Bills Digest no. 81 2008–09
Fair Work Bill 2008
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Passage history
Purpose
Background
Financial implications
Main provisions
Concluding comments
Contact officer & copyright details
Passage history
Date
introduced: 25 Nov
2008
House: House of Representatives
Portfolio: Education, Employment and Workplace
Relations
Commencement:
The substantive provisions
commence on a day or days to be fixed by Proclamation which must be
after, but no later than six months after, commencement of the yet
to be introduced Fair Work (Transitional Provisions and
Consequential Amendments) Bill 2009 (item
2).
Links: The
relevant links to the Bill, Explanatory Memorandum and second
reading speech can be accessed via BillsNet, which is at http://www.aph.gov.au/bills/.
When Bills have been passed they can be found at ComLaw, which is
at http://www.comlaw.gov.au/.
The purpose of the Bill is to ultimately replace the current
Workplace Relations Act 1996 (WR Act) with industrial
legislation designed to promote collective bargaining and broader
workplace rights for employees. At a later time, the Bill may
facilitate the referral of powers from the states to the
Commonwealth in respect of private sector workplace relations
laying the basis for a national approach to workplace relations
regulation.
Background
In speeches delivered on 17 September 2008 to the National Press
Club (with additional guidance provided in a number of
Fact Sheets) and to the Australian Labour Law Association s
conference on 14 November 2008,[1] the Minister for Education, Employment, Social
Inclusion and Workplace Relations, the Hon Julia Gillard, provided
details about the substantive industrial relations legislation
which the ALP announced in the lead up to the federal election in
2007.[2] The
Government subsequently engaged in extensive consultation with
major stakeholders, primarily under the auspices of the National
Workplace Relations Consultative Committee, to develop both the
transitional legislation that was passed by the Parliament in March
2008, and also the Fair Work Bill. The Bill s Explanatory
Memorandum details the consultative structures, dates of meetings,
names of individuals and organisations involved in the Bill s
development.[3]
The Bill was referred to the Senate Standing Committee on
Education, Employment and Workplace Relations on 25 November 2008
for inquiry and report by 27 February
2009 (the Senate inquiry). The Digest draws on submissions
to the inquiry.
Details of the inquiry are at:
http://www.aph.gov.au/Senate/committee/eet_ctte/fair_work/index.htm
Generally, the early press commentary on the Bill has been
positive. Thus The Canberra Times editorialises that the
Bill:
represents a substantial step forward in
restoring balance in the workplace.[4]
The Courier Mail argued that the Bill had achieved a
balance between employer and employee interests:
Ms Gillard deserves credit for consulting
widely and exhaustively with business and employee representatives.
The laws she has produced essentially mirror the Forward with
Fairness package taken to the election last year achieving a
reasonable balance between interests of employers and
workers.[5]
While The Age noted that the Coalition had:
made its final retreat on the issue (of
revolutionising) Australia s workplace laws.[6]
Paul Kelly of The Australian argued that the
introduction of the Bill at a time of global financial crisis was
the wrong strategy:
A bizarre fate has befallen Australia. At the
precise time it faces a global crisis, a business downturn and
rising unemployment, the Rudd Government is recasting workplace
relations to increase trade union powers, inhibit employment and
impose new costs on employers.[7]
Ross Gittins debunked the notions that the Bill put the unions
back on top or that the Bill amounted merely to a lighter version
of the current WR Act (Work Choices lite)[8]:
Although large slabs of John Howard s Work
Choices are retained, the most fundamental elements have been
reversed As a result, the industrial relations legislation the
Government unveiled this week establishes reasonably even-handed
treatment of employers, employees and their unions.[9]
The Australian Financial Review was concerned that the
new bargaining processes could lead to union turf wars, although
award modernisation would lead to efficiencies for the corporate
sector:
On a greenfields sit or project,
prenotification of a proposed agreement seemed destined to create a
turf war between competing unions. Australian industry does not
need a string of drawn out disputes The rewriting of awards due to
be introduced by January 2010 will be likely to reduce red tape as
it cuts paperwork and compliance costs, especially for large
corporations.[10]
Peter Punch, CCH s principal consultant on
industrial law summarises the implications of the Bill and its
predecessor legislation with the following:
- The legislative landscape for the regulation of collective and
individual employment relationships has been altered from a
collection of state and federal laws, regulations and tribunals to
one where workplace relations is overwhelmingly regulated at the
federal or national level
- Australia's 100-year-old cultural attachment to compulsory
independent third party conciliation and arbitration of collective
labour disputes has been debased (indeed close to eradicated) and
is unlikely to ever recapture its glory days
- Direct legislative prescription of certain minimum terms and
conditions of employment is now the norm, whereas previously such
matters were covered by a motley combination of award provisions
and specific subject legislation (usually at the state
level).[11]
Supporters would argue that the Fair Work Bill:
- puts in place a new legislative framework for workplace
relations with the principle object of recognising the Government s
intention to provide a balanced framework for cooperative and
productive workplace relations that promotes national economic
prosperity and social inclusion for all Australians
- makes more sense than the WR Act as amended by Work Choices.
For example the Bill dispenses with protected and preserved award
terms and reintegrates what used to be award wage rates into the
body of awards. However at the same time the proposed workplace
entry regulations are still tougher than traditional standards to
the extent that the Victorian unions have signalled a challenge to
the new entry laws as being contrary to core ILO
conventions, (in addition to a challenge to the restrictions on the
right to strike, determination of the level of bargaining and the
Bill s ban on pattern bargaining[12]).
- encourages employees and employers to bargain together in good
faith and reach agreement voluntarily in a model close to
international norms for collective bargaining
- introduces a workplace relations system which is built on a
fair and comprehensive safety net of minimum employment conditions
which cannot be undercut, a system that has at its heart bargaining
in good faith at the enterprise level with an emphasis on
improvements in productivity, protections for the low-paid, wider
protections from unfair dismissal, a balance between work and
family, and the right to be represented in the workplace
- retains the structural features of the WR Act as amended by
Work Choices, and in that sense the Bill represents a significant
victory to the Coalition as well as for national
regulation over a key component of the national economy.
- balanced workplace laws are desirable rights in themselves and
for this reason China the international powerhouse of economic
growth has embarked on regulation of its labour market on a far
greater scale than that possible from the Fair Work Bill. Australia
is thus not the only country regulating its labour market
in a time of economic downturn.[13] Indeed economic crises more frequently lead to
public demand for greater and more effective regulation, not less.
This was the basis for US Congress enacting the National Labor
Relations Act 1935 following the Great Depression.[14]
Arguments against the Bill rest on it re-regulating the national
labour market by the following measures:
- the new system will remove the 100 employee exemption
introduced under the WR Act and instead introduce new qualifying
periods that have to be met before an unfair dismissal claim can be
made - 12 months for employees of businesses with fewer than 15
employees and six months for employees in businesses with 15 or
more employees (effectively doubling the proportion of the
workforce who may seek a dismissal remedy)
- in a transfer of business, transferring employees will be
covered by the old employer s industrial instruments indefinitely
(not limited to the current 12 month transmission period). New
employees in the business transferred may also be covered in
particular circumstances. But most importantly, a transfer of
business includes an outsourcing, restructure or other transaction
involving use of assets
- the proposed bargaining requirements oblige an employer who is
negotiating an enterprise agreement to bargain with a union with
one or more members. Furthermore, an employer who does not want an
enterprise agreement at all can be compelled to negotiate (but not
to agree) if a majority of employees want one
- the requirement to bargain in good faith and the ability of
Fair Work Australia (FWA) to arbitrate a workplace determination on
competing claims if there are serious and repeated breaches of such
orders (provided other requirements are also met)
- multi-employer based bargaining for the low paid which means
employees employed on, or close to, the award and National
Employment Standards (but could potentially extend beyond this).
This could easily turn into massive, industry based bargaining and
arbitration. Industries particularly affected are likely to include
cleaning, retail, hospitality and child care
- a union or employee will be able to obtain an injunction
preventing an employer breaching an award or enterprise agreement.
Examples could include a union obtaining an injunction preventing a
restructure if consultation provisions or redundancy procedures in
an agreement were not followed
- what will be the cost impacts of minimum terms and conditions
resulting from award modernisation from 1 January 2010 especially
for employees who are currently award free? What arrangements will
be put into place for transitional award employers and
employees?
- a union s right of entry is now linked to either union
membership (so they can enter to investigate a breach if they have
a member who works on the premises) or union coverage (in the case
of entry for discussions) - rather than the union being party to an
applicable industrial instrument.[15]
While the Bill s predecessor, the Workplace Relations Amendment
(Transition to Forward with Fairness) Bill 2008,[16] had a relatively unobtruded
passage through the Senate, it appears that the Coalition may
oppose the Bill or parts of this Bill in the Senate. The Coalition
had earlier indicated that it would limit the number of Labor laws
it chooses to oppose in the Senate. Opposition Leader the Hon
Malcolm Turnbull had proposed that:
We (the Coalition) must frame our policies in
the light of changing circumstances and, most importantly, in the
light of the judgment of the people delivered at the election which
we heard loud and clear.[17]
However Mr Turnbull also believed that Workplace Relations
Minister Julia Gillard had exceeded her mandate on some aspects of
the industrial relations laws and the Coalition would be closely
scrutinising those areas.
Independent Senator Nick Xenophon
is also concerned the Government has gone beyond the industrial
relations policy put before the Australian people at the last
election, particularly over union powers and the potential for a
return to pattern bargaining. It has been reported that he is
worried the balance has tipped too much to the union side and it
could be dangerous in a worsening economy.[18]
Senator Fielding is reported to
have said that neither union officials nor employer organisations
should investigate breaches of employment entitlements such as
underpayments:
We have got to find something that is fair and
reasonable and, frankly, having the unions as the cop on the beat
is a joke.[19]
The Greens have indicated they will move a number of amendments
to the Bill in the Senate including amendments to allow AWAs or
ITEAs that do not meet the new better off overall test to be
terminated. They also expect to move amendments to:
provide equal unfair dismissal protections for
all workers, strengthen the safety net, expand the matters that can
be contained in collective agreements, provide workers with
internationally recognized rights to freedom of association
(including the right to take industrial action), and to increase
the powers of Fair Work Australia.[20]
By January 2009, the Coalition position appears to have hardened
over the Bill s workplace entry provisions and its unfair dismissal
provisions. Mr Turnbull has indicated that he has become aware of
the angst expressed by the (West Australian) mining industry to
certain provisions in the Bill and expected to win changes from the
Government in the Senate.[21]
The main issue to note is that the Rudd Government refused to
accept relatively minor Senate amendments over its legislative
reforms to workplace health and safety. It set aside its Safe Work
Bill 2008 on 4 December 2008 after the Government (in the House of
Representatives) refused to agree to Senate amendments to that
Bill.[22] A second
refusal by the Senate to pass that Bill would create the grounds
for a double dissolution of Parliament. What is common between this
Bill and the Safe Work Bill is the closer relationship of the
Commonwealth to the states over national or joint regulation of
aspects of the Australian labour market. Indeed, it appears that
Minister Gillard feels that the states could institute Safe Work
Australia without support of Commonwealth legislation.[23] As the Australian
Financial Review s editorial notes: this may be true, but it
is far from ideal .
If the Fair Work Bill passes Parliament successfully, it could
form the basis of further state and Commonwealth co-operation as a
blueprint for national workplace relations legislation. As has been
pointed out by Professor Andrew Stewart, the Bill does not include
provisions dealing with the referral of powers from Victoria,
meaning that Victoria may be required to introduce industrial
relations legislation in respect of its public services, its
unincorporated sector and possibly its local government entities,
despite its 1996 referral of industrial powers to the Commonwealth
unless some broader initiatives on a national industrial relations
system are undertaken.[24] On the other hand, provision for the Victorian referral
may be included in the forthcoming Transitional and Consequential
Bill.
If the Bill fails to pass as with the Safe Work Bill, it becomes
a question of whether the Government would seek to submit the Bill
a second time per the constitutional requirements for a double
dissolution of Parliament[25] and whether all parties would see it in their interests
to face an early election.
These are likely to be few as the Bill closely follows the
structure of the current WR Act and that Act following the Work
Choices amendments and the High Court upheld all of the Work
Choices provisions.[26] On the other hand, some commentators query as to
whether the structure of Fair Work Australia may impinge on the
separation of powers enunciated by the High Court in its
Boilermakers case.[27]
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According to the Bill s Explanatory Memorandum, the financial
impact is yet to be determined in consultation with the Department
of Finance and Deregulation and once agreed will be included in the
relevant appropriation bills.[28]
Main provisions
The Fair Work Bill, in tandem with the proposed Transitional and
Consequential Bill, is likely to result in the complete repeal of
the current WR Act.
Chapter 1 provides an
introduction to the Bill and its structure, key
definitions (including a Dictionary of terms and definitions,
clause 12) which go to the constitutional
underpinning of the Bill (national system employer: clause
14) as well as the timing of its commencement (i.e. not
before a to-be-released Transitional and Consequential Bill).
Chapter 2 deals with terms and
conditions of employment, including the National
Employment Standards (NES), modern awards, enterprise agreements
and workplace determinations and transmission of business.
Chapter 3 concerns rights and
responsibilities of employees, employers and
organisations, including freedom of association, protection from
discrimination, unfair dismissal, industrial action and rights of
entry.
Chapter 4 deals with compliance and
enforcement, including remedies and jurisdiction and
powers of the courts.
Chapter 5 contains
administration provisions, including establishment
of Fair Work Australia (FWA) and the Office of the Fair Work
Ombudsman.
Chapter 6 addresses a range of
miscellaneous matters.
The Bill has been commended for being more effective and
accessible in its drafting style than the current complex and
convoluted WR Act.[29] While still lengthy, the Bill is not difficult to
follow, is written in relatively clear plain English and contains
outlines at the beginning of each main part and frequent signposts
to alert readers to other relevant provisions.
The Bill however does not contain any detail on the transitional
arrangements that will apply between the current provisions under
the WR Act and the Fair Work Act. These arrangements will be set
out in the Fair Work (Transitional Provisions and Consequential
Amendments) Bill to be introduced to the Parliament early in 2009.
The transitional arrangements will no doubt give rise to complexity
and debate, and as has been noted, perhaps for that reason the
Government has sought to produce a clean Bill for the new system,
to keep the focus on that new system, rather than on the complex
transitional matters .[30]
The Bill is intended to replace the WR Act, although it does not
contain provisions providing for the repeal of that Act. Presumably
repeal will be achieved through the Transitional and Consequential
Bill.
Clause 3 sets out the object of the Bill, which
is to provide a balanced framework for cooperative and productive
workplace relations that promotes national economic prosperity and
social inclusion by the means set out in paragraphs
3(a) to 3(f). These means reflect the
overall changes in the proposed new workplace relations system and
include, for example:
- provision of a guaranteed safety net of fair, relevant and
enforceable minimum terms and conditions through the National
Employment Standards, modern awards and national minimum wage
orders (paragraph 3(b))
- assisting employees to balance work and family responsibilities
by providing for flexible working arrangements (paragraph
3(d)), and
- achieving productivity and fairness through an emphasis on
enterprise-level collective bargaining underpinned by simple good
faith bargaining obligations and clear rules governing industrial
action (paragraph 3(f)).
Clause 12 provides a dictionary containing a list of terms defined in
the Bill. Clauses 13 23 contain further more
complex definitions such as definitions of the meaning of base rate
of pay , full rate of pay , industrial action and small business
employer . The terms are explained where applicable through the
Digest.
A full discussion of the constitutional issues relating to
workplace relations is beyond the scope of this Digest. However the
following short summary may be useful background.
Under the labour power in section 51(xxxv) of the Constitution,
the Commonwealth is only allowed to make laws for the conciliation
and arbitration of interstate disputes over industrial matters .
These limitations restrict both the types of laws the Commonwealth
can enact using the labour power and the range of issues that
federal bodies can resolve.
As a consequence, the Commonwealth and the states developed six
separate but overlapping industrial relations systems. There was no
clear demarcation between federal and state systems, and employers
would often be required to comply with more than one set of
obligations.
Attempts to give the Commonwealth more industrial relations
power in a number of referenda have been unsuccessful. The referral
power (section 51(xxxvii)) has so far been used only in the case of
Victoria, when that state referred key industrial relations powers
to the Commonwealth in 1996.[31]
Before the 1990s, federal governments made little use of other
powers in the Constitution to make laws on workplace relations,
largely because of concern about encroaching on the authority of
the states.
However this sensitivity to states rights was abandoned with the
Keating Government s Industrial Relations Reform Act 1993
and the Howard Government s Workplace Relations Act 1996,
both of which made use of alternative powers, especially those over
corporations and external affairs.
The Work Choices legislation of 2006 saw a more radical reliance
on the corporations power with an estimated move of at least 70% of
all employers into the national system of workplace relations.
Although challenged by the states, Work Choices was upheld by the
High Court in New South Wales v Commonwealth (2006) 219
CLR 1. While reliance on the corporations power undoubtedly
expanded the reach of the Commonwealth system it has brought its
own uncertainties. Relying on that power, an employer can only be
covered by the federal system if it is a constitutional corporation
i.e. a trading, financial or foreign corporation. While there can
be no doubt about a proprietary limited company that trades for
profit, there is considerable doubt about the status of
not-for-profit incorporated organisations and of municipal,
charitable and educational corporations.[32]
The ALP in Forward with Fairness,[33] (FWF) foreshadowed that under a
Labor Government there would be a national system of workplace
relations for all private sector employers and their
employees.[34]
The Bill however, is more limited in its approach than suggested
by FWF. In essence it is based on existing federal constitutional
authority thus leaving for another time the question of whether
those residual categories of employees still within the state
systems will ultimately come into the national system through
agreement with the states.[35]
The Department of Education, Employment and Workplace Relations
(DEEWR) submission to the Senate inquiry states that negotiations
with the states for a full referral are continuing, although
Western Australia has indicated it will not be joining the national
system.[36]
The submission states that the Bill does not currently contain
provisions for state referrals into the national system due to the
ongoing nature of negotiations in relation to state involvement.
Any referrals will require subsequent amendments to the
legislation.[37]
The
Bill s fundamental basis of coverage is found in the definition of
national system employer which is an expression defined in
clause 14 by reference to the scope of the
Commonwealth Parliament s constitutional authority.
The new definition of a national system employer is descriptive
and relates to individuals and entities over which the Commonwealth
can assert regulatory powers by virtue of the powers granted to it
under the Constitution. Therefore national system employers are any
of the following individuals or entities, to the extent that they
employ or usually employ an individual:
|
Clause
|
Individual or
entity
|
Constitutional
power
|
|
Clause 14(a)
|
Constitutional corporations as defined under clause 12
|
Corporations power, section 51(xx)
|
|
Clause14(b)
|
the Commonwealth
|
Power to regulate
Commonwealth employers and employees, section 52(ii) and section
61
|
|
Clause 14(c)
|
Commonwealth authorities, as defined under clause 12
|
Power to regulate
Commonwealth employers and employees, section 52(ii) and section
61
|
|
Clause 14(d)
|
Employers of flight crew
officers, maritime employees or waterside workers, in connection
with their constitutional trade or commerce
|
Trade and commerce power, section 51(i)
|
|
Clause 14(e)
|
Bodies corporate, incorporated in the territories
|
Territory power, section 122
|
|
Clause 14(f)
|
Employers carrying on
activities of a commercial, governmental or other nature in a
territory
|
Territory power, section 122
|
The table above also includes the constitutional powers upon
which the Commonwealth bases its regulatory powers over individuals
and entities.
Clause 13 states that national system employees
are individuals who are employed by a national system employer. By
creating this link between the employee and the employer, the
relationship can be regulated by the Commonwealth because it is
supported by a head of power referred to above.
The definition of national system employer includes a
constitutional corporation that usually employs an
individual and a national system employee includes an individual
usually employed by a national system employer. The
Explanatory Memorandum states that the term usually employed has
been judicially considered to include casual or daily hire
employees.[38]
Clause 13 clarifies that usually employed as used
in the definition of national system employee does not include a
person on a vocational placement.
In addition to the terms national system employer/employee, the
Bill in various Parts also uses the terms ordinary meanings of
employer and employee (clause 15). The ordinary
meanings are used for example in those Parts where rights and
obligations may be imposed on any employer or any employee without
Constitutional limitations, or because references to employers and
employees are incidental to other substantive rights. The
Explanatory Memorandum provides examples of the Parts in which this
occurs.[39]
In essence, the Bill has the same coverage as the existing Work
Choices regime that is, Commonwealth Government employees,
employees in territories, and most significantly employees of the
overwhelming majority of corporations, leaving state government
employees, sole traders/partnerships and some employees of non
trading corporations still within the state jurisdiction (except
possibly in Victoria).[40] According to DEEWR, this approach will bring up to 85%
of all employees across Australia into the national system of
workplace relations.[41] However it will not provide a national system of
workplace relations for all private sector employers and their
employees only clear referrals by the states will do this.
Clauses 24 to 30 deal with how
the proposed Act will affect the operation of certain state and
territory laws. Subclause 26(1) states that the
proposed Act is intended to exclude all state and territory
industrial laws so far as they would otherwise apply in relation to
a national system employer or national system employee. In other
words clause 26 intends that the proposed Fair
Work Act should cover the field in relation to industrial relations
to the extent that it is constitutionally possible. Where the
Commonwealth successfully covers the field the states and
territories are precluded from legislating in this area and their
existing laws which regulated this area become inoperable. Note
that this approach was also adopted in the Work Choices legislation
(existing section 7C of the WR Act) and was generally upheld by the
High Court in New South Wales v Commonwealth (2006) 219
CLR 1.
Subclause 26(2) defines a State or Territory
industrial law for the purposes of clarifying which laws are
excluded. These are:
- general state industrial laws and related legislative
instruments (such as the Industrial Relations Act 1996
(NSW))
- employment laws which have a main purpose of regulating
workplace relations. To assist in identifying such laws the
definition lists six main purposes which are indicia for such a
law.
- state and territory laws which apply to employment generally,
dealing with leave other than long service leave or leave for
victims of crime
- state and territory laws establishing courts or tribunals which
can make equal remuneration orders
- state and territory laws which deal with unfair contracts
- state and territory laws which regulate union right of
entry,[42] and
- state and territory laws and statutory instruments that are
prescribed by the regulations.
However, some areas in which states and territories still retain
some powers to legislate are to be expressly excluded from these
broad overriding provisions. Clause 27 provides
that these saved areas or laws which will continue to operate
are:
- laws which deal with discrimination and/or the promotion of
equal employment opportunity
- laws prescribed by regulations made under the Act
- laws which deal with so-called non-excluded matters as
set out in subclause 27(2), and
- laws dealing with rights and remedies incidental to any of
these laws.
Some of the more significant non-excluded matters in
subclause 27(2) include:
- superannuation
- workers compensation
- occupational health and safety
- outworkers
- child labour,
- long service leave, but not for employees who have long service
leave entitlements under the NES, and
- regulation of employer and employee organisations and their
members
Clauses 28 to
30 provide further clarification on the
relationship between the Bill and state and territory laws and
largely replicate existing sections of the WR Act.
Subclause 29(1) provides that a modern award or
enterprise agreement prevails over a state or territory law to the
extent of any inconsistency. However subclause
29(2) clarifies that a modern award or enterprise
agreement is subject to any of the saved state or territory laws
mentioned above or any of the excluded laws prescribed by
regulation.
Clause 40 deals with the interaction between
Fair Work instruments and public sector employment laws. In
general, a public sector employment law would prevail over a fair
work instrument[43]
that deals with public sector employment to the extent of any
inconsistency. There appears to be no equivalent provision in the
existing WR Act.
Like the WR Act, the Bill will also have a certain
extraterritorial application (clauses 32 to
34). Clause 32 will provide that
the regulations can have the effect of changing the application of
the proposed new law with respect to the waters out to the limits
of the territorial sea, Christmas Island and the Cocos (Keeling)
Islands.
Clauses 37 to 39 are standard
clauses dealing with binding the Crown, not exceeding Commonwealth
power and acquisition of property on just terms .
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The main terms and conditions of employment provided for by the
Bill are: the National Employment Standards (NES), a modern award,
and an enterprise agreement or a workplace determination, while
other terms and conditions include national minimum wage orders and
an equal remuneration order (Clause 43).
The Bill provides for 10 national employment standards that act
as a minimum safety net for all employees. These will replace and
enhance the five matters currently covered by the Australian Fair
Pay and Conditions Standard.
Clause 44 prohibits employers from contravening
the NES (see further below under compliance).
Awards cannot exclude the NES (clause 55).
Modern awards may apply to an employee when the award
covers the employee and no other instrument based on a
provision of the Bill, applies to the employee (clause
47). Clause 48 stipulates that an award
covers an employee, employer or organisation or outworker
entity if it is expressed to so cover. Clause 48
also allows an award to cover (or not cover) an employee by a
provision of the Act, order of the FWA or order of a court. A
modern award is in operation on 1 July in the next financial year
after it is made, or on 1 July in a financial year if it is made on
1 July. Alternatively, if the FWA specifies another day, it comes
into operation on that day (subclause 49(2)). A
modern award continues in operation until it is revoked
(subclause 49(7)). Enterprise agreements cannot
exclude the NES (clause 55).
Enterprise agreements may cover employees. Under clause
52 an enterprise agreement applies to an employee when the
agreement is in operation, the agreement covers the employee,
employer or organisation and no other provision has the effect of
the agreement not applying. An enterprise agreement covers
an employer and its employees if it is expressed to cover the
employer and employees. An enterprise agreement covers an employee
organisation if the FWA has approved the agreement to so cover the
organisation. For greenfields agreements,[44] the organisation is covered where the
agreement is made by the organisation (clause
53).
Modern awards and enterprise agreements can supplement the NES
providing there is no detriment to employees (subclause
55(4)), may include certain terms about the NES
(subclause 55(2)), but must not exclude the NES
(subclause 55 (1)).
Clause 57 makes clear that a modern award does
not apply to an employee (or employer or employee organisation) at
a time when an enterprise agreement applies. Clause
58 sets out the interaction and application of enterprise
agreements including old and new agreements as well as any multi
site agreements. It stipulates that only one enterprise agreement
may apply to an employee.
The Bill retains the substance of the NES announced in June 2008
with some amendments.[45] The significant changes are:
- employees who are not covered by a modern award or enterprise
agreement are able to cash out annual leave in certain
circumstances, including a requirement that this be by written
agreement with their employer and the employee retains at least
four weeks annual leave after cashing out
- employees with less than six months service are not entitled to
the minimum notice of termination prescribed by the NES. For small
business employers (who employ fewer than 15 people), this
exclusion applies if the employee has worked for less than 12
months
- the Bill has also added a section to the NES dealing with
various other matters such as leave entitlements while on workers
compensation.
In addition, the Bill clarifies the relationship between the
NES, modern awards and enterprise agreements. As noted, modern
awards or enterprise agreements cannot exclude any provision of the
NES, but may include certain provisions permitted by the section of
the Bill which deals with the particular NES matter, such as
cashing out of leave and substitution of public holidays.
Maximum weekly hours
As with the WR Act, maximum weekly hours will remain at 38 hours
per week (clause 62). An employee may be required
to work in excess of the standard 38-hour week but the employee
cannot be required to work unreasonable additional hours
(subclause 62(2)).
In determining whether additional hours are reasonable the
following factors under subclause 62(3) must be
taken into account:
- any risk to employee health and safety from working the
additional hours
- the employee's personal circumstances, including family
responsibilities
- the need of the workplace or enterprise in which the employee
is employed
- whether the employee is entitled to receive overtime payments,
penalty rates or other compensation for working additional
hours
- the notice (if any) given by the employer of any request or
requirement to work the additional hours
- the notice (if any) given by the employee of his/her intention
to refuse to work the additional hours, and
- any other relevant matter.
Unlike the WR Act the NES do not provide rules for the averaging
of hours, although averaging of hours over 26 weeks is available
for award/agreement free employees (clause 64).
Averaging of hours arrangements are dealt with under modern awards
and enterprise agreements, which the NES expressly allow for
(clause 63).
Clause 65 provides that this entitlement will
apply if the employee:
- is a parent of a child under school age (under a state law that
sets out when a child must start attending school), or
- has a responsibility for the care of a child under school
age.
The employee will be required to make a request in writing
setting out the details as to the changes sought to be made to the
current working arrangements and the reasons supporting such
change. The employer must respond to this request in writing within
21 days. If the employer refuses the request, written reasons for
such refusal must be provided. A refusal can only be made on
reasonable business grounds . In cases where a refusal is made, it
is open to the employer or employee to suggest a modification to
the employee's request that might be more easily accommodated by
the employer. It is unclear what sanctions, if any, will apply in
the case of an unreasonable refusal by an employer to either type
of request.
There is no definition of flexible working hours. Types of
flexible working arrangements being suggested are a reduction in
hours of work (eg to part-time work), a change to non-standard
start or finish times, working from home or another location,
working split shifts or job sharing arrangements.[46] If more beneficial arrangements
are available to an employee under state or territory laws, these
are not excluded (clause 66).
Alexandra Heron, European employment law author, argues that
based on her experience working in Europe on discrimination and
other workplace issues, clause 65 is too weak and is unlikely to be
the catalyst for a serious move to substantial change in the
workplace towards 'caring friendly' working hours and practices.
She argues for amendments that would:
- require the employer to hold a face-to-face meeting with the
employee before reaching a decision, specify a timeframe for
meeting then communicating a decision, and provide an effective way
to enforce the timetable
- restrict the grounds for rejecting employee requests
- provide for independent, accessible and effective review of
employer decisions, and
- ensure a review of the right to request provisions after three
years to establish its effectiveness and whether it should be
extended to all employees.[47]
This standard continues the AFPCS provision for the granting of
parental leave (maternity, paternity and adoption-related forms of
leave) provided by the WR Act as well as by predecessor federal
legislation since 1994. Clause 67 requires, as a
general rule, that an employee must have 12 months continuous
service (other than for accessing unpaid pre-adoption leave). A
casual employee employed on a systematic and regular basis over at
least a 12-month period prior to the expected date of birth of the
child is also entitled to unpaid parental leave.
The NES standard provides an enhancement whereby each parent is
entitled to up to an extra 12 months' unpaid parental leave in
connection with the birth or adoption of their child
(clauses 71 and 72).
Notice of an intention to take unpaid parental leave must be
provided to the employer at least 10 weeks before starting the
leave, if practicable (clause 74). The mother of a
child could take 12 months' leave at the time of the birth of a
child and then return to work, at which point the father
(alternatively, the other member of the employee couple [48]) could take 12 months
of unpaid leave. Where the family prefers, one parent could take a
longer period of unpaid leave up to an additional 12 months
(clause 76).
Clause 80 allows a female employee to take
special (unpaid) maternity leave due to a pregnancy related
illness. The rules as to the required notice to be given for the
taking of parental leave and the right of return to the position
occupied prior to the taking of parental leave remain largely
unchanged (clause 84).
As with the AFPCS standard, the NES standard provides for four
weeks' paid annual leave per year (clause 87).
Certain types of shift workers will be entitled to an additional
week making a total of five weeks' leave per year (clause
87(1)(b)), also provided currently under the AFPCS.
Subclause 87(2) specifies that annual leave
accrues during periods of the employee's service . An employee's
entitlement accrues progressively during a year of service
according to the employee's ordinary hours of work.
Service is defined as all periods of employment other than:
- unpaid leave (eg leave without pay or unpaid parental
leave)
- unpaid absence (other than community service leave)
- unauthorised absence (eg unprotected industrial action).
Clause 89 specifies that annual leave is not to
absorb public holidays. Clause 92 prohibits the
cashing out of annual leave for award/agreement employees except in
accordance with the subsequent clauses. Clauses 93
and 94 authorise the cashing out of annual leave
for award/agreement covered employees and award/agreement free
employees respectively.
Rules as to the taking of annual leave and the granting of such
by the employer remain broadly unchanged. An employer must not
unreasonably refuse to agree to a request by the employee to take
paid annual leave (subclause 88(2)).
This form of leave remains unchanged from that specified by the
WR Act except that carer's leave is no longer capped at 10 days per
year. This means that provided the rules for the taking of such
leave are satisfied and the employee has accrued the required
amount of personal leave covering the period of absence on carer's
leave, the employee is entitled to the payment for the leave so
taken. As with annual leave, an employee is not taken to be on
personal/carer s leave during a public holiday (clause
98). Award/agreement covered employees may cash out
personal leave (assuming the employer agrees) providing a balance
of 15 days remains (clause 101). Clause
102 provides an entitlement to 2 days unpaid carer s leave
for emergencies per permissible occasion. Similarly,
clause 104 provides employees with 2 days
compassionate leave for each permissible occasion. Clause
107 stipulates the notice and evidence requirements for
taking personal/carer s leave, while subclause
107(5) allows awards/agreements to also specify evidence
requirements.
Community service leave provisions feature in certain awards and
agreements, however the Bill elevates this form of leave as a
national standard. The Howard Government recognised community
service by preventing the dismissal of community service volunteers
(currently under the WR Act at paragraph 659(2)(i) and subsections
659(6) to 659(8)).
The community service leave provisions will provide employees
engaged in prescribed eligible community service activity
(clause 109) the right to unpaid leave for a
reasonable period so engaged (clause
108), which includes certain travel time. The proposed
standard sets out that an employee carries out a voluntary
emergency management activity if:
- the employee carries out an activity that involves dealing with
an emergency or natural disaster
- the employee carries out the activity on a voluntary basis
- the employee is a member of, or has a member-like association
with, a recognised emergency management body
either:
- the employee was requested by or on behalf of the body to carry
out the activity, or
- no such request was made, but it would be reasonable to expect
that, if the circumstance had permitted the making of such request,
it is likely that such a request would have been made.
To be entitled to leave the employee must comply with notice and
evidence requirements set out in the NES (clause
110). Notice must be provided to the employer as soon as
practicable and indicate the period or expected period of
absence.
Jury service is also classified under this standard as community
service leave and an employee, other than a casual employee, is
entitled to be paid by the employer for the first 10 days jury
service (clause 111). The amount paid by the
employer can be reduced by the quantum of jury service pay received
by the employee.
Clause 113 provides that non agreement
employees are entitled to long service in accordance with
applicable award-derived long service leave terms, and the Bill
does not exclude state and territory laws that deal with long
service leave (Clause 27). In conjunction with
other provisions of the Bill, the effect of clause 113 is to
prevent long service leave provisions being traded away in
agreement-making.
Clause 114 sets out the right of an employee to
be absent from work on a public holiday. An employer is entitled to
request that an employee work on a public holiday, if the request
is reasonable. Conversely, the employee may refuse the request to
work the holiday on the basis that the request is not reasonable or
if the employee's refusal to work is reasonable. This entitlement
will have the effect of protecting public holidays declared by
state and territory governments.
Clause 115 stipulates the following days as
public holidays:
- 1 January (New Year s Day)
- 26 January (Australia Day)
- Good Friday
- Easter Monday
- 25 April (Anzac Day)
- the Queen s birthday holiday (on the day on which it is
celebrated in a state or territory
- 25 December (Christmas Day)
- 26 December (Boxing Day), and
- any other day, or part-day, declared or prescribed by or under
a law of a State or Territory to be observed within the State or
Territory as a public holiday. Award/agreement employees may agree
on the substitution of a day that would otherwise be regarded as a
public holiday.
Clause 116 requires that an employee who is
absent from work on a public holiday is entitled to be paid for
his/her ordinary hours that would have been worked at their base
rate of pay (which includes incentive-based payments and bonuses,
loadings, monetary allowances, overtime or penalty rates, or any
other similar separately identifiable amounts). A note advises that
if an employee would not have worked any ordinary hours on the
public holiday, the employee is not entitled to be paid for the
public holiday.
|
Clause 117 provides that an employer shall not
terminate an employee s employment without prior written minimum
period of notice of the termination, determined in accordance with
the following table (or pay in lieu of notice):
|
|
Employee s period of continuous service with the employer
at the end of the day the notice is given
|
Period
|
| |
Not
more than 1 year
|
1
week
|
| |
More
than 1 year but not more than 3 years
|
2
weeks
|
| |
More
than 3 years but not more than 5 years
|
3
weeks
|
| |
More
than 5 years
|
4
weeks
|
Notice periods for the termination of an employee's employment
have been prescribed in federal legislation since 1997. The notice
periods proposed by this NES are the same as currently prescribed
under the AFPCS, with provision for payment in lieu of the
prescribed notice or a combination of written notice and payment in
lieu. However, subclause 117(2) provides that an
employer must not terminate an employee s employment unless they
have given the employee the necessary period of notice worked out
under subclause 117(3), or they have paid the
employee in lieu of that notice. The Explanatory Memorandum notes
that the intention of paragraph 117(2)(b) is
to impose on an employer that makes the payment
in lieu of notice, an obligation to pay either to (or for the
benefit of or on behalf of) the employee, everything which the
employee would have been entitled to receive had the employee
worked out the required period of notice.[49]
Clause 119 stipulates that an employee is
entitled to be paid redundancy pay according to the schedule of
payments below. The schedule of payments mirror the redundancy
payments prescribed in federal awards (since 2004).
| |
|
Employee s period of continuous service with the employer
on termination
|
Redundancy pay period
|
| |
At
least 1 year but less than 2 years
|
4
weeks
|
| |
At
least 2 years but less than 3 years
|
6
weeks
|
| |
At
least 3 years but less than 4 years
|
7
weeks
|
| |
At
least 4 years but less than 5 years
|
8
weeks
|
| |
At
least 5 years but less than 6 years
|
10
weeks
|
| |
At
least 6 years but less than 7 years
|
11
weeks
|
| |
At
least 7 years but less than 8 years
|
13
weeks
|
| |
At
least 8 years but less than 9 years
|
14
weeks
|
| |
At
least 9 years but less than 10 years
|
16
weeks
|
| |
At
least 10 years
|
12
weeks
|
An entitlement to redundancy pay is conditional on the employer
no longer requiring the job be done by anyone, except where this is
due to the ordinary and customary turnover of labour, or because of
the insolvency or bankruptcy of the employer.
There is no entitlement to redundancy pay where the employee is
employed by a business with fewer than 15 employees (including the
employee whose employment is terminated on the ground of
redundancy), or for employees with less than 12 months.
Where the employer arranges alternative employment for a
redundant employee, FWA will determine what pay if any is to apply
and may also reduce an entitlement on the grounds of the employer s
incapacity to pay (clause 120). Clause
122 deals with redundancy situations where businesses are
sold (transfer of business). An employee s service with a former
employer does not have to be recognised by the new employer.
However where previous service is not recognised by the new
employer the old employer will be required to pay out the employee
s redundancy pay.[50] Clause 123 sets out the employees
excluded from the notice of termination requirements (such as
casual employees and other classes).
A previous WR Act provision obliging employers to provide their
employees with a Fact Sheet outlining certain aspects of their
employment conditions was repealed by the Workplace Relations
Amendment (Transition to Forward with Fairness) Act 2008.
However the NES now include an obligation to provide employees with
a Fair Work Information Statement.
The Fair Work Information Statement will be determined and
published by FWA (clause 124) and will contain
information about:
- the NES
- modern awards
- agreement making
- workplace rights, eg the right of freedom of association,
and
- the role of Fair Work Australia.
It will be a requirement that an employer provide a copy of the
statement to each new employee as soon as practicable after they
commence employment. Such a requirement will not apply with respect
to existing employees (clause 125).
Other provisions allow for school-based apprentices/trainees to
receive allowances in lieu of certain leave (clause
126). Clause 127 allows regulations to be
made to allow awards or agreements to include terms which might be
contrary to the NES. Clause 128 allows
award/agreement free employees to agree on certain prescribed
matters under the NES. Clause 129 allows
regulations to be made to permit award/agreement free employees to
agree with employers over matters which might be contrary to the
NES. Regulations may also be made to limit the scope of such
agreements. Clause 130 prevents an employee from
taking or accruing any leave while receiving workers compensation
benefits.
Awards used to be both the cornerstone of Australia s wage
safety net and the focal point for over-award bargaining in turn
leading to enterprise agreements. They were made either by consent
or arbitration to settle industrial disputes in respect of
occupations and industries. In recent years they have become a
midlevel point of the wage and employment safety net, nesting
between the Australian Fair Pay Standard (now NES) and workplace
(now enterprise) agreements.
As a result of the expansion of the federal industrial system
from 2006, there are currently about 6,000 awards (including
related instruments). The Workplace Relations Amendment
(Transition to Forward with Fairness) Act 2008 commenced a
process to restructure the contents of awards and rationalize their
number. The award modernisation process began in April 2008 in
accordance with a request made to the AIRC by the Minister for
Education, Employment and Workplace Relations on 28 March 2008. The
AIRC is required to complete the process by 31 December 2009.
Rationalized awards will be called modern awards . The first 17
priority awards to be finalised under award modernisation were
published by the AIRC on 19 December 2008 but are not due to come
into effect until January 2010 (or thereafter). Award modernisation
is being undertaken in four stages each of which involves
pre-drafting consultations, the release of exposure draft awards,
further consultation on the drafts and the publication of modern
awards. The 17 modern awards will replace some 500 awards that
currently cover those industries and occupations.[51] The Stage 1 draft awards
are:
- Black Coal Mining Industry Award 2010
- Clerks Private Sector Award 2010
- Fast Food Industry Award 2010
- General Retail Industry Award 2010
- Hair and Beauty Industry Award 2010
- Higher Education Industry Academic Staff Award 2010
- Higher Education Industry General Staff Award 2010
- Horse and Greyhound Training Award 2010
- Hospitality Industry (General) Award 2010
- Manufacturing and Associated Industries and Occupations Award
2010
- Mining Industry Award 2010
- Pharmacy Industry Award 2010
- Racing Clubs Events Award 2010
- Racing Industry Ground Maintenance Award 2010
- Rail Industry Award 2010
- Security Services Industry Award 2010
- Textile, Clothing, Footwear and Associated Industries Award
2010
Clause 134 stipulates that the
modern awards objective requires FWA to ensure that modern awards,
along with the NES, provide a fair and relevant minimum safety net
of terms and conditions, taking into account:
- relative living standards and the needs of the low paid
- the need to encourage collective bargaining
- the need to promote social inclusion through increased
workforce participation
- the need to promote flexible modern work practices and the
efficient and productive performance of work
- the principle of equal remuneration for work of equal or
comparable value
- the likely impact of any exercise of modern award powers on
business, including on productivity, employment costs and the
regulatory burden
- the need to ensure a simple, easy to understand, stable and
sustainable modern award system for Australia that avoids
unnecessary overlap of modern awards, and
- the likely impact of any exercise of modern award powers on
employment growth, inflation and the sustainability, performance
and competitiveness of the national economy.
These points constitute the modern award objective.
Clause 135 allows award minimum wages only to be
varied for work value reasons or to remove ambiguities or correct
anomalies. Other provisions allow an annual wage review and award
reviews to be conducted every four years (see below).
Clause 136 circumscribes what may or may not be
included in awards.
Awards will build on the minimum entitlements guaranteed in the
NES. Under clause 139 modern awards will deal
with:
- minimum wages (including wage rates for junior employees,
employees with a disability and employees to whom training
1arrangements apply), and skill-based classifications and career
structures; and incentive-based payments, piece rates and
bonuses
- the type of employment, such as full-time employment, casual
employment, regular part-time employment and shift work, and the
facilitation of flexible working arrangements, particularly for
employees with family responsibilities
- arrangements for when work is performed, including hours of
work, rostering, notice periods, rest breaks and variations to
working hours
- overtime rates
- penalty rates, including for: employees working unsocial,
irregular or unpredictable hours; employees working on weekends or
public holidays and shift workers
- annualised wage arrangements that: have regard to the patterns
of work in an occupation, industry or enterprise; and provide an
alternative to the separate payment of wages and other monetary
entitlements; and include appropriate safeguards to ensure that
individual employees are not disadvantaged
- allowances, including expenses incurred in the course of
employment or responsibilities or skills that are not taken into
account in rates of pay and disabilities associated with the
performance of particular tasks or work in particular conditions or
locations, providing that all allowances are separately identified
(subclause 139(2)).
- leave, leave loadings and arrangements for taking leave
- superannuation
- procedures for consultation, representation and dispute
settlement.
Clause 140 allows the FWA to include terms in
awards relating specifically to the direct or indirect employment
and remuneration of outworkers by an outworker entity, if the
entity is aware that work is reasonably likely to be performed by
an outworker at the time work is arranged to be performed.
Clause 141 allows awards to contain
industry-specific redundancy schemes, where the redundancy scheme
was included in the award as a result of the modernisation process
provided that the scope of coverage is not increased.
Clause 142 allows awards to include incidental
terms for the purpose of making a term in a practical way and
machinery terms (title, content etc).
Certain terms must be included in awards. Clause
143 requires awards to express the coverage of a
particular award; the award may cover one or more
specified employee organisations. Employers and outworker entities
may be covered specifically by name or by inclusion in a specified
class. Employees must be specified by inclusion in a specified
class. Employees not traditionally covered by awards due to the
nature or seniority of their role must not be covered by modern
awards.
Back to top
Clause 144 requires awards to have flexibility
terms permitting employers and individual employees to negotiate
individual agreements on certain matters. According to Bill s
Explanatory Memorandum, a flexibility term must not require that
any individual flexibility arrangement be approved, or consented
to, by another person meaning that the flexibility term could not
require any individual flexibility agreement to be approved by a
trade union or employer association) (subclause
144(5)). The employer and employee must genuinely agree to
any individual flexibility arrangement, the arrangement must be in
writing and signed, and the employer must ensure that the
arrangement would result in the employee being better off overall
(paragraph 144(4)(c)).
Flexibilities available, for example, under the draft
Manufacturing and Associated Industries and Occupations Award have
been identified by Australian Business P/L. They identify the
following provisions which may be altered by individual
agreement:
- minimum engagement for part-time employees
- variation to hours of part-time employees
- minimum engagement for casuals
- annualised salary arrangement
- tool allowance
- make-up time
- meal break
- time off in lieu of for overtime
- rest period after overtime
- rest break.
The following provisions
may be altered by either a majority agreement or by individual
agreement:
- period of casual election to convert to on-going
employment
- payment of wages
- ordinary hours of work for day workers on weekends
- variation to the spread of hours for day workers and shift
workers
- methods of arranging ordinary working hours
- working in excess of five hours without a meal break
- substitution of public holidays.
Provisions that may be changed by both the employer and the
majority of employees in the establishment, or a section or
sections within a workplace, include:
- ordinary hours of work, continuous shift workers
- ordinary hours of work, non-continuous shift workers
- 12-hour shifts
- public holiday shifts
- conversion of annual leave to hourly entitlement
- annual close down. [52]
As can be seen, most of these flexibility provisions relate to
the method of working ordinary hours within a workplace.
Nevertheless, in certain sectors, particularly in retailing, trade
association representatives have warned of significant lay-offs
amid mounting concerns the new awards will lead to higher costs for
employers. The WA Independent Grocers Association and Master
Grocers Australia, for example, have claimed that:
many employees, particularly casuals, faced
inevitable unemployment after the award increased Sunday penalty
rates and casual loadings in most States.[53]
However these concerns appear to overlook the ability under the
Bill to phase out state-based differences over a five year period
(see below), as well as the award in question not coming into
effect until at least January 2010.
Clause 145 deals with the situation where an
individual flexibility arrangement does not meet a requirement of
clause 144. In this situation, the arrangement still has effect as
if it were an individual flexibility arrangement, but can be
terminated by the employee giving 28 days notice, as well, the
employer may be liable to a civil remedy penalty for contravention
of an enterprise flexibility term. Clause 146
requires awards to include terms for settling disputes about any
award matter or in relation to the NES. Clause 147
requires awards to specify ordinary hours of work for each
classification of employee covered and each type of employment. If
the award includes piecework and pieceworkers, the award must
specify base and full rates of pay (clause 148).
Clause 149 allows the FWA to vary allowances when
wage rates in the award are varied, where considered appropriate to
vary.
The following clauses deal with terms that must not be included
in awards:
- objectionable terms meaning terms which offend the Bill s
general protections to employers and employees (Part 3) or the
payment of bargaining services fee (clause
150)
- terms including unreasonable payments and deductions
for the employer s benefit (other deductions from employees pay are
authorised by the Bill); or unreasonable terms in relation as to
how employees spend their remuneration (clause
151)
- terms about right of entry (clause 152)
- terms that are discriminatory, other than those required for a
particular position and other than those made in connection with an
institution conducted according religious tenets (clause
153)
- terms that contain State-based differences, allowing for a 5
year transition period to remove such differences (clause
154)
- terms that deal with long service leave, in anticipation that
the NES will be developed to include terms on such leave
(clause 155).
The Bill requires FWA to review modern awards every four years
(clause 156). At this time, FWA may make new
awards, or vary or revoke existing awards. During these reviews,
FWA may vary minimum wages in awards only if this is justified for
work value reasons. FWA may create, vary or revoke modern awards
outside the four year review period if it considers this is
necessary to achieve the modern awards objective (clause
157), to update the names of employers, organisations or
outworker entities bound by the awards (clause
159), to remove ambiguity or uncertainty or correct an
error (clause 160), or if the award is referred to
it under the Human Rights and Equal Opportunity Commission Act
1986 (clause 161).
Clauses 162 to 168 deal with
specific aspects of the FWA s powers relating to awards. These are
in addition to those specified in Chapter 5 of the Bill.
Clause 163 directs the FWA not to restrict award
coverage unless satisfied that the relevant employers and employees
will be covered by another award; and in the possibility of making
a new modern award, to ascertain whether an existing modern award
could have its coverage extended. Also a modern award cannot cover
an organisation unless the relevant organisation is entitled to
represent the employers or employees industrial interests.
Clause 164 prevents FWA from revoking a modern
award unless it has become obsolete and those covered by the award
are covered by another award. Clause 165 specifies
that award determinations (other than wage determinations) come
into effect, mainly, on the day after the determination is made.
FWA may make retrospectively only in certain circumstances.
Clause 166 requires determinations affecting award
minimum wages to have effect from 1 July in the next financial
year, unless FWA considers another date appropriate. A
determination may be made to apply retrospectively to correct
errors etc or where there are exceptional circumstances .
Clause 167 provides an immunity to a person who
has contravened a retrospective term. Clause 168
requires awards to be published.
Modern awards will not apply to high income employees
(Clause 47(2)) with a guarantee of annual earnings
(Clause 329) above a certain amount ($100,000,
indexed from 27 August 2007).[54] The concept of a guarantee of annual earnings is
discussed below. High income employees will still be covered by the
NES.
Part 2 4: Enterprise Agreements
This Part of the Bill facilitates the making of enterprise
agreements through collective bargaining, primarily at the
enterprise level. Clause 171 sets out the
objectives of the Part which, inter alia, include providing a
simple, flexible and fair framework that enables collective
bargaining in good faith at the enterprise level, and allowing FWA
to make orders for this end as well facilitating prompt approval of
agreements.
Enterprise agreements may be made about matters pertaining to
the relationship between employer and employee; employers,
employees employer organisation and employee organisations;
deductions from wages authorised by an employee under an agreement
and about how the agreement will operate (subclause
172(1)).
Collective agreements may be made as either single-enterprise
agreements (subclause 172 (2)), multi-enterprise
agreements (subclause 172(3)) or greenfields
agreements if the agreement relates to a genuine new enterprise
(subclause 172(4)). Greenfields agreements can
only be made with employee organisations, before the employer
employs any employees. Single and multi-enterprise agreements can
be made as greenfields agreements. The enterprise must be new , not
an existing enterprise acquired as a going concern (refer to
definition in clause 12).
Unlike agreements under the WR Act, there is no distinction made
between union agreements and employee (non union) agreements.
Enterprise agreements thus appear to resemble previous non union
agreements, i.e. made with employees, and if a union is involved it
is as a bargaining agent (not party principal). A union may apply
to FWA to be covered (clause 183). These
arrangements have been used previously with non union agreements
where a union has members; reflected, for example, in respect of a
2001 employee section 170LK certified agreement applying to the
Department of the Senate. There, the relevant union was able to be
bound under the terms of the agreement:
in accordance with s.170M of the Workplace
Relations Act 1996 (the Act), the Commission hereby orders that the
CPSU, the Community and Public Sector Union, is bound by the
Department of the Senate Certified Agreement 2001 - 2003.[55]
An employer that will be covered by a proposed enterprise
agreement that is not a greenfields agreement must take reasonable
steps to give notice of the right to be represented by a bargaining
representative to each employee within 14 days of the
notification time (which inter alia includes the time when
the employer agrees to or initiates bargaining). Clause
174 sets out the contents requirements for
representational rights notice which allow an employee to appoint a
bargaining agent and where such appointment is not made and the
employee is a member of an employee organisation, that organisation
automatically becomes the bargaining agent. Clause
175 requires relevant employee organisations to
be given notice of an employer s intention to make a greenfields
agreement. Clause 176 sets out persons who are
bargaining representatives for enterprise agreements which include:
the relevant employer, employee organisations which have members
and are entitled to represent those members, a person appointed by
an employee or by the employer. Clause 177 sets
out the appointment of bargaining representatives for greenfields
agreements. Clause 178 stipulates that an
appointment of a bargaining representative comes into force as
specified in the instrument of appointment. Clause
179 prevents employers or their representatives from
refusing to recognise other representatives.
An employer may request the employees to approve an agreement by
voting for it (clause 181). This request must not
be made until at least 21 days after the day on which the employer
gave notice of the employees representational rights. Before an
employer requests that employees approve an enterprise agreement,
it must take all reasonable steps to ensure that for a period of
seven days the employees are given a copy of or access to the
agreement (clause 180). The employer must also
notify the employees of the time and place at which the vote will
occur and what voting method will be used. The employer must take
all reasonable steps to ensure that the terms of the agreement and
the effect of those terms are explained to the employees
(subclause 180(3)). This explanation must be
provided in an appropriate manner, taking into account the
particular circumstances and needs of the relevant employees. These
needs include culturally and linguistically diverse backgrounds,
youth and the absence of a bargaining representative.
An enterprise agreement is made when a majority of employees
vote to approve the agreement. A multi-enterprise agreement is made
when a majority of employees of one of the employers covered by the
agreement vote to approve the agreement. A greenfields agreement is
made when it is signed by the employer and each union that will be
covered by the agreement (clause 182).
Clause 184 allows a multi-enterprise agreement
which did not receive support from a majority of employees of the
employers it was designed to cover, to be varied so that it applies
only to those employers and employees who supported the
agreement.
After an enterprise agreement is made, an employee organisation
that was a bargaining representative may give FWA a written notice
stating that it wants the agreement to be approved (clause
183). This application must be accompanied by a signed
copy of the agreement and any declarations (eg that the agreement
has been genuinely agreed to by the employees covered by it) that
are required by the procedural rules to accompany that application
(clause 185). Clause 185 requires
the application to be made within 14 days after the agreement is
made; it also requires the agreement to specify its nominal expiry
date (being not more than four years from the approval date); the
FWA to be satisfied that the terms of the agreement do not
contravene the NES; that it does not contain unlawful terms and
that the group of employees to be covered by the agreement were
fairly chosen (clause 186).
Clause 187 stipulates additional requirements
for approval such as the FWA being satisfied that employees have
genuinely agreed to the terms of the proposed agreement, while
clause 188 stipulates that the FWA must not
approve the agreement if there are reasonable grounds to believe
that the agreement was not genuinely agreed to. FWA may refuse to
certify an agreement if it considers that compliance with the
agreement may result in a breach of a Commonwealth law
(clause 192).
Clause 189 enables the FWA to approve an
agreement which does not pass the better off overall test,
if because of exceptional circumstances, approval of the agreement
would not be contrary to the public interest. These might include
the agreement being a part of a reasonable strategy for revival of
an enterprise from a short term crisis. FWA may also approve an
agreement under clause 190 where it does not meet
certain provisions under clauses 186,187 and 189 where the employer
gives undertakings to the FWA to remedy or address the perceived
shortcomings of the proposed agreement. Note that the undertakings
are taken to be a term of the agreement (clause
191).
FWA will approve the agreement if it is satisfied that the
agreement has been genuinely agreed to by the employees
(clause 186) and it passes the better off
overall test in respect of each employee (clause
193). There are additional requirements in relation to
multi-enterprise agreements. An enterprise agreement passes the
better off overall test if FWA is satisfied, as at the test
time, that each award-covered employee (and prospective
award-covered employee) would be better off overall if the
agreement applied than if the applicable modern award applied to
the employee. The test time is the time the application for
approval of an agreement is made. Enterprise agreements come into
effect seven days after FWA approval.
Clause 194 specifies enterprise agreement terms
that are unlawful. These include:
- a discriminatory term as defined in clause 195. Under
clause 195 a term is a discriminatory term where
it discriminates against an employee covered by the agreement
because of, or for reasons including, the employee s race, colour,
sex, sexual preference, age, physical or mental disability, marital
status, family or carer s responsibilities, pregnancy, religion,
political opinion, national extraction or social origin. Exceptions
are made in relation to the inherent requirements of the
employment, requirements due to religious beliefs and certain wage
arrangements (such as those for juniors, trainees and those with
disabilities).
- an objectionable term (as defined in clause 12)
- a term giving an unfair dismissal remedy to an employee who
otherwise has not completed the applicable minimum employment
period
- a term which excludes or modifies the application of the unfair
dismissal provisions in Part 3 2
- a term which is inconsistent with a provision of Part 3 3
(industrial action)
- certain terms which may be inconsistent with the right of entry
of Part 3 4, however other right of entry terms may be permitted,
such as entry to assist in dispute resolution.
These are the provisions which unions and the ACTU in
particular, have criticised:
The government has broken its election promise
to allow free bargaining , particularly by prohibiting bargaining
for better unfair dismissal rights, better union entry rights, and
by prohibiting parties from agreeing to reserve certain matters for
future bargaining. In particular, the restriction on bargaining
better union entry rights:
- undermines employees fundamental right to representation
- is uncertain (since it is not clear which purposes a union can
enter a workplace for)
- will undermine genuine bargaining (since making a claim that is
honestly thought to be lawful, but which turns out not to be so,
will prevent a party from obtaining FWA orders, taking protected
industrial action, or having an agreement approved), and
- will force parties to enter into side deals (which are
inefficient, and do not give parties sufficient certainty that
their rights are enforceable).[56]
Clauses 196 to 200 set out
additional approval requirements in respect of shiftworkers,
pieceworkers, school-based apprentices and trainees and outworkers.
Clause 201 requires the FWA to note that the
agreement includes both a model flexibility term and a model
consultation term (to be developed in the Bill s regulations), that
the agreement covers an employee organisation where it has applied
to be covered and to note where employer undertakings have been
accepted.
Enterprise
agreements must include:
- a flexibility term - enabling the employer and an employee to
genuinely agree on arrangements which vary the effect of the
agreement, providing that term leaves the employee better off
overall (clauses 202 and 203).
Clause 204 sets out protections and remedies to an
employee, where a flexibility term is agreed to but does not meet
the requirements of clause 203.
- a consultation term - requiring the employer to consult the
employees about major workplace changes (clause
205).
Clause 206 stipulates that an agreement s base
rate of a pay is not to be less that the applicable modern award
rate or the national minimum wage order rate.
Provisions of clause 207 provide that an
employer or all of the employers in the case of a multi-employer
agreement can make a variation with affected employees, providing
the agreement has already met the BOOT test and the variation is
approved by FWA. Clause 208 allows an employer to
request employees to vote on the variation (by a range of methods).
Clause 209 stipulates that a variation takes
effect on the date of approval, however a multi-enterprise
agreement cannot be varied on an enterprise by enterprise basis,
but must be approved by a majority of employees in each of the
enterprises. A representative of any of the employer, employees or
organisation must apply to FWA to approve the variation within 14
days of the variation s agreement (clause
210).
Clause 211 sets out similar rules to the
approval of variations as to the approval of agreements that is,
the variation must pass the BOOT test, employees must have
genuinely agreed but any existing individual flexibility
arrangement will be disregarded by FWA. Clauses
212 and 213 allow for variations to be
approved subject to undertakings of the employer being provided,
with such undertakings being taken to be terms of the variation.
Clause 214 allows FWA to refuse to authorise a
variation where it potentially involves a breach of a Commonwealth
law. A variation comes into operation on the day specified in the
approval (clause 216). Clause 217
allows an application to be made to FWA to vary an agreement to
remove an ambiguity. Clause 218 allows the Sex
Discrimination Commissioner to make a submission to FWA alleging
that an enterprise agreement term requires a person to do an
unlawful (discriminatory) act and for FWA to correct the
agreement.
Agreements can be terminated when an employer (or all employers
in the case of multi-enterprise agreements) and a majority of
employees covered by the agreement vote to terminate it
(clause 219). In the case of terminating a
greenfields agreement, the enterprise would have actually had to
employ person/s before the termination can be approved.
Clause 220 allows employers to request employees
to terminate an agreement providing certain formalities such as
notice about the termination are met. Clause 221
stipulates the form of agreement required for its termination and
clause 222 allows a bargaining agent then to make
an application to the FWA. FWA must terminate the agreement having
ascertained that the required formalities have been met
(clause 223), with the termination taking effect
on the date specified in the decision (clause
224). Clauses 225 to 227
deal with the termination of an agreement beyond its nominal expiry
date, allowing FWA to terminate such an agreement where it is not
contrary to the public interest.
Bargaining representatives (for both employers and employees)
must meet good faith bargaining requirements (clause
228). If an existing enterprise agreement is in operation,
a bargaining representative cannot be required to comply with the
good faith bargaining requirements if it is more than 90 days
before the nominal expiry date of the current agreement
(subclause 229(3)).
Good faith bargaining requires bargaining agents to:
- attend at and participate in meetings at reasonable times
- disclose relevant information (other than confidential or
commercially sensitive information) in a timely manner
- respond to proposals in a timely manner
- give genuine consideration to proposals and reasons for
responses to those proposals, and
- refrain from capricious or unfair conduct that undermines
freedom of association or collective bargaining.
However, these requirements do not require a bargaining
representative to make any concessions or reach any agreement.
If a bargaining representative does not meet these requirements,
or bargaining is being thwarted or delayed, another bargaining
agent may apply to FWA to make a bargaining order
(clause 229). Bargaining orders must specify a
variety of matters including the actions to be taken to comply with
good faith bargaining obligations (clause 231).
Clause 232 addresses the operation of a bargaining
order and the circumstances for its revocation. Failure to comply
with an order exposes a bargaining representative to court orders
for contravening a civil remedy provision (clause
233). FWA can exclude certain parties from bargaining and
require multiple bargaining representatives of employees to appoint
one of them to represent the others. If non-compliance with a
bargaining order is sustained, another bargaining representative
may apply for a serious breach declaration
(clauses 234 and 235).
If an employer is not prepared to bargain, a bargaining
representative of the employees can apply (under clause
236) to FWA for a majority support determination
that a majority of the employees who will be covered by the
agreement want to bargain with the employer (clause
237). If an employer ignores this determination, another
bargaining agent may apply to FWA for a bargaining order (as
above).
If a bargaining representative for a single enterprise agreement
believes that the bargaining is not proceeding efficiently or
fairly because the proposed agreement will not cover all
appropriate employees or will cover inappropriate employees, that
representative can apply to FWA for a scope order
(clause 238). Scope orders will specify the
employees to be covered by the proposed agreement. Breach of a
scope order risks an application for a bargaining order
(clause 239). Clause 240 allows a
bargaining agent to apply to FWA for assistance in disputes over
single enterprise bargaining. In the case of multi-enterprise
bargaining, all bargaining agents will need to support such an
application (other than where a low-paid authorisation is in
operation).
The Bill provides access to a separate multi-employer bargaining
stream for the low-paid. The Bill does not define low-paid, however
the Bill s Explanatory Memorandum refers to certain employees in
the community services sector and the cleaning and child care
industries who might access this stream.[57]
Bargaining representatives may apply on behalf of employers or
employees for a low paid authorisation which will allow for FWA to
facilitate bargaining for a specified list of employers
(clause 242). FWA will consider a range of factors
to determine if the proposed bargaining is in the public interest
(clause 243). These factors include the history of
bargaining in the industry where the employees work and whether the
granting of the authorisation would assist in identifying
improvements to productivity and service delivery at the
enterprises to which the agreement relates. FWA will be able to
facilitate bargaining in this stream by the use of compulsory
conferences and good faith bargaining orders which would not
otherwise be available in multi employer bargaining. Protected
industrial action will not be available. FWA must take account of
the views of employers and employees who will be covered by the
agreement and the extent to which the applicant is prepared to
respond reasonably to the needs of individual employers (i.e.
prevent pattern bargaining ).
Clause 244 allows FWA to vary a low-paid
determination to remove or add employers to the determination.
Clause 245 allows FWA to remove an employer from a
low-paid determination when an enterprise agreement or workplace
determination comes into effect and clause 246
allows FWA to provide appropriate assistance to the parties.
Clause 247 enables the Minister to make a
declaration that two or more employers (for example franchisees)
may bargain together for a proposed enterprise agreement. The
employers specified in the declaration may apply under
clause 248 to FWA for a single interest
authorisation. FWA must make such an authorisation under
clause 249, while clause 250
specifies the content of such an authorisation, and clauses
251 and 252 allows for variations either
to add or remove employers or to extend the period of the
authorisation.
Clause 253 stipulates that non permissible and
unlawful terms of an agreement have no effect. Clause
255 prevents the FWA from making orders concerning the
inclusion or exclusion of certain content from agreements or on the
approval process for agreements. Clause 257
enables agreements to include documents as in force from time to
time, such as extracts from modern awards or other laws.
Note that it is the Bill s low paid bargaining provisions which
has attracted strong criticism from employer organisations. For
example, the Australian Industry Group claims:
The low paid bargaining stream, which would
have the effect of reintroducing compulsory arbitration, would
undermine Australia s enterprise bargaining system and add a
further layer of arbitrated employment conditions above the safety
net. It should be scrapped. [58]
The current WR Act introduced new provisions (Division 8 of Part
9) allowing the Minister for Education, Employment and Workplace
Relations to issue a Declaration where protected industrial action
threatened life, personal safety, health or welfare of the
population or was likely to cause significant damage to the
economy. The Declaration terminates the bargaining period and
authorises the Minister to issue directions to ameliorate the
threat to essential services. Such directions might include:
requiring employees to lift work bans or return to work and
requiring the employer to allow employees back onto the worksite in
the case of a lockout. A Declaration allows the AIRC to make a
Workplace Determination. These provisions relating to the making of
binding determinations were similar to the previous powers of the
AIRC to make awards under subsection 170MX of the WR Act (prior to
the Work Choices amendments) and so had been a feature of the
federal industrial legislation over the 1990s. In any case, use of
these determinations has been very limited, with two applications
lodged and one determined in 2007-08.[59]
Clause 260 allows that an application may be
made to the FWA (Full Bench[60]) for a low-paid workplace determination. These
determinations may be made as consent low-paid
determinations or special low paid determinations
depending on the bargaining stream and are available where an
low-paid authorisation is in force, and one or more of the
bargaining representatives are unable to agree about the terms that
should be included in the agreement. Requirements for the FWA s
approval set out in clause 262 are that:
- the bargaining representatives are genuinely unable to reach
agreement on the terms of the proposed enterprise agreement and
there is no reasonable prospect of agreement being reached.
- at the time of the application, the terms and conditions of the
employees who will be covered by the determination were
substantially equivalent to the minimum safety net of terms and
conditions provided by modern awards together with the NES in other
words, the employees are paid at or just above the safety net.
- the FWA is satisfied that the determination will promote
bargaining for a future enterprise agreement and will assist
productivity and efficiency in the enterprises concerned and it is
in the public interest to make the workplace determination.
Additional requirements set out in clause 263
are that the relevant employer is not also included in a consent
low-paid workplace determination application, or is not covered, or
previously has not been covered by an enterprise agreement, or
another workplace determination, appropriate to the work to be
performed by the employees. Clause 264 stipulates
the core terms, the mandatory terms, the agreed terms and any other
pertinent term to be included in a low-paid determination, while
clause 265 prevents other matters being
included.
Industrial action related workplace determinations
(IARWD) relate to and may follow the termination of protected
industrial action either by the FWA for reasons that the action was
causing significant economic harm to the parties or to the
Australia economy or the Minister made a declaration.
Clause 266 provides that the FWA must make an
IARWD at the end of the post-industrial action negotiating period
where a termination of industrial action instrument (either an FWA
order under clause 423 or clause
424, or a Ministerial declaration under clause 431) and
the bargaining representatives have not settled all of the
bargaining matters. The post-industrial action negotiating period
is the period that starts on the day on which the termination of
industrial action instrument is made and ends either 21 days after
that day, or if FWA has extended the period under subclause
266(4), then 42 days after that day.
Clause 267 sets out the core terms, the
mandatory terms, the agreed terms and any other pertinent term
which can be included in an IARWD. Clause 268
prevents other terms being included.
Clause 269 requires the FWA to make a
bargaining-related workplace determination soon after the end of
the post-declaration negotiating period being the period that
starts on the day on which the serious breach declaration is made
and ends either 21 days after that day, or if FWA has extended the
period under subclause 269(3), then 42 days after
that day, if a serious breach declaration has been made and
bargaining issues are still outstanding. Clause
270 sets out the core terms, the mandatory terms, the
agreed terms and any other pertinent term which can be included in
a bargaining-related workplace determination, and which parties the
determination will cover. Clause 271 prevents
other terms than those expressed in clause 270 being included in a
determination.
Core terms specified in clause
272 include a date as the determination s nominal expiry
date, which must not be more than four years after the date on
which the workplace determination comes into operation, and terms
which would pass the BOOT test. Unlawful etc terms are not core
terms.
Mandatory terms specified in clause
273 include a procedure for settling disputes about any
matters arising under the determination and in relation to the NES,
a model flexibility term and a model consultation term.
Agreed terms are set out in clause
274 and are those agreed by the bargaining representatives
to be included in the workplace determination.
Other terms set out in clause
275 are those FWA considers necessary to the determination
and may relate to the merits of issues, interests of employer and
employees, productivity improvement measures and certain
others.
Clause 279 provides that, subject to exceptions
specified in the clause, the Bill applies to a workplace
determination as if it were an operative enterprise agreement. A
workplace determination operates from the day it is made
(clause 276). It terminates according to either
clause 224 or clause 227, as these are applied by clause 279. Under
clause 277 a workplace determination covers an
employer, employee or employee organisation if the determination is
expressed to cover the employer, employee or employee organisation,
or where a provision of the Bill, and FWA order or court order has
the effect that the determination covers the employer, employee or
employee organisation. Clause 278 specifies that
where an earlier determination applies to an employee and an
enterprise agreement or a later determination comes into operation,
the earlier determination ceases to apply.
Clause 280 stipulates that a person must not
contravene a workplace determination (subject to a civil remedy).
Clause 281 allows an application for a workplace
determination to be made by one bargaining representative of an
employer providing other employer representatives have agreed.
Where a single interest employer authorisation is in place, in
relation to the proposed enterprise agreement, the representative
specified in the authorisation may make the application.
This Part of the Bill specifies the objectives of minimum wage
setting as applied to employees under modern awards and those
without award coverage (under the NES). The minimum wage functions
of FWA set out here relate to provisions setting up FWA under
Chapter 5.
Clause 284 sets out the Bill s minimum wage
objectives. The minimum wages objective requires FWA to establish
and maintain a safety net of fair minimum wages, taking into
account: the performance and competitiveness of the national
economy, including productivity; business competitiveness and
viability; inflation and employment growth; promoting social
inclusion through increased workforce participation; relative
living standards and the needs of the low paid; the principle of
equal remuneration for work of equal or comparable value; and
providing a comprehensive range of fair minimum wages to junior
employees, employees to whom training arrangements apply and
employees with a disability. Modern award minimum wages are defined
as wage rates in modern awards including wage rates for junior
employees, trainees and employees with disabilities as well as:
casual loadings and piece rates. FWA is given the power to
set or vary these rates.
Clause 285 requires FWA to conduct annual wage
reviews each year to review modern award minimum wages (as defined
in subclause 284(3)) by making one or more
determinations to set, vary or revoke modern award minimum wages
and FWA must also review the national minimum wage order and must
make a new national minimum wage order in each annual wage review.
Clauses 286 and 287 specify when
annual wage review determinations come into effect for modern
awards and minimum wage orders, which is generally from 1 July the
next financial year.
Clauses 289 to 292 address the conduct of
annual wage reviews. Reviews are open to everyone to make
submissions; these must be published and submitters may comment on
the submissions of others. In other words the conduct is not of a
court but more similar to the pay scale reviews currently conducted
by the Australian Fair Pay Commission. FWA may commission and must
publish any research. Any new wage rates must be published by 1
July each year.
Clause 293 stipulates that employers must not
contravene minimum wage orders. Clause 294
stipulates the content of a national minimum wage order which goes
to: the national minimum wage and special national minimum wages
for all award/agreement free employees where they are:
junior employees, trainees and employees with disabilities. The
order must also include the casual loading for award/agreement free
employees. Also, the order must oblige employers to meet the rates
stipulated in the order. Wage rates must be expressed as hourly
rates while the casual loading must be expressed as a percentage.
Clause 296 prevents a national minimum wage order
from being varied except to remove ambiguity or uncertainty or to
correct an error. Where this occurs, clause 298
ensures that a person who has contravened a term of the national
minimum wage order or an enterprise agreement due to a
retrospective amendment of a national minimum wage order under
clause 297 is not liable to pay a penalty in
respect of the contravention. Clause 299 provides
that a national minimum wage order operates until replaced by the
next national minimum wage order.
Clause 302 allows FWA to make an equal
remuneration order, where it considers appropriate to ensure equal
remuneration for men and women workers for performing work of equal
or comparable value in relation to the employees to whom the order
will apply. Such orders can only be made on application from an
employee, and employee organisation or the Sex Discrimination
Commissioner. Any order must not provide for a reduction in an
employee s rate of remuneration (clause 303), and
it may be implemented in stages (clause 304).
Business outsourcings involving the transfer of employees will
result in industrial instruments transferring from the employer to
the new service provider. As the Bill s Explanatory Memorandum
states:
The circumstances in which a transfer of
business occurs under Part 2-8 are broader than those contemplated
by the current transmission of business provisions contained in
Part 11 of, and Schedule 9 to, the WR Act.[61]
The Bill introduces a new test for determining when, (under new
terminology), a transfer of business occurs for the
purposes of determining whether industrial instruments transmit to
a new employer. It provides a definition of transfer of business
and allows for the circumstances in which a transfer of business
can occur. It also sets out the definitions of old employer, new
employer and transferring work.
The new test (clause 311) provides that an
industrial instrument will transfer to the new employer where an
employee has been terminated by the old employer and
within three months is re-employed by the new employer,
and there is a connection between the old and new employer as
provided for in subclauses 311(3) to
(6). These provisions go to a transfer of assets,
outsourcing or a cessation of an outsourcing arrangement
(insourcing) or where the new employer is an associated entity of
the old employer or a transfer between related companies. A further
requirement is that the work (the transferring work) the
employee performs for the new employer is the same, or
substantially the same, as the work the employee performed for
their old employer (paragraph 311(1)(c)). The new
test focuses on there being a similarity in the work performed by
employees, rather than looking at whether a business (or part of a
business) has been transferred as is currently the case.
Clause 312 stipulates transferable
instruments which include an enterprise agreement, a workplace
determination and a named employer award . Clause
313 binds the transferable instrument that covered an old
employer and a transferring employee immediately before that
employee s employment was terminated and covers the new employer
and the transferring employee in relation to the transferring work.
This instrument displaces any other instruments applying to the new
employer. Clause 314 enables the transferable
instrument to cover other employees than those transferred subject
to an FWA order. Clause 315 enables a employer and
employee organisation to be covered by a named employer award (or
enterprise agreement). Clause 316 obliges a new
employer to meet a guarantee of earnings provided by the former
employer except in relation to the part of the guaranteed period
before the transferring employee became employed by the new
employer and to the extent that it requires the new employer to pay
an amount of earnings at a higher rate than the annual rate of the
guarantee of annual earnings. Clause 318 provides
that FWA may make orders in relation to a new employer and a
transferring employee and applicable instruments, as well as
setting who may make applications for such orders. Clause
319 enables the FWA to make orders in relation to a new
employer and a non-transferring employee and applicable
instruments, as well as setting out who may make applications for
such orders. Clause 320 permits FWA to vary a
transferable instrument to remove terms that are not or will not be
capable of meaningful operation because of the transfer of business
to the new employer.
Clause 323 requires employers to pay employees
any amounts payable to the employees in relation to the performance
of work in full (except as permitted by clause 324), in money and
at least monthly.
Clause 324 contains provisions regulating
permitted deductions from employee remuneration payments.
The provisions require any deductions to be authorised in writing
and principally for the employee s benefit. Note however clause 151
which provides that a term of an enterprise agreement, award or a
contract of employment will be of no effect to the extent that it
permits deductions from an employee's remuneration if the deduction
is directly or indirectly for the benefit of the employer.
Clauses 325 and 326 prevent
employers from directing employees as to how they might spend their
earnings and is unreasonable in the circumstances.
The Bill provides employees with an ability to enter into a
guarantee of annual earnings agreement with high income
employees (clause 328). The Explanatory Memorandum
proposes that the high income threshold amount will be
$100,000 subject to indexation from 27 August 2007, and to be
expressed by regulation.[62]
Clause 330 defines a guarantee of annual
earnings to be a written undertaking given by an employer to an
employee who is covered by a modern award, which guarantees the
employee payment of earnings over a period of 12 months or more, in
return for the performance of work by the employee. An employee
must be covered by a modern award that is in operation in order to
be employed on the basis of a guarantee of annual earnings, but not
an enterprise agreement. The employer and employee must reach
agreement about the undertaking and the employee s acceptance of
the undertaking before it commences operation, and no later than 14
days after the employee is employed, or the parties agree to vary
the employee s terms and conditions of employment.
Modern awards will not apply to employees who have entered into
such agreements (see clause 47). Clause 332
specifies the earnings that are to be included when making this
calculation. The earnings do not include payments which cannot be
determined in advance (some examples are: commissions, incentive
based payments and bonuses and overtime, unless the payment is
guaranteed), and compulsory superannuation contributions.
Back to top
Chapter 3: Rights and responsibilities
Part 3 1 of the Bill is notable in that it
consolidates, and in some cases, expands a number of previously
substantive protections into one Part. It has been commended for
rationalising and streamlining the various prohibitions on
discriminatory or wrongful treatment into a single set of general
protections .[63]
Part 3-1 will contain general protections dealing
with workplace and industrial rights, including freedom of
association, protection against discrimination, unlawful
termination and sham arrangements in respect of independent
contractors.
Clauses 335 and clauses 337 to
339 set out how Part 3-1 would apply and are
complex. The constitutional basis is different to the main
provisions of the Bill which regulate the rights and obligations of
national system employees and employers. Instead, in Part 3 1, the
terms employer and employee have their ordinary meaning
(clause 335). Part 3-1 then regulates the conduct
of all employers and employees (and a range of other persons and
entities such as independent contractors and industrial
associations) but only to the extent where the conduct is connected
to the constitutional powers that support the main provisions of
this Bill (eg the corporations power or the Territories power)
(clause 338).[64]
Clauses 340 to 345 deal with
protections of work place rights. A workplace right is defined in
clause 341 and includes:
- a person s entitlements, benefits, responsibilities under a
workplace law or workplace instrument[65],
- a person s ability to initiate or participate in proceedings or
a process under workplace laws and instruments examples of such
proceedings include: court action or conference proceedings;
protected industrial action; and making an enterprise agreement
(subclause 341(2))
- the ability to make a complaint or inquiry to certain persons,
including the person s employer or the Workplace Ombudsman.
Significantly, subclause 341(3)
provides that prospective employees are in most cases also
taken to have these workplace rights.
Clause 340 prohibits a person (including an
employer, employee and industrial association) from taking
adverse action against another person who has, or
exercises, a workplace right , or preventing the exercise of a
workplace right by another person.
The new concept of adverse action is central to a
number of the substantive protections in this Part including
workplace rights, industrial activities and discrimination in
employment.
Adverse action is defined broadly in clause
342 to include a wide range of actions which vary
according to the nature of the workplace relationship between the
persons (for example: action by an employee against their employer;
action by a prospective employer against a prospective employee;
action by a union against a person; actions by a principal against
an independent contractor; and action by an independent contractor
against its contractors or employees).
Subclause 342(1) contains a table setting out
circumstances in which a person takes adverse action
against another person. The circumstances include for example
where:
- an employer dismisses the employee, discriminates
against the employee, injures them to their detriment, or alters
the employee s position to their prejudice
- a prospective employer refuses to employ or
discriminates against a prospective employee in the terms and
conditions being offered
- an employee ceases work in the service of the employer
or takes industrial action against an employer
- where an industrial association or one of its officers
takes industrial action against a person, or prejudices the person
s employment
- in the case of independent contract arrangements:
where a principal terminates an independent contractor s contract
or refuses to supply goods or services to the independent
contractor; or where an independent contractor ceases work under
the contract.
Subclause 342(2) further broadens the meaning
of adverse action to include threatening to take adverse action and
organising such action for example, adverse action could include an
employer threatening to dismiss an employee. Subclause
342(3) provides that action is not adverse action if it is
authorised by or under this Bill, any law of the Commonwealth, or
by a State or Territory law prescribed by the regulations.
Clauses 343 to
345 set out additional prohibitions relating to
coercion, undue influence and misrepresentation in relation to
workplace rights.
Clauses 346 to 350 deal with
protections relating to industrial activities and would replace the
freedom of association provisions (Part XA) in the WR Act.
Clause 346 prohibits a person from taking
adverse action (as defined above) against another person because
the other person:
- is or is not, an officer or member of an industrial
association[66]
- engages in industrial activity as defined in
paragraphs 347(a) and (b) (i.e.
lawful industrial activity), or
- does not engage in industrial activity as defined in
paragraphs 347(c) and (g) (i.e.
unlawful industrial activity).
Engages in industrial activity is defined broadly in
clause 347 and is divided into lawful and unlawful
activities. Lawful activities are listed in
paragraphs 347(a) and (b) and
include: becoming or ceasing to be an officer or member of an
industrial association; encouraging or participating in lawful
activity for or on behalf of an industrial association; and paying
fees to an industrial association. Unlawful activities are
listed in paragraphs 347(c) to
(g) and include: organising, promoting and
participating in unlawful activity in relation to an industrial
association; and taking part in industrial action[67].
Clauses 348 and 349 set out
additional prohibitions relating to coercion and misrepresentation
in relation to industrial activity. Clause 350
broadly covers existing section 794 of the WR Act and prohibits an
employer from inducing an employee to be or not be a member or
officer of an industrial association.
Clause 351
prohibits an employer from taking adverse action[68] against a person who
is an employee, former employee or prospective employee, of the
employer because of the person s race, colour, sex, sexual
preference, age, physical or mental disability, marital status,
family or carer s responsibilities, pregnancy, religion, political
opinion, national extraction or social origin. However there are
exceptions as set out in subclause 351(2)so that
an action will not be an adverse action where: the action is
authorised under a State or Territory anti‑discrimination or
equal opportunity law; if it is taken because of the inherent
requirements of the particular position; or where the action is
taken for genuine religious reasons.
Clause 351 is intended to broadly cover
paragraph 659(2)(f) of the WR Act, which makes it unlawful to
dismiss an employee for discriminatory reasons. However, the
protection in clause 351 has been expanded to prohibit any adverse
action[69] on
discriminatory grounds not just dismissal. Clause
351 has also been expanded to include a person s carer s
responsibilities as a ground upon which adverse action is
prohibited.
Part 3-1 also provides other
protections. For example, clause 352 (equivalent
of paragraph 659(2)(a) of the WR Act) prohibits an employer from
dismissing an employee because the employee is temporarily
absent from work because of illness or injury of a kind prescribed
by the regulations. Clause
353 (equivalent of section 801 of the WR Act)
prohibits an industrial association, or its member and officers
from demanding payment of a bargaining services fee.
A sham
arrangement in the context of employment has been described as
An arrangement through which an employer seeks
to cloak a work relationship to falsely appear as an independent
contracting arrangement in order to avoid responsibility for legal
entitlements due to employees.[70]
Clauses 357 to 359 deal with
protections against sham arrangements in employment and broadly
correspond to existing sections 900 to 903 of the WR Act. These
provisions were introduced in 2006 as part of the independent
contractor legislation.[71]
Clause 357 prohibits an employer
misrepresenting an employment or proposed employment relationship
as an independent contracting relationship. The provision broadly
corresponds to sections 901 and 902 and contains similar
defences.
Clause 358 prohibits an employer from
dismissing (or threatening to dismiss) an employee who performs
particular work for the employer, in order to engage the individual
as an independent contractor to perform the same, or substantially
the same work under a contract for services. The clause broadly
coves section 902 of the WR Act, although notably, does not contain
the sole or dominant purpose reason test, which was the subject of
some criticism at the time of its introduction in 2006. Whereas
existing section 902 prohibits dismissal of an employee with the
sole or dominant purpose of re-engaging them as an independent
contractor, clause 358 will prohibit the dismissal
if it is one amongst other reasons.[72]
Clause 359 prohibits a person from knowingly
making a false statement to a current or former employee with the
intention of persuading or influencing that worker to become an
independent contractor to do the same, or substantially the same
work. It is intended to broadly cover section 903 of the WR
Act.
Clauses 360 362 contain important rules that apply
generally to all contraventions under Part 3 1. They include:
- The sole or dominant test does not apply rather the reason for
a person s action can be one of a number of reasons and must be an
operative or immediate reason for the action (clause
360). [73]
This is an easier test to prove.
- The onus of proof is generally reversed in all civil
proceedings involving contraventions under Part 3 1 (clause
361). This reflects existing section 809 of the WR
Act.
- Clause 362 provides further general
prohibitions involving advising, encouraging, inciting, or taking
any action with intent to coerce another person to breach any of
the Part 3 1 provisions.
All the prohibitions in Part 3 1 are civil remedy provisions
under Part 4 1. There are monetary penalties, and remedies would
include injunctions, compensation and reinstatement in the case of
dismissal (clauses 539 and
545).
Dismissal-related contraventions in Part 3 1 (eg termination for
a discriminatory reason) are to be dealt with differently to other
contraventions. Where there is a dispute about dismissal it must
generally be dealt with by a FWA conference[74] in the first instance (clause
368). Such applications do not require agreement of both
parties, may be made by either the employee dismissed or an
industrial association entitled to represent the interests of that
person (clause 365), and must generally be made to
FWA within 60 days (clause 366). If the dispute
remains unsettled after the conference, the dismissed employee can
proceed to court (clauses 369 and
371). Where there is a request for an interim
injunction (for example to stop a threatened dismissal), an
employee could make a court application without requiring a FWA
conference (clause 371).
In disputes other than dismissals, a conference is not
obligatory, although the parties may agree to apply to FWA for a
conference to deal with the dispute (clause 374).
Where the parties do not agree on a FWA conference, the person
alleging the contravention can still make an application to the
Federal Court or the Federal Magistrates Court for orders.
Clause 376 would allow FWA to make costs orders
against lawyers and paid agents where it is satisfied that the
lawyer or paid agent encouraged the Part 3 1 application when it
was reasonably apparent there were no reasonable prospects of
success.
The Bill, as foreshadowed in FWF,[75] proposes significant changes to the
unfair dismissal regime. Amongst other things, it removes the
exclusions which deny unfair dismissal rights to employees in
businesses which employ 100 or fewer employees[76] and to employees dismissed for
operational reasons . In addition the Bill makes changes to some of
the unfair dismissal procedural matters with the stated aim of
allowing prompt, practical economical and fair processes .[77]
The unfair dismissal provisions are located under Part 3-2,
clauses 379 405 of the Bill.[78] The key elements are as
follows.
The scheme applies to national system employees (clause
380).[79]
Such employees will be eligible to bring an action for unfair
dismissal where:
- the employee was employed by a small business (i.e. less than
15 employees at the time of dismissal)[80] and was employed for more than 12
months
- for all other employers, the employee was employed for more
than 6 months (clauses 382 and
383).
In addition, the employee must be covered by an award or
enterprise agreement or earn less than the high income
threshold[81](subparagraph 382(b)(iii)).
The Australian Chamber of Commerce and Industry (ACCI), while
noting the Government s clear intention to re-introduce unfair
dismissal rights questions the validity and impact of re-exposing
small business to unfair dismissal claims, particularly in the
current economic climate.[82]
Against this argument, a number of submissions to the Senate
inquiry generally in support of opening up unfair dismissal rights,
have been critical of the qualifying periods of 6 and 12 months and
have recommended that all employees should be protected from unfair
dismissal after a three-month probation period.[83] The ACTU, for example argues
that the qualifying period of 12 months would operate almost as
harshly as the total ban on unfair dismissal claims that workers in
small businesses face under the Work Choices legislation.[84]
Clause 385 sets out the test for unfair
dismissal. A person has been unfairly dismissed, when FWA is
satisfied that all of these factors exist:
- the person has been dismissed
- the dismissal was harsh, unjust or unreasonable
- the dismissal was not a case of genuine redundancy, and
- in relation to small businesses, that the dismissal was not
consistent with the Small Business Fair Dismissal Code.
Clause 386 sets out the meaning of dismissed .
A person is dismissed if the person s employment was terminated on
the employer s initiative, or if they resigned from their
employment but were forced to do so because of conduct engaged in
by their employer. Subclause 386(2) sets out
exemptions which include circumstances relating to termination of
seasonal and contract workers and trainees.
Clause 387 sets out the factors FWA must take
into account when considering whether a dismissal was harsh, unjust
or unreasonable. These include, amongst other things: whether there
was a valid reason for the dismissal related to the person s
capacity or conduct; whether the person was notified of that
reason; whether the person had been warned about any unsatisfactory
performance connected to the dismissal; the size of the enterprise
and its possible impact on the procedures followed in the
dismissal; and any other matters that FWA considered relevant. It
is similar to subsection 652(3) of the WR Act with an additional
factor in paragraph 387(d) that the FWA must take
into account any unreasonable refusal by the employer to allow the
person to have a support person present to assist at any
discussions relating to dismissal.
Subclause 388(1) enables the Minister to
declare a Small Business Fair Dismissal Code by legislative
instrument. If a small business employee s dismissal is consistent
with the Small Business Fair Dismissal Code then the dismissal will
be considered fair and the other factors relating to unfair
dismissal do not need to be considered.
The ACCI, whilst not agreeing with the merits of re-introducing
the full force of the unfair dismissal system against small
businesses, welcomes the effort to create the Fair Dismissal Code
and the attempt to have it generate some level of security and
navigability for small business.[85]
A
draft code has been released and some of the submissions to the
Senate inquiry expressed concerns about its content particularly
the provisions relating to summary dismissal and warnings about
under performance.[86] The draft Code sets out the circumstances in which a
summary dismissal (a dismissal without notice or warning) is
warranted, including cases of alleged theft, fraud or violence. The
ACTU expressed concern that there is no requirement for the
employer s suspicion to be correct, or for the employer to provide
the employee with procedural fairness. For under-performing
employees, the Code requires the employer to give the employee a
valid reason (based on the employee s conduct or capacity to do the
job) why the employee is at risk of being dismissed and a
reasonable chance to rectify the problem. Multiple warnings are not
required. The ACTU suggests that the Code should be redrafted so as
to better reflect the jurisprudence of the courts and the AIRC. It
also suggests that the Code be incorporated into the Bill or, at a
minimum, that the Senate should view the final version of the Code
before it approves the Bill.[87]
If a dismissal is a genuine redundancy it will not be an unfair
dismissal. Paragraph 389(1)(a) provides that a
person s dismissal will be a genuine redundancy if his or her job
was no longer required to be performed by anyone because of changes
in the operational requirements of the employer s enterprise and
providing the relevant award provisions for redundancy are complied
with. However subclause 389(2) provides an
exemption, so that a dismissal is not a genuine redundancy if it
would have been reasonable in all the circumstances for the person
to be redeployed within the employer s enterprise, or within the
enterprise of an associated entity[88] of the employer. This exception is
aimed at preventing employers abusing the redundancy or operational
reason defence for dismissal.
The remedies available for unfair dismissal in clauses
390 to 392 are essentially the same as
under the existing regime and include reinstatement/reemployment,
remuneration for lost pay, or monetary compensation. FWA must not
order the payment of compensation unless satisfied that
reinstatement is inappropriate and payment of compensation is
appropriate in all the circumstances (clause 390).
Under clause 392, compensation can be an amount
consisting of up to 26 weeks remuneration, with many similar
limitations and restrictions as currently exist.
In terms of procedural matters, in general there would be
limited representation and appeal rights, and FWA would have
significant discretion as to how it will deal with an unfair
dismissal matter. For example, the unfair dismissal claim will in
the absence of exceptional circumstances have to be made within 7
days of the dismissal. Currently the time limit is 21 days. This
shortened time frame has been criticised for being unduly harsh,
counter-productive and out of line with the 60 day time frame for
Part 3.1 dismissals.[89]
FWA will be responsible for reviewing each application and,
before considering its merits, must consider whether the employee
was protected from unfair dismissal, whether it was a genuine
redundancy and whether the time period for applications was
complied with (clause 396).
Where there are no facts in dispute, FWA has discretion as to
whether to hold a conference or a hearing (clause
397). Where it does hold a conference, FWA must take into
account any difference in the circumstances of the parties ,
including their advocacy experience, and the procedural wishes of
the parties, including in relation to the location of the
conference or the method of conducting it. A conference may be
conducted by a member or a delegate of FWA (clause
398).
Under clause 596 parties will not be entitled
to be represented by a lawyer or a paid agent in most matters
before FWA, including unfair dismissals, without FWA s permission.
The FWA may only grant permission where the matter could be
conducted more effectively, or where it would be unfair not to
allow the person to be represented. However this does not prevent
an employee or employer being represented by a lawyer or agent who
is an officer or employee of the person, or a member, officer or
employee of an organisation of which they are a member (e.g. a
trade union), or a bargaining representative (subclause
596(4)).
FWA may only grant permission to appeal an unfair dismissal
decision on public interest grounds, unless the appeal question is
one of fact and concerns a significant error of fact
(clause 400).
The restoration of unfair dismissal rights and in particular the
abandonment of the exclusion of employees dismissed by firms with
less than 100 workers has been welcomed in a number of submissions
to the Senate inquiry. However, as noted above, many of those in
support of unfair dismissal rights have questioned some of the
exclusions and conditions imposed, particularly on small business
employees. The most common criticism has been in relation to the 7
day time frame for lodging unfair dismissal claims.
While the introduction of a Code for small business has been
seen as innovative and worthwhile, there have also been criticisms
of the draft Code for its apparent abandonment of procedural
fairness in relation to employees and for the lower standard of
conduct expected of employers.
Industrial action refers to action in which employees work in a
manner different from the customary manner. It includes
restrictions, limitations, or bans upon work and in respect of
employers, industrial action usually refers to some form of
lock-out. The Bill retains many of the current rules relating to
industrial action, including requirements that protected industrial
action is only permissible in support of enterprise bargaining
agreement negotiations, a mandatory secret ballot be held and
approved by the workforce and that strike pay not be paid. Changes
introduced however address the procedural requirements parties must
comply with in order to take protected industrial action and
payments to employees during industrial action (whether protected
or not).
Clause 406 provides a general overview of Part
3-3. Clause 408 defines protected industrial
action as either: employee claim action, employee response
action or employer response action. Employee claim action
is industrial action organised by employees or and their
representatives against an employer to support claims about
permitted matters which may be included in an enterprise agreement.
It must be authorised by a protected action ballot and not concern
a demarcation dispute, nor should it involve pattern bargaining
(pursuit of a common outcome across many enterprises). Employee
response action is defined by clause 410 to
be industrial action organised in response to industrial action
undertaken by an employer in relation to a proposed enterprise
agreement. It must not be undertaken in relation to a demarcation
dispute. Employer response action is defined by
clause 411 to be employer industrial action
undertaken in response to industrial action conducted by employees
or their representatives. Pattern bargaining is defined in
clause 412 is a course of conduct by a bargaining
representative for two or more proposed enterprise agreements. That
course of conduct must involve the bargaining representative
seeking the inclusion of common terms in two or more proposed
enterprise agreements.
Clause 413 sets out common requirements for
industrial action to be protected industrial action. These are that
industrial action cannot relate to a proposed greenfields agreement
or multi-enterprise agreement; persons organising or engaging in
industrial action must be genuinely trying to reach an agreement;
notice requirements for the action must be met; the action must not
contravene FWA orders or Ministerial Declarations. Clause
414 specifies notice requirements the parties must meet
before engaging in protected industrial action. For employee claim
action, bargaining representatives must provide written notice of
the intended industrial action to the employer. That notice must be
given at least three working days prior to any industrial action
unless FWA has specified a longer period (of up to seven working
days) in a protected action ballot order, and must not be given
until the results of the required ballot have been declared. For
employee response action, a bargaining representative of an
employee must provide written notice of the intended industrial
action to the employer of the employee. For employer response
action, the employer need only provide notice to all employees who
may be affected as to the nature of the industrial action and the
day the employer action will commence.
Clause 415 confirms that where a person is
engaged in protected industrial action, immunity from civil
liability exists in respect of an action under any law in force in
a State or Territory, or under common law actions.[90] Clause 416
allows an employer engaged in employer response action to refuse to
make payments to employees in relation to the period of the
action.
Clause 417 prohibits persons from engaging in
industrial action before the nominal expiry date of an enterprise
agreement or workplace determination, subject to Federal Court (or
Federal Magistrates Court) injunction , or other order available
under Part 4-1.
Clause 418 requires FWA to make a stop
order that industrial action stop or not be organised if it
appears to FWA that the industrial action being organised is not
protected industrial action. FWA may make the order on its own
initiative or on application of a person (or organisation) who is
or may be affected by the action. Clause 419
requires FWA to make stop orders in relation to non national system
employers and employees, where the action has the potential to
cause loss or damage to a constitutional corporation.
Clause 420 stipulates that FWA must determine the
application within two days, but if it cannot so determine it must
make an interim order ceasing the action.
Clause 422 authorises the Federal Court or
Federal Magistrates Court to grant an injunction against industrial
action of employees (claim action) and the bargaining
representative is engaging in pattern bargaining.
Clause 423 authorises FWA to order the
suspension or termination of protected industrial action on the
basis that it is causing significant economic harm to employers
and/or employees when it is satisfied certain requirements have
been met. Subclauses 423(2), (3), (5) and (6) set
out the requirements. If the protected industrial action is
employee claim action, FWA must be satisfied that the action is
causing or threatening to cause significant economic harm to any
employer and any employees who will be covered by the agreement. If
the protected industrial action is employee response action or
employer response action, FWA must be satisfied only that the
action is causing or threatening to cause significant economic harm
to any of the employees who will be covered by the agreement. If
the protected industrial action is threatening to cause significant
economic harm, FWA must be satisfied that the harm is imminent.
Subclause 423(4) sets out the factors that FWA is
to take into account in deciding whether protected industrial
action is causing or is threatening to cause significant economic
harm, including: the source, nature and degree of harm suffered or
likely to be suffered; the likelihood that the harm will continue
to be caused or will be caused; the capacity of those persons to
bear the harm; the views of those persons and the bargaining
representatives for the enterprise agreement as well as the parties
are genuinely unable to reach and whether there is no reasonable
prospect of agreement being reached.
Under clause 424 FWA must make an order (within
five days where practical) suspending or terminating protected
industrial action if it is satisfied that the protected industrial
action has threatened, is threatening or would threaten to endanger
the life, the personal safety, health or welfare of the population
(or part of it) or to cause significant damage to the Australian
economy (or an important part of it). Clause 425
enables FWA to suspend the taking of protected industrial action to
provide for a cooling-off period when a suspension would assist the
parties to reach agreement and such suspension would be in the
public interest. Protected industrial action cannot be
terminated on this ground. Clause 426
requires FWA to suspend protected industrial action if the
industrial action is adversely affecting any employer or any
employee who will be covered by the proposed enterprise agreement
(subclause 426(2)) and the industrial action is
threatening to cause significant harm to a person other than a
bargaining representative for the agreement or an employee
(subclause 426(3)). Clauses 427
and 428 authorises FWA to specify the period of
industrial action suspension and to extend the period.
Clause 429 enables employee claim action to be
resumed without recourse to another protected action ballot in
certain circumstances, such as where some of the industrial action
authorised by the required protected action ballot is yet to be
taken.
The right of union officials to enter workplaces to inspect
conditions, standards and documents, or talk to employees for
purposes of information-gathering or recruitment, is set out in
Part 3-4, clauses 478 521 of the Bill. The
provisions have in some respects generated controversy.
Union right of entry to workplaces for the purposes of
consulting with members and those eligible to become members has
been seen as fundamental to the core purpose of trade union
organisation, as lawyers Shaw and Walton have observed:
It is plain that effective trade union
organisation of employees cannot occur without access on the part
of the union and its authorised representatives to workplaces in
order to recruit non-unionists, to communicate with union members
and take up their concerns and to police award prescriptions and
occupational health and safety requirements by inspecting the
workplace.[91]
ILO Convention No. 87,[92] which Australia has ratified, protects two basic
rights: the right of workers and employers to form and join
organisations of their choice, and the organisational autonomy of
trade union and employer associations.[93]
In interpreting the principles of freedom of association and the
right to organise, the Freedom of Association Committee of the
Governing Body of the ILO has held that:
Workers representatives should enjoy such
facilities as may be necessary for the proper exercise of their
functions, including the right of access to workplaces.[94]
However, it is also valid to argue that unbridled intrusion by
unions into the workplace can interfere with the conduct of
business, and as Professor William Ford has noted, balance is the
key to facilitating entry and preventing intrusion:
the difficult policy problem [that] right of
entry arrangements have always had to address that of striking an
appropriate balance between the interest unions have in, at the
very least, monitoring compliance with the terms of industrial
instruments and the interest employers have in carrying on business
without unreasonable interference
Union right of entry legislative provisions at federal level
were first introduced in 1973 into the Conciliation and
Arbitration Act 1904[95] and these provisions were largely incorporated into the
Industrial Relations Act 1988. Substantial changes to the
regulation of right of entry occurred under the Howard Government
with the Workplace Relations Act 1996 with further
significant restrictions introduced in 2006 through Work
Choices.[96]
The key elements of the proposed right of entry regime are as
follows.
The terms employees and employers have their ordinary meaning in
this Part (clause 479) in other words the scheme
is not limited to national system employees and employers.[97]
Under the Bill, union officials with a right of entry permit are
able to visit employees in their workplace in three
circumstances:
- to investigate suspected breaches of industrial laws and fair
work instruments[98]in relation to or affecting their union members working
on the premises (clause 481)
- to hold discussions with employees who are, or are eligible to
be, members of their union (clause 484), or
- to investigate breaches of state occupational health and safety
laws (clause 494).
These three permitted purposes exist in the current WR Act,
although arguably they have been broadened in two significant
respects.
Under section 221 of the WR Act, right of entry for discussion
purposes is not available where all employees at the workplace are
on AWAs, or at workplaces covered by non-union collective
agreements. In other words, unions even with substantial membership
in a workplace may be excluded merely because a non-union
collective agreement (or an agreement with another union) has been
voted up by other workers at that site. In contrast, under
clause 484 this limitation is removed and a permit
holder could enter a workplace to hold discussions provided that
the premises has just one or more employees whose industrial
interests the union is entitled to represent.
The ACCI is critical of this broadening of union right entry for
discussion purposes and argues it is contrary to the Government s
commitment that Labor s new system builds certainty and stability
into our workplaces by ensuring that existing right of entry laws
will be retained . Furthermore ACCI believes the broadening under
clause 484 will result in a system inferior the
existing regime by encouraging disputation between employers and
unions seeking entry, creating uncertainty, and providing an open
door to entry.[99]
Clause 482 lists the rights the
permit holder can exercise while on premises to investigate a
suspected breach under clause 481. These are the right to:
- inspect work, processes or objects
- interview people who agree to be interviewed
- require the occupier or an affected employer to allow the
inspection and copying of any record or document relevant to
the suspected breach, kept on, or accessible from the
premises.
The broadening of the right to inspect any records relevant
to the suspected breach has been the main source of concern
with the proposed right of entry provisions.[100] Whereas existing subsection
209(4) denies union access to non union employee records[101] clause
482 would allow it but only to the extent that it is
relevant to the suspected breach that the permit holder is
investigating.[102] The ACCI in its Senate submission argues that the
extended access raises significant concerns for individuals freedom
of association, and in relation to what a union may do with private
information of non-members. The submission states that where are
dangers of fishing expeditions and an unacceptably dangerous
exposure of personal information to third parties.[103]
However, to counteract the widening access to records, the Bill
creates a new prohibition on using or disclosing employee records
obtained by permit holders if such use or disclosure is for a
purpose other than the primary purpose of the record s collection
(clause 504). This is in line with National
Privacy Principle 2 of the Privacy Act 1988.[104] It covers conduct
not just of the permit holder but also by any other person who has
received the information as a result of the permit holder acquiring
it. The clause is a civil remedy provision with a maximum penalty
of $6,600 for an individual and $33,000 for a union. In addition, a
person affected by a breach of the Privacy Act may complain to the
Privacy Commissioner who can investigate and resolve the complaint.
A further penalty would be imposed via clause 510,
which requires that FWA must revoke or suspend a union official s
permit for either unauthorised disclosure of employee records or in
cases where the Privacy Commissioner has substantiated a complaint
about the permit holder relating to employee records
(paragraphs 510(1)(b) and
(c)).
A number of submissions to the Senate inquiry noted that these
provisions relating to misuse of information could be improved.
Liberal Senator George Brandis in questioning DEWR officials at
hearings pointed to drafting problems that could mean the Bill
provides inadequate protection for employee related information
other than employee records.[105] The Office of the Federal Privacy Commissioner
submission states that the use of the term employee record in the
Bill has the potential to create confusion and uncertainty and that
an alternate such as employee personal information may be more
appropriate.[106]
The Bill largely retains the current requirements in the WR Act
that relate to the entry permits for union officials, many of which
were introduced under Work Choices.
For example:
- the union official must produce an entry permit on entering the
premises (clause 489)
- the union official must be considered a fit and proper person
before being issued an entry permit (clause 512).
FWA will make this determination according to the strict criteria
set out in clause 513.
- union officials may only enter the workplace if they give an
entry notice to the occupier of the premises during working hours
at least 24 hours, but not more than 14 days, before the entry
- FWA may impose conditions on an entry permits (clause
515)
- FWA may revoke and suspend entry permits and may ban for a
specified period the issue of entry permits in relation to the
permit holder or to the permit holder s organisation.
Clause 510 lists the circumstances under which FWA
must revoke or suspend a permit holder s entry
permits.
- Civil penalties for contravention of the provisions relating to
right of entry remain the same as those introduced under the Work
Choices legislation 300 penalty units ($33,000) for bodies
corporate and 60 penalty units ($6,600) for individuals
- entry will not be authorised unless a permit-holder complies
with reasonable requests of an occupier or affected employer to,
produce documents evidencing their authority to enter and observe a
specified route upon entry if directed (clause
492).
The Bill makes some other minor changes relating to permits. For
example if the union official enters the workplace to investigate
breaches, the Bill provides that he or she must give the entry
notice to any affected employer (clause 487) in
addition to the current requirement to give the notice to the
occupier of the premises.
The Bill also adds additional content requirements for entry
notices. In the case of a suspected breach, they will have to
contain a declaration that the permit holder s union is entitled to
represent the industrial interests of an affected member
(subclause 518(2)). In the case of entry to hold
discussions with employees, they will have to contain a declaration
that the permit holder s union is entitled to represent the
industrial interests of a person who performs work on the premises
(subclause 518(3)). In both cases, the notice will
have to refer to the provision of the union s rules that creates
such an entitlement.
While the Bill retains much of the current right of entry
regime, as introduced by Work Choices, it does expand union rights
in two significant respects: namely to allow union access to
non-union employee records in certain circumstances; and to remove
the prohibition on union right of entry for discussions with
employees in workplaces where all employees are either on AWAs or
bound by non-union collective agreements.
However, as DEEWR departmental officers have pointed out in
evidence to the Senate inquiry into the Bill, these two changes are
not new and existed in the pre-Work Choices WR Act.[107] It could also be
argued that the proposed extended union access is appropriately
balanced with other union obligations. In particular, the new
penalties introduced for abusing the scrutiny of employee records
provisions, plus the retention of the fairly onerous obligations on
permits holders to be fit and proper persons should allay concerns
that the new rights could be abused by unions.
Part 3 5 deal with the power of an employer to
stand down employees without pay in certain circumstances. It
applies to national system employers and national system employees
(clause 523) and broadly equates to sections 691A
691C of the WR Act.
Clause 524 provides that an employer may stand
down an employee during a period in which the employee cannot
usefully be employed because of:
- industrial action (other than such action organised or engaged
in by the employer)
- a break down of machinery or equipment, (providing the employer
cannot reasonably be held responsible), or
- a stoppage of work for any cause for which the employer cannot
reasonably be held responsible.
Subclause 524(2) provides that
these statutory provisions are subject to any relevant enterprise
agreement or employment contract stand down provisions.
AiG, in its submission to the Senate inquiry
strongly supports the need for stand down rights noting that though
they are rarely accessed they are essential. However the submission
is critical of the qualification placed on breakdowns and the use
of phrase the employer cannot reasonably be held responsible
for the breakdown . AiG argues that it is likely to lead to
disputes about the level of preventative maintenance carried out on
a company s machinery whenever an employer seeks to stand down
employees because of a breakdown. Furthermore, the qualification is
a departure from wording which has been in common usage in the
industrial relations system for many decades.[108]
The ACTU, in its submission to the Senate inquiry
argues for an amendment of clause 524 so as to
clarify that an employer cannot stand down employees taking
protected industrial action.[109]
The enforcement and compliance provisions of the Bill are
similar to those in the WR Act but notably have been rationalised
and consolidated into one Chapter.
Proposed Part 4-1 establishes a single
compliance framework for the new workplace relations system.
Clause 539 sets out in table form all civil remedy
provisions in the Bill. Each entry in the table identifies: the
section number; who may apply to enforce the civil remedy
provision; the courts to which a person may apply; and the maximum
penalties available to courts in enforcing the provisions. Most
enforcement matters will be heard by the Federal Court or the new
Fair Work Division of the Federal Magistrates Court, but state and
territory courts will be able to hear matters relating to
underpayment of wages.
Clauses 545 and 546 deal with
orders. The Federal Court and the Federal Magistrates Court can
make any orders they consider appropriate to remedy a contravention
of a civil remedy provision including injunctions, compensation and
reinstatement orders. State or territory courts may make
underpayment orders. The maximum pecuniary penalties are in the
main 60 penalty units (i.e. $6,600) for individuals and 5 times
that amount ($33,000) for bodies corporate. These amounts are in
line with the WR Act.
Clause 548 deals with small claims procedure.
Small claims procedures can be heard in the Federal Magistrates
Court or state magistrates courts. The cap on awards has been
increased from $10,000 to $20,000 or a higher amount if prescribed
by regulation. Small claims matters are to be dealt with in an
informal manner and without regard to legal forms and
technicalities. Lawyers can represent parties only with the leave
of the court, although the limitation on representation by lawyers
does not preclude representation by the party s in house lawyers
(subclause 548(7)). Union representation would
only be available if there is a regulation to that effect
(subclause 548(8)). The ACTU, in its submission to
the Senate inquiry argues that this provision be amended so as to
clarify that an employee has the right to be represented by a
union.[110]
Clause 549 to 559 contain
general rules relating to civil remedy provisions and essentially
replicate existing provisions in the WR Act. They include the
following.
Clause 550 confirms that contravention of a
civil remedy provision is not a criminal offence and cannot result
in a criminal conviction.
If a person commits two or more breaches in the same course of
conduct , they would be deemed by clause 557 to
have committed one breach only. If an eligible court makes an order
in respect of the breach, then repetition of the behaviour will be
treated as a fresh breach (subclause
557(3).
Clauses 552 to 554 deal with
the interaction between civil and criminal proceedings. An eligible
court cannot make a pecuniary penalty order against a person who
has been subject to a criminal penalty for that same course of
conduct (clause 552).A civil-penalty proceeding is
stayed if criminal proceedings are brought against the person for
the conduct grounding the civil proceeding (clause
553). Evidence given in respect of a civil proceeding is
not admissible in criminal proceeding where the same course of
conduct would ground both actions (clause
555).
Clause 556 protects a person from civil double
jeopardy that is, a person cannot be subjected to a pecuniary
penalty for one course of conduct under more than one Commonwealth
law.
Proposed Part 4 2, (clauses
562 to 568) sets out the jurisdiction and
powers of the Federal Court and the Federal Magistrates Court. The
Federal Court has jurisdiction in both civil and criminal matters
(clause 562) whereas the Federal Magistrates Court
has jurisdiction only in civil matters (clause
566). The jurisdiction is generally required to be
exercised in the Fair Work Divisions of those courts.
Clause 570 deals with costs and provides that
costs can only be ordered if:
- the party instituted the proceedings vexatiously or without
reasonable cause
- the party s unreasonable act or omission cause the other party
to incur the costs, or
- the party unreasonably refused to participate in a matter
before FWA and the matter arose from the same facts.
Clause 569 allows the Minister to intervene on
behalf of the Commonwealth in proceedings providing the Minister
believes it is in the public interest. Orders of costs can be made
against the Commonwealth, despite the rule in clause
570 that costs are not normally ordered (subclause
569(3)).
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According to the Explanatory Memorandum, the proposed FWA will
be established as an independent statutory agency and will replace
five existing agencies (the AIRC, the AIR, the AFPC, the AFPC
Secretariat and the Workplace Authority) with the current functions
of these five agencies being transferred to the new entity.[111] The inclusion of
the ABCC into FWA is subject to a report to Minister Gillard by
Justice Wilcox.[112]
Proposed Part 5-1 primarily deals with the
institutional aspects of FWA by establishing and conferring
functions; conduct of matters; organisational issues; appointments
of members and their terms and conditions; cooperation with State
Commissions; the FWA seal, reports and reviews, and information
disclosure; FWA staffing arrangements including the General Manager
and offences relating to FWA.
Proposed Part 5-2 of Chapter
Five establishes the Office of the Fair Work Ombudsman
(OFWO) by setting out functions of the Fair Work Ombudsman
(Division 2) and OFWO staffing arrangements and Fair Work Inspector
compliance powers (Division 3).
Under clause 575 the FWA will be structured
into three tiers consisting of a President, an unspecified number
of Deputy Presidents and Commissioners and a minimum of four and a
maximum of six Minimum Wage Panel Members.
Clause 576 (1) provides a subject matter list
of functions to be undertaken by FWA with the details of each
function provided in relevant clauses dealing with each subject
matter. The Explanatory Memorandum states that, in the main, these
functions are conferred on the FWA as an organisational entity
rather than on office holders themselves.[113] The functions ascribed are:
- The National Employment Standards (Part 2-2)
- Modern awards (Part 2-3)
- Enterprise agreements (Part 2-4)
- Workplace determinations (Part 2-5)
- Minimum wages (Part 2-6)
- Equal remuneration (Part 2-7)
- Transfer of business (Part 2-8)
- General protections (Part 3-1)
- Unfair dismissal (Part 3-2)
- Industrial action (Part 3-3)
- Right of entry (part 3-4)
- Stand down (part 3-5)
- Other rights and responsibilities (Part 3-6)
- Extension of the National Employment Standards entitlements
(Part 6-3)
- Unlawful termination protections (Part 6-4)
Clause 576(2) limits FWA dispute
resolution functions to those covered in clause
595, requires FWA to promote public understanding of its
functions and activities including providing assistance and advice
and outlines administrative support arrangements with state
industrial authorities as covered in clause
650.
Clause 577 directs FWA to perform its functions
and exercise its power in a fair and just manner which deals with
matters quickly and avoids unnecessary technicalities, is open and
transparent and promotes positive workplace relations. In doing so,
clause 578 requires FWA to take into account the
objects contained in the Bill; equity, good conscience and the
merits of the issue; and help prevent and eliminate workplace
discrimination through respecting and valuing workforce diversity.
The Bill requires FWA to take into account Australia s
international labour obligations as contained in ratified ILO
Conventions.[114]
Clause 579 provides FWA with the privileges and
immunities of the Crown in right of the Commonwealth reflecting the
fact that FWA will be established as an independent statutory
agency. Clause 580 provides individual FWA members
with the same protections and immunities as a Justice of the High
Court of Australia.
Clause 581 to clause 584 deal
with the functions and powers of the President as the head of FWA.
Clause 581 makes the President responsible
ensuring FWA is efficient and serves the needs of employers and
employees in the manner in which it performs its functions and
exercises its powers. Subclause 582(1) provides
that the President may give directions as to the manner in which
particular functions are to be performed to (subclause
582(2)) an FWA member, a Full Bench, the Minimum Wage
Panel and the General Manager. However, subclause
582(3) protects the independence of FWA members in their
decision making by prohibiting such a direction to focus on a
decision by FWA. Clause 582(4) lists some examples
of the types of directions which the President can give (including
various reviews and work process issues such as dealing with two
matters jointly or transferring matters between FWA members or Full
Benches) whilst subclause 582(5) requires the
person given such a direction to comply. Subclause
582(6) specifies that a Presidential direction given in
writing is not a legislative instrument.
Reflecting the fact that FWA is to operate as an independent
statutory agency, clause 583 specifies that the
President is not subject to direction by or on behalf of the
Commonwealth. Clause 584 states that the President
can delegate any or all of Presidents functions and powers to a
Deputy President except those under clause 620
(dealing with Minimum Wage Panels) and clause 625
(dealing with delegations to General Manager and FWA staff).
The manner in which matters are to be conducted before FWA are
prescribed in clauses 585 to 595. Whilst
clause 585 stipulates that applications to FWA
must be in accordance with relevant procedural rules,
clause 586 introduces a degree of flexibility by
providing FWA with the discretion to allow corrections or
amendments to applications or other documents or to waive an
irregularity in the form or manner in which an application is
made.
Subclause 587(1) states, without prohibiting
other grounds, that FWA may dismiss an application on the grounds
that it is not made in accordance with this Act; is frivolous or
vexatious; or has no reasonable prospect of success. However,
subclause 587(2) prohibits FWA
from dismissing an application concerning dismissals
(clause 365) or terminations (clause
773) on the ground that it is frivolous or vexatious or
that it has no reasonable prosect of success. Subclause
587(3) makes it clear that FWA may dismiss an application
on its own initiative or on application by one of the parties.
Applications may be discontinued by an applicant in accordance with
relevant procedural rules, whether or not the matter has been
settled (clause 588).
Procedural and interim decisions are covered by clause
589 which, without limiting FWA ability to make decisions,
provides FWA with the power to decide as to how, when and where a
matter is to be dealt with, including the ability to make an
interim decision. These decisions can be made by FWA on its own
initiative or on application.
Clause 590 grants FWA wide powers to inform
itself in relation to matters before it, including requiring
attendance; inviting oral or written submissions; requiring
provision of documents, records or other information; taking
evidence under oath or affirmation; requiring a FWA Member, a Full
Bench or the Minimum Wage Panel to prepare a report; conducting an
inquiry; undertaking or commissioning research; conducting a
conference or by holding a hearing. Clause 591
provides that FWA is not bound by rules of evidence and procedure
in relation to matters before it.
FWA conferences are controlled by clause 592
which stipulates that FWA may choose to inform itself by holding a
conference and can direct a person to attend at a specified time
and place. Such conferences are to be conducted by a FWA Member or
a delegate of FWA and are generally held in private except for
conferences conducted regarding unfair dismissal or general
protection matters (see clauses 368, 374, 398 and 776). Minimum
Wage Panel Members are prohibited from conducting conference (see
Part 2-6).
In line with Government policy to move away from overly formal,
adversarial processes[115], clause 593 stipulates that FWA,
except as specifically provided by the Act, is not required to hold
a hearing in order to perform is functions or exercise its powers.
All such hearings are required to be held in public unless, due to
the confidential nature of any evidence or for other reasons, FWA
issues orders enabling the hearing to be conducted in private. A
suppression order prohibiting or restricting the publication of
information or evidence can be made by FWA, under clause
594, if it is satisfied that this is desirable course of
action. However, suppression orders can not be made regarding
submissions to an annual wage review (see clause 289).
Under clause 595 FWA may deal with disputes
only where it is expressly authorised to do so and, in dealing with
such disputes, the FWA use methods it considers appropriate
including mediation or conciliation or by making a recommendation
or expressing an opinion. The authorised disputes are: bargaining
disputes under Part 2-4; general protections disputes under Part
3-1; right of entry disputes under Part 3-4; stand down disputes
under Part 3-5; and procedural disputes regarding modern awards,
enterprise agreements, workplace determinations or contracts of
employment. However, FWA may only deal with a dispute using
arbitration where it is expressly authorised by the Act to do so.
FWA has the power to arbitrate a bargaining dispute or a Part 6-2
dispute where the parties to the dispute have agreed that it may
arbitrate and in right of entry and stand down disputes with or
without agreement of the parties. In dealing with disputes FWA may
exercise its powers to inform itself and to hold conferences or
hearings.
Another element of the Government s policy to ensure that FWA
shifts away from formal, adversarial processes, including legal
representation and intervening parties, toward an efficient and
informal operating system is a more restrictive approach toward
legal representation in matters[116]. Reflecting this policy, clause
596 specifies that, except for written submissions
regarding modern awards and minimum wages or regarding procedural
rules, a person may only be represented by a lawyer or a paid agent
with the permission of FWA. Further, FWA may only grant permission
if doing so would allow the matter to be dealt with more
efficiently; or that it would unfair not to allow representation
due to an inability of the person to represent themselves
effectively or taking into account fairness between the parties.
Importantly, however, where the lawyer or paid agent is an employee
of the person; or an employee of an organisation, bargaining
representative or peak body representing the person; or is a
bargaining representative then FWA permission is not required.
Clause 597 entitles the Minister to make a
submission in relation to a matter before the FWA only if the
matter is before the Full Bench and it is in the public interest
for the Minister to do so or if the matter involves public sector
employment. This entitlement applies regardless of the method
adopted by FWA to deal with the issue, i.e. whether or not a
hearing is held.
Clauses 598 to 603 deal with
decisions of FWA. For the purposes of this Part of the Bill,
clause 598 defines a FWA decision in broad terms
to include any decision, however described, but which does not
include an outcome of a dispute process (subclause
595(2)) unless such an outcome is a result of arbitration.
As courts and tribunals often make decisions by order,
subclause 598(3) stipulates that a decision of FWA
that is described as an order must be made by order and
subclause 598(4) provides discretion to FWA to
make any of its other decisions by order. Another element in the
policy to allow FWA to operate in a manner which is fair, just and
avoids unnecessary technicalities, clause 599
provides that, except as provided by the Bill, FWA is not required
to make a decision in relation to an application in the terms
applied for. Further, to avoid delays clause 600
allows FWA to determine a matter in the absence of a person who has
been required to attend before it.
In setting out FWA writing and publication requirements
clause 601 specifies that certain decisions must
be written in plain English including a decision or an interim
decision made under another part of the Bill and a decision
relating to an appeal or review. Whilst FWA has discretion to
provide written reasons for any decision made, the Explanatory
Memorandum states that there is an expectation that FWA will
provide written reasons for all significant decisions.[117] In promoting this
transparency FWA is required to publish, as soon a practicable, a
decision required to be in writing and an approved enterprise
agreement. However, in order to reduce FWA workload decisions
relating to right of entry permits and conscientious objection
certificates are exempt from publication requirements.[118] Clause
602 allows FWA, on its own initiative or on application,
to correct any obvious error, defect or irregularity in relation to
a decision but modern awards and national wage minimum wage order
are exempt from this provision. Clause 603
provides that, on its own initiative or on application by an
affected person, FWA may vary or revoke a decision except where
that decisions related to modern awards, enterprise agreements,
workplace determinations, minimum wages, transfer of business,
protected action ballots, partial work bans and those prescribed by
the regulations that cannot be varied or revoked under this
section. A note explains that FWA can vary or revoke decisions, or
instruments made by decisions, under other provisions of the
Bill.
Clauses 604 to 608 deal with
the manner in which FWA handles appeals, reviews and referring
questions of law. Clause 604 provides that a
person aggrieved by a FWA decision may apply to a Full Bench for
permission to appeal that decision and, without limiting
circumstances for approving appeals, if FWA is satisfied that it
would be in the public interest to do so it must grant permission.
The appeal would also be heard by a Full Bench. This provision does
not apply to a decision of a Full Bench or the Minimum Wage Panel
and a note states that unfair dismissals, which are dealt with by
clause 400, are also not covered by the clause.
The Explanatory Memorandum states that only in situations where the
Full Bench identifies some error on the part of the primary
decision-maker can these powers be exercised.[119] Further, where a significant
level of discretion was acted upon in the original decision, the
Full Bench should only intervene if the original decision-maker had
acted upon a wrong principle, been guided by irrelevant factors,
mistaken the facts or failed to take some material consideration
into account. The concept of permission expressed in this
clause replaces the current concept of leave and, other
than in the specified case of the public interest, would call up
all the existing jurisprudence about granting leave to appeal thus
ensuring that FWA has broad discretion in granting permission to
appeal.
Clause 605 allows the Minister to apply to a
Full Bench for a review of a FWA decision where the Minister
believes that the decision is contrary to the public interest and,
without limiting circumstances for approving reviews, if FWA is
satisfied that it would be in the public interest to do so it must
conduct a review. Where a review is conducted FWA must ensure that
each person with an interest in the review is made aware and the
Minister is entitled to make a submission for consideration in the
review. Clause 606 provides that, where FWA hears
an appeal or conducts a review under clauses 604
or 605, FWA may order that all or part of the
decision be stayed until a decision relating to the appeal or
review is made or a further order issued. This clause does not
apply to a protected action ballot order.
In dealing with the process for hearing an appeal or conducting
a review clause 607 states the FWA must hold a
hearing unless it is satisfied that the appeal or review can be
adequately determined without presentation of oral submissions for
consideration and where the persons who would otherwise be entitled
to make such a submission consents to the appeal or review
proceeding without a hearing. In dealing with appeals and reviews
FWA may admit further evidence and take into account other
information and evidence. With regard to the outcome of an appeal
or review, FWA may confirm, quash or vary the original decision,
make a further decision in relation to the said matter, or refer
the said matter to a FWA Member who would be required to deal with
the subject matter or to act in accordance with the directions of
FWA.
In dealing with referring questions of law, clause
608 requires the President to refer a question of law to
the Federal Court for an opinion of the Full Court. Unless the
question of law deals with the exercise of FWA powers, FWA may
still make a decision in the matter. However, if that decision is
inconsistent with the opinion expressed by the Federal Court, FWA
must vary the decision to make it consistent with the Federal Court
determination. If FWA did not make a decision whilst the Federal
Court was determining the question of law then FWA may only make a
decision which is consistent with such a determination.
Clause 609 provides that the President may,
after consultation with FWA members, make procedural rules relating
to the practice and procedure to be followed by FWA or the conduct
of business in relation to matters dealt with by FWA, including
procedural rules relating to functions conferred on FWA by other
Commonwealth laws. Such procedurals rules include the procedural
requirements concerning applications, submissions, directions,
notifications and the making of FWA decisions. Clause
610 provides that FWA procedures may be mandated through
regulations if deemed necessary.
With regards to costs, clause 611 states that a
person must bear their own costs in relation to matters before FWA.
However, in circumstances where FWA is satisfied that a person made
an application vexatiously or without reasonable cause, or the
application or response to the application had no reasonable
prospect of success, the FWA may order the person to bear some or
all of the costs of another person. A note advises that such orders
can be made against lawyers and paid agents in termination and
unfair dismissal matters.
Clauses 612 to 625 deal with
the organisation of FWA including which persons may or must perform
functions and the delegation of FWA s functions and powers to the
FWA General Manager and staff. The Explanatory Memorandum states
that powers and functions are generally conferred on FWA as an
entity as opposed to individual statutory officeholders. As such,
functions will usually be performed by a single FWA Members with
FWA staff, under supervision of FWA Members, performing ancillary
non-determinative functions (e.g. gathering and collating relevant
information and making recommendations). This part of the Bill
deals with exceptions to these work processes.
After confirming that a function or power of FWA may be
performed or exercised by a single FWA Member, clause
612 acknowledges exceptions to this rule provided under
this sub-section including that actions taken with regard to misuse
of right of entry provisions must be taken by a Deputy President
unless the President directs that a Full Bench deal with the
matter.
Clause 613 provides that generally appeal
decisions must be made by a Full Bench (see clauses
604 and 607) except that where the
decision appealed was made by the FWA General Manager or staff
under delegation, the President of Deputy President may make the
appeal decision. Clause 614 provides that a review
decision based on clause 605 (Ministerial
application to review FWA decision) must be made, and if required,
determined by a Full Bench. Clause 615 enables the
President to direct that a function or power of FWA, either
generally or with regard to a matter or class of matters, is to be
performed or exercised by a Full Bench.
Clause 616 states that the following functions
must be performed by a Full Bench (or more than one Full
Bench):
- Making of a modern award (Part 2-3)
- Conducting a four yearly review of a modern award (Part
2-3)
- Making a determination that varies or revokes a modern award in
a four yearly review
- A single FWA Member may make a determination that varies or
revokes a modern award if the determination is not made as part of
a review.
- Making a workplace determination (Part 2-5).
Clause 617 provides that the wages functions of
conducting an annual wage review (Part 2-6) and any subsequent
making or varying of a national wage order or determination, must
be performed by a Minimum Wage Panel (see clause
620).
In dealing with the constitution and decision-making of a Full
Bench, clause 618 requires that in composing a
Full Bench the President must ensure it comprises of at least three
FWA Members including at least one Deputy President (a Minimum Wage
Panel Member may also form part of a Full Bench). A decision of the
majority of the Full Bench prevails and, where no majority is
formed, the decision of the FWA Member who has seniority prevails.
Clause 619 sets out the order of seniority of FWA
Members President; Deputy Presidents (according to the day on which
their appointments to this position took effect and, where two or
more Deputy Presidents were appointed on the same day, according to
the precedence assigned them in the instruments of appointment).
The FWA Member with seniority is also responsible for managing the
Full Bench in performing functions and exercising powers of the
FWA.
As set out in clause 620, the constitution of a
Minimum Wage Panel is at the discretion of the President but must
consist of seven FWA members of which one must be the President and
at least three must be specialist Minimum Wage Panel Members. The
President can select the remaining members from either FWA Members
or Minimum Wage Panel Members. The President is also responsible
for managing the Minimum Wage Panel in performing functions and
exercising its powers and if there is no majority decision then the
decision of the President prevails.
To ensure that matters continue to be dealt with when a FWA
Member becomes unavailable clause 621 provides
that, in the case of a single FWA Member, the President must direct
another FWA Member to deal with the matter. Similarly,
clause 622 applies if the unavailable FWA Member
forms part of a Full Bench or the Minimum Wage Panel. In these
instances the matter can continue to be dealt with without the
unavailable member provided:
- The Minimum Wage Panel still consists of the President and at
least three Minimum Wage Panel Members or
- A Full Bench still consists of at least three FWA Members
including at least one Deputy President.
If those conditions are not meet the President must direct
another FWA Member to form part of the Minimum Wage Panel or Full
Bench before the matter can continue to be dealt with.
Clause 623 states that in the above situations the
new FWA Member must take into account everything that occurred
before FWA and that FWA did on the matter at hand. Further,
clause 624 provides that a decision is not
invalidated merely due to the fact that a Minimum Wage Panel or a
Full Bench was constituted otherwise than provided for.
For FWA to operate efficiently and effectively the President
requires the ability to delegate certain powers and functions to
either the General Manager or OFWA staff. To achieve this,
clause 625 enables the President, in writing, to
delegate a range of procedural, non-determinative powers to the
General Manager or OFWA staff. Further, the President may delegate
certain substantive functions and powers to the General Manger, SES
or acting SES staff, or a member of OFWA staff who is a class of
persons prescribed by regulation. In addition to publishing, these
responsibilities include endorsing conscientious objection
certificates, dealing with entry permits, entry notices and
certificates.
Clauses 626 to 648 deal with
FWA Members. The Explanatory Memorandum states that the Government
s intention is that all current AIRC members will be statutorily
appointed to FWA.[120] Clause 626 provides that new FWA
Members are to be appointed by the Governor-General by written
instrument which must specify the category the member will hold
(see clause 575) and, if required, assign a precedence to the FWA
Member (see clause 619). In recognition of the diverse roles and
responsibilities across FWA, clause 627 sets out
the qualifications and experience required for each category of FWA
Member. Clause 628 provides that the President,
Deputy President or a Commissioner hold office on a full-time basis
with the latter two categories being able to work part-time with
approval of the President. Minimum Wage Panel appointments are made
on a part-time basis.
In setting out the relevant periods of appointment for FWA
Members clause 629 provides that: generalist FWA
members hold office until 65 years of age unless they resign or are
terminated; Minimum Wage Panel Members for a period not exceeding
five years as specified in their instrument of appointment; and,
for a member of a prescribed State industrial authority appointed
to FWA, for the period specified in their instrument of
appointment. To facilitate the appointment judges to FWA,
clause 630 confirms that where a judge of a
federal court is appointed or serves as a FWA Member the judges
tenure of office as a Judge and all rights and privileges will not
be affected. Clause 631 provides for dual federal
and State appointments of suitably qualified persons to concurrent
positions in both FWA and a prescribed State industrial authority.
Clause 632 provides for similar arrangements
between FWA and Territory appointments. In addition to reinforcing
the general requirement that FWA Members must not, without the
prior approval of the President, engage in paid employment outside
FWA clause 633 also provides the exception that if
the employment is within the Defence Force such prior approval is
not required. Clause 634 requires an FWA Member to
take an oath or affirmation prior to discharging the duties of
office.
Concerns have been raised that the new remuneration
arrangements, which provide for the Remuneration Tribunal to
determine pay levels for FWA Members (excluding the President) may
have unintended longer term consequences for FWA. Former Senior
Deputy President of the AIRC, the Hon Paul Munro, has suggested
that the proposed severing of the link between FWA Members
remuneration and that of Federal Court judges, combined with
changes regarding retirement incomes, will make it more difficult
to recruit talented lawyers to FWA. He has argued that ensuring a
well qualified pool of presidential members, capable of legal
analysis, is critical for FWA to perform its functions.[121]
Clause 635 provides that, if the President is
from a non-judicial background, the applicable salary is linked to
the salary payable to the Chief Justice of the Federal Court. If
the President is from a judicial background but whose judicial
salary is less than the Chief Justice of the Federal Court then an
allowance which would increase the President s salary to that level
is payable. Clause 636 provides that the President
is eligible to be covered by the Judges Pension Act 1968
but can choose to stay in the public sector superannuation scheme.
Clause 637 provides that the salaries of FWA
Members, other than the President, are to be determined by the
Remuneration Tribunal.
Clause 638 provides that Deputy Presidents or
Commissioners may get approval from the President to work part-time
under a written agreement specifying workload and clause
639 deals with an FWA Member s leave entitlements
including recreational leave.
In dealing with disclosure of interests, clause
640 requires that an FWA Member (other than the President)
who is dealing, or will deal, with a matter in which they have a
potential conflict of interest that Member must disclose this fact
to the President. If the President determines that the Member
should not deal with the matter then the President must remove the
Member from dealing with the matter.
Clause 641 specifies the manner and processes
involved in the Governor-General terminating the appointment of an
FWA member on the grounds of misbehaviour or incapacity whilst
clause 642 enables the Governor-General to suspend
from office, on full pay, an FWA Member (other than the President)
on the grounds of misbehaviour or incapacity. Clause
643 requires the Governor-General to terminate the
appointment of an FWA Member on grounds of bankruptcy, excessive
unauthorised leave, or the Member fails to properly comply with
disclosure of interest requirements. Clause 644
deals with termination of FWA Members for unauthorised outside
employment and clause 645 states that FWA Members
may resign their appointment by providing the Governor-General with
a written resignation stating date of effect. Where they are not
covered by this Bill, clause 646 permits the
Governor-General to determine the terms and conditions by which an
FWA Member holds office.
Clause 647 enables the appointment of an acting
President, by the Governor-General, during a vacancy in the office
or when the President is absent or otherwise unable to attend to
the duties of office. Acting appointments must be made on the same
basis as appointments but are limited to a maximum 12 month term.
Clause 648 enables the Governor-General to appoint
acting Deputy Presidents for a specified period with the approval
of the Minister. Acting appointments must be made on the same basis
as appointments but in the case of Deputy Presidents can exceed a
12 month term. Both clause 647 and 648 provide that a person over
the age of 65 can be appointed to the acting positions and that the
actions of a person purporting to act as President or Deputy
President would not be invalid merely due to certain specified
defects or irregularities.
Clauses 649 and 650 promote
cooperative arrangements between FWA and State industrial
authorities. Clause 649 provides that the
President must perform the functions and exercise the powers of
office in a manner that facilitates cooperation between FWA and
State industrial authorities. Clause 650 allows
the President to enter into arrangements with a State industrial
authority, on a fee for service basis[122], for FWA to provide administrative
support to the authority or for the authority to provide
administrative support to FWA.
Clauses 651 to 655 deal with
the FWA seal, reviews and reports, and information disclosure.
Clause 651 provides that FWA must have a seal
inscribed with the words The Seal of Fair Work Australia and that
all courts, judges and persons acting judicially must presume that
a document bearing them was duly sealed by FWA, unless evidence to
the contrary exists. Clause 652 requires the
President to provide the Minister with an annual report on the
operations of FWA as soon as practicable after each financial year.
The annual report must include a financial statement and comply
with Section 34C of the Acts Interpretation Act 1901.
Clause 653 requires the General Manager to conduct
a review and prepare a report on the effects of enterprise
agreement making on certain vulnerable groups at the end of each
three year period. The written report must be provided to the
Minister within six months of the end of the period the report
covers and tabled in Parliament by the Minister within 15 sitting
days of receipt. Previously these reports on the effects of
enterprise bargaining were written by the Department.
Clause 654 requires the President to provide
the Minister and the FWO with certain publicly available
information to inform them about trends, research and matters
before the FWA. Clause 656 provides that
information acquired by FWA may be disclosed if the President
reasonably believes it is required in the course of performing
functions or exercising powers or if it likely to assist in the
administration or enforcement of the law.
Clauses 656 to 673 deal with
the FWA General Manager, staff and consultants. Clause
656 establishes the General Manager position and
clause 657 provides that the General Manager s
role is to assist the President in ensuring that FWA performs its
functions and exercises its powers. As stated in clause 582, the
General Manager is subject to directions from the President however
clause 658 provides that the General Manager is
not required to comply with a direction from the President to the
extent that compliance with the direction would be inconsistent
with the General Manager s performance, functions, or exercise of
powers under the Financial Management and Accountability Act
1997 or the Public Services Act 1999 or if the
direction relates to the review of enterprise agreement making
under clause 653. Clause 659 makes it clear that,
except as provided by this or another Act, the General Manager is
not subject to direction by or on behalf of the Commonwealth.
Clause 660 provides that the Governor-General
will appoint the FWA General Manager by written instrument, on a
full-time basis, and for a period not exceeding five years (see
also clauses 668 and 669). Clause 661 provides
that the General Manager s remuneration is to be determined by the
Remuneration Tribunal or, if not determination in operation, by the
regulations. Allowances prescribed in the regulations are also
payable. Clause 662 states that the Remuneration
Tribunal also determines the General Manager s recreation leave
entitlements and that the Minister may grant other leaves of
absence.
Clause 663 prohibits the General Manager from
outside employment without prior approval of the President and
clause 664 directs the General Manager to
disclose, in writing, all interests that conflict or could conflict
with the performance of his or her duties. Clause
665 provides that a General Manager may resign his or her
appointment by providing the Governor-General with a written
resignation stating date of effect. Clause 666
sets out the circumstances which would lead to the termination of
the appointment of General Manager. The Governor-General
may terminate for misbehaviour or incapacity but
must terminate for bankruptcy, excessive unapproved
absenteeism, engaging in unapproved outside paid employment, or
failure to disclose interests that conflict or could conflict with
the proper performance of functions. Clause 667
specifies that any matters concerning the terms and conditions of
the General Manager s appointment not covered by this Act are to be
determined by the Governor-General in consultation with the
President. Clause 668 enables the appointment of
an acting General Manager, by the Minister in consultation with the
President, during a vacancy in the office or when the General
Manager is absent or otherwise unable to attend to the duties of
office. Acting appointments must be made on the same basis as
appointments but are limited to a maximum 12 month term. Anything
done by or in relation to a person purporting to act as General
Manager are not invalid merely due to certain specified defects or
irregularities. Clause 669 requires the Minister
to Consult the President prior to appointing the General Manager
(see clause 660).
Clause 670 provides that FWA staff must be
engaged under the Public Service Act 1999 and that for the
purpose of that act the General Manager and staff together
constitute a Statutory Agency with the General Manager as its Head.
Clause 671 allows the General Manager, in writing,
to delegate his or her functions or power to a member of the FWA
staff who is an SES, or acting SES, employee or to a person who is
in a class of employees prescribed by regulation. Clause
672 allows FWA to be assisted by: employees of other APS
agencies; or by officers and employees of a State or Territory; or
by officers and employees of a Commonwealth, State or Territory
authority. Clause 673 allows the General Manager
to engage suitably qualified and experienced person as consultants
to FWA.
Clauses 674 to 678 set out the
offence provisions relating to FWA. The Explanatory Memorandum
states the these provisions replicate a number of existing
provisions contained in sections 814 to 823 of the WR Act and are
consistent with equivalent provisions in that Act.[123] However it would
seem that in some cases the penalties have been increased.[124] Clause
674 provides that a maximum penalty of 12 months
imprisonment may apply for the following offences: insulting or
disturbing an FWA Member; using insulting language; interrupting
matters before FWA; creating or continuing a disturbance; improper
influence of FWA Members (including delegates); adversely affecting
public confidence in FWA. Clause 675 provides that
a maximum penalty of 12 months imprisonment applies to a person who
engages in conduct which contravenes an order of FWA. However, this
does not apply to orders relating to: modern awards; bargaining
orders; scope order; minimum wage order; equal remuneration order;
transfer of business order; a suspension or termination of
protected industrial action order; orders relating to a protected
action ballot; or an order dealing with stand down. Clause
676 provides that a maximum penalty of 12 months
imprisonment will apply to a person if they threaten, intimidate,
coerce or prejudice another person because that person has, or
proposes, to provide information to FWA. Clause
677 provides that a maximum penalty of six months will
apply to a person who: a person who is required to attend before
FWA but fails to do so; the person attends before FWA but refuses
or fails to be sworn in or to make an affirmation; the person
attends before FWA but refuses or fails to answer questions or
produce documents. However, the above actions do not apply if the
person has a reasonable excuse. Clause 678
provides that a maximum penalty of 12 months imprisonment applies
to a witness who provides false or misleading evidence in
connection with a FWA proceedings and the same penalty applies to
an offender who induces, threatens or intimidates a witness to give
false or misleading evidence in a matter.
Clauses 681 to 686 deal with
the establishment and the functions and powers of the Fair Work
Ombudsman (FWO). Clause 681 establishes the
position of the FWO whilst clause 682 sets out the
FWO s functions which include: promoting harmonious and cooperative
workplace relations and compliance with the Act and fair work
instruments by providing education, assistance and advice; monitor,
inquire and investigate compliance issues; commence enforcement
actions before a court or FWA; represent employees in enforcement
actions where this promotes compliance; and refer maters to
relevant authorities.
In recognising that many of day-to-day functions of the FWO will
be conducted by staff of the Office of the Fair Work Ombudsman
(OFWO) or inspectors, clause 683 allows the FWO to
delegate, in writing, any of his or her functions and powers to an
OFWO staff member or an inspector. To provide for appropriate
levels of supervision, accountability and consistency, the delegate
must comply with any directions given by the FWO in performing
functions or exercising powers under the delegation.
Clause 684 provides that the Minister may, by
legislative instrument, give written directions of a general nature
to the FWO who must comply. The requirement that these directions
be made by legislative instrument will provide Parliament with some
degree of oversight and assist in ensuring transparency, although
significantly the directions are not disallowable (see
Note, clause 685(1)). Compliance by the FWO is not
required with a direction to the extent that it relates to the
performance of functions or the exercise of power under the
Public Service Act 1999. Clause 685
allows the Minister to direct the FWO, in writing, to provide
specific reports on FWO functions. These reports are not required
to be tabled. In addition, clause 686 also
requires the FWO to prepare and provide an annual report to the
Minister, for tabling in Parliament, consistent with the annual
report rules contained in section 34C of the Acts
Interpretation Act 1901.
Clauses 687 to 695 deal with
the FWO s appointment and terms and conditions of employment.
Clause 687 provides that, subsequent to the
Minister being satisfied that the person has suitable
qualifications or experience and is of good character, the
Governor-General may, by written instrument, appoint that person as
the FWO. The appointment is required to be on a full-time basis for
a specified period of not more than 5 years, as contained in the
instrument of appointment. A note reminds the reader that the FWO
can be reappointed. Clause 688 states that the FWO
s remuneration is to be determined by the Remuneration Tribunal but
that such a determination has not been made the FWO will be paid
the remuneration prescribed by regulation. In addition, the FWO is
entitled to such allowances as prescribed by regulation.
Clause 689 deals with FWO recreational and other
leave entitlements whilst clause 690 prevents the
FWO from paid employment outside the OFWO unless approved by the
Minister. To avoid actual or perceived conflicts of interest and to
assist with impartiality, clause 691 requires the
FWO to disclose, in writing, all interests that could conflict with
the performance of the FWO s functions.
Clause 692 allows the FWO to resign by
providing the Governor-General with a written resignation notice.
Clause 693 provides that the Governor-General
may terminate the FWO s appointment for misbehaviour or
physical or mental incapacity but must terminate the
appointment where the FWO: becomes bankrupt, has excessive
unapproved absences, engages in paid employment outside the duties
of office without the Minister s consent, or fails, without
reasonable excuse, to disclose interests that conflict or could
conflict with proper performance of functions. Clause
694 allows the Governor-General to determine terms and
conditions of the FWO appointment that are not determined by this
Act. In order to cover periods where the FWO is absent or otherwise
unable to perform the duties of office, clause 695
enables the Minister to appoint an acting FWO with the acting
appointment made on the same basis as the appointment but limited
to a maximum term of 12 months under the Acts Interpretation
Act 1901.
The OFWO is established by clause 696 which
also provides that the OFWO will comprise the FWO, the staff of the
OFWO and the inspectors appointed under clause
700. Clause 697 provides that OFWO staff
must be engaged under the Public Service Act 1999 and, for
the purposes of that Act, the FWO and the staff of the OFWO
together comprise a Statutory Agency with the FWO as its Head. In
addition, clause 698 allows the FWO to be assisted
by: employees of other APS agencies; or by officers and employees
of a State or Territory; or by officers and employees of a
Commonwealth, State or Territory authority. Clause
699 states that the FWO may engage suitably qualified
persons as consultants to the OFWO.
The appointment of Fair Work Inspectors (inspector) is dealt
with by clause 700 which restricts such
appointments to persons of good character already appointed or
employed by the Commonwealth or already employed by a State or
Territory. An inspector may be appointed for a period not exceeding
four years as specified in the instrument of employment.
Clause 701 clarifies that the FWO is also an
inspector. Note that prima facie, clause 700 may be seen not to
fully comply with the ILO Labour Inspection Convention. The short
term contracts may not be in line with the requirement that:
the inspection staff shall be composed of
public officials whose status and conditions of service are such
that they are assured of stability of employment and are
independent of changes of government and of improper external
influences.[125]
Clause 702 provides that all inspectors must be
provided with an identity card, in a form approved by the FWO and
containing a recent photo, which must be carried by an inspector
when performing functions or exercising powers. Due to the
potential consequences of a person misusing this identity card,
when a person ceases to be an inspector they must return their
identity card within 14 days. It is a strict liability offence not
to do so albeit if the identity card was lost or stolen strict
liability does not apply but the evidential burden is born by the
ex-inspector.
Clause 703 provides that the compliance powers
conferred on an inspector are specified in his or her instrument of
appointment. Clause 704 provides that the FWO may,
by legislative instrument, give a written direction of a general
nature to inspectors relating to the manner in which they discharge
their duties as inspectors. In addition, clause
705 allows the FWO to give specific directions to a
particular inspector about the performance of that inspector s
functions or exercise of powers. Unlike the general directions in
clause 704, these particular directions are not legislative
instruments hence the former will come under Parliamentary scrutiny
whilst the latter will not.
Clause 706 provides that an inspector may
exercise compliance powers for one or more specified compliance
purposes including to determine if provisions of this Bill or a
fair work instrument are being or have been complied with or to
determine whether there has been a contravention of a safety net
contractual entitlement. However, an inspector can only exercise
compliance powers with regard to a safety net contractual
entitlement if the inspector reasonably believes that one party to
the contract has not complied with one or more of the following: a
provision of the NES, or a term of: a modern award; an enterprise
agreement; a workplace determination; a national wage case order or
an equal remuneration order.
Clause 707 enables an inspector to exercise
compliance powers during working hours or any other time reasonably
deemed necessary by the inspector for compliance purposes.
Clause 708 provides that an inspector may enter
premises if the inspector has a reasonable belief the work related
to this Act or a fair work instrument is being undertaken.
Similarly, an inspector can enter business premises if the
inspector has a reasonable belief records or documents relevant to
compliance purposes are stored in, or accessible from, the
premises. In gaining entry, an inspector must not use force but
does not require the consent of the occupier. Additionally, an
inspector must not enter a part of the premises used for
residential purposes unless a reasonable belief exists that
relevant work is being carried out on that part of the premises
this provides the required access to deal with contraventions
relating to outworkers whilst protecting privacy at residential
premises. Either before or as soon as practicable afterwards an
inspector must show his or her identity card to the occupier or the
occupiers representative.
In dealing with the powers an inspector can exercise whilst on
premises, clause 709 provides that an inspector
may:
- inspect any work, process or object
- provided there is a connection to compliance purposes
- interview any person
- with their consent, either whilst on premises or at another
agreed time or place
- identify who has relevant documents
- authorises an inspector to require a person to identify who has
custody of, or access to a document relevant for compliance
purposes
- request records or documents
- permits an inspector to require a person who has custody of, or
access to, relevant documents to produce those documents, either at
that time or within a specified period
- inspect and copy documents
- allows an inspector to inspect and make copies of any relevant
record kept on the premises or accessible from a computer on the
premises
- take samples
- enables an inspector to take samples of any goods or substances
in accordance with the regulations.
In order to facilitate compliance inspection processes,
clause 710 provides that a suitably qualified and
experienced person may accompany, without consent of the occupier,
an inspector as an assistant where the FWO is satisfied that the
assistance is necessary and reasonable. FWO approval is required in
respect of each assistant and for each occasion that an assistant
accompanies an inspector under this clause. The assistant is
required to follow the direction of the inspector but must not do
anything that the inspector does not have power to do. For
accountability purposes, anything done by an assistant is taken to
have been done by the inspector. Examples provided in the
Explanatory Memorandum as to the types of assistants who could
facilitate compliance inspection processes include
translators/interpreters, forensic accountants or IT
specialists.[126]
Where an inspector reasonably believes that a person has
contravened a civil remedy provision, clause 711
requires that person to provide name and address details when
requested to do so by an inspector. Additionally, if the inspector
reasonably believes that a false name or address was provided the
person can be asked to show proof of identification, such as a
driver s licence. A person must comply with these requirements if
the inspector explains that failure to do so may contravene a civil
remedy provision and the inspector shows his or her OFWO inspector
identification card. If a person has a reasonable excuse then the
requirement that they provide name and address details to the
inspector does not apply but the evidentiary burden to demonstrate
they have a reasonable excuse falls to the individual involved.
In addition to the power under clause 709 to require records or
documents to be produced whilst an inspector is on the premises,
clause 712 provides that an inspector may, by a
written notice served on the person, require the person to produce
the record or document at a specified place with a specified period
of at least 14 days. The person who is served the notice must not
fail to comply without a reasonable excuse. Further, clause
713 provides that self-incrimination is not a reasonable
excuse for failure to comply with the notice. The Explanatory
Memorandum explains that whilst this abrogates the common law
privilege against self-incrimination, this is balanced by the fact
that documents produced and any information or thing obtained as a
direct or indirect consequence will not be admissible as evidence
against the individual in any criminal proceedings .[127]
In the normal course of events an inspector would be expected to
copy and return original documents however, where documents are to
be produced in court or an inspector reasonably believes that they
may be destroyed or altered clause 714 provides
that an inspector may, in addition to inspecting and making copies,
also keep the records or documents for such period as necessary.
However, during the period the inspector is in possession of the
records or documents, the person who produced them and any person
entitled to possession or authorised by a person entitled to
possession may inspect or make copies at all reasonable times.
To provide the FWO with a range of options in dealing with
non-compliance, as alternative to pursuing court proceedings, the
Bill provides for enforceable undertakings and compliance notices.
Clause 715 provides that, where the FWO reasonably
believes that a person has contravened a civil remedy provision,
the FWO may accept a written undertaking from that person in
relation to the contravention. In order to prevent the FWO or an
inspector from pursuing multiple enforcement mechanisms in relation
to the same contravention, the FWO cannot accept an enforceable
undertaking from a person already issued with a compliance notice
nor can an inspector apply for an order under Division 2 of Part
4-1 if the person has not withdrawn any enforceable undertaking
previously given. With the consent of the FWO, a person may
withdraw or vary the undertaking at any time. If the FWO considers
that the person who gave the undertaking has breached any of its
terms the FWO may apply to a court of jurisdiction for an order. If
the court is satisfied that the breach occurred, the court may
make: an order requiring the person to comply with the relevant
term; an order awarding compensation to a person suffering loss due
to the contravention; any other order the court considers
appropriate.
Alternatively, where an inspector reasonably believes that a
person has contravened an entitlement provision contained in the
NES or in a term of a modern award, enterprise agreement, workplace
determination, national minimum wage order, or an equal
remuneration order, a compliance notice may be issued under
clause 716. The notice will require the person to
do either or both of the following:
- take specified action to remedy the direct effects of the
contravention identified
- produce reasonable evidence of the person s compliance with the
notice.
The notice must also contain a range of information including
the name of the person to whom the notice was issued and the
inspector who issued the notice, details of the contravention and
must explain that failure to comply may contravene a civil remedy
provision and that the person may apply to a court of jurisdiction
for a review of the notice. A person must not, without reasonable
excuse, fail to comply with the notice. As stated above, a
compliance notice cannot be issued if the person has given an
enforceable undertaking (clause 715) in relation
to the contravention which has not been withdrawn.
Clause 717 provides that a person given a
compliance notice can apply to the court for a review of the notice
on either or both of the following grounds:
- the person has not committed a contravention set out in the
notice
- the notice does not comply with the content requirements as set
out in clause 716.
After the application is made the court may stay the operation
of the notice as it considers appropriate and may confirm, cancel
or vary the notice following the review.
In dealing with the disclosure of information by the OFWO,
clause 718 states that the information covered by
this clause includes any information acquired by the FWO,
inspectors, assistants, staff and consultants in the course of
performing their functions or exercising their powers. Further, the
FWO may disclose, or authorise the disclosure of, information if
the FWO reasonably believes that doing so is necessary or
appropriate in the course of performing functions or exercising
powers or that the disclosure is likely to assist in the
administration or enforcement of Commonwealth, State, or Territory
law. The clause also allows the FWO to provide the information to
the Minister if the FWO believes the disclosure is likely to assist
the Minister to consider a complaint or issue in relation to a
matter arising under the Act. To further facilitate Ministerial
access, the FWO may also provide the information to the Secretary
or staff of the Department for the purpose of briefing the Minister
on the relevant matter.
The Explanatory Memorandum states that clause
718 operates in conjunction with relevant provisions in
the Privacy Act 1988, the Public Service Act 1999
and the Public Service Regulations 1999 (including the APS
Code of Conduct).
Clause 721 prevents FWA dealing with an
application for an equal remuneration order under clause 302 if
there is an adequate alternative remedy that would ensure equal
remuneration for work of equal or comparable value for the relevant
employees. Clause 722 provides that FWA must not
make an order under subclauses 532(1) or 787(1), which require an
employer to consult with any relevant employee industrial
association(s) in circumstances where it is proposed to terminate
15 or more employees if there is an acceptable alternative remedy.
Clause 723 prevents a person from making an
unlawful termination application under Part 6-4 if they are able to
make an application under the general protection provisions in Part
3-1 in relation to the same termination of employment.
Clause 724 prevents FWA dealing with an
application for an equal remuneration order in relation to an
employee if proceedings for an alternative remedy have commenced
under a law of the Commonwealth (other than the equal remuneration
provisions in Part 2-7) or a law of a State or Territory.
Clause 725 stipulates that as a
general rule a person who has been dismissed must not make an
application of a kind referred to in clauses 726 to 732 in relation
to a dismissal if any other of those sections applies. Under
clause 734 a person must not make a general
protections court application where an application for a remedy has
been made under other Commonwealth or State or Territory laws.
Clause 737 requires the regulations to
prescribe a model term for dealing with disputes that could be
included in an enterprise agreement. Clause 739
sets out what FWA can and cannot do when dealing with disputes
under a term of a modern award, enterprise agreement or contract of
employment. Clause 740 authorises persons to deal
with an enterprise dispute by arbitration and make a binding
decision where, in accordance with such a term, the parties have
agreed to this.
Clause 743 provides that the object of this
Part is to give effect, or further effect, to Australia s
international treaty obligations by providing for a system of
unpaid parental leave. Clause 744 extends the
application of the Bill s parental leave to a non-national system
employee. Clause 747 ensures that State or
Territory laws that provide employee entitlements in relation to
the birth or adoption of children are not excluded and continue to
apply to non-national system employees where they provide more
beneficial employee entitlements than the extended parental leave
provisions.
Clauses 758 and 759 extend the
Bill s entitlement to notice of termination or payment in lieu of
notice to non-national system employees. Clause
762 ensures that State or Territory laws that provide
employee entitlements in relation to notice of termination of
employment (or payment in lieu of notice) are not excluded and
continue to apply to non-national system employees where they
provide more beneficial employee entitlements than the extended
notice of termination provisions.
Part 6 4 essentially replicates the existing
unlawful termination provisions in the WR Act. Like the WR Act
provisions, Part 6 4 has wider application than national system
employees.
Part 3 1 includes protections from unlawful termination but only
in connection with national system employers and employees. In
contrast, through its reliance on the external affairs power (based
on Australia s international treaty obligations regarding
termination of employment) Part 6 4 has capacity to provide a
remedy for all employees in regard to unlawful
termination. The Bill is drafted so as to restrict the use of Part
6 4 to those employees not covered by Part 3 1 (clause
723). The net result is that unlawful termination
protection is available for all employees.
Clause 771 names the various international
treaties that support the constitutional basis and give effect to
the unlawful termination provisions.
Clause 772 prohibits termination of employment
for any reason listed in paragraphs 772(1)(a) to
(h) including:
- temporary absence from employment due to illness or injury
(paragraph 772(1)(a))
- trade union membership or non-membership (paragraphs
772(1)(b) and (c))
- filing a complaint or legal proceedings against the employer
(paragraph 772(1)(e))
- the employee s race, colour, sex, sexual preference, age,
physical or mental disability, marital status, family or carer s
responsibilities, pregnancy, religion, political opinion, national
extraction or social origin (paragraph 772(1)(f)).
Paragraph 772(1)(f) has also been expanded to
include a person s carer s responsibilities as a ground upon which
termination of employment is prohibited.
There are exceptions namely: where the action is authorised
under a state or territory anti-discrimination or equal opportunity
law; if it is taken because of the inherent requirements of the
particular position; or where the action is taken for genuine
religious reasons (subclause 772(2)).
The procedures and process for dealing with unlawful termination
in clause 772 essentially replicate the Part 3 1
dismissal related procedures. For example the dispute must
generally be dealt with by a FWA conference in the first instance
(clause 776); may be made by either the employee
dismissed or the industrial association entitled to represent the
interests of that person (clause 773); and must
generally be made to FWA within 60 days (clause
774). If the dispute remains unsettled after the
conference, the dismissed employee can proceed to court
(clause 779). Where there is a request for an
interim injunction, an employee could make a court application
without requiring a FWA conference (clause
779).
Concluding comments
One question likely to emerge from parliamentary debate on the
Fair Work Bill is whether it will engender a relative period of
peace and calm in Australian industrial relations. The period of
the previous 10 years industrial relations reform has been
described as controversial, while the period since Work Choices has
been described as chaotic .[128] Thus many practitioners may be looking forward
to the Bill delivering a relative period of stability, particularly
given the Opposition s initial commitments not to block the passage
of the Bill. It also delivers some clarity in its layout and
expression and as Peter Punch has observed, employers have
generally indicated a propensity to either work with or cope with
its provisions. At its base, the Bill delivers a system which
employer and employee organisations will be reasonably familiar
with. On the negative side, the Bill does not incorporate
transitional provisions and therefore is not as complete as Work
Choices was. No doubt, considerable additional detail will need to
be incorporated into the pending Transitional and Consequential
Bill.
Members, Senators and Parliamentary staff can obtain further
information from the Parliamentary Library on (02) 6277 2463.
Glossary
|
ACCI
|
Australian Chamber of Commerce and
Industry
|
|
ACTU
|
Australian Council of Trade
Unions
|
|
AFA
|
Award Flexibility Agreement
|
|
AFPC
|
Australian Fair Pay Commission
|
|
AFPCS
|
Australian Fair Pay and Conditions
Standard
|
|
AiG
|
Australian Industry Group (formerly
the Metal Trades Industry Association or MTIA)
|
|
AIRC
|
Australian Industrial Relations
Commission
|
|
ALP
|
Australian Labor Party (Labor)
|
|
APCS
|
Australian Pay and Classification
Scales
|
|
AWA
|
Australian Workplace Agreement
|
|
BOOT
|
Better Off Overall Test
|
|
DEEWR
|
Department of Education, Employment
and Workplace Relations
|
|
FWA
|
Fair Work Australia
|
|
FWF
|
K. Rudd and J. Gillard: Forward with
Fairness: Labor's Plan for Fairer and More Productive Australian
Workplaces, April 2007 and Forward with Fairness, Implementation
Plan, August 2007.
|
|
FWO
|
Fair Work Ombudsman
|
|
GEERS
|
General Employee Entitlements and
Redundancy Scheme
|
|
IARWD
|
Industrial Action Related Workplace
Determinations
|
|
ITEA
|
Individual Transitional Employment
Agreement
|
|
NAPSA
|
Notional Agreement Preserving State
Award
|
|
NDT
|
No Disadvantage Test
|
|
NES
|
National Employment Standards
|
|
OFWO
|
Office of the Fair Work
Ombudsman
|
|
SES
|
Senior Executive Service
|
|
SWA
|
Safe Work Australia
|
|
Transitional Act
|
Workplace Relations Amendment
(Transition to Forward with Fairness) Act 2008
|
|
Transitional & Consequential Bill
|
|
Proposed to be called the Fair Work (Transitional Provisions and
Consequential Amendments) Bill 2009
|
|
|
Work
Choices
|
The Workplace Relations Amendment
(Work Choices) Act 2005. This Act amended the WR Act as from 2006,
and the current WR Act is often referred to as ‘Work
Choices’.
|
|
WR
Act
|
Workplace Relations Act
1996
|
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[11]. Peter
Punch, Fair Work Bill 2008 A chance for IR stability at last? in
Australian Industrial Law News, Issue 11, CCH (www.cch.com.au), 15 December 2008.
[18]. ibid.
[26]. High Court
of Australia (HCA), New South Wales v Commonwealth of
Australia; Western Australia v Commonwealth of
Australia (2006) 229 CLR 1.
[32]. New South
Wales Office of Industrial Relations, Submission No. 101, SEEWRC
inquiry, p. 14. For example: the Federal Court in AWU (Qld) V
Etheridge Shire Council [2008] FCA 1268 found that a
Queensland council is not and cannot be a constitutional
corporation; the NSW Industrial Court in Hardeman v Children s
Medical Research Institute [2007] NSWIRComm 189 (24 September
2007) ruled that that a non-profit organisation, the Children s
Medical Research Institute, is not a trading or financial
corporation.
[40]. In
contrast to the WR Act, the Bill does not include provisions
relying on a referral of power from Victoria. It is possible that
the Transitional and Consequential Bill may provide for the
Victorian referral.
[48]. The
definitions of employee couple and de facto partner in
clause 12 would provide coverage for same sex
couples.
[51]. AIRC,
Award Modernisation Stage 1 Decision 19 December 2008.
[52]. This
analysis of award flexibilities has been prepared by Australian
Business Pty Ltd, see: Modern awards - coverage and flexibility ,
Workplaceinfo.com.au, 29 September 2008.
[53]. B.
Spencer, Shop worker penalty rates a threat to jobs The West
Australian, 27 December 2008.
[55].
Department of the Senate Certified Agreement 2001 2003, p.
1.
[76] The Howard
Government s many attempts to reduce the applicability of unfair
dismissal laws are well documented. For a more detailed background
and history, and for arguments for and against a small business
exemption, the reader is referred to S. O Neill, , Unfair dismissal
and the small business exemption , Background Note,
Parliamentary Library, Department of Parliamentary Services, 11
March 2008 and previous Bills Digests and parliamentary committee
reports.
[77]. Peter
Punch, op. cit., p. 4.
[80]. A small
business employer is defined in clause 23. All
employees employed by the employer will be counted, including all
casual employees who have been employed on a regular and systematic
basis and employees employed by associated entities (as defined in
clause 12).
[86]. ACTU,
Submission No. 13, SEEWRC inquiry, p. 48.
Steve O Neill and Miles Goodwin
30 January 2009
Bills Digest Service
Parliamentary Library
© Commonwealth of Australia
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