Category Archives: Industrial relations

10 National Employment Minimum Standards

As part of the new Government’s overhaul of the industrial relations system, it has proposed the creation of new modern awards as an integral part of a minimum safety net for employees.

The Workplace Relations Amendment (Transition to Forward with Fairness) Act (2008), inserts a new part 10A into the Workplace Relations Act to provide for award modernisation in the Government’s industrial relations policy. This provision will require that the award modernisation process to be conducted in accordance with a request from the Minister, to the AIRC president.

Minister for Employment and Industrial Relations Julia Gillard will make proposed award modernization request to the President of the AIRC, Justice Geoffrey Giudice now that the Bill has been passed. A proposed section 576J of the Transition Bill will set out 10 award matters.

The Explanatory Memorandum to the Transition Bill introduces a time line of 2009 for the awards to be finalised. In this time, the AIRC must:

• identify a list of priority industries or occupations to undergo the award modernisation process, after consulting with “major workplace relations stakeholders and other interested parties”;
• set a timetable for completing the process with a view to having the priority industries or occupations completed by the end of this year; and
• develop a proposed model award flexibility clause that Gillard said today would provide for agreements that met employees’ genuine individual needs while ensuring they were not disadvantaged.

Additionally, the president of the AIRC, is obliged to publish quarterly reports which detail which industries or occupations are about to undergo award modernisation, the individual Commission member responsible for the modernisation and include ay update on any developments in the past or coming quarter, or any changes to the modernisation timetable.

There will also be an obligation upon the AIRC to publish an exposure draft of each modernised award. The Commission member will be able to liaise with both unions and employer organisations when developing the draft. Consultation on the exposure drafts will also be “open and transparent.”

This will be irrelevant to most people.
The exposure draft of the 10 national employment minimum standards, was released on 14 February 2008. These
minimum standards will apply, along with the proposed new awards system, from January 1 2010.
The draft 10 Minimum standards include:

1. Hours of work – the standards are a 38 hour week with provision for employees to work reasonable additional hours;
2. Parental leave – giving parents a right to separate periods of 12 months unpaid leave, up to a total of 24 months (if parents want one parent to take a further 12 months after they have taken the first 12 months, then they must make a request, with employers only able to refuse such requests on reasonable business grounds);
3. Flexible work for parents – which includes the “right to request” flexible work until children reach school age, with ‘reasonable business grounds’ the only reason an employer is able to refuse such requests;
4. Annual leave – Four weeks paid annual leave for full time employees, pro rated leave for part time employees and an additional week’s leave for shift workers;
5. Personal, carer’s and compassionate leave – ten days a year of paid personal/carer’s leave for full time employees (pro rated for part timers), plus two days a year of paid compassionate leave on the death or serious illness of a family member or a person the employee lives with, plus two days a year of unpaid personal leave for “genuine caring purposes” and family emergencies;
6. Community service leave—this will consist of paid leave for prescribed community service activities, which includes jury service and reasonable unpaid leave for emergency services duties.
7. Public holidays – eight national public holidays are guaranteed (Christmas Day, Boxing Day, New Year’s Day, Australia Day, Anzac Day, Queen’s Birthday, Good Friday and Easter Monday), State public holidays are prescribed (such as Labour Day, Easter Saturday and Easter Tuesday), additionally local public holidays are provided for (such as cup days);
8. Provision of information in the workplace – employers are to provide all new employees with a Fair Work Information Statement containing prescribed information about rights and entitlements, including the right to choose whether to be a member of a union and where to seek information and help;
9. Termination of employment and redundancy – up to four weeks notice (progressing from one week for employees with less than 12 months service to four weeks for workers with more than five years service) for all employees plus an extra week for workers aged over 45. Employees in workplaces with 15 or more employees are also entitled to severance pay of up to 16 weeks after nine years service and 12 weeks after 10 years service (the standard arising from the 2004 Redundancy Test Case, which applied before Work Choices); and 10. Long service leave – as a transitional step to a national standard on long service leave, entitlements will reflect arrangements in current state laws or federal awards or agreements, while employees who accrue leave under the transitional arrangements won’t be disadvantaged.

Comment has been encouraged from employer, employee and community representatives by 4 April 2008. The
awards will be finalized by 30 June 2008, in order to give the AIRC an opportunity to insert industry – specific detail into the modernized awards. The National employment standards will then apply to all employees and be sent to parliament as a major part of the new Governments substantial industrial relations reforms.

Major Changes

Employees who earn above $100 000 per annum will not be subject to or constrained by awards. They will be free to agree their own pay and conditions. This will provide those employees with greater flexibility in entering into common law agreements, which have previously been required to comply with all award provisions, regardless of the employee’s rate of pay.

Previous arrangements for minimum standards

These proposed minimum standards differ from the minimum standard arrangements under WorkChoices, provided for in the “Fairness Test.” The Australian Fair Pay Commission (APFC) standard includes:
• 10 days sick leave (this is able to be used as carer’s leave) in addition to two days paid compassionate leave and a further two unpaid personal leave days for emergencies.
• Four weeks annual leave (with an extra week for shift workers)
• 12 months unpaid parental leave
• A standard 38 hour week (this is able to be averaged over a year if the employer and employee agree), although reasonable additional hours may be required.
• The federal minimum wage as stated in the AFPC
“Protected” award conditions were
• Penalty rates
• Shift and overtime loadings
• Monetary allowances
• Annual leave loading
• Public holidays
• Rest breaks
• Incentive based payments.

The AFPC standard conditions were unable to be traded away at all however, the protected award conditions were able to be traded away for fair compensation, subject to the agreement passing the fairness test.

Implementing Labor’s ‘Forward with Fairness’ Policy

On Wednesday 13 February 2008, the new Rudd Government began the first steps of its promised overhaul of the
Howard Government’s WorkChoices industrial relations system. Workplace Relations Minister Julia Gillard, introduced the Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 (the Transition Bill), which plans to have Labor’s new industrial relations system (Forward with Fairness), in place by 2010. On Wednesday 19 March, Labor’s transition bill for Industrial Relations passed through parliament. It is now referred to as the Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008.

What does this mean?

The legislation facilitates Labor’s implementation of “Forward with Fairness” by:

• banning new Australian Workplace Agreements (AWAs);
• establishing Individual Transitional Employment Agreements (ITEAs);
• introducing a new no – disadvantage test for both collective agreements and ITEAs to replace the Work-
Choices ‘fairness test;’
• enabling the Australian Industrial Relations Commission (AIRC) to begin the award modernization process;
and
• removing the Employer Fact Sheet requirements implemented by WorkChoices.

These changes during the transition phase of the policy will allow the Government to:
AWAs – After the legislation is proclaimed, the making of new AWAs will be banned. AWAs with terms of up to five
years made before the commencement date of the Government’s legislation and lodged within fourteen days, may operate until terminated or replaced. Additionally, the Australian Public Service will no longer offer AWAs. Parties to pre WorkChoices agreements will be able to extend their agreements for up to three years.

ITEAs – ITEAs will only be available to employers who on 1 December 2007 employed a worker under an individual
deal, including an AWA, a pre reform AWA, an individual preserved state agreement, or an individual Victorian employment agreement. ITEAs will cease to operate on 31 December 2009. Employers will be able to offer ITEAs on a take it or leave it basis, even if there was a collective agreement operating at their workplace in addition to AWAs. These agreements will be prohibited from disadvantaging employees compared to an applicable collective agreement and the current AFPCs or in the absence of an agreement, the current AFPCs and the relevant award.

The legislation was passed with amendments, extending ITEAs to former employees No disadvantage test – This test replaces the fairness test passed in 2007, and applies to both collective agreements and ITEAs. The Workplace Authority Director will conduct the test and will be required to ensure that a workers overall terms and conditions are not reduced in comparison with a ‘reference instrument’ such as a collective agreement or an Award (if there is no award, the Workplace Authority Director can designate an award). Collective union, non union agreements and ITEAs for existing employees will be subject to the no disadvantage test.

The minister has confirmed that the WorkChoices exceptional circumstances test would be retained for agreements
that have failed the no disadvantage test. However, agreements that were approved under those provisions, would be
limited to a two year term. The Workplace Authority Director would have to publish their reasons (which would not be subject to judicial review), for passing those agreements. The legislation was passed with amendments providing that The Coalition’s Industrial Relations reform.

Implementing Labor’s ‘Forward withFairness’ Policy.

Long service entitlements under state laws can be considered when agreements undergo the no disadvantage test.
There is no difference to be seen between this new test and the Fairness Test which came in, in May 2007.
NAPSA’s The legislation includes Notional Agreements Preserving a State Award (NAPSA’s). There have been concerns raised by both employers and employees in regards to the Work Choices deadline of March 26, 2009. This has been altered to December 31 2009, to take the old state awards to the end of the Government’s transitional arrangements.

Other WorkChoices arrangements that the Act extends until the same date, include superannuation,
which would otherwise become a non allowable award matter, and arrangements for transitionally registered associations. The passing of the legislation included amendments allowing the extension and variation of NAPSA’s

Other The legislation also removes the 90 day rule for unilateral termination of expired deals. This means that a party
wanting to end an expired agreement will have to apply to the AIRC and meet a public interest test (as was the
case prior to WorkChoices). If this is successful, employees are then subject to whatever award or workplace
agreement would have applied to them, but for the terminated agreement.

The rule will continue to apply for AWA or ITEAs which have passed their nominal expiry date, however, employees will then fall back on the relevant agreement or, if none exists, the full award. Another change is that certified agreements made prior to WorkChoices, can under the legislation, be extended or varied for a maximum of three years on application to the AIRC. This is to prevent parties falling between Work-Choices and the new legislation.

The AIRC may only grant the extension/variation if parties genuinely agree. It can not do so if industrial action is threatened or organized by either party from the day after the bill was introduced to parliament. There is a prohibition on parties using any other action to force the extension/variation.

Award modernisation

Award modernisation will be conducted as a part of the new industrial relations system. This process and all that it
entails will be more substantially discussed in the next article in this newsletter.
Other significant provisions of the bill will:

• remove the restriction on referencing other industrial instruments in agreements;
• require that workplace agreements be lodged with signatures attached although lodgement could still
be done electronically via PDF’s;
• ensure that most agreements will take effect from seven days after being advised by the Workplace Authority Director that they have passed the no disadvantage test; and
• require the Workplace Authority to consult more widely when designating awards for the purposes of
the no disadvantage test.

In addition to this legislation, the Minister will chair meetings with the Government’s Business Advisory Group and
the Small Business Working Group. The Working Group will be the primary group given the task of drafting the fair
dismissal code for businesses with fewer than 15 employees.

As stated above, the legislation was passed through parliament on Wednesday 19 March 2008. It will take effect
as soon as it is proclaimed, which will be as soon as possible according to the Government.