March 2011

A Fair Work Miscellany - awards, workers compensation, holiday entitlements & other issues

Although The Fair Work Act 2009 commenced on 1 July 2009 it wasn't until 1 January 2010 that the referral of the state private sector was complete and the National Employment Standards ("NES") commenced. More than a year later we are still seeing how the disparate state regimes are being firmly massaged into a cohesive national system.

There is a great deal that can be said about the Fair Work Act and the new system, but for now, here is our miscellany of the Fair Work Act, and some thoughts:

The Modern Award

Perhaps the biggest achievement of the year was the rollout of the nationwide Modern Awards. These Modern Awards cover nearly every occupation in Australia (but not lawyers!) and set out consistent industrial minimums. Once we get used to the system we'll see the benefits of simpler, clear, consistent standards for all, and with the flexibility at enterprise level to negotiate something better and different.

Holidaying on workers compensation

Did the Fair Work Act 2009 take away the existing entitlement of NSW workers to accrue annual leave when on workers compensation? Some say it did, but we think not. The argument will continue to be run, and some workers will miss out, until there is a dispute with enough money involved for an employee to go to court for a ruling.

Suing the worker

In the olden days the boss could sue the worker if the worker's negligence caused a loss. The NSW Employee Indemnity Act put a stop to that, and employers now claim on insurance instead of suing their employees. Is it possible that the comprehensive Fair Work Act displaced the NSW Employee Indemnity Act?

Not every state has legislation of the NSW type and there is nothing obvious in the Fair Work Act to say the protections in the NSW Act were preserved. A regulation could be made to cover the gap, but in the meantime we won't know the extent of coverage of the Fair Work Act until an uninsured employer sues a careless employee.

The Fraser-Kirk effect

Whilst not a simple Fair Work Act claim the Fraser-Kirk/David Jones settlement has certainly had an impact on workplace disputes. Hardly a claim is made without a request for $37 million, and sometimes more, "because my case is worse". With those expectations claims are harder to settle so we may see more contested hearings.

Paid parental leave

The Federal paid parental leave scheme commenced 1 January 2011. The scheme is more social benefit than workplace relations, but the employers are to be the paymasters with Federal money. The trick to watch is that the Federal benefit will be on top, and not in lieu, of any already negotiated paid parental leave schemes.

Don't fence me in

For us lawyers the interesting issue in the last year has been the restraint of trade. The carefully drafted "ladder" clause (non-competition for 15 or 12 or 9 or 6 months, and a restraint throughout Australia or NSW or Sydney) is back, but only if you can resolve the ever present tension between the anti-competitive tendencies of business and the desire of some ex employees to compete. But the "one size fits all" approach won\'t work. The question is whether businesses are prepared to spend the time, money, and effort, to draft the right restraint, at the right time, for the right employee.

High paid redundancy

From 1 January 2011 those without an existing industrial or contractual entitlement to redundancy pay will be eligible to receive the National Employment Standards payment on termination for redundancy; and service since 1 January 2010 will count. There is no exclusion for the well off, so those senior managers making the decision to restructure will pick up a benefit upon making themselves redundant.

Penalising the victim

The NES prevails over the terms of any Modern Award or Enterprise Agreement. Under the NES untaken annual leave is paid out on termination, but the Clerks Modern Award apparently allows the employer to deduct a wages penalty from that accrued untaken annual leave payment if the employee does not work out the notice period.

That might seem fair, but its not. If employees don\'t work out their notice, then they won\'t get paid. Why does the Modern Award add a super penalty of also losing the accrued NES annual leave entitlement?

Think of a departing victim of sexual harrassment who faces the choice between two more weeks within reach of the harrasser or losing the financial cushion of a few weeks annual leave. Did the NES really intend to allow Modern Awards to operate in this way?

Here or there?

The Fair Work Act appears to cover the field when it comes to remedies for termination of employment. But a recent decision of the NSW Industrial Relations Commission challenges the primacy of the Fair Work Act when it comes to workers compensation (ACI Operations Pty Ltd v Field [2011] NSWIR Comm5). The NSW Industrial Relations Commission found it had jurisdiction to consider reinstatment of an employee whose employment has been terminated as a result of a work related injury.

Not all will agree with the constitutional reasoning underpinning the decision. The Fair Work Act deals comprehensively with remedies for terminations of employment even if it leaves "workers compensation" to the States.

We can expect more dispute over whether a law to do with the reinstatement of workplace injured workers is properly characterised as one to do with workers compensation, or one to do with a remedy for termination of employment.

Eight days a week?

If your full time week is worked regularly Tuesday to Saturday do you receive an extra days pay for a Monday public holiday? It seems you do, or at least there is a decision to that effect. An extra days pay, but not an extra day off. Seems a bit odd, but then there are employers who would readily change a weekly roster to avoid paying a public holiday. There is virtue in the brevity of the NES but a few more words might have clarified whether some full time employees have an eight-day-Public-Holiday-week.

Author: Mark Paul

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