February 2007

Changes to workplace laws introduced - January 2007

2007 begins with some new workplace laws, some answers, and some solutions in the transition to Work Choices. A quick round up of the main changes follows.

Fine tuning Work Choices

On 11 December 2006, important amendments were made to Work Choices:

  • Preservation of redundancy - an employee's agreement based entitlement to redundancy pay is now preserved for twelve months after the unilateral termination of a pre-reform certified agreement, pre-reform AWA or preserved state agreement;

  • Stand down - an employer is now given the statutory right to stand down an employee if the employee cannot be usefully employed in the circumstances of a strike, breakdown of machinery or stoppage of work for which the employer is not responsible;

  • Frequency of payments - the employer and employee can now agree about the frequency of the payment of wages, being monthly or more frequently;

  • 38 hours means 38 hours - it is now clear that leave is accrued on an ordinary 38 hour week and not hours worked beyond 38 hours per week;

  • Unpaid leave doesn't count - periods of authorised unpaid leave or unauthorised leave do not now count as service for the purposes of calculating the annual leave entitlement;

  • Cashing out sick leave - there is now an ability to cash out personal/carer's leave provided 15 days personal/carer's leave leave remains; and

  • Faster AWA's - employees can now waive the seven day period to consider a workplace agreement and the Employment Advocate Information Statement before agreeing to enter into the AWA.

These amendments fix some of the uncertainties of Work Choices but employers should expect more changes in 2007, especially after the NSW and Federal elections.

And remember - on 27 March 2007, the new record keeping laws finally commence.

A new Federal Independent Contractor Act 2006

The Federal Independent Contractors Act 2006 deregulates independent contractor arrangements, by

  • introducing a single system for the limited review of independent contractor arrangements on grounds of being "unfair" or "harsh" and

  • removing State legislation that deems contractors to be employees

The Act is expected to commence early this year and it will then displace any remnant of the NSW unfair contract jurisdiction.

The NSW government legislates to confirm workers compensation coverage

The NSW Government has moved the protections against dismissal for injured workers with workers compensation claims from the Industrial Relations Act 1996 to the Workers Compensation Act 1987.

Whether that change means the injured worker provisions survive Work Choices for constitutional corporations remains to be seen.

The AIRC defines "genuine operational reasons"

The Australian Industrial Relations Commission has clarified the meaning of the "genuine operational reasons" exception for unfair dismissal claims upon redundancy (Carter v Village Cinemas Australia Pty Ltd [2007] AIRCFB 35).

The Full Bench decided an employee had been terminated for "genuine operational reasons" even though the company had failed to grant what seemed like a fair request for long service leave to be used as an interim alternative to redundancy.

Provided the termination was for reasons that included genuine operational reasons, then no application for unfair dismissal can be made to the Commission.

A Federal magistrate says workers compensation is "paid sick leave"

Work Choices prohibits termination of an employee's employment for "a temporary absence from work because of illness or injury". The Regulations say an absence becomes "not temporary" only when an employee's absence extends beyond three months in a 12 month period, and after any "paid sick leave" entitlement has expired.

After considering the Termination of Employment Convention 1982, the Court decided that an employee on workers compensation was, for the purposes of the Regulations, on "paid sick leave". It seems to follow, that termination of any employee whilst on workers compensation would be now unlawful because they would always be on "paid sick leave" if receiving weekly compensation.

Expect this decision to be tested in the near future.

Work Choices is here and constitutional corporations are beginning to realise that they cannot act as if there has been no change. Much is happening and employers need to keep up to date.

Authors: Mark Paul & James Mattson

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