Inside the Fair Work Commission Sydney offices. 

One of the most senior figures at the Fair Work Commission (FWC) has blasted Australia’s workplace relations umpire on his way out the door as industry groups say it’s proof the Commission has become dysfunctional. 

FWC Vice President Graeme Watson launched a rapid fire attack against the Commission in his resignation letter to federal Employment Minister Michaelia Cash last week. He was in his tenth year at the FWC.

Mr Watson, a former partner at Freehills, the union-busting law firm that Ms Cash also once worked for, said businesses increasingly viewed the FWC as being “partisan, dysfunctional and divided”.

He accused it of undermining Fair Work laws and said that the Commission’s approach was damaging jobs, investment and growth.

“I do not consider that the system provides a framework for co-operative and productive workplace relations and I do not consider that it promotes economic prosperity or social inclusion. Nor do I consider it can be described as balanced,” Mr Watson said in his letter to Ms Cash.

He said employers often paid off vexatious staff members who took their complaints to the FWC – even when they felt the worker had no case – because they had lost faith in the Commission’s ability to be impartial, particularly when judging unfair dismissal claims.

He said the bargaining system was “unduly complex” and minimum wage safety net laws were outdated.

“The workplace relations system is undeniably regarded as a “danger zone” for business. It no longer plays a constructive role in modern workplaces. It does not foster cooperation or productivity,” Mr Watson concluded.

He also raised the need for an independent appeals tribunal, which he said would improve the consistency of the Commission’s decisions.

The Australian Mines and Metals Association (AMMA) seized upon Mr Watson’s resignation and said it proved the Commission has lost its way.

The AMMA, who lists one of its five top priorities on its website as scrapping the FWC and reforming unfair dismissal laws, said Mr Watson was always fair, objective and pragmatic during his work for the employment tribunal.

AMMA chief executive Steve Knott said: “While VP Watson’s resignation is a real loss to the Fair Work Commission, of even greater concern is the dysfunction in the tribunal and our workplace laws that has prompted the early resignation of one of its most senior and widely respected members.”

“The issues raised in the Vice President’s resignation letter add further weight to previous calls from the business community for the government to conduct an urgent review of the Fair Work Commission, its structures, powers and decision making,” Mr Knott said.

He said Mr Watson was the second senior FWC member to leave well before their statutory retirement date. Senior Deputy President Peter Richards left in September 2016. Both men were appointed by the Howard government.

Former Prime Minister Tony Abbott and ex-federal Employment Minister Eric Abetz have also piled into the fray calling Mr Watson’s resignation unprecedented and highlighting what they see as the FWC’s bias towards unions.

Mr Abetz told The Australian that FWC President Justice Iain Ross had repeatedly attempted to sideline Mr Watson, which he said reflected poorly on Mr Ross’ leadership, “It also reflects poorly on Bill Shorten who stacked and packed the Commission with union cronies rather than meritorious and worthy appointments,” Mr Abetz said.

Relations are known to have long been strained between Mr Watson and Mr Ross, particularly because they are at different ends of the political spectrum. Mr Ross was a Labor choice and Mr Watson was appointed by the Coalition. In the past, Mr Watson has spoken in favour of cutting Sunday penalty rates in the hospitality industry by one-fifth.

The 2015 Productivity Commission review on Australia’s Workplace Relations Framework mentioned that ‘numerous stakeholders’ had complained about the “apparent randomness” of the Commission’s decision in regard to unfair dismissal but it laid blame for this at the over politicisation of staff appointments.

The Productivity Commission recommended in its review that an expert panel be stablished to hire FWC staff so that appointments were based more on merit and less on the politics of the government of the day, which it said would minimise inconsistency in decisions. 

The review also suggested splitting the functions of the FWC in two and creating a new body, the Workplace Standards Commission (WSC). The FWC would retain responsibility for the adjudication of individual and collective disputes and the approval of enterprise agreements, right of entry permits, and protected industrial action ballots, while the new WSC would take over responsibility for decisions with broader economic impacts, such as annual wage reviews and modern award reviews.