As part of the Abbott government’s “Cutting red tape” reforms, the “Fair Work Principles” (Principles) will be repealed, effective from 1 July 2014.

These reforms will remove various employment-related requirements which have applied since 2009 to companies tendering for certain government contracts in excess of $80,000 (non construction ) or $9 million (construction).  Around 20,000 procurement contracts each year will be affected, at an estimated saving to the government of approximately $5 million per year for the next 10 years.

The key business impacts will likely include:

  • companies that have not previously participated in tenders because of the Principles may seek to do so after 1 July 2014, resulting in increased competition
  • companies tendering for government contracts should ensure they understand what requirements will apply before and after 1 July 2014 and review their employment or industrial arrangements accordingly.

Changed requirements

All tenderers will remain subject to the Fair Work Act 2009, modern awards and enterprise agreements and the general requirements for Commonwealth procurement.   However, from 1 July 2014, tenderers will no longer be required to comply with the Principles.  Key changes include removal of the following requirements:

  • additional declarations of legal compliance based on the Principles
  • requiring all enterprise agreement dispute resolution clauses to make provision for  arbitration by an independent third party (typically the Fair Work Commission)
  • for cleaning services, payment of set minimum rates (which exceeded minimum award rates by an average of around 25%)
  • for clothing, textile and footwear manufacturers, being accredited under the Code of Practice administered by Ethical Clothing Australia.

Status and next steps

The Department of Employment has released the Options-stage Regulation Impact Statement and will now consult with stakeholders, including the relevant unions and employer groups.  At this stage, the repeal of the Principles has been welcomed by organisations such as the Building Services Contractors Association of Australia and criticised by the ALP.

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Photo of Michael Tamvakologos Michael Tamvakologos

When clients were asked what they valued most in Michael, one client responded “He is very sharp, quick and commercial, and very good at building relationships with the commercial side of our business; you can put him in front of the CEO or…

When clients were asked what they valued most in Michael, one client responded “He is very sharp, quick and commercial, and very good at building relationships with the commercial side of our business; you can put him in front of the CEO or anyone else and know he won’t let you down”, Chambers.

What makes Michael more than a stand-out strategic litigator sought after by leading multi-nationals, is a MBA at INSEAD University (rated by the Financial Times as the No 1 MBA in the world in 2017) which is reinforcing an understanding of the commercial side of your organisation.

Photo of Erin Hawthorne Erin Hawthorne

Erin enjoys using the opportunities presented by difficult employment and industrial problems to deliver outcomes for her clients.

She has worked in both private practice and in-house roles and uses her experience of being a client to deliver the best legal strategy through…

Erin enjoys using the opportunities presented by difficult employment and industrial problems to deliver outcomes for her clients.

She has worked in both private practice and in-house roles and uses her experience of being a client to deliver the best legal strategy through a lens of practicality.

An experienced litigator representing employers when litigation is unavoidable or advantageous, she has the game plan needed to protect or attack.