Doing nothing is a choice under WorkChoices for existing state award employers

Analysis

Doing nothing is a choice under WorkChoices for existing state award employers

The uncertainties surrounding the WorkChoices legislation in the light of High Court challenges by State governments has meant that many employers are standing back and waiting before taking steps to embrace the new system.

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The uncertainties surrounding the WorkChoices legislation in the light of High Court challenges by State governments has meant that many employers are standing back and waiting before taking steps to embrace the new system. Remaining under the current industrial instrument is consequently the choice many employers are making. This article looks at employers choosing to remain under current state awards.

The consequences of employers' 'doing nothing' is being examined in a series of articles on WorkplaceInfo. The first three articles covered employers that are currently covered by federal awards, federal agreements and state agreements (respectively). See 'Related' below for links.

Not much changes

In the absence of a new agreement under WorkChoices, the current working arrangements in a workplace will remain relatively unchanged. For many businesses more than one set of working arrangements apply to different employees.

For example, senior staff and managers may be award-free (ie. employed under an individual contract of employment), clerical staff may be covered under the relevant state clerks award, maintenance employees could be covered under the relevant federal metal industry award, or some employees in the workplace may be covered under an existing federal or state agreement.

The incidence of state awards in workplaces in Australia is quite high, particularly in jurisdictions such as New South Wales, Queensland and Western Australia, so employers wishing to maintain the status quo under existing state awards has created some concerns for employers in these states. This article looks at the impact on those employers who prefer to have employees remain under the terms and conditions of their existing state award.

The fate of state awards

With the Federal Government creating one national industrial relations system under WorkChoices for those businesses that are constitutional corporations, many employers are under the mistaken belief that industrial instruments created under the various state systems (ie. state awards and agreements) will be invalid under WorkChoices. Affected employers who have employees currently covered under a state award will have the award content preserved as a 'notional agreement preserving state awards' (referred to in this article as a 'pre-existing state award').

The pre-existing state award also binds the employer, relevant employees and any union which has a member among the employees and is entitled to represent the employee(s). It will also apply to new employees engaged after WorkChoices commences so long as the pre-existing state award would have applied to that employee under the relevant state legislation and it has not been varied or terminated under WorkChoices.

Impact of AFP&C Standard

This means the current terms of a pre-existing state award will not change, except for the Australian Fair Pay & Conditions Standard (where more generous) and the removal of prohibited, ambiguous or discriminatory content. The WorkChoices model dispute settlement procedure also applies. The pre-existing state award will also apply to both current and new employees in that workplace.

Australian Fair Pay & Conditions Standard (AFP&CS)

The AFP&CS applies to a pre-existing state award where it is more generous to the employee than the relevant award provision. It should be noted that the state industrial law must also be more generous than the equivalent AFP&CS standard.

More generous?

At this stage, it is unclear whether the 'more generous' test will apply to each particular award (legislative) provision or be applied to the overall entitlement. For example, the NSW Annual Holidays Act provides for the pro rata payment of 1/12th of ordinary pay on termination of employment, whereas, the AFP&CS prescribes 1/13th.

On this particular condition the state legislation is clearly the more generous, however, both prescribe 4 weeks' annual leave per year, which means the state legislation is equal to, but no more generous, than the AFP&CS. It is hoped this ambiguity will be clarified by the Regulations to WorkChoices when promulgated shortly.

AFP&CS applies when more generous

The following standards apply where the AFP&CS is more generous than the corresponding provision in the pre-existing state award:

Annual leave: Under the AFP&CS, full time and part-time employees (but not casuals) accrue 1/13th of the nominal hours (ordinary hours including paid absences but excluding overtime) he or she has worked in a 4 week period and the accrued entitlement must be credited at least monthly. This equates to 4 weeks' annual leave for an employee on a 38 hour working week.

A seven day continuous shift worker regularly required to work on Sundays and public holidays also accrues an additional 1/52nd of his or her nominal hours worked in a 12 month period. There is some concern that the extra week's annual leave will apply to an employee whose ordinary hours are worked, for example, Wednesday to Sunday inclusive. This is not normally the case under the current circumstances, where an employee usually receives the extra week's annual leave when working on a rotating shift roster which operates on a 24 hour - 7 day week basis.

Annual leave accrues on a pro rata basis and is cumulative. Annual leave is paid at the employee's ordinary rate of pay (excluding bonuses, loadings, allowances, etc). Annual leave cannot be cashed out if an employee is under a pre-existing state award. Award provisions with respect to annual leave loading will continue to apply.

Personal/carer's leave: (covering leave for personal sickness or injury, carer's leave, to care for an immediate family or household member who is sick, injured or affected by an unexpected emergency, and compassionate leave to attend a life threatening illness or injury to, or funeral of, an immediate family or household member).

Personal leave can be paid or unpaid. An employee accrues paid personal leave at the rate of 1/26th of the nominal hours he or she has worked in a 4 week period and the accrued entitlement must be credited at least monthly.

This equates to 10 days' paid personal leave per year for a full time (38 hour week) employee. Personal leave is pro rata and cumulative. However, an employee is not entitled to take more than 10 days' (for a full time employee) paid carer's leave in each 12 month period. Generally, the personal leave provisions contained in pre-existing state awards are likely to be more generous than the AFP&CS.

An employee is entitled to additional unpaid carer's leave of up to 2 days per occasion if an immediate family or household member requires care or support because of personal illness or injury or an unexpected emergency. Unpaid carer's leave may only be taken if the employee's entitlement to paid carer's leave is exhausted.

In addition to personal leave the AFP&CS provides an entitlement of 2 day's paid compassionate leave per occasion. Compassionate leave is wider than bereavement leave because it may be accessed when a member of the employee's immediate family or household has a life threatening illness or injury, or dies. It is unlikely that any bereavement leave provision in a pre-existing state award will be more generous than the AFP&CS.

Parental leave: Parental leave (covering maternity, paternity and adoption leave) is not significantly altered from the pre WorkChoices standard under the Workplace Relations Act 1996. The AFP&CS standard applies to all full time, part-time and regular casual employees, including employees of an unincorporated business.

Any employee with, at the time of the expected birth, at least 12 months' continuous service, or a casual employee engaged on a regular and systematic basis during a period of at least 12 months prior to the expected birth, and who has a reasonable expectation of on-going engagement, is entitled to up to 12 months' unpaid parental leave.

The paid maternity leave provisions provided in a pre-existing state award are separately preserved. Leave taken as paid parental leave is deducted off the AFP&CS unpaid leave where it also applies or read according to the award if the award's unpaid parental leave is more generous.

Pre-existing state awards varied for the recent federal and state 'Family Provisions' cases will probably be more generous than the parental leave AFP&CS and, therefore, will continue to apply.

Hours of work: (not applicable) The hours of work provisions in the AFP&CS do not apply to the employment of an employee while his or her employment is subject to a pre-existing state award. It should be noted that the AFP&CS for hours of work does not apply to a pre-existing state award which does not contain an hours of work clause.

Public holidays: (not applicable) WorkChoices gives an employee the right to reasonably refuse to work on a public holiday, however, as this only applies to current federal awards or a workplace agreement made under WorkChoices, this standard does not apply to an employee who is covered under a pre-existing state award.

Meal breaks: (not applicable) Whilst WorkChoices prohibits an employer from requiring an employee to work for more than 5 hours continuously without an unpaid meal break of at least 30 minutes, this standard does not apply to an employee who is covered under a pre-existing state award.

State employment legislation

Where the terms and conditions of employment apply to an employee under one or more provisions of a state award, or a state industrial law, all the employee's state-based terms and conditions, including the specific provisions of a state industrial law are preserved as part of the pre-existing state award.

State legislation that provides minimum employment entitlements include annual leave legislation, parental leave legislation, and personal/carer's leave legislation (in some states).

The provisions of the appropriate state industrial legislation will be incorporated into the pre-existing state award as a minimum condition of employment to be compared with the AFP&CS (where relevant).

Termination of a pre-existing state award

A pre-existing state award will cease to operate after 3 years unless earlier terminated or replaced by a new agreement under WorkChoices. It is anticipated that within three years the award rationalisation process will have be completed by the Australian Fair Pay Commission and employees' conditions will revert to the most appropriate 'rationalised' federal award.

Prohibited content in state awards

Prohibited content in a pre-existing state award will be removed from the award. In the interim, prohibited content will be unenforceable from the commencement of WorkChoices.

Examples of prohibited content include - payment of union bargaining fees; deduction of union dues; prohibition of AWAs; restricting the use of independent contractors or on-hire employees; trade union training leave; and providing a remedy for unfair dismissal.

Related

Doing nothing is a choice under WorkChoices for federal award employers

Doing nothing is a choice under WorkChoices for federal agreement employers

Doing nothing is a choice under WorkChoices for existing state agreement employers

 

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