Second Round of Fair Work Act Changes Commence In Six Weeks
With 6 weeks to go to the start of the Modern Awards, Minister for Employment and Workplace Relations, Julia Gillard ordered a rewrite of the airline staff award, following union claims that under the new award ground staff face pay cuts of up to $300 a week and pregnant cabin crew loose their right to shift to other duties.
Interestingly this was about the only media coverage during the week relating to the Modern Awards and National Employment Standards which commence on 1 January 2010. Given the initial results of the CompliSpace Survey indicate that approximately 47% of executive managers have little or no understanding of these changes (which will have a major impact on their businesses) lets hope that either the government or the media start to highlight the key issues prior to the Christmas break.
In the background the Fair Work Ombudsman continues its audit/inspection and education programs with announcements this week that 1 in 4 businesses examined during an audit in Hobart were not compliant and a number of companies/directors in Adelaide and Melbourne have been fined in excess of $50,000 for deliberately underpaying workers.
Disgruntled Shareholders Continue to Apply the Pressure
The AGM season continued with a steady flow of protest votes from disgruntled shareholders. A quarter of top 200 ASX companies have now received protest votes on executive remuneration from 25% or more investors. This is a major concern for directors, executives and their industry groups given the Productivity Commission’s proposed “two strike” rule which would allow a minority of shareholders to dismiss entire boards if they vote against directors’ remuneration for two consecutive years. Also this week the Fairfax board was grilled over “appalling” governance and former Allco Chairman (and GFC poster boy) David Coe survived a 33% shareholder protest vote at RHG (formerly RAMS).
Extra Regulation for Credit Rating Agencies
Given that many commentators have laid at least some of the blame for the Global Financial Crisis on credit agencies, it doesn’t come as a great surprise that the government is now looking to apply more control in this area.
From 1 January 2010, credit rating agencies will be required to hold an Australian Financial Services (AFS) licence. To this end agencies will need to get their houses in order to meet the core AFS licensing obligations which include the implementation of effective risk management, compliance, conflict management and dispute resolution programs.
In addition, from 1 January 2010, issuers of investment products will need to seek the consent of a credit rating agency if they wish to reference a credit rating during any fund raising or takeover activities. This new requirement will create a direct link between the credit rating agency and the investor potentially opening up the credit agencies to litigation claims in the future.
ASIC says that these moves will bring Australian regulation largely in line with major markets in Japan, Europe and the United states, and in keeping with the International regulatory framework for credit rating agencies.