docs.employment.gov.au€¦ · Web viewThe indifference of the sector shown toward speculating on a...
9
To: the Review Panel Submitted: 17 February 2012 by email Email: [email protected] ITCRA’s Submission to the Fair Work Act Review 2012
Transcript of docs.employment.gov.au€¦ · Web viewThe indifference of the sector shown toward speculating on a...
To: the Review Panel
Submitted: 17 February 2012 by emailEmail: [email protected]
ITCRA’s Submission to the Fair Work Act Review
2012
Who is ITCRA?
Australia is well known globally as a source of innovative technologies and the Australian information and communications technologies (ICT) industry continues to grow strongly and integrate into ICT supply chains around the world1.
ITCRA (Information Technology Contract & Recruitment Association Ltd) established in 1999, is the pre-eminent professional body for ICT2 recruitment and contract organisations, their professionally accredited ICT consultants, and suppliers across Australian and New Zealand.
The Association’s vision is to set the direction for the sector, and influence standards and best practice through knowledge, education, benchmarking, business practice and advocacy.
This is underpinned by a comprehensive Code of Conduct as well a Business and Professional Toolkits and a unique dataset, SkillsMatch, to support its research program.
ITCRA Members
ITCRA Members provide a range of services broadly grouped and defined as follows:
Contracting Services
A commercial service where an organisation (ITCRA Member), in return for a fee, completes a defined scope of work for a third party (Client). Such services may be performed utilising persons for whom statutory payments/coverage (superannuation, withholding tax, payroll tax and workers’ compensation) may be undertaken by the organisation (ITCRA Member).
Contractor Management Services
A commercial service where an organisation (ITCRA Member), in return for a fee, manages aspects of an engagement and contractual relationship between independent contractors and the person conducting the business or undertaking (Client) for whom the independent contractors perform work.
Permanent Placement Services
A commercial service where an organisation, in return for a fee, recruits on behalf of a third party (Client) candidates that match a desired profile for employment or engagement by the client.
On-Hired/Labour Hire Employee Services
A commercial service where an organisation (ITCRA Member) in return for an hourly fee, supplies one or more of its candidates for whom statutory payments/coverage (superannuation, withholding tax, payroll tax and workers’ compensation) must be undertaken by the organisation (ITCRA Member) to perform work for a third party (Client) under their (the Client’s) general management instruction.
The fundamentals that underpin the services supplied by ITCRA Members are FLEXIBILITY, PRODUCTIVITY, INNOVATION, VALUE and CHOICE.1 Austrade ICT Overview accessed 16 Feb 2012, 1006 hrs.2 Information, communications and technology.
Information Technology Contract and Recruitment Association LtdT: +61 03 8622 4700 W: www.itcra.com E: [email protected]
Basis for Submission
By virtue of the range of services provided by its Members under competitive global market conditions, ITCRA is uniquely placed to provide insights with regard to selected key themes in the FWA Review as they impact upon the ICT sector.
In preparing this submission ITCRA has commissioned and made use of the following resources:
iPulse Survey Program
ITCRA uses an external online survey tool to gather Member input and the proposed changes were the subject of a comprehensive survey of Members. The questions posed in the survey are set out in Annexure A together with sample comments and the responses are articulated in the attached pie charts.
Longhaus Statistical Overview Regarding Elements of the Australian ICT Contractor Market, February 16, 2012
Longhaus is globally recognised as one of Australia's leading boutique ICT research and advisory companies offering local research and analysis to assist major organisations overcome the challenges presented by the adoption of global ICT solutions3. The Longhaus overview is attached as Annexure B.
3 http://www.longhaus.com/ accessed 16 February 2012, 1022hrs.Information Technology Contract and Recruitment Association Ltd
T: +61 03 8622 4700 W: www.itcra.com E: [email protected]
Questions and Member Responses
"Has the Fair Work Act created a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians?"
Responses were neutral or negative in the main. A key observation was reported:
[It] has the potential to improve fairness and productivity but it also has the potential to reduce productivity by returning to less flexible work arrangements and a more rigid bargaining culture. The use of independent contractors on IT, and I suspect in other industry sectors, has grown as a consequence of the real benefits it delivers to both employers and the individuals who choose to contract.
In an industry sector where participants are presented with a real choice between contemporary commercial and traditional models for engaging services/service, the preference for a commercial model of engagement may tend to suggest that the FWA has not proved responsive to the needs of sector participants.
"Can the Fair Work Act provide flexibility for businesses and is this being achieved?"
Responses were neutral or negative in the main. A key observation was reported:
Employers are crying out for more flexible work agreements, particularly in the current uncertain economic climate. Independent contractors are not celebrated in this country despite the inherent flexibility they offer in this regard.
The FWA is a piece of legislation that is principally about a traditional model for engaging service. The observation suggests that whilst it remains so its capacity to provide the type of flexibility demanded by new industries and emerging technologies will remain limited.
"Has the Fair Work Act facilitated flexible working arrangements to assist employees to balance their work and family responsibilities?"
Responses were evenly distributed with comments suggesting that much of the flexibility needed to assist employees to balance their work and family responsibilities was already in place prior to commencement of the FWA. The FWA’s provisions with regard to carers’ and maternity entitlements drew favourable comment
“Yes, there has been more recognition of ‘carers’ and working mums returning from maternity leave.
"Has the Fair Work Act's focus on enterprise level bargaining helped to achieve improved productivity and fairness?"
The majority of responses were neutral or negative, with some positive responses and one very positive response. The ambivalence of the sector on this issue is perhaps reflected in the comment:
Information Technology Contract and Recruitment Association LtdT: +61 03 8622 4700 W: www.itcra.com E: [email protected]
Not really applicable for the ICT contracting industry, if anything the compliance and policy has reduced productivity. In a company of five people we have two managing compliance now, where previously this was something that took less than half a person.
"What has been the impact, if any, of the Fair Work Act on labour productivity?"
The majority of responses were neutral or negative, with some positive responses and one very positive response. A significant proportion of respondents reported that FWA was not a relevant factor with respect to labour productivity in the ICT sector. An indicative comment was:
“In the IT recruitment industry, the impact has not yet been experienced to any great degree but there are a number of concerns that difficulties being experienced in other sectors may flow on to our sector over time.
The specific characteristics and needs of the sector which tend to distinguish it from those sectors where traditional models of service engagement are more prevalent was evident in this response and was reinforced by the responses on questions related to bargaining and agreement as appears below.
Does the bargaining framework promote discussion and uptake of measures to improve workplace productivity?"
Half of all respondents indicated that the issue was simply not relevant to their enterprise model.
How have employers pursued productivity improvements during bargaining for a new enterprise agreement? Are there any obstacles to achieving productivity improvements in bargaining in the legislation?
Half of all respondents indicated that the issue was simply not relevant to their enterprise model. The indifference of the sector shown toward speculating on a possible association between productivity improvements and enterprise bargaining is perhaps explained in the observation:
Productivity in the Act is not an issue, therefore to focus on productivity is a moot point in bargaining… if productivity improvements were part of the criteria for FWA to improve an EA, then that would give employers more leverage
What has been the impact of allowing a wider range of matters to be included in enterprise agreements by removing the list of “prohibited content” provided under the Workplace Relations Act?
58% of respondents indicated that the issue was not relevant to their enterprise model.
What has been the impact on bargaining and productivity?
62.5% of respondents indicated that the issue was not relevant to their enterprise model.
Information Technology Contract and Recruitment Association LtdT: +61 03 8622 4700 W: www.itcra.com E: [email protected]
The specific characteristics and needs of the sector, which tend to distinguish it from those sectors where traditional models of service engagement are more prevalent, were markedly demonstrated in a supplementary question posed by ITCRA in its survey of Members.
Have you been impacted by enterprise agreements that contain restrictions on the right to engage contractors?
Whilst Members’ responses indicated awareness of the issue and concern in respect of those areas of operation where restrictions on the right to engage contractors were sought to be imposed, 83% of survey participants reported “not applicable” (37.5%); “never” (33%) or “rarely” (12.5%).
The strong pattern of indifference in the sector toward speculating on the ability of the FWA to meet sector participants’ demands for flexibility and productivity was repeated in responses to the questions:
Are Individual Flexibility Agreements allowed for under the flexibility terms of enterprise agreements providing employers and employees with the flexibility to tailor working agreements to meet their genuine needs?"
75% of respondents “not applicable” or “neutral” on the issue.
Are employees appropriately protected when making Individual Flexibility Arrangements?"
54% of respondents “not applicable”.
Sector Summary
Utilising the methodology adopted in the Member survey:
• It would appear that generally, on the scale from minus-2 to plus-2, the FWA has failed to achieve any of its purported outcomes with an almost universal negative result.
• Most measures show a slight negative rating of between zero and minus-1
• Generally, ICT recruiters are negative about the changes introduced by the Act
• However, this appears to be primarily on issues of compliance red tape as a distraction, and the lack of barriers to lodging spurious claims by disaffected former workers
• It appears that the expected outcomes of the laws have not been realised due to their lack of provision for second-tier employment structures, with too great a focus on first-tier employment.
Assessed against the background of these responses, the Longhaus observations (Annexure B) assume critical importance to the growth and competitiveness of the sector:
In the recent ICT Spending and Priorities Study 2011, Longhaus found that as a core business instrument for both cost-containment and strategic delivery, ICT contractors remain
Information Technology Contract and Recruitment Association LtdT: +61 03 8622 4700 W: www.itcra.com E: [email protected]
one of the top three (3) tactics employed by Australian ICT executives in the 2011-2012 financial year.
In the latest series of quarterly CIO studies undertaken by Longhaus across Australia since July 2011 (with corresponding data back as far as 2009), the results for demand indicating significant increases in ICT contractors has remained at a stable net positive .
Such demand increases remain steady for contractors in accordance with rising payment rates for select skill sets and high experience.
What is clear, in ITCRA’s submission is that these observed effects are moulded under competitive global market conditions that operate in an industry sector where participants are presented with a real choice between contemporary commercial and traditional models for engaging services/service. The preference for a commercial model of engagement may tend to suggest that the FWA has not proved responsive to the needs of sector participants and that in the course of proposing future changes special attention needs to be given to creating the conditions necessary to promote FLEXIBILITY, PRODUCTIVITY, INNOVATION, VALUE and CHOICE.
Information Technology Contract and Recruitment Association LtdT: +61 03 8622 4700 W: www.itcra.com E: [email protected]
