And so it begins – from “Work Choices” to “Forward with Fairness”
The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008
The changes
The Bill involves a series of amendments to the Workplace Relations Act 1996 (Cth) (“the WRA”) (rather than enacting a new piece of legislation) and deals with reforms that have been announced by the Government, namely:
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the abolition of Australian Workplace Agreements (“AWAs”);
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he creation of new instruments called “Individual Transitional Employment Agreements (“ITEAs”);
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the reinstatement of the No Disadvantage Test;
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the development of a process to modernise awards.
What has not changed
These issues must await the next piece of legislation, which is expected to be produced as an exposure draft in April 2008.
It is also important to note that the Bill does not change the coverage of the WRA. If you are an employer not presently subject to the WRA (because you are a partnership, a sole trader, or a corporation which is not a constitutional corporation) you remain unaffected.
AWAs
The main effect of the Bill is to abolish (from the date that the Bill becomes law) the making of new AWAs. With the exception of employers who are able to make ITEAs (which we discuss in detail below) employers and employees will no longer be able to make statutory individual agreements which over-ride awards and collective agreements. Employers and employees will still be free to make individual common law contracts but these contracts do not over-ride awards or collective agreements.
Current AWAs or those made prior to the date in which the Bill becomes law will not be affected and will continue in force until their nominal expiry date.
ITEAs – the return of the no-disadvantage test
An ITEA is an individual employment agreement which is quite similar to a pre-Work Choices AWA in that it is underpinned by a “no disadvantage” test.
Not all employers will be able to make ITEAs with their employees. In order to be eligible to make an ITEA with an employee, an employer will need to have employed, as at 1 December 2007, at least one employee subject to an AWA.
No-disadvantage test for collective agreements
The No Disadvantage Test also replaces the Fairness Test as the yardstick against which collective agreements (including greenfields agreements) must be measured. The No Disadvantage Test will be administered by the Workplace Authority.
Award modernisation
The Bill removes the Award Review Taskforce established by the previous Government and hands the responsibility for award modernisation to the Minister and to the Australian Industrial Relations Commission (“the AIRC”). The Minister initiates the process by making an “award modernisation request” to the AIRC, which must then carry out an “award modernisation process”, which must conclude within two (2) years with the making of a “modern award”.
Modern awards will:
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be structured to provide only a “fair minimum safety net”;
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not contain any terms providing for rights of entry for union officials; and
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not contain any State-based differences (other than in the first five years of the operation of the “modern award”, when such differences are permissible).
The timing – what happens now?
The Government does not presently have control of the Senate because the Senators who were elected at the most recent election will not take up their positions until 1 July 2008.
The Coalition has used its numbers in the Senate to refer the Bill to a Senate enquiry with a reporting date of Monday, 28 April 2008.
From 1 July 2008, the Government will need the support of both the South Australian independent Senator-elect Nick Xenophon and the Victorian Family First Senator Steven Fielding to pass legislation. The key message is that change will not be immediate.
What do employers need to do to prepare?
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Consider your future employment regulation needs and whether those are most likely to be met by the current (Work Choices) regime or by the proposed new regime.
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If the current regime is likely to be advantageous, look to lock in arrangements, but remember that communication strategy is likely to be very important.
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Identify whether you will be eligible to enter into ITEAs once the new regime commences, and if so, identify the relevant awards or other instruments which will be used as reference instruments in order to perform the no-disadvantage test.
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If you have a current collective agreement, especially if it is shortly to expire, give consideration to the best strategy for ensuring that any replacement agreement can be made operative in a timely manner.
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Most importantly, remember that the Bill will, when enacted, make only very limited changes to the current Work Choices regime, and that the majority of the provisions introduced by the Work Choices amendment remain in effect.
Conclusion
This is a necessarily brief summary of a piece of legislation which runs to 125 pages. If you have any questions about anything arising from this alert, please contact a member of the DAS Workplace Relations Team.
If you would like more information, please contact a member of our National Workplace Relations Team listed on the right hand side of the screen.
To view a print friendly version please click on the PDF link below.
