Michael Brennan Senior Associate

1
Aboriginal Health Medical Research Council
WorkChoices
9 May 2006

• Michael BrennanSenior Associate
• Jaclyn FoleySolicitor

2
Introduction

• Most significant change to Australias industrial
  relations system since the system of compulsory
  conciliation and arbitration was established 100
  years ago
• By using the Commonwealths power to regulate
  trading and financial corporations, the
  Government intends to create a unitary industrial
  relations system

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Introduction (cont)

• The Government has stated that the legislation
  will make Australias industrial relations
  simpler and fairer
• However, the Act and Regulations are 1700 pages
  long and extremely complicated

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Overview of Presentation

• Todays presentation will focus on the following
  areas
• national system
• the new standard
• changes to award system
• the move from State to Federal regulation
• changes to agreement making system
• unfair dismissal
• record keeping requirements

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Who will be covered by the new system?

• Constitutional corporations and their employees
• A corporation is a constitutional corporation if
  its financial or trading activities are
  significant.
• All employers and employees in Victoria
• Organisations registered under the Workplace
  Relations Act
• Employees and employers within a Territory

6
Who will be outside the new system?

• Unincorporated associations and their employees
  (other than in Victoria)
• Partnerships and their employees (other than
  Victoria)
• Public service employers and employees (other
  than in Victoria)
• A key change - more than 85 of the employed
  workforce will be covered by the new system and
  will be excluded from the State IR systems

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What will remain covered by the State systems?

• Occupational health and safety
• Workers compensation
• Long service leave
• Discrimination and EEO

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Australian Industrial Relations Commission (AIRC)

• With limited exceptions, the AIRC will no longer
  exercise compulsory powers of conciliation and
  arbitration
• It will instead provide voluntary dispute
  resolution services

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The New Standard

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Australian Fair Pay and Conditions Standard
(Standard)

• New concept 5 minimum legislative entitlements
• Minimum wages set and adjusted by the AFPC
  (FMW/APCS)
• Maximum ordinary hours of work 38 hours per
  week and reasonable additional hours
• Annual leave four weeks per annum
• Personal and carers leave 10 days per annum
• Parental leave 12 months unpaid
• Significant change applies to contracts of
  employment and all workplace agreements

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Australian Fair Pay Commission (AFPC)

• Replaces the AIRC as the wage setting and wage
  review body
• AFPC to determine the timing, scope and frequency
  of wage reviews, how they are conducted and when
  implemented
• Can inform itself about its functions (including
  effect of its decisions)

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Awards

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AH MRC Award Coverage

• Main Award Health Services Union of Australia
  (Aboriginal Torres Strait Islander) Award 2002
  (Federal award)
• Some AMS covered by state awards
• We will look at what happens to
• Federal awards and
• State awards under WorkChoices

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Changes to Federal Awards

• The changes are
• rationalisation of all awards within 3 years to a
  limited number of industry-based awards (maybe)
• simplifying awards by making all non-allowable
  matters unenforceable immediately on commencement
  of WorkChoices
• permanent removal from award system once an
  employees employment becomes subject to an
  agreement made under the new legislation
• limited powers of AIRC to make and vary awards

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Changes in Federal Awards(cont )

• Protected Award Terms v Preserved Award Terms

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Content of Awards Preserved Entitlements

• Preserved award terms
• Annual leave, personal and carers leave,
  parental leave (prevail over Standard if more
  generous)
• Long service leave
• Notice of termination
• Jury service
• Superannuation (until 30 June 2008)
• No variation
• Taken to be included in any replacement award
  (original coverage remains)

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Protected Award Conditions

• Protected award conditions - specified
  allowable conditions that are protected for
  employees entering into agreements
• rest breaks
• incentive based payments and bonuses
• annual leave loadings
• monetary allowances
• overtime and shift work loadings
• penalty rates
• Protected award conditions can be expressed
  excluded or modified by a Workplace Agreement

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Transition of State Awards Agreements

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Transition of State Awards and Agreements

• State awards and agreements applicable to
  constitutional corporations will transfer to
  the Federal system and become
• Notional Agreements Preserving State Awards
• Preserved State Agreements
• Binding on current parties to State agreements
  and those subject to State awards

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Notional Agreements Preserving State Awards

• Will cease to operate after 3 years or earlier if
  replaced by a new Federal agreement
• No prohibition on industrial action during 3 year
  period
• If not replaced transition to Federal award
  (preserved award terms retained in new
  rationalised Federal award)
• AFPC Standard applies (except hours of work) if
  more generous
• Cannot contain prohibited content

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Changes to Agreement Making System

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Agreements - Overview

• Six types of Workplace Agreements
• AWAs
• employee collective agreements
• union collective agreements
• union greenfields agreements
• employer greenfields agreements
• multiple business agreements

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Content of Workplace Agreements

• Required content
• Nominal expiry date 5th anniversary from
  lodgment where agreement silent (12 months for
  Greenfields agreements)
• Dispute settlement clause model clause where
  silent
• Express exclusion or modification of protected
  award conditions (if required)
• public holidays, rest breaks, incentive based
  payments and bonuses, annual leave loadings,
  specified allowances, penalty rates,
  shift/overtime loadings, prescribed matters
• AFPCS must be met during life of agreement
• Employer must not be reckless as to lodgment of
  agreement containing prohibited content

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Content of Workplace Agreements (cont)

• Prohibited content
• restrictions on employing labour hire workers /
  contractors
• prohibitions on AWAs
• allowing for industrial action during the term of
  an agreement
• providing for trade union training leave,
  bargaining fees to trade unions or paid union
  meetings
• mandating union involvement in dispute resolution
• providing that any future agreement must be a
  union collective agreement
• providing a remedy for unfair dismissal
• matters that do not pertain to employment
  relationship or allow or require breach of
  freedom of association

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Making Agreements

• Key changes
• Similar procedures for AWAs and collective
  agreements
• Employees to have seven days access to agreement
  and information statement
• lodgment with OEA within 14 days of approval
  (together with declaration)
• Notify employees of lodgment within 21 days
  (collective agreements only)
• Agreement commences operation on day of lodgment
  (even if requirements not met)

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Termination of Agreements

• Workplace Agreements can be terminated after
  nominal expiry date
• by agreement
• in accordance with terms (after NED)
• upon 90 days notice (after NED)
• Revert to Australian Fair Pay and Conditions
  Standard (plus protected Award Conditions)

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Interaction of Industrial Instruments

• AWAs will exclude both collective agreements and
  awards
• Collective agreements will exclude awards
  (completely) but will not be able to exclude AWAs
• Collective agreements - first in time prevails
  prior to nominal expiry date
• New AWAs replace old AWAs

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Transitional arrangements for current Federal
Agreements

• Pre-reform certified agreements continue to
  operate until replaced or terminated (in
  accordance with the old termination provisions)
• Pre-reform certified agreements can be replaced
  prior to their nominal expiry date (however
  protected action cannot be taken until after that
  date)
• Pre-reform certified agreements continue to
  prevail over awards to extent of inconsistency
• Dispute resolution in accordance with old s170LW
• Only content stripped is anti-AWA provisions
• The Standard does not apply

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Termination of Employment
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Termination of Employment Unfair dismissal

• As a result of the changes, the following types
  of employees cannot make an unfair dismissal
  claim
• employees who have not completed the qualifying
  period of employment (extended from 3 months to
  6 months)
• employees dismissed for genuine operational
  reasons or for reasons that include genuine
  operational reasons, eg, redundancy
• Employees employed by an employer with 100
  employees or less
• seasonal workers

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Unfair Dismissal Changes to the Commissions
Powers

• Commission can determine extension of time and
  jurisdictional issues on the papers, that is,
  without a hearing
• Commission may dismiss (without a hearing) an
  unfair dismissal claim on the basis that it is
  frivolous, vexatious or lacking in substance

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Unfair Dismissal Changes to the Commissions
Powers (cont)

• An employer may apply for the dismissal of an
  unfair dismissal application on the basis that
  the employment was terminated for genuine
  operational reasons, or for reasons that include
  genuine operational reasons
• If an employer makes such an application, the
  Commission must hold a hearing to determine the
  employers application before dealing with the
  matter any further

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Termination of Employment - Compensation

• In determining an amount that may be awarded to
  an employee, the Commission must have regard to
• the amount of any income earned by the employee
  between the date of termination and any order
  made for reinstatement
• any misconduct of the employee that contributed
  to the employers decision to terminate the
  employees employment
• Compensation may not include a component
  representing compensation for shock, distress, or
  humiliation, or other analogous hurt, caused to
  the employee by the manner of dismissal

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Record Keeping Requirements

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Record keeping requirements

• Under the new regulations
• there are comprehensive record keeping
  obligations for all employees
• these cover working hours, pay various forms of
  leave (including annual and personal leave),
  superannuation and termination of employment
• recent exclusion announced for employees not
  entitled to overtime and earning over 55,000
  (hours of work records only)

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Conclusion
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Conclusion What Does AH MRC Need to do?

• Assess your current position, that is, make sure
  you understand
• the scope of your State and Federal Awards and
  Agreements
• when your Agreements expire
• what will and will not be enforceable under your
  Awards and Agreements
• what your various unions are likely to do or
  demand

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Conclusion Decide Future Direction

• Will you observe pre-existing Award and Agreement
  obligations that are no longer enforceable?
• Will you continue with past practices or are
  there opportunities to steer in a new direction?
• What changes do you wish to bring about?