Important detail on Forward with Fairness revealed
A speech1 to the National Press Club today by The Hon. Julia Gillard MP, Minister for Employment and Workplace Relations, revealed some significant detail about what the Federal Government’s new workplace relations system will look like.
One of the most surprising announcements is the intention that the changes to the new bargaining system and unfair dismissal laws will commence on 1 July 2009. The other substantive changes are intended to commence, as planned, on 1 January 2010.
At the same time, the Federal Government also released 10 fact sheets2, plus the proposed Small Business Fair Dismissal Code. The fact sheets are important because they reflect what the reforms will look like, and provide detail and guidance about the nature of the new system that was not previously available.
The fact sheets are published under the following headings:
- The new workplace relations system
- Fair Work Australia institutions—a one stop shop
- A strong and simple safety net for all Australian workers
- Minimum wages
- General protections for freedom of association and other workplace rights
- Bargaining in good faith
- Assisting low paid employees and those without access to collective bargaining
- Approval and content of enterprise agreements
- A simple, fair dismissal system for small business, and
- Clear, tough rules for industrial action.
Key new elements in the announcements which were made today are outlined below.
A timetable for introduction of the reforms including an early start for key elements of the new system
A Substantive Bill is to be introduced into Federal Parliament by the end of 2008, as well as separate legislation in the first half of 2009. The separate legislation will set out transitional and consequential changes to assist with moving into the new system on 1 January 2010. However, the bargaining framework and unfair dismissal changes will commence from 1 July 2009.
This is especially important because many employers had expected all of the changes to commence in January 2010, and had constructed their bargaining strategies on that basis. The announcement today will require employers whose agreements expire in 2009 to carefully consider their options.
The Federal Government has also confirmed that the new bargaining rules will remove the restraint of including prohibited content in workplace agreements.
The structure of Fair Work Australia
For the first time the Federal Government has outlined the proposed structure and functions of Fair Work Australia.
In addition to tribunal functions performed by members, the body will include a Fair Work Inspectorate and a Minimum Wages Panel.
New Fair Work divisions of the Federal Court and Federal Magistrates Court
New divisions of the courts will be set up to hear matters arising under the new system.
Previously, it had been assumed that Fair Work Australia would have its own judicial structure. There is an understandable simplicity in absorbing these changes within the existing court system.
Regular review of the Modern Awards
The new Minimum Wages Panel will be required to review awards every four years to ensure they maintain a relevant and fair minimum safety net.
Streamlining of freedom of association and other workplace protections
The existing freedom of association, unlawful termination and other protections are to be streamlined into a new set of general protections. In addition to unlawful dismissal, other actions—such as a demotion, or refusing to employ a person—will also be unlawful if undertaken for a prohibited reason.
Changes to the bargaining framework
The requirement to formally notify the commencement of bargaining is to be removed.
In addition to powers to make good faith bargaining orders, Fair Work Australia will have power to determine whether there is majority employee support for pursuing an enterprise agreement. It appears from the fact sheet that this assessment will be based on overall employee support for a collective agreement—not just support from union members. Where there is majority employee support Fair Work Australia will be able to require an employer to bargain collectively, and to require an employer to notify employees of their right to be represented. Unfortunately, there is no additional information about how the new laws will enable non-union workplace agreements to be made.
Good faith bargaining will not include compulsory arbitration. Arbitration will be limited to exceptional circumstances—for example where industrial action is causing a threat to safety or health, a threat to the economy, or significant harm to the parties.
A Better Off Overall Test for agreements
Agreements lodged with Fair Work Australia will be assessed under a Better Off Overall Test against the relevant Modern Award. The test will be applied as a point in time test.
No further detail is included on the application of test. However, it is presumed that it will be substantially the same as the existing No Disadvantage Test.
A change to the strike pay rules for protected action
The current mandatory four hour deduction rule for strike pay in cases of industrial action will be kept, but only in relation to unprotected action.
Where protected industrial action is taken that results in the complete withdrawal of labour (for example a strike), employers will be required to withhold payment for the actual period of industrial action.
Where the protected action is a partial ban, employers will be able to choose to pay full pay, or dock part of an employees wages in proportion to the duties that are being refused.
Fair Work Australia will be able to review whether the amount deducted is proportional if required. This is consistent with the general trend to empower the new tribunal.
Fair Work Australia to facilitate low paid employees can collectively bargaining with multiple employers
Employees in low paid sectors (like aged care, community services, security, and cleaning) will be given access to a separate ‘multi-employer’ bargaining stream.
This stream will include, where parties agree, access to binding determinations by Fair Work Australia to settle matters.
However, Fair Work Australia will be empowered to invoke its powers of mediation and conciliation to require parties to participate in this process.
Again, this proposal is consistent with the general thrust of the Federal Government’s changes to empower the new tribunal.
Detail on the changes to unfair dismissals, including the new Fair Dismissal Code for Small Business
Employees of a small business of fewer than 15 employees will only be able to claim for unfair dismissal after they have been employed for at least 12 months. A blanket six-month qualifying period will apply to other employees.
To dismiss a small business employee fairly after 12 months, the employer will have to comply with a new six-paragraph Fair Dismissal Code for Small Business.
Decisions on unfair dismissal will be made without public hearings (unless the case involves particularly complex issues).
Conclusion
These are the key new elements included in the announcements made today. Employers, particularly those who are moving into bargaining from the middle of 2009, should familiarise themselves with the detail contained in the fact sheets. We will continue to inform clients when the proposed legislation is made available.
Endnotes
1. Speech - Introducing Australia's New Workplace Relations System
2. Forward with Fairness Fact Sheets
This article was written by Tony Wood, Partner, and Nick Ogilvie, Senior Associate, of Freehills’ Employee Relations group.
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