Key points:
- Labor’s substantive reforms to the workplace relations regime will largely commence on 1 July 2009.
- The passage of the FW Bill through parliament may not necessarily be a smooth one, however, substantive changes are unlikely.
- Employers should keep a keen eye on its passage and its forthcoming implementation date, whilst at the same time ensuring they are ready and equipped to deal with the challenges and opportunities that await them.
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Despite rhetoric to the contrary, the substantive workplace reforms contained in Labor’s Fair Work Bill (FW Bill) were never about completely ‘tearing up WorkChoices’. A fair reading of the ALP’s pre-election policy, ‘Forward with Fairness’, clearly bears this out. The ‘balanced’ approach Labor advocated to reforming the existing legislative regime has largely been carried through in the release of the FW Bill. However, there are a few surprises which have attracted some focus in recent media commentary.
General overview
There are positive aspects to the FW Bill from a business perspective. It continues the move towards a national regime through the enhanced legislative safety net and the revitalised award modernisation process. It retains a strong compliance culture in dealing with unlawful conduct and unprotected industrial action. It also proves easier to read than the current Act, but the real proof will be the manner in which the transitional arrangements (yet to be released) provide for the move from the old system to the new.
The substantive reforms are largely due to commence from 1 July 2009. Consistent with Labor’s policy, both unions and the new industrial umpire, Fair Work Australia, will be empowered under the new regime. Fair Work Australia has regained many of the powers lost under the existing regime and will have an expanded role to play in settling general disputes and those arising in the bargaining context. Not surprisingly, ’collective bargaining’ is the big winner out of the reforms. That is not to say employers do not have the tools to continue to hold bargaining representatives and employees accountable for their conduct in bargaining and in workplace dealings generally. The FW Bill provides for such controls, primarily through Fair Work Australia.
The most interesting changes arise in the bargaining space, with the right of entry changes and new transmission of business rules a close second and third respectively. It is these particular changes that we focus on in this article.
The new bargaining regime
Since around 1996, employers and employees have generally had access to union collective agreements, employee collective agreements and individual statutory agreements (AWAs) as options to regulate their employment relationships. Labor moved quickly to abolish AWAs shortly after their election victory, consistent with their policy position. It seems now that ‘traditional’ employee collective agreements and single union greenfield agreements may have a limited shelf life. This consequence largely stems from Labor’s policy position on representation in bargaining.
The concept of a ‘bargaining representative’ is a key feature of the FW Bill. A bargaining representative is guaranteed a seat at the bargaining table and can shape the course of bargaining and, in some cases, the outcome through accessing good faith bargaining orders and the assistance generally of Fair Work Australia where required. More often than not, the bargaining representative will be a union (or unions with coverage in the relevant business). This can occur by default where a member does not appoint a bargaining representative.
The new bargaining regime undoubtedly creates a number of challenges for employers but they are not insurmountable. Opportunities also arise as a result, particularly given the rules attached to ‘good faith bargaining’ and the increased powers of Fair Work Australia. Careful strategic planning around the bargaining process and appropriate contingency planning will mean business objectives can still be achieved, despite the changed bargaining dynamics.
Further, whilst the legislative landscape may have changed, the fundamentals around an employer’s approach to bargaining should not. Open, transparent and productive relationships with employees remain critical to keeping bargaining ‘on track’, together with a clear communications plan and a keen sense of history. There are many lessons learned from the Keating/Brereton reforms of 1993–96 which will be invaluable in approaching the challenges and opportunities which lie ahead.
Right of entry
The FW Bill does not fundamentally alter the rules around right of entry to workplaces. In a general sense, the objectives of balancing the legitimate rights of unions to enter workplaces and the legitimate interests of the employer in regulating and controlling such visits are maintained. However, some subtle changes relating to a broader right to access employee records relevant to suggested breaches of legal obligations, and the relaxing of the rules relating to the accessing employees eligible to be members for discussion purposes at any workplace were not totally expected. These changes may result in increased interactions with unions outside the bargaining sphere.
As a result, employers should look carefully at their existing right of entry protocols and make relevant adjustments to accommodate the changes, whilst also continuing to be cognisant of the control which can be exercised over any particular request for entry and the behaviour of union officials whilst at their workplace.
Transfer of business
Labor did not specifically focus on transmission of business issues leading up to the election or in subsequent policy statements. We see in the FW Bill that the transmission rules which were largely modified by the Work Choices regime have been rewritten. Specific attention has been given to outsourcings involving a transfer of work and internal group restructures. These later ‘transactions’ can now attract the new ‘transmission’ rules, meaning that transferring employees take their industrial instruments with them.
Employers will need to be aware of the effect the new transmission rules may have on any operational decision involving a transfer of work from one employer to another. This is even so in the absence of a transfer of the substantive assets constituting the ‘business’ of the old employer. In many respects, the new transmission regime resembles the approach favoured by the Federal Court in the late 1990s where the relevant test focused upon the transfer of work rather than the transmission of the old employer’s business (or part thereof) to the new employer.
Some employers will find the new transmission rules restrictive and challenging. Others may find the new rules a blessing, now that the transactional uncertainty surrounding the transferring instrument is to be abolished. Regardless, the policy position is clear in seeking to protect employees from losing the protection of their existing arrangements in circumstances where they transfer with the work.
More information
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