Varying an industrial instrument under WorkChoices

Analysis

Varying an industrial instrument under WorkChoices

With the introduction of WorkChoices, many employers presumed the conditions prescribed by a pre-WorkChoices industrial instrument were 'frozen' as at 27 March 2006. However, there are matters within pre-WorkChoices industrial instruments that can be varied by respective industrial bodies.

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With the introduction of WorkChoices, many employers presumed the conditions prescribed by a pre-WorkChoices industrial instrument were 'frozen' as at 27 March 2006. However, there are matters within pre-WorkChoices industrial instruments that can be varied by respective industrial bodies.

A further point to note is that the ability of the relevant industrial tribunals to vary the minimum entitlements prescribed by these industrial instruments has been restricted.

Conditions contained in some pre-WorkChoices industrial instruments may be varied by the relevant industrial tribunal, under certain circumstances.

Also, the ability to vary a workplace agreement made under WorkChoices is subject to the provisions of the Workplace Relations Act.

Both pre and post 27 March 2006 instruments considered here

This article looks at the matters that can be varied in pre-existing industrial instruments, and the conditions of employment that may still be varied under WorkChoices instruments.

Pre-WorkChoices industrial instruments

A 'pre-WorkChoices industrial instrument' would include: a pre-reform Federal award, notional agreement preserving State awards (NAPSA), pre-reform certified Federal agreement, pre-reform Australian Workplace Agreement (AWA), and a preserved State agreement (PSA).

Variation of each of these instruments is considered below.

Pre-reform award

Employers and employees who were bound by a Federal award immediately before WorkChoices commenced are now bound to an instrument referred to as a 'pre-reform award'. WorkChoices provides that a pre-reform award may be varied by the Australian Industrial Relations Commission (AIRC), under certain circumstances, subject to application by the relevant party to the pre-reform award.

A pre-reform award may be varied by the AIRC:

  • as a result of an award rationalisation or award simplification process
  • if the variation is essential to maintain minimum safety net entitlements - in varying a pre-reform Federal award under this section, the AIRC must be satisfied that ALL of the following conditions have been met: the variation is not inconsistent with a decision of the AFPC, the variation only applies to employees employed under that award, is not inconsistent with the award rationalisation and award simplification process, and the variation would not act as a disincentive to agreement-making at the workplace level
  • if an award is ambiguous or uncertain to remove the ambiguity or uncertainty
  • to bind additional employers, employees and organisations
  • to remove objectionable provisions from awards

The AIRC may only create new awards as part of the award rationalisation process. A variation to maintain 'minimum safety net entitlements' would be restricted to matters that are referred to under WorkChoices as 'allowable award matters', and could only to be varied to a level previously determined by the AIRC. These matters include:

  • ordinary time hours of work - for example, a pre-reform award currently prescribing a 40-hour week could be varied to the 'standard' weekly hours of 38
  • incentive-based payments and bonuses
  • annual leave loadings - a pre-reform award could be varied to the 'standard' annual leave loading of 17 1/2%
  • observance of public holidays - the observance of a public holiday and/or the appropriate penalty rate for work performed on a public holiday may be varied. For example, the observance of Melbourne Cup Day holiday this year (in metropolitan Melbourne) may require variation if the day is moved because of the equine flu outbreak. A pre-reform award that refers to 'Melbourne Cup Day' as a holiday would not require variation, however a reference to 'the first Tuesday in November' would require variation, if the holiday is to be observed on the day the Melbourne Cup is run.
  • monetary allowances - these have already been the subject of variations by the AIRC, in December last year and an increase operative from October this year. The type of allowances that have been increased by these decisions include work-related allowances, eg industry allowance, leading hand allowance, disability allowance, etc, and expense-related allowances, eg tool allowance, meal allowance, living away from home allowance, etc.
  • loadings for working overtime or shift work
  • penalty rates
  • redundancy pay - a pre-reform award could be varied to reflect the AIRC's redundancy pay 'standard', except it could not vary an award to provide redundancy pay to an employer employing fewer than 15 employees
  • stand down provisions
  • type of employment - eg full-time, regular part-time and casual employment and shift work. For example, an award that does not provide for casual employment or shift work could be varied to allow this type of employment.
  • conditions for outworkers

NAPSA (previous State award)

Under WorkChoices, a NAPSA is considered to be a 'nominal agreement' for the purposes of the legislation, therefore it is considered to be different in nature to a pre-reform award.

The AIRC may only vary a NAPSA to remove a provision that creates ambiguity or uncertainty, or any matter that is considered to be 'discriminatory'.

The Workplace Ombudsman may exercise his/her power to remove prohibited content from a NAPSA, although this is limited to a provision restricting the offer of AWAs in the workplace and any restriction on training arrangements.

Pre-WorkChoices agreements

A pre-WorkChoices agreement, ie a pre-reform certified agreement, pre-reform AWA, or preserved State agreement, may only be varied to remove any ambiguity or uncertainty, or any provision that is considered discriminatory.

The Workplace Ombudsman may exercise his/her power to remove prohibited content from a preserved collective State agreement or a preserved individual State agreement. However, there is no power for the Workplace Ombudsman to remove prohibited content from a pre-reform certified agreement or a pre-reform AWA.

Workplace agreements under WorkChoices

There are a number of different types of workplace agreements which may be negotiated under WorkChoices. Because the maximum duration of a workplace agreement made under WorkChoices is five years, the parties may wish to vary the agreement during the life of the agreement.

The most common agreements negotiated under WorkChoices are Australian Workplace Agreements (AWA), employee collective agreements and union collective agreements.

The process of varying a workplace agreement is basically the same as making the agreement. When varying a workplace agreement, the employer must consider the following:

  • the varied conditions continue to meet the Australian Fair Pay and Conditions Standard after the variation
  • if applicable to the employees, fair monetary or non-monetary compensation has been given when varying a 'protected award condition' subject to the 'fairness test'
  • the agreement still contains a dispute resolution procedure
  • no 'prohibited content' has been included with the variation
  • where applicable, the employer must not remove any mandatory provisions in relation to basic rates of pay and casual loading for Victorian employees
  • the employer gives all employees currently under the agreement as varied, the completed 'Information Statement for Employees', which sets out how and when the employer will seek approval of the variation from the employees
  • the 'information statement' is to be given at least seven days before the variation is approved by the employees, unless the employees have signed and dated a waiver of this period
  • the employer meets with a bargaining agent appointed by the employees, if requested to do so
  • access to the variation in writing is given at least seven days before the variation was approved by the employees, although this period can be waived by employees in writing
  • the employer gives access to any industrial instruments, such as awards or workplace agreements, where the variation to the agreement incorporates terms from these industrial instruments
  • the employees approved the variation either by a vote in which a majority of the employees currently employed who are covered by the agreement, or who will be covered by the agreement as varied, approved, or, if another method is used, a majority of those employees indicated they approved
  • the variation includes the signatures of both the employer and a representative of the employees to the agreement, or a bargaining agent appointed by the employees
  • the parties' signatures must be accompanied by the full name and address of each person signing the variation and an explanation of that person's authority to sign the variation

In the case of an AWA, if an employee is under 18 years of age, an appropriate person over the age of 18 (eg parent or guardian, but not the employer) must also sign the variation and that signature witnessed.

The minimum provisions of the WorkChoices Standard and other minimum entitlements will automatically override any condition contained in a workplace agreement that is less favourable than the Act.

Variation to an agreement in these circumstances would be advisable, so as to avoid the possibility of an underpayment of wages or entitlements by the employer. Lodgement of any variation to a collective agreement is to be made with the Workplace Authority.

Related

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Minimum wages and WorkChoices

Awards and agreements

 

 

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