Some “sensible” changes are needed to the Fair Work transfer of business laws, according to a detailed Australian Industry Group submission to the Federal Government.
“As the laws currently stand they are operating against the interests of both employers and employees," said Ai Group Chief Executive Heather Ridout.
"The transfer of business laws require employers who take over outsourced work to adhere to enterprise agreements and other instruments which applied to the old employer.”
Ms Ridout said the transfer of business provisions of the Fair Work Act have a wide scope, and are very different to the previous provisions.
“For example, in some circumstances the instruments can become binding on employees of the new employer who did not transfer, she said.
"After 12 months of operation, it is very clear that the laws are acting to deter employers who take on outsourced work from employing any employees of their client. This is not sensible when in many cases the new employer, the old employer and the employee would all like the employee to transfer. The laws are creating a lose-lose-lose scenario.
"Ai Group has proposed a series of sensible and practical changes to the laws, including reinstating the “character of business” test which was developed by the High Court but effectively extinguished by the Fair Work Act.
"It is vital that Australia maintain a fair and productive workplace relations system which enables Australian employers to remain flexible and globally competitive.”