November 2007

Forward with Fairness - but where to? What will the new government mean for workplace relations law?

Now that the Labor Party has won the election, what will this mean for workplace relations in your business?

Timetable for change

The first thing is that nothing will change immediately. Labor's Policy Implementation Plan refers to sensible transition provisions and the need for existing employment provisions to be honoured. The Workplace Relations Act as it was before the election will continue to apply until it is amended.

The Government is drafting transitional legislation, but it will not be introduced until the beginning of next year, and then will have to pass the Senate.

Substantive legislation will be developed after further consultation in 2008 and 2009, with a view to commencement on 1 January 2010. So mark that date in your diaries! We will now look at some of these changes in more detail, however remember most of these changes will not apply until 1 January 2010.

National Employment Standards

Like the five matters contained in the Fair Pay and Conditions Standard now, but with extra benefits, these expanded standards will apply to all workers and cannot be contracted out of. These cover -

  • Hours of work

  • Parental Leave (increased to 24 months unpaid - 12 for each parent)

  • Flexible Work for Parents (with a new right to request flexible work arrangements until children reach school age)

  • Annual Leave

  • Personal, Carer's and Compassionate leave

  • Community Service Leave

  • Public Holidays

  • Information in the Workplace

  • Notice of Termination and Redundancy (severance pay rights for employees)

  • Long Service Leave (a nationally consistent standard to be developed).

Australian Workplace Agreements

Existing Australian Workplace Agreements (AWAs) will continue to operate until termination according to their terms. Until the new Transition Bill comes into effect employers can still introduce AWAs provided they meet the current legislative requirements, including the fairness test.

Once the Transition Bill commences individual statutory agreements will be allowed to operate until 31 December 2009.

Award simplification

Awards will be simplified by the AIRC to contain a minimum of a further ten conditions and entitlements and may provide industry specific guidance on the National Employment Standards. The current Federal awards, and any transitional agreements from the last round of changes, such as NAPSAs or PSCAs continue to apply until replaced by these simplified awards on 1 January 2010.

Changes for employees earning over $100,000

Employees earning over $100,000, indexed annually, will be free to agree their own terms and conditions without reference to awards. These employees will still be covered by the ten National Employment Standards.

Changes to unfair dismissal

Small business with less than 15 employees will be exempt from unfair dismissal claims for the first 12 months of an employee's employment. For businesses of 15 or over, the period will be 6 months. The focus is on reinstatement, not compensation. The current "operational reasons" exclusion will be abolished.

A Fair Dismissal Code will be developed to assist small business employers to implement dismissals in a way that minimises the chance of claims, and if genuinely complied with, would result in a dismissal being considered fair. It is intended that claims be dealt with by Fair Work Australia in a quick and cost-effective way.

Fair Work Australia

As if we haven't seem enough re-branding already, Labor will introduce a new one-stop shop to provide practical information, advice and assistance, settle grievances and ensure compliance. The body will be called "Fair Work Australia". Fair Work Australia will be able to hear unfair dismissal claims, and unlawful dismissal claims, and it is intended it will have offices in suburbs and regional centres to improve access to services.

A truly national system?

The Labor Government proposes to work towards a national workplace relations system for all private sector employers, irrespective of their incorporation status, in co-operation with the State and Territory Governments, although the model is not yet clear. It could be achieved by a referral of powers or other forms of co-operation and harmonisation. State public sector and local government will remain with the State systems, so there will still be work to do for the State Industrial Relations Commissions.

So what do you do?

While now is a good time to review your workplace arrangements, not much will change in the short term. If you have employees on AWAs you should consider when the AWA will expire, and whether it is better to re-negotiate the agreement now, rather than wait until you need an Individual Transitional Employment Agreement.

Finally, diarise 1 January 2010 and sit back until 2009.