KALGOORLIE (miningweekly.com) – The Australian resources sector has welcomed the release of the Productivity Commission’s (PC’s) draft report on Australia’s workplace relations, with the Minerals Council calling for greater debate.

The draft report identified a number of deficiencies in the current regime, suggesting reforms of these, including bargaining arrangements for large, capital-intensive greenfield projects; unfair dismissal and the generate protections provision; the introduction of scope to remove system complexity; and that steps should be taken to ensure aborted strikes and brief stoppages were not used by unions to damage employers in a bargaining context.

PC chairperson Peter Harris said changes to the workplace relations framework had to recognise that it was not just about the economics, but also ethical and community norms that should be considered.

Harris noted that reforms were also needed within the Fair Work Commission, the workplace relations regulator, as its decision-making on unfair dismissals, wage regulation and enterprise bargaining, were key to the proper functioning of the system, and at least as important as legislation change.

Mineral Council deputy CEO John Kunkel said the PC’s inquiry was the best change Australia had had in years to ensure the workplace relations system was geared towards future prosperity.

Kunkel said the PC report can and should be the catalyst for a meaningful debate around workplace laws and regulations.

The Australian Petroleum Production and Exploration Association (Appea) also welcomed the draft report, with CEO Malcolm Roberts saying the need for a more realistic form of agreement for major projects had been highlighted in the commission’s draft review of the workplace relations framework.

“The Fair Work Act, as it stands, can make it impossible to deliver major resource projects on time and on budget,” he said.

“Union threats to disrupt the completion of Australia’s biggest resource project as part of a campaign for more generous rosters highlight the need for urgent reform.

“Requiring enterprise bargaining agreements for major projects to be renewed during the construction phase – as is happening on the Gorgon liquefied natural gas (LNG) project now – lets unions hold developments to ransom.”

Roberts noted that the fact that agreements could be negotiated for no more than four years meant they almost always needed to be renegotiated at critical times in an LNG project’s development.

“This raises significant uncertainty and risk for investors who need to know what labour costs will be over the life of a project, not just the first few years.”

He added that the recommendation that enterprise agreements be extended to cover the life of greenfield projects was not radical and should be adopted by all political parties, adding that it was important that other measures to limit disruptions to major projects also be considered.

“There is more at stake than just the timing of a single project or the pay and conditions of already well-paid workers. Rising development costs are a growing threat to oil and gas investment in Australia. We risk losing major projects worth billions of dollars to our competitors if we fail to act. 

“Generous pay and conditions today will mean little if there are no new jobs in the future.”

The draft report would now be open for public comment until September 18.