I am pleased to introduce the Fair Work Commission's annual report for 2015–16.
It has been another busy year for the Commission, as it continued the 4 yearly review of modern awards, implemented the final initiatives of the Future Directions program, and also dealt with more than 34,000 new applications lodged in 2015–16.
In 2015–16 the Commission continued its Future Directions program, substantially implementing the final 30 initiatives announced in May 2014 and integrating programs it had piloted earlier into business as usual. The Commission launched Future Directions in October 2012 to achieve better and more efficient services to the community and greater transparency and accountability of the Commission.
Initiatives implemented in 2015–16 included developing and publishing new benchbooks, providing parties with access to audio recordings of Commission hearings at no cost, delivering a new website, providing virtual tours of hearing rooms and extending a program to provide pro bono legal help to unrepresented unfair dismissal and general protections parties.
4 yearly modern award review
The Fair Work Act 2009 requires the Commission to review all modern awards four years after they commenced operating. The Commission began the 4 yearly review in 2014 and expects to complete it in 2017. The 4 yearly review is a large and significant body of work for both the Commission and the parties involved. In 2015–16, more than 20 decisions and 58 statements were issued and more than 5,000 documents were posted on the website.
Among the matters progressed during the 12 months were applications to vary penalty rates in a range of hospitality and retail awards. By the end of the reporting period, the Full Bench had largely dealt with the evidence, having received evidence from more than 130 witnesses and more than 6,000 submissions.
During the year the Commission also consulted with interested parties and finalised terms to be inserted into most modern awards to give effect to a June 2015 decision increasing flexibility in annual leave provisions. The Commission also commenced hearings in March 2016 on applications to vary the entitlements of casual and part-time employees, which will continue through the remainder of 2016.
Through the 4 yearly review, the Commission is taking steps to make the structure and language used in modern awards easier for employees and employers, especially small business employers, to understand and apply. Making rights and obligations clearer helps to promote compliance with these legal obligations. The structure of awards has been reviewed by small business operators, and in 2015–16 a pilot was undertaken to create a plain language draft of the Pharmacy Industry Award 2010. A number of other awards have been selected for plain language drafting, based on the high levels of award reliance, particularly among small businesses, in the industries covered.
Improvements in service delivery
In last year's annual report I outlined three pilot programs the Commission had introduced – the general protections, enterprise agreements and permission to appeal pilots.
General protections pilot
The general protections pilot involved trained staff conciliators, rather than Members, conducting telephone conferences for general protections applications involving dismissal. The Commission progressively extended this program in 2015–16 to all general protections applications involving dismissal, after an independent review in 2014–15 identified improvements in a number of key client satisfaction measures, timeliness and settlement rates.
The improvement in performance has continued since the program has been extended, with further improvements in participant satisfaction with the process (72 per cent satisfied or very satisfied compared to 63 per cent during the pilot) and the settlement rate of 71 per cent compares favourably to the 73 per cent during the pilot and 60 per cent settlement rate for conferences convened by Commission Members during the pilot.
For the first time this Annual Report includes data on the outcomes of conferences in general protections disputes involving dismissal. Whilst we have previously collected and published this data for unfair dismissals, we are now in a position to collect and report outcomes of general protections matters. This information will give applicants an appreciation of the outcomes of these applications, so that they are better informed in deciding whether to lodge and pursue an application. It also provides greater transparency to the broader community about the functioning of this relatively new jurisdiction.
The agreements pilot involved introducing a triage process for approving enterprise agreements. A team of administrative staff conducts a preliminary review of whether agreements lodged meet the statutory requirements, including assessment against a checklist developed by senior Commission Members. The decision on whether to approve an agreement or not continues to be made by Commission Members. An external review identified that the pilot led to improvements in approval timeliness as well as opportunities flowing from the centralised process to identify trends and common errors in agreement approval applications. The new process was progressively extended in 2015–16 to cover 90 per cent of lodgments by the end of the reporting period. Overall, timeliness in agreement approvals improved in 2015–16, with 50 per cent of applications finalised in 18 days (down from 21 days) and 90 per cent of applications finalised within 49 days (down from 56 days). The process also promotes greater rigour and consistency in the approach to agreement approval applications, contributing to a greater number of applications being withdrawn when issues are identified. In addition to the Notice of Employee Representational Rights Guide published in May 2015, a comprehensive step by step guide to making a single enterprise agreement has been added to the Commission's website.
Permission to appeal pilot
In January 2016, the Commission made the permission to appeal pilot the standard practice for unfair dismissal and certain other appeals, after a positive internal review. Under the process, a Full Bench determines whether to grant permission to appeal as a threshold issue, so parties do not have to incur the costs of preparing and filing submissions on the merits of the appeal if permission is refused. The pilot applies to appeals that data suggested had a higher likelihood of being refused permission to appeal, which included unfair dismissals (which have a higher statutory threshold for permission to appeal). The result has led to significant reductions in the time between lodgment and hearing of an appeal. In 2015–16, 94.8 per cent of appeals were listed within 12 weeks compared to 75.7 per cent reported in last year's annual report, and 98.3 per cent were listed within 16 weeks compared to 92.7 per cent the previous year.
It is encouraging to report the improvement in our performance in 2015–16 in these key areas. Following the successful pilots, we have now embedded new ways of delivering services that are more efficient and improve timeliness and consistency. In this way we deliver greater value to the Australian community by using our resources more effectively.
These changes not only improve outcomes and reduce transaction costs for parties, they also enable the Commission to more effectively manage within the resources provided by government. This is important as the Commission's funding is significantly reduced in the forward years following the abolition of the Road Safety Remuneration Tribunal in early 2016 and the potential further reduction in funding if functions relating to registered organisations are transferred to a Registered Organisations Commission.
The Commission developed its New Approaches pilot in 2013 to give effect to its statutory function to 'promote cooperative and productive workplace relations and prevent disputes'. The program aims to assist parties at the enterprise level to resolve issues before they become formal disputes. Parties participate on a voluntary basis and the Commission works with them in an informal manner to identify common ground and facilitate constructive discussions and collaborative problem-solving. Based on positive outcomes from the pilot, the Commission this year made the program an ongoing service and took the first steps towards its formalisation.
The Commission has long had committees of Members and senior staff who have oversight of various activities and responsibilities within the Commission. During 2015–16, following consultation with Members, the committees were reconstituted and revamped. Committees are now in place with oversight of: Commission Rules and Benchbooks; New Approaches; Future Directions; Access, Engagement and Communications; Internal Engagement; Professional Development; and International Engagement. For the first time, we have invited external stakeholders to join the Rules and Benchbooks Committee. In doing so, these stakeholders are able to have direct input into formal changes to the Commission's Rules, which govern our processes, and the development and review of benchbooks.
Completing the Future Directions program does not mean the end of our efforts to improve our services. Future Directions has been instrumental in reshaping the Commission's culture to be more externally-focused and user-centred. Nearly four years on from when Future Directions began, this approach is now integral to how we view ourselves and the services we deliver. In the year ahead, we will be particularly focusing on the needs of small business and on improving the way we deal with unfair dismissal applications. Unfair dismissals comprise more than 40 per cent of the applications lodged with the Commission, and we will be trialling different approaches to case management for matters that do not settle at the conciliation stage with a view to further improving our timeliness, national consistency and service standards.
This year has seen the departure of long-serving Members of the Commission and I would like to take this opportunity to acknowledge their contribution and to thank them for their service.
I would also like to acknowledge our stakeholders, including the peak employer and union bodies and small business representatives who work collaboratively with us in pursuit of a shared objective of improving how the Commission discharges its statutory functions. Their feedback is welcome and valued.
Finally, all that has been achieved by the Commission over the past year was only possible because of the hard work and commitment of all Members and staff across the country. I thank them for their ongoing dedication to serving the Commission and, through it, the Australian community.
Justice Iain Ross AO
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