Howard's AWA double back-flip over safety net

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Howard's AWA double back-flip over safety net

The Howard Government has buckled in the face of bad election polls and brought a 'fairness test' back into AWAs through a highly intrusive, third party system.

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The Howard Government has buckled in the face of bad election polls and brought a 'fairness test' back into AWAs through a highly intrusive, third party system.

This is despite arguing for more than a year that employers and employees should be able to negotiate workplace agreements between themselves, without third party interference.

Prime Minister John Howard today released details of his new AWA process which have outraged some employers and caused Labor to describe them as a 'cynical election ploy'.

No disadvantage system back

Despite explicitly removing the 'no disadvantage test' from AWAs supplanting awards when it introduced WorkChoices, it has now brought such a test back into the system.

Howard and Workplace Relations Minister, Joe Hockey, now say that it was 'never the intention that it should become the norm for penalty rates to be traded off without proper compensation', although they admit it was 'accepted that in some limited cases a job without penalty rates was better than no job at all'.

Yet when unions and the ALP raised case after case of workers losing their penalty rates for no return, Howard continued to defend the WorkChoices AWA system, saying it was in Australia's economic interest.

When a survey of AWAs by the Office of Employment Advocate showed that almost every AWA had stripped at least one award condition, the Government ordered that such statistics be no longer kept.

'Some concern in the community', says Howard

In a statement today, Howard revealed details of the new system, saying 'the Government understands there is some concern in the community that the removal of penalty rates and other protected conditions without fair compensation might occur, with adverse consequences for final take-home pay'.

He said that under the new AWA system a Fairness Test will guarantee that entitlements such as penalty rates and public holiday pay are not traded off without adequate compensation.

No compensation for existing AWAs

However, those workers who have already lost their penalty rates and other entitlements will receive no compensation at all.

The new Fairness Test will protect workers who would otherwise have been entitled to award conditions and are paid less than $75,000 a year. It will be applied to all agreements lodged on or after 7 May 2007. If an agreement removes or modifies those award conditions, then the employee will be required to receive fair compensation.

Protected award conditions

These protected award conditions are:

  • penalty rates, including for working on public holidays and weekends
  • shift and overtime loadings
  • monetary allowances
  • annual leave loadings
  • public holidays
  • rest breaks, and
  • incentive-based payments and bonuses

Agreements will continue to be lodged with the Office of the Employment Advocate which will be renamed the Workplace Authority.

The Workplace Authority will conduct the Fairness Test by considering both the monetary and non-monetary compensation offered relative to what would have been payable under the relevant award.

Work obligations considered

In establishing what is fair compensation the Workplace Authority will consider the work obligations of the employee, such as whether the employee would be required to undertake shift work at weekends.

The Authority will also consider, where appropriate, other factors such as the industry, location and economic circumstances of the business and the specific employment circumstances or opportunities of the employee. It will take into account all relevant working arrangements and entitlements, including family friendly conditions.

Howard said the Fairness Test will be conducted in a similar fashion to the no-disadvantage test. The employee will most often be compensated with a higher rate of pay for each hour worked.

14 days to make AWA fair

However, in both cases employees receive fair compensation for trading off protected award conditions such as penalty rates and holiday pay. If an agreement does not pass the Fairness Test, the relevant industrial instrument will apply until an agreement is formed that passes the test.

If an agreement does not pass the Fairness Test, the employer and employee will have 14 days to make the agreement fair.

No arbitration

While the Workplace Authority cannot arbitrate AWAs for fairness, it will provide advice to the employer and employee on why the agreement is not fair and how it could be changed to make it fair.

Employees will be able to access independent advice on their workplace agreements and pre-check agreements before signing. In addition, a new Workplace Ombudsman will provide additional protection for workers, with enhanced powers to investigate employers who fail to meet their obligations under the workplace laws.

If an agreement does not pass the Fairness Test, the employer will be expected to make up any back pay.

Pre-lodgement assessment

The Workplace Authority will also offer a pre-lodgement assessment of proposed agreements against the Fairness Test.

Howard said the Workplace Relations Act will be amended to expressly prohibit an employer dismissing an employee because their agreement does not meet the Fairness Test.

The law will also be amended to explicitly state that an employer must not force an existing employee to agree to remove or vary a protected award condition.

The Workplace Authority

In addition to the Employment Advocate's current responsibilities, the Workplace Authority will be responsible for:

  • conducting the Fairness Test
  • providing a pre-lodgement facility to check agreements
  • providing information and advice to employees and employers about agreement making
  • providing a single information source for straightforward information and advice on all aspects of workplace relations, and
  • providing advice specifically targeted at young people

The Workplace Ombudsman

The Office of Workplace Services will be renamed the Workplace Ombudsman.

The Workplace Ombudsman will take on a greater role in ensuring that employers comply with their legal obligations. For instance, the Workplace Ombudsman will conduct regular random audits to ensure employers are meeting their obligations to young people.

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