I am pleased to introduce the Fair Work Commission’s annual report for 2018–19.

The 2018–19 reporting period has been another busy and productive one for the Commission. The Commission has undertaken significant work in relation to our access to justice initiatives, while the continued improvement of our core business functions remained a focus throughout the year.

Agreements

The Commission is required to ensure that each agreement and approval application complies with the various requirements of the Fair Work Act 2009 (Fair Work Act). From late 2016, all approval applications have been determined by Members with the assistance of an administrative ‘agreement triage’ process. The triage process was designed to increase rigour in assessing all agreements and approval applications in order to increase consistency in the decision-making process.

Rigour in the decision-making process is important. The consequences of failing to identify either a technical or a substantive defect in the agreement making process or the agreement itself are significant. An agreement invalidly approved exposes all parties to it to a collateral attack in the courts, creating uncertainty as to whether the agreement is a legal nullity.

The volume of agreement applications assessed as non-compliant has more than doubled since 2016. During 2018–19, 66 per cent of agreements approved required undertakings to resolve deficiencies, up from 35 per cent three years earlier. This has contributed to a deterioration in our timeliness performance.

At the date of submission of this annual report, in September 2019, the Commission has successfully resolved the temporary decline in timeliness for approving agreements caused primarily by the increase in applications assessed as non-compliant or incomplete.

Assisted by the Enterprise Agreement User Group, the Commission took decisive action during 2018–19 to improve timeliness. Changes in operational practices, including streamlining communication with parties, increase resources and additional information materials, have resulted in a reduction in agreement matters on hand from a peak of 2,063 applications in January 2019 to less than 550 applications.

Based on performance for agreements lodged and finalised in the last seven months, compliant and complete applications are being approved within a median of 17 days from lodgment. Similarly, all applications, simple and complex, lodged and finalised in that period have been approved in a median of 34 days from lodgment.

On 12 December 2018, the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Amending Act) revised s.188 of the Fair Work Act to provide a mechanism for the Commission to conclude that an enterprise agreement has been ‘genuinely agreed’ despite ‘minor procedural or technical errors’. This amendment has given the Commission the power to approve agreements that would otherwise have to be dismissed.

The best way of improving timeliness is for the Commission to be able to approve agreements that are complete and compliant at the time of lodgment. That is why the Commission published a guide this year to help employers and employees lodge compliant applications for enterprise agreements, including how to avoid common problems that delay the approval process.

The guide helps employers, employees and their representatives to lodge agreement approval applications that meet all of the statutory requirements so they can be approved quickly by the Commission.

There is further information about our initiatives to improve the timely approval of agreement applications in the Enterprise agreements section.

What’s Next

The work of the Commission has changed significantly in recent years. There are now fewer regular clients, with many parties more likely to be first-time participants in the Commission’s jurisdiction. As a result, one of our main aims has been to focus on better understanding and responding to the changing needs of our users.

In July 2018, the Commission launched What’s Next, the Commission’s plan to ensure it continues to provide a world-class dispute resolution service. The message at the core of What’s Next is simple – listen to and meet the needs of all of those who use our services. Building on the foundations of Future Directions, What’s Next is the latest in a series of reforms the Commission has undertaken.

What’s Next brings together a suite of initiatives designed to make it easier for employees and employers to access our services. Key initiatives and activities with stakeholders included greater support for small business and individual users, working more closely with parties and expanding our access to free legal advice.

Workplace Advice Service

Free legal advice can improve access to justice, reduce participants’ anxiety and confusion, and avoid unnecessary costs for all where an application does not have merit.

The Workplace Advice Service, the Commission’s national pro bono program was launched on 30 July 2018. The service provides eligible employees and small business employers with access to free legal advice that aims to help parties make informed decisions and better understand the implications of continuing with a claim that may be unlikely to succeed.

The service has expanded around the country and has now partnered with more than 60 law firms, community legal centres and legal aid bodies. The service consistently receives positive feedback from users and has provided approximately 1,000 hours of free legal advice to eligible parties. Its success would not be possible without the generous support and participation of our participating partners. I take this opportunity to thank them for their service – without their support and time, we could not deliver this most valuable assistance to the community.

Plain language

We are working hard to improve the resources we provide to employers and employees to enable them to help themselves. It is vital that the information we provide is easy to find and in plain, clear language.

With this in mind, the Commission is undertaking a major review of all our correspondence, notices and guidance materials to ensure they are accessible, accurate and consistent. This process has already reviewed and redrafted in plain language the 90-plus template letters and notices that we send to employers and employees as part of the unfair dismissal process.

The purpose of redrafting these letters and notices is to address the uncertainty and confusion that our research shows is experienced by many self-represented employees and employers. Clearer correspondence will assist those parties more effectively, build trust in the process and support all users to make informed decisions about the cases they are involved in. We expect to finalise and introduce the plain language letters in the second half of 2019.

Behavioural insights

Behavioural insights (BI) draws on behavioural science, psychology and behavioural economics to understand the biases and motivations that influence how people think, make decisions and behave. It recognises that humans are not always rational and do not always follow through with their intentions. Decision making can be affected by seemingly unconnected things, such as how information is presented or what others are doing.

BI has the potential to improve the services we provide the community by helping parties to make informed, timely decisions about their case, particularly where employers and employees are self-represented.

We are using BI to improve compliance and timeliness of unfair dismissal applications and to increase compliant enterprise agreement applications.

Modern awards

The 4 yearly review of modern awards has been an enormous undertaking that has involved more than 1,000 hearings and hundreds of decisions and statements. On 12 December 2018, the section of the Fair Work Act covering the 4 yearly review was repealed by the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Repeal Act) with effect from 1 January 2018. This means that there will not be any more 4 yearly reviews of modern awards, but the Commission will complete the current review.

Regional allocation

The proportion of collective matters that the Commission deals with has declined in recent years. This has resulted in a progressive reduction in the number of industry panels and in the volume of matters dealt with by those panels. In April 2019, some 47 years after their establishment, the Commission replaced the industry panels with a regional allocation system.

Relevant matters are now allocated to Members based on their location in one of three regions:

• Region 1 – New South Wales, Queensland, Northern Territory and Australian Capital Territory
• Region 2 – South Australia and Western Australia
• Region 3 – Victoria and Tasmania.

This change aims to improve national performance by providing clear responsibility and greater internal oversight of work allocated to Members, while also streamlining administrative processes and reducing costs.

External parties have experienced little change in service delivery, but we are confident that changes will yield benefits for the efficiency of the Commission and for those who use our services.

Small Business Reference Group

To enable us to establish whether our improvements are hitting the mark we have established a Small Business Reference Group, which includes representatives of the small business community, including government, advisers to small business, and industrial associations with small business membership. This group serves as an ongoing contact point between the Commission, small businesses and those who represent them, so that we can hear about the challenges facing small business and what we can do to further improve our services.

Departing Members

Commissioner Anna Lee Cribb retired in the last year. I take this opportunity to acknowledge Anna Lee for her contribution to the Commission and to the Australian community.

Thank you

I look forward to the next reporting period, when we will continue to innovate and improve our services to make sure the Commission meets the ongoing needs of business, government, the community, employer and union organisations, and individuals alike.

Finally, I thank the Commission’s dedicated and hardworking Members and staff across Australia. All that has been achieved in 2018–19 would not be possible without their ongoing dedication to serving the Commission and, through it, the Australian community.