HRM523 - Advanced Studies: A Critique of Fair Work Ombudsman Practices

This report provides a critical analysis of the Fair Work Ombudsman's (FWO) best practices, focusing on consultation and cooperation in the workplace, particularly in the context of plant closures and job losses in Australia. The report identifies gaps in the FWO's framework, especially concerning employee consultation and cooperation during organizational changes, such as offshoring and factory closures. It examines the limitations of current practices in addressing job losses, contract renegotiations, and the role of unions. The report also explores the roles of various stakeholders including the government, unions, and management in improving the FWO's best practices. It recommends government intervention to facilitate negotiations, review policies, and prevent the offshoring of production units. The report also highlights the need for better employee involvement, negotiation practices, and consideration of individual employee rights.

Running head: CRITIQUE ON FAIR WORK OMBUDSMAN
CRITIQUE ON FAIR WORK OMBUDSMAN
Name of the Student
Name of the University
Author Note

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Executive Summary
The report has focused on finding the various gaps that can be present within the Fair Work
Ombudsman’s best practices. The most important areas of the report has focused towards finding
the gaps in the consultation and cooperation division of the FWO best practices to understand
their implications on the development of better employee relationships. Many companies
presently are moving their production units outside Australia leading to the local populations
losing their jobs and affecting the economy. The recommendations have been provided for the
government, the union, the management and the other involved stakeholders.

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Table of Contents
Introduction......................................................................................................................................3
Discussion: Consultation and Cooperation within the workplace...................................................3
Recommendations on strengthening best practices.........................................................................6
Role of the Government...............................................................................................................6
Role of Unions.............................................................................................................................7
Role of Management....................................................................................................................8
Role of other stakeholders...........................................................................................................9
Conclusion.......................................................................................................................................9
References......................................................................................................................................11

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Introduction
The report is focused on finding the various gaps that can be present within the Fair Work
Ombudsman’s best practices. The best practices are focused towards developing ethical and
effective practices within the workplace that can be used to create better work environments for
workers across the Australian organizations. This has become important in view of some recent
events where workers in the country were subjected loss of their jobs due to the various large
operational and organizational changes that their companies went through. Companies such as
the Huggies have recently moved their manufacturing operations offshore leading to the loss of
jobs for many Australian workers (www.news.com.au, 2019). Incidents like these cannot be said
to be fair for the workers even if the formal regulatory obligations are met by the organization.
The study takes into consideration the consultation and cooperation oriented best practices that
are present in the FWO framework. The study is important in view of the gaps that it focuses on
identifying within the FWO considering the recent overseas shift of many Australian business
operations. Hence, the ombudsman’s best practices need to be reviewed in view of the recent
events that have threatened greatly the workers of the country. The most important areas that are
addressed by the fair work ombudsman are family and work, flexible work arrangements,
consultation and cooperation, individual flexibility, guiding young workers, gender pay equity
and other important areas.
The objective of the study would be identifying the gaps within the consultation and
cooperation in the workplace and subsequently recommend the various actions that need to be
taken by the identified stakeholders.
The study would help in the future to create more effective and stronger fair work
ombudsmen best practices and the effective implementation of the same.
Discussion: Consultation and Cooperation within the workplace
The Fair Work Ombudsman (FWO) has within its best practices framework, the sub-
division of consultation and cooperation in the workplace. The consultation and cooperation
division of the FWO best practices is concerned with the development of the consultation
mechanisms that can encourage the better engagement and cooperation of the management and
the employees (Welcome to the Fair Work Ombudsman website, 2019). It is a part of the best

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practices that are concerned with the development of an environment of cooperation and
coordination between the various employees and the organization. The FWO wants to implement
a culture of consultation and cooperation in the various workplaces. The employees are often
subject to certain contract terms or workplace agreements at their organizations. These guide the
terms of work, the value of production and the entirety of the tenures of the employees.
Some of the most important areas associated with the consultation and cooperation are
concerning the better participation of the employees within the decision making functions of the
management. The most important aspects are, consultation regarding workplace change;
termination of employment; occupational health and safety and other situations. The creation of
employee awareness and involvement according to the best practice guide leads to various
positive organizational changes. These are formation of more productive workplaces, better
decision making and idea implementation, effective retention of staffs, effective coping with
change, and minimization of workplace conflicts and minimization of claims of employees
against the employers. In essence, the focus is on the development of better workplace
relationships though the development of best practices for ensuring cooperation and
coordination.
The strengths of the best practices can be much essentially put forward. They are
determination of effective frameworks for the development of better workplace coordination and
creation of better value for the employee within the organization. Additionally, it helps to
empower the employees more within the given organization. It is an effective sub-division of the
best practices concerning the development of better workplace relationships and greater
cooperation. It puts forward the most important areas concerned with the development of work
culture within the various workplace scenarios present. The various aspects that can determine
the effective empowerment of the employees have been covered. However there are certain
important gaps that need to be identified in view of the recent issues related to the closures of
various Australian plants.
Some of the important plant closures in Australia can be considered to provide a clearer
picture of the issues occurring with employees despite the best practices. One important issue
concerning the employees losing jobs due to the various coal-powered power stations as a result
of Australia now slowly moving away from coal usage for electricity generation (Bad news.

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Closing coal-fired power stations costs jobs. We need to prepare, 2019). The local
unemployment rates are bound to rise as a result of the same. In relation to the same the
consultation regarding the termination of employment clause becomes very important. One
important limitation of this best practice is that although it asks to consult the labor unions before
the termination of jobs, it does not address how the employer should actually make better ways
to ensure the employment of the affected employees. Additionally, if an employee is not part of
the union, the employer is not obliged to inform the employee of the termination. This is a major
gap as in many of the recently affected industries many do not have strong labor unions. At the
same time the power of the labor unions have greatly been reduced in the last decade.
Victorian manufacturing company, Pacific Brands, one of the biggest names in the
clothing industry of the country decided to cut 1800 jobs (Ben Schneiders, 2019). The company
transferred most of its manufacturing units to Asia. The offshoring of the Australian brands has
thus become one of the major issues affecting the organizational areas of Australia. The same has
been the case with the General Motors Holden. The automobile manufacturers ceased their car
production in Australia in 2017. Around 2900 jobs were affected as a result of the decision. High
exchange rate of Australia was found to be one of the main reasons. The high cost of labor of the
country has been one of the most important reasons for the offshoring of the large enterprises. In
2017, Qenos, a manufacturing company had to cut the employee base by 15% as a result of the
higher energy prices. All these layoffs of the employees had some things in common. The
employees suffered as the organizations were unable to properly re-negotiate the contracts of the
employees.
Steps to consider for the
Company Step 1 Step 2 Step 3 Step 4
Pacific Brands Creation of
negotiation
terms
Negotiating with
the relevant
stakeholders
Communicating
effectively with
the employees
approaching the
government
General Motors
Holden
Negotiating with
manufacturing
unit workers
Creation of
dialogue
between workers
and employers
Reaching the
government for
support
Creating
employee
grievance
addressing

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system
Qenos Re-think the
energy
consumption
proices
Shifting to
cheaper form of
energy
Negotiating with
the employees
Consulting with
the government
Huggies Address the
issues of the
employees
Engaging
effectively with
the stakeholders
Managing
conflict with the
government
Campaign for
subsidized
production costs
The best practices do not properly address the renegotiation of the contract term
effectively between the employers and the employees. This causes the employers to shift their
organizational functions offshore with only paying the legal entitlements to the employees. The
employees on the other hand lose their jobs to strive again for finding better opportunities. In
consideration of the same the enterprise agreement aspects should be considered essentially.
There is a significant lack of negotiation best practices that can determine mutually agreeable
solutions. This means that the companies are being unable to come to terms with their
employees, as a result of which the employees are having to move their operations offshore and
resulting in the significant loss of jobs for the employees. One of the organization that was found
to be working effectively as part of the FWO best practices is Quenos. The manufacturing
organization has effectively negotiated the terms with the employees and provided a better
framework for employee relationships development. The organization is especially implementing
the consultation and cooperation framework. It has developed an employee forum through which
it has effectively managed the organizational aspects.
The most important elements that need to be considered in this case are improving the
general consultation, the workplace change consultation and the termination consultation
process. The rights of the individual employees need to be given more importance than the
union. This is an areas where a significant gap is being created by the organizations engaging in
the employee relationship processes. There have been significant employee protests in regards to
the loss in jobs as a result of the operations of the various organizations moving offshore.
Recommendations on strengthening best practices

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Role of the Government
Some important recommendations cane be made in regards to the various changes that
can be implemented to make the FWO frameworks better. At the same time the roles that the
different stakeholders can play in the process can be made known more effectively. It is
important to consider the role of the government in this case. The government is directly related
to the formation and implementation of the Fair Work policies. Hence, the government should
intervene in this case to make things easier for both the organization and the employees in the
middle of the issue. It is recommended that the government take steps to re-negotiate the shifting
of the production units of various Australian companies offshore. Some of the important
decisions need to be taken in the field of better implementation of the FWO best practices. The
intervention of the government is important as this can determine the effectiveness of the entire
process of best practices implementation among the organizations. In essence, the organization is
focused towards creating mutually beneficial work prospects. Government intervention in this
case can provide more strength towards building mutually beneficial relationships.
It is a major responsibility of the government to review the policies that are related to the
creation of effective employee and employer relationships (Bray, Budd & Macneil, 2019). In this
case there are to major roles that needs to the played by the government agencies. Firstly, the
government should ensure that the FWO best practices are effectively reviewed. Secondly, the
government would need to oversee the effective implementation of the fair work ombudsman
practices across all organizations. There is an important role that the government has to play
concerning the negotiation of the employees and the employers. Considering the same, the
government should act as a mediator facilitating the better negotiations between the employees
and the employers of the organizations that are planning to take their productions offshore. The
government would need to provide better opportunities to the various organizations that are
working in the country to keep intact their productivity targets. At the same time laws should be
formed against the offshore shifting of entire production units of the various factories. The
government’s role becomes even more important due to the fact that it is the highest decision
making body for the country. The FWO procedures are important in determining the value off
the offshoring of the Australian plants. The practices need to be followed more effectively and
sincerely by the organizations.

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Role of Unions
The Australian labor unions in the recent times have lost much influence due to the
creation of apparently better and more effective labour laws within the country. However, the
problem arises due the fact that as per the FWO framework, termination and employment related
decisions should be made by the organization by effectively consulting with the unions of the
organizations. However, it should be considered that the unions are losing much of their powers
and are currently also losing much of their memberships. This is increasingly making it difficult
for them to take strong measures against the rapidly shifting jobs of Australia due to the better
opportunities provided to the employees overseas. One of the major roles of the union would be
to further strengthen themselves. This means that the union would need to create for themselves
a larger scope for operation. They would be the ones who would come into contact with the
affected employees first. Hence, it becomes much important that the employees are more focused
towards forming unions that can help in the entire negotiation process. The unions for need to
empower themselves by creating the right networks. At the same time they should also focus
towards empowering the employees more towards the achievement of significant goals.
Job loss of a large portion of the employee base of Australia brings forward the need for
the creation of better negotiation terms of the employees with the organizations that are leaving
the country. It is important to consider the fact that Australia is also being affected with regards
to the economy of the country. The labor union should focus on bringing the employees closer to
the organizations decision making system. Hence, it is important that they use their negotiation
power to the fullest in terms of the negotiation processes that are required while forming the
strategies for employee termination management. The union would need to be more effective and
empower all the employees that are under them. They at the same time should focus on
increasing membership. The theories connected with employee relationships become very
important in this context. According to the theory of pluralism conflict at workplaces is deemed
to be inevitable. In view of the same the functions of the union should be to focus on the
complex structural relationships that business organizations share with the environment. Conflict
should be identified and accepted to find mutually acceptable solutions.

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Role of Management
The role of management in this case becomes much important as it can determine the
outcomes of the conflicts. The management of the organizations in view of the constant shift of
the operations to the overseas of the Australian firms, needs to develop better conflict
management and employee relationships frameworks. It is also important that the management
provides more focus on the important roles that it needs to maintain internally. In essence, the
functional areas of the management are effective in terms of the decision making that become
very important at these times of conflicts.
Some of the most important steps that need to be taken by the management are re-
negotiating with the current employees to ensure that the production units can be kept in the
country. There is a strong need for better stakeholder identification and subsequent management.
The principles of employee relationship management (ERM) can be applicable in this case. The
management needs to focus on the relationships that it has with the employees. One of the most
important functions of the management would be to engage in proper negotiation with the
government and the employees to stop the occurrences of the shifting of the production units to
overseas locations. In relation to this theory, workplace conflict can be said to be inevitable.
Hence, the conflict should be acknowledged by the management and steps need to be taken
through the effective engagement of the HRM department (Vachon, Wallace & Hyde, 2016). In
essence, the management should provide more emphasis towards the all-round implications of
the decisions for shifting their operations to offshore locations. The CSR perspectives should be
given more importance in consideration of the same. There is a need to understand that the
management cannot put in danger the livelihoods of a large number of Australian employees. In
essence, the management needs to ensure that the employees are not adversely affected by any
decisions. An important step that can be taken by the management is to provide special employee
schemes that can provide pay cuts and increased benefits while keeping the production units
onsite. Through this the organization can improve the relationships with the employees. It is
important to understand that the management’s most important role at this time is to re-negotiate
the contract terms. Mutual agreements need to be formed by considering all the major
stakeholders.

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Role of other stakeholders
The other stakeholders that can be identified in view of the issues that are being currently
faced are the local communities, the employee welfare groups, the employee rights activists and
the industry leaders. It is important that a general public awareness is created by the members of
the general publics in order to ensure that the local communities are not affected by the decisions
of the management of the larger organizations. The best practices do not properly address the
renegotiation of the contract term effectively between the employers and the employees. This
causes the employers to shift their organizational functions offshore with only paying the legal
entitlements to the employees. The employees on the other hand lose their jobs and have to strive
again for finding better opportunities. In consideration of the same the enterprise agreement
aspects should be considered essentially (Nechanska, Hughes & Dundon, 2018). The role of the
local communities become important in this case as they have to sign petitions in order to bring
about the necessary changes in the FWO policies and best practices. It is important to understand
that the fair work ombudsmen need to be made aware of the situations that can affect a large
number of poor Australian workers if the factories start to move outside the country.
The role of almost all the other stakeholders at this point is to bring forward and uphold
the principles of pluralism. In accordance with the same the organizations need to abide by the
rules of community welfare and development (Godfrey & Lewis, 2019). It is important to note in
this case that the decisions of the organizations to move their operations outside the country is
especially detrimental to the growth and development of the local communities that are
benefitted by the provision of employment by the larger organizations (Johnstone & Wilkinson,
2018). It is important to focus on the development of the communities. The communities should
bring to the attention of the government the problems that are being faced at the times. In essence
the value is to be created with all the organizations, the government and all the major
stakeholders that are involved. Employee relationships are directly related to the development of
mutually beneficial relationships between the employers and the employees and need to be dealt
in the same way.
Conclusion
The implications of the report point to the fact that currently Australia is facing
significant issues due to the transfer of the operations of many large organizations to offshore

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locations. The consultation and cooperation division of the FWO best practices are most
important in this case as they are connected essentially with the development of the
organizational areas that are connected with the development of employee relationships. It was
found that the most important reasons for the organizations moving their production units to the
offshore locations were more labor costs being endured to run the operations in the country. It is
recommended that the government take steps to re-negotiate the shifting of the production units
of various Australian companies offshore. The labor union should focus on bringing the
employees closer to the organizations decision making system. The management should focus
toward re-negotiating the terms of employment to keep the production units in the country. It
was found that the other stakeholders now need to take up the issue and spread awareness about
the matter. Employee relationship management can solve the current problems if planned and
implemented effectively.