On 19 June 2009, the Government released the Fair Work Regulations 2009 (Cth) (Regulations).
The Regulations, will replace the Workplace Relations Regulations 2006 (Cth) (WR Regulations) and supplement the Fair Work Act 2009 (Cth) (FW Act), are comprised of six chapters plus schedules.
This update highlights the areas of the Regulations which are likely to be of most relevance to employers.
The Regulations will commence on 1 July 2009, except for Part 2-2 (which deals with the National Employment Standards (NES)), and Part 6-3 (which deals with the extension of some NES entitlements to non-federal employees), both of which will commence on 1 January 2010.
Terms and conditions of employment
The Regulations deal with terms and conditions of employment, and contain provisions that:
- deal with the Fair Work Information Statement (FWS) and how the FWS can be given to an employee by an employer;
- relate to enterprise agreements, including how a notice of representational rights may be given to an employee. Set out in the relevant schedules are:
- the prescribed form of the notice of employee representational rights;
- the model flexibility term for an enterprise agreement (which will be taken to be a term of the agreement if the agreement does not contain a flexibility term that complies with the requirements of the FW Act);
- the model consultation term for an enterprise agreement (which will be taken to be a term of the agreement if the agreement does not contain a consultation term);
- set out the formula for working out the 'high income threshold' for an employee. For the year commencing 1 July 2009, the high income threshold will be $108,300. The high income threshold is relevant to determining:
- whether an award/agreement free- employee can make a claim for unfair dismissal under the FW Act; and
- whether an employer and employee can enter into a guarantee of annual earnings so that a modern award does not apply to the employee.
The NES provides that all employees (covered by the NES) are entitled to redundancy pay. Some expected that the Regulations would provide that this entitlement would not apply to very senior employees. This is not the case, the Regulations do not provide a carve out for redundancy for very senior employees.
The rights and responsibilities of employees, employers and organisations
The provisions of the FW Act dealing with rights and responsibilities of employees, employers and organisations are supplemented by provisions in the Regulations that:
- clarify that an employee who is absent from work while receiving workers' compensation payments is not on a 'temporary absence from work because of illness or injury' for the purposes of section 352 of the FW Act;
- deal with matters relating to industrial action, including protected action ballots and payments relating to periods of industrial action and partial work bans; and
- deal with employer obligations to make and keep employee records and to issue pay slips to employees. These obligations include requirements as to the content of employee records and pay slips, as well as records that must be kept regarding pay, overtime, averaging of hours, leave, superannuation, individual flexibility arrangements, guarantee of annual earnings, termination of employment and transfer of business. The obligations as to record keeping under the Regulations are similar to those imposed by the WR Regulations, with obvious differences being the requirement to keep records relating to individual flexibility agreements and any guarantee of annual earnings which are new concepts introduced by the FW Act.
The Regulations do not impose an obligation for an employer to keep a record of each employee's start and finish times. This is relevant to the requirement under the NES that an employer's request that an employee work more than 38 hours per week is reasonable.
A factor that must be considered when determining whether additional hours are reasonable, is whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of working additional hours.
This may make it more important for employers to have an accurate record of the actual hours that employees work, for salaried employees as well as those paid an hourly rate plus overtime, to support an argument that employees are adequately compensated for additional hours they work.
Compliance and enforcement
The Regulations also provide additional detail relating to the compliance and enforcement regime established by the FW Act, including the small claims procedure and the payment of a penalty by a person alleged to have contravened a civil penalty provision of the FW Act, as an alternative to civil proceedings.
Administration
Administrative matters to do with Fair Work Australia and the Office of the Fair Work Ombudsman are also dealt with by the Regulations.
Miscellaneous
The Regulations contain a 'miscellaneous' chapter, dealing with a variety of matters, including that the model dispute settlement term for enterprise agreements is set out in schedule 6.1 of the Regulations.
Conclusion
The Regulations add necessary detail to the Fair Work regime due to commence on 1 July 2009. Whether the Regulations in their current form contain enough detail or will need to be amended once the Fair Work regime is up and running remains to be seen.
Our
Employment team will keep you updated on significant changes to the FW Act and the Regulations as they occur.