Confusion reigns with impending workplace relations changes.
by Ben Thompson, EI Group
After the radical changes introduced by
WorkChoices and now new changes to come under the Labour Government’s
Forward with Fairness Reforms to the Workplace Relations Act 1996 (Cth) ("the Act"), confusion is still widespread as to what exactly employers and employees can expect in the workplace, and when the various changes take effect.
The long-awaited
Fair Work Bill, setting out the new industrial relations law for Australia, was introduced to Parliament on 25 November 2008. Whilst the majority of changes are slated to take place in January 2010, Minister Julia Gillard has previously announced that certain changes will commence from 1 July 2009, to “give Australians relief from the harshest remaining aspects of Work Choices as quickly as possible”.
Refer to the transcript of Minister Gillard's speech for more background information.
Consequently, it is more important than ever before for you to know where you stand in terms of your workplace rights and obligations. Failure to keep abreast of the three big changes slated for implementation in 2009 and 2010 could result in disruptive and potentially costly difficulties for your business.
1. Unfair Dismissal Code
The WorkChoices reforms of the 27th March 2006 resulted in an exemption from unfair dismissal claims for businesses with up to 100 employees, or demonstration of genuine operational reasons. From 1 July 2009, unfair dismissal protection will be re-introduced to all employees covered by the Act on the following terms:
- Small businesses with fewer than 15 employees will be subjected to the Unfair Dismissal Code after an employee has worked for more than 12 months. This Code will justify the dismissal of an employee where they have been provided with at least one warning and have been given sufficient time to improve their performance or behaviour following that warning.
- A business with 15 or more employees can be subjected to the Unfair Dismissal Code once an employee has worked for a qualifying period of 6 months. A dismissal, which is considered “harsh, unjust or unreasonable”, would result in compensation or reinstatement.
Claims for unfair dismissal will be dealt with by the newly established
Fair Work Australia, the body set to replace current government bodies like the
Workplace Authority and the
Australian Fair Pay Commission.
Fair Work Australia will be the ‘one stop shop’ for information, advice and assistance of workplace issues and will be able to decide on the validity of a claim without cross-examination or written submissions. This process has been advocated by the Labor Government to streamline the unfair dismissal process, but also raises some legitimate concerns among the business community. For example, the process will be a closed and informal conference without written submissions, no cross examination, and no hearing. There also appears to be a preference against legal representation.
2. Good faith bargaining
Another major change to the workplace relations landscape in July 2009 will be the introduction of mandatory ‘good faith’ bargaining for parties seeking to implement an enterprise agreement (an agreement which replaces the relevant award in the regulation of terms and conditions of employment).
Section 228 of the
Fair Work Bill sets down the requirements which bargaining representatives must meet to comply with their
‘good faith bargaining’ obligations. They include:
- attending, and participating in, meetings at reasonable times;
- disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner;
- responding to proposals made by other bargaining representatives for the agreement in a timely manner;
- giving genuine consideration to the proposals of other bargaining representatives for the agreement, and giving reasons for the bargaining representative’s responses to those proposals; and
- refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining.
Fair Work Australia will hold the power to enforce good faith bargaining through orders. The prospect of this aspect of the change has prompted lively media discussion, with employers raising particular concerns about the potential for heavy union involvement in bargaining.
3. A new “safety net”: National Employment Standards and Modern Awards
Prior to its election, the Rudd government pledged to replace the Howard government’s
Australian Fair Pay and Conditions Standard (AFPCS) with its own version of a national safety net. The final draft of the
National Employment Standards ("NES") was released by the Federal government on 16 June 2008 and comes into effect from January 2010.
Similar to the
AFPCS, the
NES will set out maximum hours of work, parental, annual and personal leave. However some changes will occur in relation to how these minimum terms and conditions are calculated, or who they apply to. For example, in relation to maximum hours of work, the current
AFPCS says that the 38 hour week can be averaged out over a period of 12 months. The
NES remove this provision and states that such averaging may only occur if provided for in a corresponding award. The
NES will also introduce some new requirements not present under the current
AFPCS. For example, the
NES grants permanent and eligible casual employees the right to request flexible working arrangements if the employee is a parent or hasresponsibility for the care of a child under school age. Such a request may be refused by an employer on ‘reasonable business grounds’. Redundancy will also become a minimum entitlement under the
NES, applying to all employers with 15 or more employees, with up to 16 weeks severance payable to terminated employees.
The biggest change in this area relates to the introduction of a ‘second arm’ of the safety net. The
National Employment Standards will be complemented by
Modern Awards for employees earning under $100,000 a year. These
Modern Awards will include up to ten additional entitlements including: minimum wage rates, overtime and penalty rates, provisions about when work is to be performed and procedures for consultation, representation and dispute resolution. Rather than including minimum wages in the
NES, the Rudd Government has announced that from January 2010 minimum wage will be determined in accordance with
Modern Awards. Minimum wages and associated casual leave loadings will be reviewed every year by a specialist
Minimum Wages Panel within
Fair Work Australia.
The Bottom Line
Whilst speculation is rife, the bottom line is that in the current environment of legislative uncertainty, the real impact of the new industrial laws remains to be seen. Employers and employees can only wait out the current period of transition, in the hope that come 1 January 2010, the new industrial relations system will deliver the fairness it promises to both employers and employees.
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