In our
update of 28 November 2008, we reported on the significant changes proposed to be made to Australia's industrial relations legislation by the government through its
Fair Work Bill 2008 (FW Bill).
Much has happened since then. The FW Bill was referred to the Senate's Standing Committee on Education, Employment and Workplace Relations which conducted public hearings nationally. The committee received 154 written submissions and its report contained a number of amendments recommended by government, opposition and crossbench senators.
An eleventh hour deal negotiated between the government and Family First Senator Fielding enabled the FW Bill to pass the Senate late last Friday afternoon. In all, 225 amendments were made to the draft legislation introduced in November. Some other concessions agreed to by the government will be dealt with in the transitional legislation.
Amendments made to FW Bill
While many of the amendments are of a largely technical nature, some of them will have a direct practical impact on employers and employees. Some of the more notable amendments include:
- a two phase approach in relation to what will constitute a small business for the purposes of the unfair dismissal rules. Until 1 January 2011, a small business will be a business with less than 15 full-time equivalent employees which will be determined by averaging the ordinary hours worked by all employees in the business over the 4 weeks immediately before the employee's termination and dividing that by 38. From 1 January 2011, a simple headcount of all employees working in the business will be undertaken. Employees of small businesses will need to have worked for 12 months before being able to bring an unfair dismissal claim; employees of other businesses will only need to have worked for 6 months;
- changes to the rules around greenfields agreements including deletion of the requirement for an employer to notify all unions with coverage before an agreement is made;
- elaboration of the considerations Fair Work Australia is required to take into account where an employer, in a transfer of business (ie sale, outsourcing or insourcing) situation, applies for an order that industrial instruments covering transferring employees not apply to it; and
- changes to the right of entry rules including that a union official may only inspect documents which are directly relevant to a suspected breach of the legislation or an industrial instrument, restrictions on the use or disclosure of information obtained and, addressing concerns raised over union access to non-member records or documents, clarification that union officials will not have an automatic right of access to such records and documents. Instead, unions will be able to apply to Fair Work Australia for an order allowing them to inspect non-member records or documents. Fair Work Australia will be able to make an order if it is satisfied that the order is necessary to investigate a suspected contravention.
Transitional Bill introduced into Parliament
Also of note is the Fair Work (Transitional Provisions and Consequential Amendments) Bill (Transitional Bill) which was introduced into the Parliament on 19 March 2009. The Transitional Bill is relatively long - the draft comes in at 296 pages - and complex. It deals with how parties operating under the Workplace Relations Act 1996 (WR Act) will transition into the new Fair Work framework. Among other things, it deals with:
- the repeal of the WR Act;
- how existing industrial instruments will be regulated moving forward. Essentially, existing industrial instruments (defined as "transitional instruments") will continue to apply as if the WR Act had not been repealed. From 1 January 2010, the new NESs will apply to all employees including those working under transitional instruments. Disputes relating to transitional instruments and employee entitlements under the WR Act will be dealt with by Fair Work Australia as if that Act had not been repealed.
- Fair Work Australia's ability to make take home pay orders where one or more employees' take home pay is reduced as a result of award modernisation;
- commencement of good faith enterprise bargaining from 1 July 2009. The effect of the transitional provisions is that bargaining participants will have to either finish their bargaining under the WR Act system before 1 July 2009 or commence bargaining for a new enterprise agreement under the new Fair Work system; and
- commencement of the transfer of business rules from 1 July 2009 including in relation to transitional instruments.
What's still to come?
The next piece of the jigsaw is a further piece of legislation which is expected to be introduced into the Parliament in the last week in May to deal with consequential amendments to other Commonwealth laws and any referrals of industrial relations power by the States. This, and the Transitional Bill, will be debated in early June. The government is also still to release regulations.
It is now likely that much of the new regime - including the new unfair dismissal, enterprise bargaining and transfer of business rules - will commence operation from 1 July 2009. Other aspects - including the new NESs and modern awards - will operate from 1 January 2010. Businesses will need to quickly come to terms with the changes so as to best position themselves to operate in the new system. It will also be important to have regard to the impact of the new laws on any transactions or restructures planned for the coming months.
Our
Employment team will provide more detailed analysis and commentary in relation to the FW Bill and the transitional legislation that accompanies it over the coming weeks.
For further information, please contact: