Professor Andrew Stewart

University of Adelaide & Piper Alderman 8th Annual Workforce Conference Melbourne, 22 September 2009

The Fair Work safety net

 A two part ‘safety net’ of minimum conditions under the Fair Work Act 2009, to commence on 1 January 2010  National Employment Standards (NES) for all national system employees (Pt 2-2)  standardised and simplified ‘modern awards’ for most such employees (Pt 2-3)  currently being created by AIRC under WR Act 1996 Pt 10A, continued in effect by TPCA Act (Fair Work (Transitional Provisions and Consequential Amendments) Act 2009) Sch 5

The Fair Work safety net

 Plus national minimum wage orders for award-free workers  to be set by FWA Minimum Wage Panel under FW Act Pt 2-6  first annual wage review in 2010, to take effect on 1 July  by 1 July 2011, there must be a minimum wage for juniors and trainees  TPCA Act Sch 9 cl 4

Transitional arrangements

 Australian Fair Pay Conditions Standard in Part 7 of Workplace Relations Act 1996 continues until end of 2009  TPCA Act Sch 4 cl 2  Minimum wages set under Part 7 Div 2 continue into 2010 and beyond, until displaced by modern awards or NMWOs  TPCA Act Sch 9 cl 5

Transitional arrangements

 Until modern awards take effect, ‘award based transitional instruments’ can continue (TPCA Act Sch 3)  ie, pre-reform federal awards, NAPSAs  Query arrangements for State reference employers outside Victoria  presumably to be revealed in forthcoming amendments to FW Act

Preparing for the NES

 Affected employers need to review existing employment arrangements and ensure NES compliance by 1 January 2010  applies to all employees, including executives  unlike AFPCS, no exemption where old agreements deal with matters covered by NES

Preparing for the NES

 Key new entitlements/obligations  right to request flexible working arrangements  parents eligible if they have children below school age or with a disability  refusal by employer can be disputed, but only if employer has agreed  extended (unpaid) parental leave  if refused, agreed dispute resolution only

Preparing for the NES

 Key new entitlements/obligations (cont’d)  cashing out annual leave  directing when annual leave is taken  unpaid compassionate leave for casuals  community service leave  voluntary emergency management activities  jury service

Preparing for the NES

 Key new entitlements/obligations (cont’d)  redundancy pay  based on 2004 federal award standards  usual exceptions for casuals, fixed term contracts, etc  Fair Work Information Statement  new employees only

Accrued entitlements

 ‘Service’ defined in FW Act s 22  General rules for pre-NES service (TPCA Act Sch 4 cl 5)  service with an employer before 1 January 2010 generally counts towards NES entitlements  but where employee has already had the benefit of an entitlement, they cannot ‘double count’

Accrued entitlements

 Special rules  employee carries over whatever annual leave or paid personal/carer’s leave entitlements they have accrued before NES (TPCA Act Sch 4 cl 6)  but if leave taken after 1 January 2010, NES rules apply (eg as to cashing out, notification, etc)  for redundancy pay, pre-NES service counted only if employee had some entitlement as of 31 December 2009 (TPCA Act Sch 4 cl 5)  including under an award, agreement or employment contract

Award modernisation

 The challenge for the AIRC  review around 1700 awards/NAPSAs that apply to more than one business  standardise and simplify, to reduce number of awards and eliminate State/Territory-based differences in wages and conditions  avoid disadvantaging employees or increasing costs for business  complete process by end of 2009

Award modernisation

 Progress to date  93 awards either ‘finalised’ or issued in exposure draft, for Stages 1 to 3  30 more industries/occupations still to be dealt with in Stage 4, plus ‘miscellaneous’ award  note challenge of framing coverage of miscellaneous award  on track for 2010 start, but ongoing adjustments can be expected  plus review after first 2 years (TPCA Act Sch 5 cl 6)

Transitional arrangements

 Model/default transitional provisions announced in [2009] AIRCFB 800 (2 September 2009) 

Some awards will have different arrangements, or move to modern award conditions immediately

Transitional arrangements

 Under default arrangements  most modern award provisions commence on 1 January 2010  but for minimum wage rates, loadings and penalty rates  six month ‘grace period’  phasing up or down of each rate or loading in 5 instalments from 1 July 2010, where significant discrepancy with transitional instrument

Transitional arrangements

 Two big queries about default provisions  no reductions in take-home pay  supplements protection offered by TPCA Act Sch 5 Pt 3  but is the protection automatic, or only on application to FWA?

 how they apply to new businesses  commencing after 1 January 2010  commencing between 27 March 2009 and 1 January 2010

Enterprise awards

 Excluded from current modernisation process  No new enterprise awards from now on (except in Victorian public sector)  Parties can ask FWA to modernise existing enterprise awards (TPCA Act *)  unmodernised awards to expire at end of 2013  FWA’s discretion  to modernise or not to modernise?

Award modernisation

 An assessment of the process  The inevitable problems (and complaints) when standardising and simplifying  Government intervention – help or hindrance?

 An encouragement to make enterprise agreements?

 Is it worth the pain?