Changes to Industrial Law in Australia

The Labour Government has introduced the Fair Work Bill 2008 (the Bill) to honour its election promise to revolutionise industrial law in Australia. A Senate enquiry is in process that may lead to changes in the current Bill. Until the actual Legislation is seen we can only discuss aspects of the Bill.

The Bill creates National Employment Standards (NES) which will apply to all employees, and which will guarantee maximum weekly hours of work, flexible working arrangements, entitlements, annual leave, personal/carers leave and compassionate leave, community service leave, long service leave, public holidays, notice of termination and redundancy pay and provision of fair work information statements.

Section 96 of the Bill provides for accrual of personal/carer's leave from year to year. Section 101of the Bill goes further to allow cashing out of such leave if it is included in the modern award or enterprises agreement.

The former system of awards has been reprieved in the form of new "modern awards". How the modern award and the NES will operate together in practice remains to be seen. Modern award does not apply to high income earners, ie those people earning $100,000 or over on a full time basis. The high income threshold amount is adjusted in July each year in line with annual growth in average weekly ordinary time earnings for full time adult employees.

The Bill puts to an end the making of Australian Workplace Agreements.

Employees who have been employed for at least 12 months by an employer who employs 15 employees or more will be entitled to a redundancy payment if his or her employment is terminated by way of redundancy.

The unions have been given more power by the Bill. Unions will be the automatic bargaining representative for their members unless an individual signs a direction otherwise. If an employer refuses to negotiate with a union, then depending on the circumstances, the union can seek a number of remedies including a bargaining order, a majority supporting determination or a scope order. Employers will be required to negotiate with unions in good faith.

The Government has honoured its promise to simplify the unfair termination procedure but some commentators argue that this has been at the sacrifice of fairness. The Bill proposes removal of the 100 employee exemption introduced under Work Choices and introduces new qualifying periods that have to be met before an unfair dismissal claim can be made as follows: 12 months employment for employees of businesses with fewer than 15 employees and 6 months employment for employees in business with 15 or more employees. Casual employees will no longer be excluded but will have to meet the same qualifying periods as a permanent employee, provided that they have been employed on a regular and systematic basis for the requisite period and they had a reasonable expectation of continual employment by the employer.

Employees not covered by a modern award or employed under collective agreements whose remuneration exceeds a high income threshold and employees dismissed due to genuine redundancy will be excluded from making an unfair dismissal claim.

Fair Work Australia (FWA) will be responsible for dealing with unfair dismissal claims. Employees only have 7 days to lodge an application for relief on the grounds that the termination was harsh, unjust or unreasonable with FWA. Both parties (employer and employees) will have to be well prepared within the required time frame to answer the questions put to them by FWA.

For advice on the new employment law regime please call Ann Parnell on 9549 0723