Existing awards and Fair Work

This commentary discusses the fate of previously existing awards since modern awards and the National Employment Standard (NES) commenced on 1 January 2010.

This commentary discusses the fate of awards that existed prior the commencement of modern awards and the National Employment Standard (NES) on 1 January 2010.
 
Existing awards
 
The Fair Work (Transitional and Consequential Amendments) Act 2009 (TA Act) identifies a number of specific awards as ‘award-based transitional instruments’ recognised by the Fair Work Act. These include:
  • an award (refers to a pre-reform federal award)
  • a notional agreement preserving state awards (NAPSA)
  • a transitional federal award.
The impact of the Fair Work Act on the continued operation of these awards is discussed below.
 
Pre-reform federal awards
 
A pre-reform federal award is referred to by the TA Act as an ‘award-based transitional instrument’. This means the applicable federal award continued to apply to employers and employees until 31 December 2009, when the applicable modern award replaced it. 
 
However, transitional instruments from the previous Workplace Relations Act will continue to apply until replaced by a Fair Work Act instrument. This means that in the unlikely event that a modern award does not have coverage of employee(s) currently covered by a pre-reform federal award, the transitional instrument continues to apply beyond 1 January 2010 until replaced by a Fair Work Act instrument.
 
Transitional federal awards
 
Transitional federal awards applied to an employer named as a respondent to a federal award who is not a corporation, such as a sole trader or a partnership. Because these employers were not incorporated, they could not be covered by the federal workplace relations system at that time. 
 
Under the Workplace Relations Act, these instruments were given a life span of five years after the commencement of WorkChoices, meaning employees under these instruments revert to the relevant state workplace relations system from 27 March 2011. 
 
Referral of state powers
 
However, as all states except Western Australia have now referred their industrial relations powers to the Commonwealth, employees in those states are now covered by the relevant modern award. Western Australian employees of an employer whose business is unincorporated reverted to the relevant state award from 27 March 2011.
 
NAPSAs
 
NAPSAs are notional agreements preserving state awards. From 1 January 2010, the relevant modern award replaces the current NAPSA, although a NAPSA may continue to apply to affected employees where no modern award has been given specific coverage of that industry or occupation at that time. 
 
 
Enterprise NAPSAs
 
Enterprise NAPSAs continue to apply beyond 31 December 2009.
 
Modern awards are expressed so as to not apply to employers covered by an enterprise NAPSA (although the coverage clause may, in the absence of the enterprise NAPSA, cover the employees). 
 
An enterprise NAPSA is potentially convertible into a modern award, which is done by application to FWA. A party can also apply to terminate the enterprise NAPSA. 
 
If nothing is done, it ceases to operate on 31 December 2013. If, in the meantime, it is terminated on application, or a modern enterprise award is made, or the FWC declines to convert it into an enterprise modern award on the grounds that there is an appropriate modern award, the enterprise NAPSA ceases. (Div 1 Part 2, Sch 6 of the TA Act).
 
While it applies, the enterprise NAPSA forms the basis of the Better Off Overall Test (BOOT) (Part 4 Sch 7 of the TA Act) for any new agreement.
 
Sample documentation
 
For an extensive library of policies, agreements, forms, correspondence and checklists, designed to make human resources (HR) management easy for your business see our HR Advance website.

 

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