New flexibility clause for individual workers only


New flexibility clause for individual workers only

The AIRC has listed 14 industries for which it will prioritise modernised awards, and released a draft flexibility award clause that restricts flexibility arrangements under an award to apply between employers and individuals — with unions largely marginalised.


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The AIRC has listed 14 industries for which it will prioritise modernised awards, and released a draft flexibility award clause that restricts flexibility arrangements under an award to apply between employers and individuals with unions largely marginalised.

Full text of the Commission’s decision is at the AIRC webpage.

The new flexibility clause has been regarded by employer organisations as replacing AWAs, and will see workers again able to trade off such things as penalty rates and overtime.

In a major blow to the unions, a Full Bench of the Commission rejected the ACTU’s suggestion that employees be able to enter into a collective flexibility arrangement that would have modified the application of the award to all employees in a workplace.

Individual workers and flexibility clause

Instead, the AIRC’s draft flexibility clause limits the arrangement to individual workers and the employer, saying this conformed with the award modernisation request from IR Minister Julia Gillard.

However, it included the provision that a flexibility clause could not be offered as a condition of employment. It also set no fixed term for such agreements, which can be terminated by either party with four weeks notice, or immediately if both parties agree.

The Commission says there should be no inhibition on an individual employee using the services of a union, and expects that in many cases unions and employer bodies will be involved.

The flexibility clauses also do not require formal approval by any registering body, as AWAs did.

What can be included under ‘flexibility’

The award terms that can be included in the flexibility clause are:

  • arrangements for when work is performed

  • overtime rates

  • penalty rates

  • allowances

  • leave loading.

The Commission also includes a no-disadvantage test (NDT) based on the one in the former Workplace Relations Act and the existing one in the test for ITEAs in the transitional legislation.
No-disadvantage test at commencement date of arrangements

However, the Commission says the flexibility agreement only has to meet the NDT as at the date it commences to operate and not continuously during its existence - meaning it is possible for employees to fall behind the terms of the award over time.

The Commission said a continuous test ‘would add an extra process requirement to agreement-making and introduce an element of ongoing uncertainty’.

However, the Commission said the termination provisions would provide additional attention, and the Workplace Authority would be expected to monitor the use of the flexibility clauses.

Priority areas for modern awards

The 14 areas to be given priority are:

  • Coal Mining Industry

  • Glue and Gelatine Industry

  • Higher Education Industry

  • Hospitality Industry

  • Metal and Associated Industries

  • Mining Industry

  • Private Sector Clerical Occupation

  • Racing Industry

  • Rail Industry

  • Retail Industry

  • Rubber Plastic and Cablemaking Industry

  • Security Industry

  • Textile, Clothing and Footwear Industry

  • Vehicle Manufacturing Industry.

The Commission decided not to include for priority the following industries:

  • Aged Care Industry (excluding Nursing) and Nursing Occupation

  • Electrical Occupation

  • Gardening and Sportsground Maintenance

  • Graphic Arts Industry

  • Information and Communications Technology Industry

  • Insurance Industry

  • Poultry Processing Industry

  • Professional Engineers and Scientists Occupations

  • Recorded Entertainment Industry

  • Vehicle Repair, Services and Retail Industry.

The Commission will announce on 10 October the list of industries and occupations that will be given early attention, even if they are not on the priority list.

Exposure drafts of the first lot of modernised awards will be published by 12 September, with submissions and suggestions being received until 10 October. The final date for the publication of priority awards is 19 December 2008.

Employers ‘pleased’

Unsurprisingly, employer organisations have welcomed the flexibility clause, with the Australian Industry Group saying it is ‘sensible and fair and workable for all parties’.

The Australian Chamber of Commerce and Industry (ACCI) said that since modernised awards are to have a reactivated safety net role, ‘it is vital that they are flexible enough to meet the evolving needs of employees and employers’.

‘Their flexible application is also essential in a system without statutory individual agreements,’ chief executive Peter Anderson said.

‘The model clause decided by the AIRC appears straightforward and balanced, provided that it operates in an efficient manner, particularly in the small business sector where less capacity for industrial relations expertise is available.'

‘The AIRC has largely rejected complicated union alternatives.’

At the time of going to press, the ACTU had not responded to the Commission’s draft flexibility clause.

Award Modernisation - Request from the Minister for Employment and Workplace Relations - FB of AIRC -  PR062008 - 20 June 2008


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