Non-allowable award matters and Transitional Instruments

Analysis

Non-allowable award matters and Transitional Instruments

Some employers have queried whether the old rules relating to pre-reform federal awards or NAPSAs (now referred to as award-based transitional instruments) still apply in respect of ‘unenforceable’ non-allowable award matters.

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Some employers have queried whether the old rules relating to pre-reform federal awards or NAPSAs (now referred to as award-based transitional instruments) still apply in respect of ‘unenforceable’ non-allowable award matters.
 
WorkplaceInfo recently published an article which identified those matters that are applicable during the ‘transition period’ from the introduction of the Fair Work Act 2009 (1 July 2009) and the introduction of modern awards and the National Employment Standards (NES) (1 January 2010). 
 
Transitional issues are primarily dealt with by the Fair Work (Transitional and Consequential Amendments) Act 2009 (henceforth, TA Act), detailing a number of matters relating to continuity of service and employee entitlements, as well as the continued operation of industrial instruments that existed under the previous Workplace Relations Act.
 
This article addresses the concerns of those employers with employees covered by a pre-reform federal award or NAPSA (award-based transitional instruments) that are unsure of the on-going application of certain provisions of the (previous) Workplace Relations Act in relation to these instruments, particularly regarding those employment conditions that were unenforceable under the Workplace Relations Act (ie non-allowable award matters).
 
Non-allowable award matters in transition period
 
The following conditions prescribed by a pre-reform federal award are regarded as non-allowable award matters and continue to apply, and are, therefore, unenforceable:
  • conversion from casual employment to another type of employment
  • the number or proportion of employees that an employer may employ in a particular type of employment
  • prohibitions on an employer employing employees in a particular type of employment
  • maximum or minimum hours of work for regular part-time employees
  • restrictions on the range of or duration of training arrangements
  • restrictions on the engagement of independent contractors
  • restrictions on the engagement of labour-hire workers
  • union picnic days
  • tallies in the meat industry
  • dispute resolution training leave
  • trade union training leave.
 
It should be noted that an employer may continue to observe these provisions in a pre-reform federal award, without penalty.
 
Transitional instruments covered by content rules
 
The TA Act provides for the continuation of content rules of prescribed transitional instruments that previously operated under the Workplace Relations Act. The instrument content rules not only cover pre-reform federal awards, but also the following transitional instruments:
Award-based transitional instruments: State reference transitional awards and common rules, notional agreements preserving state awards (NAPSAs).
 
Agreement-based transitional instruments: Collective agreements, workplace determinations, preserved collective State agreements, pre-reform certified agreements, old IR agreements, s170MX awards, Individual Transitional Employment Agreements (ITEAs), preserved individual state agreements, Australian Workplace Agreements (AWAs), pre-reform AWAs.
Transitional instrument content rules
 
As noted, pre-reform federal awards are now referred to under the Fair Work Act as an ‘award-based transitional instrument’. A number of terms prescribed by pre-reform federal awards were referred to as ‘non-allowable award matters’, meaning there is no legal compulsion for the employer to continue to provide these conditions for those employees covered under a pre-reform federal award.
 
Situation from 1 July to 31 December 2009
 
Under the TA Act, Sch 3 — Part 4 provides that transitional instruments continue to be subject to the same instrument content rules that applied under the Workplace Relations Act. ‘Instrument content rules’ are:
  • provisions about what may, must or must not be included in an instrument (including non-allowable award matters)
  • provisions to the effect that a particular term of an instrument is of no effect (however described)
  • provisions to the effect that a particular term is taken to be included in an instrument.
 
The first bullet point above is describing both non-allowable award matters and allowable award matters. This means that non-allowable award matters that were specified under the Workplace Relations Act will continue to be unenforceable in pre-reform federal awards until 1 January 2010, when these provisions will be replaced by modern awards and the NES.
 
Modern awards
 
Modern awards will become operative from 1 January 2010. Although the concept of non-allowable award matters will no longer exist from 1 January 2010, most of the non-allowable matters provided under the Workplace Relations Act will not be prescribed in modern awards in any case.
 
Non-allowable matters becoming enforceable
 
Current non-allowable matters that will be enforceable under modern awards and that have already been determined by the Australian Industrial Relations Commission (AIRC) include ‘conversion from casual employment to another type of employment’, ‘maximum or minimum hours of work for regular part-time employees’, and ‘dispute resolution training leave’. These matters will become enforceable from 1 January 2010.
 
Prohibited in modern awards
 
Sections 150–155 of the Fair Work Act prescribe those terms that must NOT be included in modern awards. These terms are:
  • ‘objectionable terms’, ie a term that deals with general protections (these cover ‘workplace rights’, ‘industrial activities’ and ‘sham arrangements’)
  • the payment of a bargaining fee
  • a term covered by s326(1) of the Fair Work Act (which deals with unreasonable payments and deductions for the benefit of an employer)
  • a term covered by s326(3) (which deals with unreasonable requirements to spend an amount)
  • terms that require or authorise an official of an organisation to enter premises to hold discussions with, or interview, an employee; or to inspect any work, process or object
  • terms that discriminate against an employee on the basis of race, religion, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, political opinion, national extraction or social origin, unless of the inherent requirements of the job or an institution conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed
  • terms and conditions of employment that are state-based, unless included in the modern award process (but only for up to five years)
  • terms dealing with long service leave.
 
Source: Paul Munro, IR Consultant.
 
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