and improve competitiveness," Mrs Ridout said.

"The panel members, Dr John Edwards, the Hon Michael Moore and Professor Ron McCallum AO, have an onerous responsibility presiding over the Review at a time when Australia's competitiveness is declining and, integrally, productivity is flat-lining.

"Ai Group has pressed for the Review to focus on the broader economic imperatives rather than take a narrow and technical approach. Therefore, we are particularly pleased that the Government has responded to Ai Group's representations by appointing an eminent economist to the panel.

"Importantly, the Review should focus on the precarious nature of global economic circumstances, the immense structural pressures facing non-mining trade-exposed businesses (the big employing sectors) and the barriers in the Act which are inhibiting businesses from making the necessary changes to remain competitive. The Review should be about changes for today that will help companies deal with the very real challenges of the next five years.

"Australia has become a high cost economy and it is vital that we achieve substantial and sustained productivity growth in order to overcome our cost disadvantage. The Act has been thoroughly tested and found wanting in a number of important respects and workplace flexibility has clearly decreased since the Fair Work Act was introduced.

"On the face of it, it is worrying that the terms of reference for the Review don't specifically include a focus on our competitiveness; however, they refer back to the Object (Section 3) of the Fair Work Act which in our view enables this essential focus for the inquiry's work.

"Ai Group has identified several key barriers to productivity growth and workplace flexibility, which need to be addressed, including:

• Provisions which restrict the engagement of contractors and on-hire workers;
• The lack of a workable form of agreement which provides flexibility to employers and individual employees;
• Increased union power, including the ability for unions to disturb lawful and fair workplace arrangements which are supported by the majority of employees in a workplace;
• General Protections provisions which are too loose and uncertain.

"While the Review presents opportunities, it also presents significant risks to industry, particularly given some of the proposals being pursued by the unions.

"During the Review Ai Group will present a substantial case in support of making positive changes to the Act and we will oppose the negative changes being pressed by the unions," Mrs Ridout said.

www.aigroup.com.au