Abetz signals penalty rates could be traded for workplace flexibility, as new workplace leadership centre is opened

Individual flexibility arrangements are set to be enhanced, as next week the Coalition will introduce a bill which could see employees given the opportunity to trade penalty rates for increased workplace flexibility.

Employment Minister Eric Abetz intends to introduce a bill focused on improving individual flexibility arrangements (first introduced under the Labor government) to give employers and employees greater scope to come to mutually beneficial outcomes.

Abetz says a range of initiatives are on the cards, but with the caveat that workers are better off overall. 

He says the legislation will be aimed at ensuring individual flexibility arrangements (IFA) “actually work as suggested and proposed by the Labor Party in 2007”.

“What we’ve seen unfortunately is enterprise agreements and awards trying to restrict the IFA regime,” Abetz said while addressing media at the opening of the new Centre for Workplace Leadership.

“It stifles the capacity of individual workers and businesses from being able to cooperate with their workforce, from being flexible to allow individuals to remain in the workplace, to be productive, to be able to work hours which suit them and their family life balance.”

Abetz used an example first made by Julia Gillard where a gym instructor wants to finish work earlier to coach his son’s sports team. After discussions with his employer it is agreed he can finish early and start early, forgoing the penalty rates the employer would have needed to pay for the early start.

Abetz says the worker is better off overall in this situation because he values coaching his son’s sports team more than the extra money for starting early.

Another change to be included in the bill will add greater permanence to IFAs, which could see the unilateral cancellation of IFAs increased to 90-days’ notice, rather than the current 28 days.

“There does need to be flexibility, but it needs to be done sensibly to bring the workforce along. That is where I think this partnership will be of great benefit to the Australian economy, to Australian workplaces,” Abetz said when opening the new centre.

“I don’t believe that governments create jobs, the best thing we can do is create an environment where jobs can grow courtesy of the private sector. And when the private sector collaborates with the academic sector to try and get the very best for the leadership of those businesses, then I think we have the foundation for creating the environment where jobs can be grown.”

Meanwhile, Centre for Workplace Leadership director Peter Gahan told SmartCompany the first task of the new centre will be to create a set of tools for business owners to help them manage the changing business environment and the associated management issues.

“The business environment is changing very rapidly… we’ve seen the rise of big data and other sorts of things which are undermining existing business models in really fundamental ways,” he says.

“Firms have to respond more rapidly and more frequently to events that are much harder to predict than we were in the past. So we’re looking to create a set of diagnostic tools, learning modules which improve skills that might enable managers, particularly in small and medium sized enterprises to manage those types of processes better.”

Gahan says the tools will be centred on helping businesses manage the change process.

Earlier this week a study by the Australian Institute of Management and Monash University found Australian middle managers were thought of as under-skilled and were hampering workplace productivity.

Gahan says the problem with middle managers is part of a “broader more systemic problem with management”.

“What we need to do in the first instance is go back to basics. We need to in effect to a stock take of the quality of Australian management. We need to have a systematic understanding of some of the big issues facing business and the over-horizon type challenges which will require different types of managerial skills,” he says.

Gahan says the prominence of internet-based businesses, the increasing number of teleworkers and the development of new communication technologies influence the management skills people need.

“The big gap is really in the ongoing development of skills as we go through this process of rapid change.

“It’s about taking the managers that we’ve got because they have a lot of experience… not that they don’t have valuable skills, but they may need to refresh those skills and update them. We need to think about professional development in a more systematic way.”