development and labour market issues
covers the skills and labour market issues that face Australia's food
processing industry. Labour and skills featured prominently in the submissions
and evidence before the committee. Two broad themes emerged from the inquiry:
those relating to tightness in the labour market, particularly with respect to
the supply of skilled employees; and those relating to flexibility under the Fair
Work Act 2009 (Cth) (FW Act) and its associated modern awards.
The food processing
examining the skills and labour issues identified in the inquiry, it is useful
to set out some background information about the food processing labour market
In evidence to
the committee, the Department of Education, Employment and Workplace Relations (DEEWR)
noted that, as at February 2012, the food processing industry employed some 194
300 people across about 10 000 businesses.
Many of these businesses are in rural centres and are a major source of
employment for people in country towns.
In these towns, it is not simply the workers who depend upon the continued
existence of food processing companies, but also a raft of local industries,
from tradespeople to retailers, as well as their families.
the food processing sector has defied the general decline in manufacturing
employment in Australia. According to Dr Alison Morehead, Group Manager of the
Workplace Relations Policy Group, DEEWR:
though employment and manufacturing as a whole decreased by 62,000, or 6.1 per
cent, in the five years to August 2011, employment in food product
manufacturing increased by 12,200, or by 6.7 per cent.
predicted that this trend would continue, particularly in the manufacturing of
bakery products, dairy products and meat and meat products.
This growth in employment was not even across the sector or over the five year
period for which DEEWR provided statistics. In answer to a question on notice,
DEEWR provided the following table setting out employment trends in the food
processing sector for the past five years:
at Feb 2012 (000s)
Year Change to Feb 2012 (000s)
Year Change to Feb 2012 (000s)
Food Product Manufacturing (Overall)
Meat and Meat Product Manufacturing
Dairy Product Manufacturing
Fruit and Vegetable Processing
Oil and Fat Manufacturing
Grain Mill and Cereal Product Manufacturing
Bakery Product Manufacturing
Sugar and Confectionery Manufacturing
Other Food Product Manufacturing
DEEWR, Answers to Question on Notice from public hearing 11 May 2012, received
1 June 2012.
food product manufacturing' subsector, in which the greatest job losses
occurred, includes potato crisp manufacturing, animal feed production and other
‘non‐staple’ items such as coffee and
presented statistics about employers' recruitment experiences in the 12 months
to September 2011, including in the agriculture, forestry and fishing industry
and the food product manufacturing and beverage and tobacco product
manufacturing sectors. It is particularly notable that, despite reporting low
levels of competition for vacancies and low numbers of suitable candidates,
employers in both the agriculture, forestry and fishing industry and the food
product manufacturing and beverage and tobacco product manufacturing sectors
reported rates of unfilled vacancies lower than the rate across all industries.
These statistics are set out in more detail in Appendix 3.
significantly for this inquiry, DEEWR noted that the industry faced a number of
skill shortages in both the professional labour market and technicians and
trades market. In the professional sphere, DEEWR noted that there had been
'persistent shortages of agricultural scientists/consultants' since 2007,
mainly driven by a low supply of such professionals.
In relation to technicians and tradespeople, DEEWR noted that some employers
found it difficult to recruit agricultural technicians, and that the industry
had had some trouble recruiting qualified bakers and butchers for the last
before the committee bore out DEEWR's statistics on shortages in the labour
market. Submitters noted shortages of both skilled and unskilled workers. In
order to suggest methods of addressing these shortages, it is important to
understand why they have occurred. In this regard, the evidence before the
committee was remarkably consistent, focusing on a shortage of food science and
agriculture graduates, a perceived gap between graduates' skills and knowledge
and industry's expectations and impact of the mining boom. These issues are
dealt with in the next sections of this chapter.
Shortage of food
science and agriculture graduates
submitters argued that skilled labour shortages facing the industry resulted
from a shortage of food science and agricultural graduates. The Australian
Dairy Industry Council (ADIC) quoted a study which showed that, while there
were 5000 agricultural scientist positions for graduates each year, there were
only about 800 graduates.
ADIC also provided the committee with a May 2011 report by the Allen Consulting
Group for the Food Technology Association of Australia (FTAA) on the demand for
food science and technology graduates. This report noted that the number of
food science and technology graduates had been declining in Australia and that
this trend was in line with international experiences.
for the shortage
reason submitters offered for this decline in enrolments related to the food
processing industry's image as a potential career path. The problem was one of
both perception and awareness. The Australian Food and Grocery Council (AFGC)
time AFGC and its members have been concerned about the shortage of high
calibre candidates for senior management roles in technical areas such as
technology management and quality assurance. Although the reasons for poor
recruitment of students into food science, technology and engineering
disciplines have not been clearly established AFGC considered it is more deep
rooted than a simple reflection of the skills shortage which Australian
industry generally is experiencing. One contributing factor is thought to be
the general lack of awareness among young people of the career opportunities
which exist in the food industry, including in technical areas.
A number of
submitters noted that food processing was simply not seen as an attractive
option by many students:
one senator said in Hansard that they did believe that the food industry was
sexy. It is not. Generally, we have moved away from it. If you go round the
average factory, be it a milk factory, a canning factory or an abattoir, you
will see it is not sexy.
I am a
food technologist. The job is hot and sweaty, it involves shift work and early
starts and if you have a trial you can guarantee it is going to be in the
middle of the night. I have always found the job to be rewarding, but it is
definitely not glamorous. You do not need to worry about whether the job is
glamorous or this or that. It is real—you are making something real. You are
paying your bills, you are part of society and you are paying your tax.
some submitters, this lack of allure meant that students chose more lucrative
specialisations in science and engineering than food. Mr Peter Bush, Executive
Officer of the FTAA, argued that:
food science and technology is almost at the bottom level, with engineering and
things like that at the top, it is very difficult to attract students of food
science and technology ...
McHugh, Senior Project Manager, Food and Agribusiness in the Tasmanian
Department of Economic Development, Tourism and the Arts, echoed these
back to the issue of what incentives there are for people to enter these
courses when they have so much other choice before them, particularly people
with a scientific bent and a good scientific brain. There is engineering, there
is the mining industry and, if you are mathematically inclined, there is
banking and finance.
students had an interest in food and agricultural sciences, some submitters
believed that universities did not offer courses which led naturally to a
career in food processing. Instead, submitters believed that university courses
privileged nutritional studies
or environmental sciences
over food technology and agricultural sciences. Dr Michael Eyles, Senior
Adviser, Food, Health and Life Science Industries Group, Commonwealth
Scientific and Industrial Research Organisation (CSIRO), stated that:
heard about the numbers going into food science. There has also been quite a
shift in the composition of those numbers. There has been an increasing move of
students away from the hard sciences like engineering and so forth associated
with food science and into nutrition. So that has obvious consequences for the
way those people can be used. A lot of things that go into helping school
students make up their mind whether food process engineering or nutrition is
sexy and at the moment it is nutrition.
ADIC noted that, in the case of environmental sciences, the focus of the
qualification and the skills and interests it developed were quite different to
those developed by an agricultural science program:
education sector has responded to the broad community promotion of
environmental issues with young people enrolling in environmental science
programs. Environmental science is generally focussed on preserving functioning
biological systems; it is not about producing saleable products in a
sustainable manner. In contrast, agriculture requires the management of
biological, economic and human resources to produce a profit; agriculture can
only be sustainable as long as it is profitable. Rather than assuming
environmental science graduates can be used to fill the gap, perhaps a better
approach would be to boost the 'public good' credentials of agricultural and
food science degrees.
regard, the committee notes that data provided by DEEWR suggests that
enrolments in agricultural studies, including both general agricultural studies
and more specific courses related to fisheries, forestry, horticulture and
viticulture, have also dropped significantly over the last ten years. In the
same period, enrolments in environmental studies have increased dramatically.
Grant, First Assistant Secretary of the Agricultural Productivity Division,
Department of Agriculture, Fisheries and Forestry (DAFF), believed that the
Department had more to do to understand why this shift had occurred:
to better explore in particular the tertiary education system through both the
technology institutes and the universities to find out if this is a supply led
issue or a man led issue? Are the universities cutting courses because no-one
is applying, or is no-one applying because there are no courses? We keep getting
this circular argument. That is certainly an issue we are trying to explore
better with some of those institutions. 
It is notable
that these declining enrolments occur in the context of a decline in the number
of secondary and tertiary students studying science more generally. Some
submitters believed that this decline in numbers exacerbated the recruitment
problems posed by the industry's relative lack of glamour.
about the decline in enrolments in food and agricultural science degrees were
also accompanied by concerns about the sorts of skills possessed by graduates
of those courses. That is, some in the food processing industry believed that
not only were tertiary education institutions not producing enough graduates for
the food processing industry, they were not properly equipped for entry into
Mr Bush, of
the FTAA, believed that the content of courses that traditionally led to food
processing careers had changed, moving away from technical science skills and
into content less relevant to the workplace:
science and technology ... has now changed to food science and nutrition. The
courses have changed. Even young people feel that food science and technology
is not sexy but food science and nutrition is. So the courses have been changed
in their content. Firstly, they have gone from four years to three years.
Secondly, they have reduced the amount of food and food related topics and
increased human nutrition and nutrition topics in general.
Meat Industry Council (AMIC) held similar concerns;
Campbell Arnott's referred to this process as 'a slow erosion of Food Science
Consulting Group Report, which surveyed a number of food processing businesses,
noted that this had resulted in:
[food science and technology] graduates [who] do not possess the skills and
attributes businesses consider important. The disparity between skills
identified by businesses as important, and skills identified as usually being
possessed by FST graduates suggests that many graduates do not possess the
technical skills that are considered important by business.
report also found that this disparity 'may be exacerbated by high business
expectations', these expectations came from managerial experience:
business expectation has developed primarily due to managers expecting the
skills of graduates to be similar to the skills they possessed when they left
university. However, it was noted that degree courses teaching these skills
don't necessarily exist anymore.
Elder, Executive General Manager of Quality and Innovation at Simplot, argued that the decreased focus
on core technical skills in food science and technology courses was, in part, a
result of changes to the role of universities:
move onto the universities, the training of agronomists and other specialists
that we need in this country that have a significant lack of, they have become
profit centres and tend to produce courses that are the cheapest for them to
run. Every university has a nutrition or food course; hardly any of them have
any technical food science courses anymore, because they are required to have
equipment and this equipment is expensive to buy and maintain.
Consulting Group Report found that these industry perceptions about the skills
and practical experience of food science graduates did not always affect their
employability in the same way. Large businesses and businesses in rural areas
found that graduates' willingness to relocate was a greater factor affecting
their recruitment; it was in small and medium-sized businesses and in
businesses in metropolitan areas that 'skills mismatch' was more frequently
cited as a reason for not employing graduates.
A number of
businesses told the committee that they had reacted to this skills shortage by
recruiting from overseas. Mr John Millington, Company Spokesman for Luv-a-Duck
told the committee that:
the biggest issue for us is skilled labour shortages. In recent years—for the
last 10 to 15 years—we have been sourcing our skilled labour workforce from
overseas, mainly from South Africa. ... Our demand is primarily for skilled
from Simplot, argued that these graduates often had access to better technology
and training in their home countries. By recruiting these graduates,
businesses, particularly smaller businesses, were able to access knowledge
about new technologies and procedures that was not easily available to them in
access to pilot plant equipment and expertise that we can draw on in people who
can utilise that equipment to be a very difficult thing. Quite often now we are
actually getting graduates and people from overseas, from Germany and other
countries that do have wonderful centres. CSIRO has got a good processing
centre, the Victorian centre at Werribee is very good. Apart from that, they
are almost non-existent across the country. How do SMEs, which are not big
companies like us, get to trial new equipment—pilot scale equipment—to see if
it is right for their processes, to see if it can give them improved
efficiencies or productivity advantages, if they cannot access that at a centre
of excellence or a research centre.
Mr Bush, from
the FTAA, believed that there were often strong pathways for international food
science and technology students, particularly postgraduate students, to enter
the Australian workforce:
government has made it quite easy with working students, even 457 visas et
cetera, and we find ourselves today with the situation where many of the
students who came want to stay and many of them still want to work here in
Australia. We may well have made that easy for them. Secondly, in terms of our
immigration policy of going for qualified persons, we find within the industry
now the developing lower strata or entry level is heavily made up of
immigrant—if that is the word—food science technologists, very well qualified,
particularly from New Zealand, the Subcontinent, South Africa, Ireland and, as
is developing now, Thailand and China.
heard evidence offering a number of solutions to the problems faced by the food
processing industry in attracting graduates. These solutions revolved around
promoting the industry as an attractive potential career path to students, both
secondary and tertiary, and increasing industry engagement with tertiary
institutions to ensure that courses develop skills and knowledge that more
closely match industry expectations.
with perception issues
Skills Australia submitted that any approaches to addressing the shortage of
food science and technology graduates should be accompanied by the industry
making a concerted effort to make its image more contemporary:
important that there be effort focused on contemporising industry's image as
a place to work and grow. Academics, policy makers and even careers
advisors are susceptible to the stereotypical image of the food sector as lower
skilled and offering poor job and career options. To the contrary, the industry
has a wide range of technical and highly sophisticated job roles in vibrant,
world class companies. Promoting an industry image which focuses on
contemporary and emerging job roles, and importantly career 'pathways' they
open up, remains paramount.
Annison, Deputy Chief Executive of the AFGC, gave similar evidence to the
It is my
personal belief that there has been a fundamental shift in the last 10 years in
the way the food industry has been viewed in Australia. It was my observation
during the 1990s that the food industry, for want of a better term, was the
flavour of the month, so we had a number of very positive developments that
really highlighted the opportunities with the food-processing industry. ...
That growth continued in that trajectory on into the mid-2000s. Around 2005 it
started to drop off. But it was also in the year 2000-01 that the concerns
around obesity and diet suddenly took off, and I think our industry went... [to
being viewed as] not making the right products, we were not labelling them
properly and we were not promoting them correctly.
Mr Grant, of
DAFF, made it clear that the Department was aware of these image concerns. He
gave evidence to the committee that there were clear connections between the
image of agriculture and pathways into careers in food processing.
Mr Grant believed that:
two elements to it. One is: how do you give agriculture a better name so that
people become more interested in it to start with, so that that will flow
through to people wanting to study related agricultural degrees? We are
interested in people studying science per se as much as agriculture per se,
because you can generally translate science into a whole range of agricultural
second thing is to identify that agriculture is not just about farms and hard
work; agriculture is also about food processing. It is about high tech and it
is about sophistication. Those are some of the messages we need to get across.
of career paths in schools
submitters believed that these perception issues needed to be dealt with
initially in schools, particularly secondary schools:
identified that we need to get into schools at primary school level and at
secondary school level as well to give people an understanding of what our
industry can offer them in a working career. It is not just about getting down
and milking the cows. There is laboratory work. A huge array of skills are
required in this field of agriculture. The rural-urban divide is a real issue
for us, and more and more that is becoming the case. I am aware that the
National Farmers Federation is thinking along the same lines and trying to get
agricultural education curriculum back into the schools. It is a problem now,
but it will become a big problem if we do not, as far as getting staff is
from the CSIRO, noted that attracting students to the food sciences could occur
within existing programs aimed at encouraging students to pursue careers in
two issues you touched on: one is attracting students into science and the
other is attracting students into food science, in particular, at the graduate
level. One of the programs that CSIRO has had in place for some years, ...is a
program called Scientists in Schools [which] teams up working scientists with
science teachers. The intention is to give students in schools a real feel for
what science is all about.... The reason I mention it in this context is because
there has been a special focus in some states on getting food scientists into
schools and helping students understand that actually food science is not
cooking; it is quite sophisticated stuff that is interesting and you can have a
really interesting career in food science.
Skills Council similarly submitted that there were a number of programs already
in operation aimed at showing students possible careers paths in food science
and technology. The Council highlighted its development of industry pathways
programs for food processing in South Australia as a method of encouraging
students to consider careers in the food sector. It noted that an industry
pathways program was:
industry endorsed set of learning strategies, career resources and nationally
accredited VET [vocational education and training] competencies and/or
qualification(s) that articulate into apprenticeships, traineeships, further
education or training and direct employment.
Skills Council's submission also highlighted the possible use of the Primary
Industry Centre for Science Education (PICSE) as having the potential to expand
the scope of its operations to include the promotion of science careers in food
science and technology.
PICSE is a body aimed at attracting students in years 11 and 12 into the
tertiary study of science, particularly as it relates to agribusiness. PICSE is
the result of collaboration between government (DEEWR, the Grains, Fisheries
and Cotton Research and Development Corporations), universities (University of
Tasmania, University of Western Australia, Flinders University, University of
New England, University of the Sunshine Coast and University of Southern
Queensland), and industry (GrowSmart Training (SA), Horticulture Australia,
Dairy Australia and the Cotton Catchment Communities Cooperative Research
Centre). Its focus is currently on science in primary industries, with particular
emphasis on agriculture, aquaculture, ecology, horticulture, fisheries, water
security, sustainability, climate change and the environment.
also noted that whatever is done to educate children in schools, local
businesses will need to ensure they continue to engage with students in order
to convert interest into a vocation. Without this continued engagement, the
Council believed that the industry would continue to suffer from a poor image
amongst students and graduates.
to a question on notice, DEEWR noted that the Australian Curriculum: Science,
which has been adopted by Education Ministers, provided:
for teachers to include education about agriculture and primary industries
broadly and food processing more specifically. Additional opportunities will be
afforded through the technologies learning area, the curriculum for which is
still to be decided.
Department of Industry, Innovation, Science, Research and Tertiary Education
(DIISRTE) also brought the committee's attention to the $54 million allocated
in the 2012–13 federal budget to improve student engagement in maths and
science. DIISRTE stated that:
through this program will support innovative partnerships between universities
and schools that are experiencing difficulty in engaging students in science
and maths, have poor outcomes in maths and science, and/or have low numbers of
students going on to further study in science and maths.
and higher education engagement
A number of
submissions to the committee pointed to the need for greater engagement with
tertiary and other higher education institutions. They believed that the lack
of connection between industry and universities resulted in poor outcomes in
two respects. First, because it meant that food science and technology career
paths were not being adequately or accurately presented to tertiary students;
and secondly, because it meant that universities were developing courses and
curricula without sufficient reference to the workforce needs of industry.
that there was 'a huge disconnect' between academia and the food processing
industry, Mr Bush, of the FTAA, provided the committee with anecdotal evidence
about the effects of site visits he undertook with students from universities
We had a
grant for five factory visits. The first one was exceptionally successful and
was published. It was with RMIT. We came up here and went to Simplot and
Riverland Oilseeds. We had the whole situation set up for the two-day visit.
From memory, there were 28 students and 25 of them were international students.
I did a survey in the bus coming out of Melbourne, asking them: 'Would you
consider working in rural Victoria? If not, why not?' I did the same survey
when we were driving back into Melbourne;...there was a 90 per cent change: of
those students, even international ones, 90 per cent said on the way back that,
yes, they would [work in rural Victoria].
contended that the food processing industry should be proactive about engaging
with tertiary education institutions.
ADIC noted that it had done so, through its development of the People in Dairy
strategy and the National Centre for Dairy Education Australia (a partnership
with a number of Australian TAFE colleges). It did, however, believe that there
was only so much it could do:
industry would welcome a more visible and proactive training strategy developed
between the industry and government and integrated with the National Food Plan.
Only government can address issues such as the National Training Package
working for the industry, access to training funds, and difference between
states in vocational education and training models.
submitted that it had begun the process of re-engaging industry with academia.
It pointed to its announcement in 2011 that it would assist in funding a
professorship in food science and technology at the University of Queensland
from January 2012. Dr Annison and Ms Kate Carnell, Chief Executive Officer of
the AFGC, told the committee that:
purpose of that will be to support a particular individual, but that person
will also be responsible for developing an industry placement program and
scholarship program which will then be supported by the industries themselves
or by the companies themselves, [so that the message goes down through the
university undergraduates and down into the schools that there is active
support for students who choose a career option in food science or food
of this is that the companies will provide holiday work, internships and a
whole range of things around this. I have to say that, for an organisation like
the Australian Food and Grocery Council, jointly funding a chair at one of the
bigger universities is a very exciting financial challenge for us. But, for all
of that, we believe it is important. The companies are absolutely on board with
providing that great experience...We are putting quite significant money on the
table to try to lift the profile of the industry generally. But more has to be
Consulting Group Report also picked up on the use of internships as a method of
providing pathways into the industry and ensuring that graduates learn skills
relevant to the workplace. It noted, however, that industry and universities
did not always share enthusiasm for internships:
relation to addressing these issues [of the mismatch between university studies
and industry requirements], most respondents believe that requiring internships
to be part of a degree, giving graduates a level of work experience, would be
effective. It was noted that internships introduce people to a workplace, allow
the development of workplace skills and also allow employers to get to know
suggested that from a university perspective, requiring internships to be part
of degrees is difficult. It was suggested that internships are hard to manage,
requiring large amounts of time and expense, and they are not usually
before the committee did, however, suggest that, even where industry bodies and
businesses had identified the need for greater engagement with tertiary
education providers, their approach was not necessarily coordinated. Dr David
McKinna suggested that '[t]he pathways for students between training and job
outcomes can be rather ad hoc'.
indicated that it was examining pathways from tertiary education into the
industry as part of the National Food Plan. Mr Grant, of DAFF, noted the number
of stakeholders meant that any initiatives undertaken in this context required
close and careful consultation:
are a lot of players around both the private sector and within government that
have a role in delivering education. So we are working closely with the deans
of agriculture, who I am pretty sure work those figures [about the number of
food technology workers from overseas]—that have come from AgriFood Skills
Australia—with organisations like PIEF [Primary Industries Education
Foundation] and PICSE.
Dr Eyles, of
the CSIRO, also noted that there were a number of informal linkages and
programs that did, in fact, link government, industry and educational
providers. Dr Eyles told the committee that:
are a lot of connections in place—for example, ... like the chair at the
University of Queensland. The CSIRO and the University of Queensland and the
professional organisation that I mentioned, AIFST [Australian Institute of Food
Science and Technology], work together to run a summer school for postgraduate
students in food science and technology each year. .... So at the informal
level, people are actually talking to each other reasonably well, I think, in
the food space.
response to questions on notice, DIISRTE, through DEEWR, indicated that it had
a number of programs in place to assist the development of courses in
agriculture. These included $1.2 million over the period 2007–2011 to develop
projects on soil science, plant breeding and rangelands management, as well as
$3.6 million to PICSE.
It was clear
from the evidence before the committee that there are unlikely to be any easy
solutions for the problems faced by food processors in recruiting skilled food
science and technology graduates. In part, this appears to be because of the
position of the industry. It is affected by the same stresses and issues that
affect both the Australian agricultural and manufacturing industries. It is
also affected by the general decline in science graduates and enrolments at
both a secondary and tertiary level. For many businesses, their rural location
accentuates these pressures, particularly when it comes to the labour market.
structural issues confronting the Australian economy and they demand a
coordinated response from government, educational institutions and industry.
The evidence before the committee suggests that this has been lacking, and both
government and industry have pursued an ad hoc approach to addressing this
is concerned at evidence suggesting a disconnect between the food processing
industry and education and training providers. It is concerned because, as some
submitters noted, of the high average age of workers in the agriculture and
agricultural sciences sector, many of whom will retire in the near future.
It is concerned because of current reports about the need for 5000 agricultural
scientists each year when Australian universities are only producing 800.
It is concerned because the future of Australia's food processing industry lies
in product innovation, research and development and, at the current time, our
capacity for these things appears to be diminishing. The committee believes
that engagement between the food processing industry and education and training
providers is crucial. While ADIC made the following remarks about the dairy
industry alone, the committee believes that they apply equally to whole of the
food processing industry:
future of the ... industry relies on highly capable and well-trained people
continuing to work invest and work in the industry. A coordinated effort by
industry and government is required to attract, retain and develop the people
the committee agrees with AMIC's submission that:
going to be [the industry's] ability to innovate, mechanise and adopt some of
the latest technology that will help maintain its competitive profile globally
in the future.
the committee believes that there are promising signs for the future. First, it
is clear that at least some industry bodies have identified the need to engage
with tertiary and secondary education institutions. In this regard, the
committee welcomes moves by the ADIC and, more recently, AGFC to establish more
formal links with tertiary and higher education providers. These sorts of initiatives,
which encourage career pathways from education institutions to industry, appear
to the committee to be an important part in ensuring that courses and training
will be more relevant to both students and industry.
industry moves cannot occur in a vacuum. Tertiary and higher education
providers should also seek to capitalise on these moves and engage further with
industry about the sorts of skills required. The committee therefore recommends
that tertiary and higher education providers should engage more directly with
food processing businesses about curricula and outcomes to ensure that the
skills developed through further education better match those required by
Tertiary and higher education
providers should engage more directly with food processing businesses about
curricula and outcomes to ensure that the skills developed through further
education better match those required by industry.
committee notes that food issues appear to have moved into the public's
consciousness in recent times. The government is developing the National Food
Plan, and, in recent months, there has been some public discussion about food,
food security and the future of the Australian food industry.
There is substantial opportunity for industry to engage with the public about
food and careers in food production, to lift its image and present itself as a
vibrant industry with a focus on innovation and sustainability and one which
offers challenging, rewarding and attractive career paths.
notes, however, that these moves will only form part of a solution. Without
some form of coordination, they might only continue the current fragmented
approach. In this sense, the committee believes that the government must do
more to both assist and coordinate industry efforts to engage with education
providers at all levels and to promote careers in agriculture and food sciences
may be many informal connections between industry, government and educational
the committee believes more should be done to ensure that these connections are
formalised and coordinated.
before the committee suggests that there are a number of existing programs and
bodies that could be expanded to better promote the food sciences and
technology, particularly given the connections between the food processing
sector and agriculture. At a tertiary level, they include the postgraduate
summer school run by the CSIRO and AIFST at the University of Queensland. At a
secondary level, these include PICSE and the Scientists in Schools program run
by the CSIRO. The evidence before this inquiry appears to suggest that it is
particularly important to develop students' interest in science generally, and
agriculture and food science and technology in particular, at least in
secondary school. This could include more explicit incorporation of education
about food processing in the Australian Curriculum, including in the
technologies learning area curriculum.
recommends that the government consider, in consultation with State and
territory governments and industry, expanding existing programs promoting the
study of, and career paths in, science to include food science and technology.
believes that the development of the National Food Plan presents an opportunity
for the government to address these issues and to assist in the coordination of
the engagement between industry and higher education providers. In this
context, the committee recommends that the National Food Plan deal specifically
with the labour issues facing the food processing sector, including the supply
of appropriately and adequately trained agriculture and food science and technology
The National Food
Plan should explicitly deal with the labour supply issues facing Australia's
food processing sector.
inquiry, it became apparent to the committee that there was a need for greater
coordination of industry's activities in engaging with education providers at
all levels. There are a number of industry bodies, including PICSE, PIEF, the
National Farmers' Federation, AgriFood Skills and the Agribusiness Association
of Australia, who are responsible for discrete issues affecting the food
processing industry. There is, in these circumstances, some risk of the siloing
of responsibilities and issues, and of unnecessary competition between bodies.
The committee believes that their efforts would result in enhanced outcomes for
the agrifood sector if their activities were more actively coordinated by a
peak council. The committee therefore recommends that the government encourage
and assist the agrifood sector in setting up such a peak council so that the
industry may, amongst other things, more effectively engage with primary,
secondary, tertiary and higher education providers about potential career paths
in the food processing sector.
recommends that the government encourage and assist the agricultural and food
processing industry in setting up a peak council of industry bodies so that the
industry may, amongst other things, more effectively engage with primary,
secondary, tertiary and higher education providers about potential career paths
in the agrifood sector.
committee notes that a number of businesses have been forced to look
internationally to fill agricultural scientist and food science and technology
positions. While this is understandable and appropriate, the committee believes
that this should not occur at the expense of businesses' engagement with local
institutions, particularly educational institutions.
Other labour shortages
also some evidence before the committee about shortages in both tradespeople
and unskilled labour. Submitters attributed these shortages to a range of
factors, including the mining boom, the nature of the work and more traditional
labour mobility issues associated with the rural and regional location of many
before the committee suggested that the reasons for shortages for tradespeople
and unskilled labour were varied. Mr Stuart Clarke from the Western Australian
Department of Agriculture and Food was typical of a number of submitters when
he said that:
suffers more than Western Australia from the influence of the mining and
petroleum sector drawing labour and competing for labour with the processing
industry. We have heard it from all different sectors—from agricultural
producers right the way through the chain to food processors.
Chris Griffin, Chairman of ADIC stated that:
trying to educate people in the diverse range of roles and jobs available in
the industry but it is difficult. To the west there is a mining boom, in
Queensland there is a mining boom and we are fighting those labour issues.
People are being attracted out of all sorts of industries to go to the mines
and that is impacting on our ability to keep good staff.
submitters, such as Haigh's Chocolates, identified a range of factors as
affecting their ability to find and retain skilled and unskilled staff:
last number of years, Haigh's has experienced an increasing amount of pressure
to retain highly skilled people due to wages offered by the Government
supported automotive and defence industries and the growing demand for labour
in the mining industry. Contract trades people to install, maintain and develop
our key plant and equipment have become more expensive and more difficult to
the AMWU articulated in its submission that there was a greater need to
advertise and promote the training and career opportunities that presently
no shortage of labour per se, but more of a lack of interest, more people,
particularly younger people, would be encouraged to go into these industries if
they knew they could get a trade certificate or diploma, but many people simply
do not realise the opportunity to do so is there.
The nature of
the work was also cited as a reason for labour shortages. Mr John
Hazeldene the Managing Director of Hazeldene's Chicken Farm noted that his
business was 'not an employer of choice when you talk about a processing
But, he noted, the work was rewarding and:
We have a
pretty good workforce. It is not a glamorous job and it is probably hard to
entice the really highly educated people. But as far as unskilled workers are
concerned, we provide a lot of employment for those sorts of people.
A number of
submitters noted that the effect of these factors was to drive up the cost of
labour at least in the short term. As Mr David Harrison, General Manager of
Advocacy, Chamber of Commerce and Industry of Western Australia, stated:
at some of the challenges for our members, and certainly food suppliers and
manufacturers are no exception to this, the biggest challenge is labour—the
availability of it and the ability to retain their workforce. For those who are
lucky enough to find or hang onto their workers, it comes at a significant cost
in terms of dollars because they are competing across the whole economy,
including with the resources sector, for those workers. Workers are at a
premium price at the moment and that is impacting on margins, bottom lines and
profitability, and I am sure that each of the members here will talk to you
Mrs Mac's Pty Ltd confirmed that the cost of labour would only increase, at
least in the near term:
shortages (both skilled and unskilled) are an issue for the food industry,
particularly in WA where the mining boom creates a shortage of labour in the
lower paid industries forcing wages up ...It is expected we will be facing
another serious labour shortage in 2012 as many mining and energy projects come
Skills Council argued that food processing businesses were particularly
vulnerable to wage rises resulting from a tight labour market:
particularly in regional Australia where many food processing establishments
are located and dependent on the food production supply chain, which is
vulnerable to workforce attrition to the resources boom due to portability of
skills. Across the supply chain enterprises are competing for an already scarce
labour pool at higher pay-rates than the food sector can afford. If not
addressed ..., these factors may threaten the sustainability of Australia's
food industry as a whole – with significant implications for regional social
fabric, the economy and the environment.
before the committee about potential solutions concentrated mainly on the role
of immigration in alleviating the pressure food processors felt as a result of
labour shortages. These current programs took two general forms: those which
connected recent migrants and jobs, and those which specifically brought in
labour from overseas to assist industries.
were generally very positive about programs connecting recently arrived
migrants and jobs. Mr Millington, of Luv-a-Duck, noted that Luv-a-Duck had
considered relocating to a bigger city to overcome labour shortages, but that
it instead employed a number of recently arrived migrants:
labour shortages we have overcome ourselves. Given Nhill is an isolated area
and we are a big fish in a small pond, the unemployment rate in Nhill is around
two per cent. So it is not that we do not employ the locals or the locals do
not want to work for us. The fact is that there are just not the numbers there
to be able to do it. When we wanted to expand the operation[we found more
staff with the Karen Burmese. who have done a fantastic job for us.
of Hazeldene Chickens, for example, noted similarly that much of his company's
workforce was drawn from non-English-speaking backgrounds, such as Vietnamese,
Thais, Chinese and Burmese, who had contributed very positively and been well
accepted in the Bendigo community. 
to questioning from Senator McKenzie, Mr Hazeldene went on to explain that he
had not sought to access any special immigration schemes. Rather, the local
council had approached him about providing employment opportunities to
migrants, most recently Karens from Burma.
Clarke, Director of Food Industry Development, in the Western Australian
Department of Agriculture and Food, stated that his Department had met with
representatives from the baking industry to discuss solutions to the labour
shortage resulting from the mining boom. Mr Clarke told the committee that:
recently had a workshop where we put in the same room access to pools of labour
that the baking and milling businesses had not previously accessed before.
These are recent migrants. ...There were lots of light bulb moments in the room,
about how to access labour that would be appropriate for that particular
business [The migrants] are keen to be part of the community and to be
gainfully employed. That is one solution for a particular type of labour, particularly
unskilled labour in the food industry.
believed that direct connections between the industry, government and
non-government groups assisting immigrants had a number of benefits:
businesses are now liaising with those agencies to get that direct input.
...[Both] were very keen to see how far they could go It is to build an ongoing
connection as well, ...We got the training providers involved in the meeting as
well. The training council were there. They have a certain role to play also. It
is several pieces of the puzzle, but the puzzle is coming together now.
Cator, Chief Executive Officer of the Greater Shepparton City Council, informed
the committee that his council had previously used the Victorian Government's
Skilled Migration Program to attract workers to regional centres, and that this
program had been successful in placing skilled migrants:
Victorian government has previously successfully funded a skills program to
attract skilled workers into the area. The City of Greater Shepparton has been
part of that program. That has been successful to the extent that 47 placements
have been provided in the last few years. Across our area 28 businesses have
been assisted. We have 10 successful placements happening at this period of
time and we are attempting to assist 33 businesses currently. I would suggest
that it has been a very successful program but, unfortunately, the Victorian
government has not sought to continue funding for that program for next year.
submitters found solutions to their labour problems in specialist immigration
schemes. Mr Millington, of Luv-a-Duck, stated that his company had used visas
available under section 457 of the Migration Act 1958 (Cth) (457 Visas)
to fill demand for skilled labour:
is primarily for skilled tradesmen—and we have heard talk this morning about
the mines and the fact that they are sucking up a lot of the skilled tradesmen.
We are one of the companies that suffer as a result of that. We have a
predictive scheme in our company whereby we train apprentices and after four to
five years they decide to go to the west to make their fortune. Some come back
but most do not. So that is one of the problems that we have. To overcome it we
have been bringing in staff from overseas, particularly from South Africa and
did have some criticisms of the 457 Visa regime, telling the committee that his
company had lost access to good people because of delay in assessing their
an issue regarding trade recognition [which] ... is causing a lot of headaches. I
will give you an example. In the last three weeks we have had a toolmaker join
our company. He is from South Africa. It has taken us nearly two years to get
him in. He is a very patient person and he also knew one of the diesel
mechanics that we had brought in previously. On the other hand, we had three
others that we interviewed nearly a year ago—two refrigeration mechanics and a
fitter and turner—and in the last month they have all bailed out; they have
said they cannot wait any longer. So we went to South Africa and we interviewed
them, only to lose them at the last moment. That has set us back 12 months. It
is a big problem.
Skills Australia also raised concerns about skills recognition in its
submission to the committee, noting that:
is a growing demand for labour which will not be met by national labour supply.
A key barrier for industry to be eligible for skills programs is the ANZSCO
code system. This system does not accurately reflect the occupations within the
food processing industry, and where it does, the skill level requirements are
at too low a level.
presented some evidence to the committee about its programs to address labour
shortages through migration. It made particular reference to the Pacific
Seasonal Worker Pilot Scheme as a means to assist the horticultural industry
deal with peak demands. It noted that the Scheme had recently expanded to
become the Seasonal Worker Program.
This Program has not been extended to allowing food processors to employ
seasonal Pacific workers, though the committee notes that AgriFood Skills
Australia submitted it should.
before the committee suggests that the food processing sector has suffered not
only from a shortage of skilled graduates, but also of tradespeople and
unskilled workers. It indicates that, as low margin and high volume businesses,
it was often difficult for processors to compete with the wages offered by the
mining sector and they were unable to either employ or retain sufficiently
skilled employees. Obviously, this inhibits food processing businesses'
profitability, sustainability and prospects for growth.
is encouraged by the industry's use of partnerships with government and
communities in order to fill these labour shortages. The committee is
particularly encouraged by the evidence it received about food processing
businesses in regional centres employing recently arrived migrants, such as the
Karen from Burma. The committee recommends that the government continue to
promote and investigate partnerships and programs that connect recently arrived
migrants and international workers to jobs in the food processing sector,
particularly to jobs in rural and regional centres.
recommends that the government continue to promote and investigate partnerships
and programs that connect recently arrived migrants and international workers
to jobs in the food processing sector, particularly to jobs in rural and
also notes the possibility of extending the Seasonal Worker Program to allow
food processing businesses to offer seasonal work. While the committee
understands that the Program has only recently progressed from its pilot stage,
it believes that it could be extended to the processing sector, not least
because of its intimate connections to the agricultural industries which may
already access the Program. The committee believes that this would assist the
sector in overcoming short term labour difficulties, without undermining the
wages, conditions or employment prospects of Australian workers.
recommends that the government investigate the possibility of extending the
class of employers able to access the Seasonal Worker Program to include
employers in the food processing sector.
heard some evidence to suggest that the 457 Visa process was not entirely
adapted to the food processing sector, particularly in relation to skills
recognition. The committee therefore recommends that the government
investigate whether the skills recognition frameworks used for skilled
migration programs, such as the Australia and New Zealand Standard
Classification of Occupations code system, are appropriately recognising food
processing skills and qualifications.
recommends that the government investigate whether the skills recognition
frameworks used for skilled migration programs, such as the Australia and New
Zealand Standard Classification of Occupations code system, are appropriately
recognising food processing skills and qualifications.
committee also heard evidence suggesting that the 457 Visa process did not
always take into account the issues facing the food processing industry,
particularly the impact of a two-speed economy. The committee understands that
some food processing businesses have had difficulties in obtaining workers
through the 457 Visa process as a result of the demand for particular skills in
the mining sector and because government does not adequately differentiate
between industries in assessing applications for such visas. The committee
recommends that the government require the officers responsible for assessing
457 Visa applications for the food processing sector to have specific knowledge
of the sector, its requirements, and the markets within which it operates, or
access to expertise and advice about these issues.
recommends that the government require the officers responsible for assessing
457 Visa applications for the food processing sector to have specific knowledge
of the sector, its requirements, and the markets within which it operates.
skills shortages, many submitters were concerned about workplace relations
issues. While there were a number of discrete issues that submitters raised
about the operation of specific parts of the FW Act, concerns were ultimately
focused on the issues of wages and flexibility.
submitters indicated concern about increasing wage rates under the FW Act and
modern awards. Mr Gary Burridge, Chairman of AMIC, submitted that these wage
rates had been occurring in recent years without simultaneous increases in
rising labour costs without productivity offsets, along with on-costs such as
workers compensation and the new superannuation contributions, are driving
higher per unit labour costs, making running a low-margin meat processing
business in regional Australia less viable.
Durkan, Merchandise Director of the Coles Group, believed that wage rates had
the potential to impact very significantly on the future of the Australian food
processing industry. In evidence to the committee, Mr Durkan stated:
labour rates have the potential to make Australia an expensive place for food
manufacturing. You can see that with some of the manufacturers who have moved
offshore where they have factories in local countries such as New Zealand and
South-East Asia that allow them to provide goods to Australia. We are in danger
of seeing more of that happening, specifically with multinationals where they
can supply efficiently in large volumes. This is where scale plays a part for
those multinationals. With local Australian businesses it is more difficult to
do that, obviously.
submitters noted that high wages were both positive and negative as they could
operate to attract workers to Australia, alleviating the pressure many felt as
a result of labour shortages. Mr Roger Lenne, a member of Fruit Growers
Victoria, told the commission that his orchard business employed substantial
numbers of backpackers:
about 100 backpackers because Australians do not wish to work in orchards. We
must get that clear; they do not wish to. We do have three Australians and they
are all over 50 years old. It is an awful job so you would expect people to
move on, wouldn't you, from time to time? You would expect a large turnover. We
had three leave such a terrible job. Why, you have to ask. We are paying
exactly double what these people earn at home. We are paying them €150 to €160
a day. They get between €60 and €80 at home. We are meant to be internationally
Murdoch, Chairman and Director of the Tasmanian Agricultural Productivity Group
(TAPG), argued that high wages were simply a reality of the current labour
of labour is a cost to production. When we compare ourselves to New Zealand,
for example, we are much higher. Where we sit in the overall scheme of things,
if we looked at paying people less we would not get anybody working for us.
Everybody would leave and go to the mines [Even now] we have got people going
elsewhere working because we cannot pay them enough.
these costs were a reality, Mr Murdoch argued that they would not be without
effect. Such high labour costs would lead to increased mechanisation as
businesses sought to remain competitive in domestic and international markets.
was more pessimistic about the effect that high labour costs would have on the
future of Australia's food processing sector. Dr McKinna submitted that the
future was stark:
food products where there is a high labour content or the cost of raw or
materials is high, Australia is not competitive, and these industries will
gradually die. High labour, fresh food products will only remain viable because
it is not practical to ship them cost effectively, e.g. washed lettuce.
By far the
most significant issue that submitters raised with respect to workplace
relations was that of flexibility under the FW Act and modern awards. The
committee heard evidence that the FW Act was inflexible in key areas around
penalty rates, working hours and casual rates.
A number of
submissions to the committee noted that the FW Act and modern awards applicable
to the food processing industry did not account for the commercial realities
within which they had to operate. In particular, some submitters felt that the
applicable modern awards did not sufficiently take into account the connections
between food processing and agriculture and the seasonal nature of the
industry. Mr Murdoch, of TAPG, summarised the issue that faced many food
are processing vegetables you need to process vegetables on the weekend. When
you are paying double time and double time and a half on public holidays and
all those sorts of things, it is a huge cost, and those things are not really
incurred in New Zealand.
sentiments were echoed in a number of other submissions. In response to a
question on notice, McCain Foods stated that:
current penalty rates regime in Australian award structures do not encourage
continuous 24 hour 7 day processing. Overtime and shift penalties are much
higher in Australia than in New Zealand, which again contributes to lower
productivity and lack of competitiveness in Australian made products.
Wilsmore, General Manager of Policy and Government Affairs, Winemakers
Federation of Australia, noted that assumptions about working hours and
requirements under the FW Act clashed with the seasonal nature of the wine
thing to note is that the wine making industry and our cellar doors, and the
grape-growing side of our business, is not a typical manufacturing industry
where you can turn your machine off at five o'clock or over the weekend. There
are midnight pickings during vintage and it is just full on for weeks on end.
The current structure [under the fair Work Act] does not allow you the
flexibility as an industry to be able to meet the workforce requirements which
are there for us.
As Mr Andrew
Heap, Policy Advisor to the Tasmanian Farmers and Graziers Association, starkly
put the issue:
not talking about basic wages here; we are talking about the sorts of penalties
that our competitors do not have.
gave evidence to the committee that recognition of the commercial realities of
the food processing industry should either come through changes to the modern
award or through greater flexibility to negotiate the terms and conditions of
employment with employees. Ms Carnell, of AFGC, stated that:
reality is that there have been some very real issues for a number of our
members with regard to the flexibility clause and not being able to translate
it into new agreements [with] the level of flexibility that they have had in
the past, and that is a real issue. 
Effect of flexibility provisions
effect of the lack of flexibility in industrial awards was, according to
evidence before the committee, to increase the cost of production and reduce
the domestic and international competitiveness of Australian food products. Ms
Jan Davis, Chief Executive Officer of the Tasmanian Farmers and
Graziers Association, provided the following example of the manner in which the
inflexibility of the FW Act limited the ability of employers to offer their
employees additional hours:
previous role, I was the CEO of the mushroom industry association. The mushroom
industry is one of our most labour intensive industries—it is hugely labour
intensive. We have very short windows for producing mushrooms. They double in
size every 22 hours. They have to be picked when they have to be picked,
because markets will require a certain size product. We had many, many people
who were prepared to come in and work split shifts, largely women with
school-age children. They would work from 6 until 8, go home, and come back and
work 4 until 6 and go home—a split shift, but you cannot do it now. We have
many people who are prepared to work weekends because it suits their family
circumstances, but because of the loadings we cannot do that now.
Dick Smith has similar concerns, as expressed in the following exchange with
Smith: I think
we should look at that [the issue of penalty rates], because the alternative is
that everything will get processed overseas. We will not employ anyone. As I
mentioned, our costs will go down slightly, but our taxes will go up to pay for
the dole for these people. It is an international marketplace. Our governments,
with the support of the electorate, have said, 'We want to have free trade; we
want the advantages.' That does mean you may need look at penalty rates. A good
example is Heinz taking their beetroot manufacture to New Zealand just because
the labour cost is slightly lower.
McCain has done
the same thing with vegetables.
Smith: I would
have much preferred it stay here, to have done a deal with the unions and said,
'Either you can lose your jobs or we can not have the penalty rates that we
have at the moment and the jobs will stay in Australia.
Current flexibility provisions
and their review
was some acknowledgment that the FW Act included flexibility provisions, but
submitters argued that these were either not being taken up, or were
insufficient for the purposes of the food processing industry. Ms Barb Cowey, Senior Policy Advisor
to Business SA, argued that:
flexibilities in the act, no-one is questioning that, but they are not
necessarily flexibilities that actually suit the industry, the industry nature
and the way that the industry actually needs its labour force.
its evidence to the committee, DEEWR noted that modern awards were made
following significant input from both employer and employee groups.
Dr Morehead, of DEEWR, noted that, during the initial award modernisation
process in 2009, employer concerns about the original horticultural modern
award resulted in its amendment:
horticultural award was one that got particular focus during the process [of
award modernisation]. The then minister for workplace relations in August 2009
actually varied her award modernisation request relating to the horticultural
award in response to the industry-specific concerns that were raised with her
from employer groups.... [Consultation] resulted in the then Australian
Industrial Relations Commission on 23 December 2009 issuing a decision which
turned around and agreed with the majority of the employers' concerns. In that
respect, issues such as piece rates, flexibility provisions, minimum payments
for casual employees and other issues were really addressed in favour of what
we had heard from employers. For example, the National Farmers Federation came
out very much in support of that and was very happy with that result.
relation to the horticultural award, Dr Morehead went on to note that:
modern horticultural award does have a span of ordinary hours, which the
employer groups supported. There were a number of flexibilities in respect of
overtime and Sunday pay rates...with that particular award.
explained to the committee that Fair Work Australia (FWA) was currently in the
process of reviewing the operation of modern awards, and that FWA had received
a number of applications to vary the awards governing employment in the food
processing sector. Dr Morehead noted that eight applications had been made to
vary the Food, Beverage and Tobacco Manufacturing Award 2010, and that
representatives from both sides had sought its variation:
issues in the applications include things like clarifying the qualifications
required for workers undertaking quality control; removing the shift allowance
payable to casuals; and the unions, the AMWU and the National Union of Workers,
seeking to have adult wages paid at the age of 18 years and to include loadings
and entitlements to employees working non-standard hours, and so on.
Morehead did, however, note that FWA was dealing with a number of issues that
were raised in submissions relating to multiple industries. In a statement made
on 27 April 2012, Justice Ross, President of FWA, relevantly identified applications to consider
penalty rate, award flexibility and public holiday provisions in the Food,
Beverage and Tobacco Manufacturing Award 2010 as being dealt with as common
It is clear
from the evidence before the committee that workplace relations issues are of
significant concern to a number of businesses in the food processing industry.
There are numerous pressures on the industry to remain locally and globally
competitive, including the high wages paid to Australian food processing workers
relative to those in many export-competing nations. The issues that appeared to
be of most concern to witnesses were not generally those of union dominance or
strikes, but of the impact of workplace relations laws on labour costs through
both wage setting and penalty rates.
members believe that the impact of penalty rates may have a
disproportionate effect on some sections of the food processing industry. The
wine industry, for example, relies heavily on cellar doors and other venues
trading after-hours, weekends and public holidays. Under the new Awards, this
may be prohibitive due to wage costs, potentially affecting the economy of
before the committee does not suggest that the FW Act is having an appreciable
impact on basic wage rates, at least in the food processing sector. It seems
clear to the committee that there are other factors operating in the labour
market to increase wages without productivity offsets that, had wages been
increased through FWA, might otherwise have been taken into account. There are
other factors operating in the labour market to increase wages, including the
mining boom and skills shortages identified in this chapter.
industries expressed concern that inflexibilities in the FW Act and modern
awards do affect processors' labour costs. In particular, restrictions on food
processors' ability to negotiate terms and conditions of employment that take
into account the commercial realities of the food processing industry appear to
be negatively affecting food processing businesses, their profitability and, as
one witness put it, their sustainability.
The evidence before the committee suggested that the current flexibility
provisions in the FW Act, relating to the negotiation of enterprise agreements
and individual flexibility arrangements, do not adequately serve industry
believes that, while the award modernisation process has resulted in the
reduction of red tape and compliance costs for businesses (in that there are
now only 123 modern awards instead of thousands of industrial instruments),
this has occurred at the expense of flexibility, particularly individual
flexibility. The committee believes that the one-size-fits-all approach of the
FW Act and modern awards inhibits productivity, business profitability and
employment prospects, and that it should be accompanied by an appropriate level
of flexibility. Allowing employers greater flexibility to negotiate the terms
and conditions of employment with their employees will assist in increasing
productivity and lowering employers' labour costs. The committee therefore
recommends that the government review the flexibility provisions under both the
FW Act and modern awards, with a view to increasing the ability of employers
and employees to negotiate flexible working arrangements, particularly with
respect to penalty rates, split shifts and minimum hours for seasonal
The committee notes
that FW Australia's 2012 report into the FW Act contained a number of
recommendations to improve the flexibility of awards.
The committee believes that the government must act to ensure that the FW Act
provides meaningful individual flexibility arrangements while
maintaining protections for employees.
recommends that the government review the flexibility provisions under both the
Fair Work Act 2009 and modern awards, with a view to increasing the
ability of employers and employees to negotiate flexible working arrangements,
particularly with respect to penalty rates, split shifts and minimum hours for
notes that some of the food processing industry's concerns about flexibility
may be dealt with through the review of modern awards. It encourages businesses
in the food processing industry to become involved in that review, to ensure
that FWA takes their views into account.
believes that more flexible workplace relations laws better take into account
the commercial realities facing the food processing sector. The committee
acknowledges that the expectations consumers and retailers place on food
processors and producers (and consequently workers and unions) are such as to
require workplace relations laws that do not inhibit or penalise constant
production during peak periods.
As an aside,
the committee notes that many witnesses spoke of the need for greater
'flexibility', but few explained precisely what they meant by the term or how
increased flexibility would affect their business if it were granted. That is,
it was not entirely clear whether witnesses used the term 'flexibility' as an
alternative way of expressing their interest in lowering labour costs to boost
competitiveness, or whether they believed that an increased ability to depart
from the terms of the modern award would in fact improve outcomes for workers
and raise productivity (for example, that lowering penalty rates for split
shifts might increase the number of hours offered to individual employees
during peak production periods).
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