ACTU ‘concerned’ about award modernisation details


ACTU ‘concerned’ about award modernisation details

The ACTU submission to the Senate inquiry into the Federal Government’s interim IR legislation has welcomed the Bill but expressed concern about ‘areas of uncertainty’ regarding award modernisation.


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The ACTU submission to the Senate inquiry into the Federal Government’s interim IR legislation has welcomed the Bill but expressed concern about ‘areas of uncertainty’ regarding award modernisation.

The submission says it does not doubt it is intended that the AIRC will address some of these tensions when making the new modern awards; however, the ACTU ‘would welcome the Government providing clear advice to the AIRC’.

National Employment Standards

The first concern of the ACTU was the interaction of modernised awards with the National Employment Standards (NES).

‘The Minister’s draft award modernisation prohibits awards operating inconsistently with the NES,’ the submission says. ‘On its face this prohibits an award providing more beneficial provisions, where to do so requires the award to operate in a manner that offends the NES.'

‘We acknowledge that the proposed request permits a modern award to "build on" entitlements contained in the proposed National Employment Standards (NES) in certain circumstances, and to provide industry detail where required. This allows the awards to supplement the NES.'

Retrenchment pay

‘However, this does not deal with situations where the NES purports to prohibit or restrict entitlements. An example would be where an award currently provides for retrenchment pay in all workplaces.'

‘On the one hand this would be permitted in a modern award as retaining the safety net having regard to the existing entitlements of the employees.'

‘On the other hand it is a provision that operates inconsistently with the NES. Similarly, the awards in an industry might provide for the taking of some or all leave whilst an employee is receiving workers’ compensation. This would be inconstant with the express prohibition in the draft NES, and therefore unable to be included despite the fact it is accepted industry practice.’

The ACTU recommended the Government clarifies that the proposed prohibition on awards operating inconsistently with the NES is to be read beneficially.

State differentials

The ACTU also expressed concern about the situation with State differentials:

‘The ACTU recognises and supports the Government’s objective is to achieve nationally consistent and fair industrial relations system, at least for the private sector,’ the submissions said.

‘However we are concerned that the prohibition on awards containing any State based differentials after 2013 constitutes an unnecessary restriction on the discretion of the AIRC to develop modern awards.'

‘The ACTU supports the Commission being obliged to eliminate, as far as practicable, State based differentials. But we urge the Government to allow awards to contain State based differences on an ongoing basis where there remains a sound basis for the differential.’

Enterprise awards

The ACTU also expressed concern about enterprise awards, which, at present, the Bill does not allow to be modernised.

‘The ACTU considers this to be unduly restrictive, and unfair to people employed in businesses with enterprise awards,’ the submission said.

‘The Government’s "Forward with Fairness: Policy Implementation Plan" indicated that the Commission would be able to review enterprise awards if requested by the parties. The ACTU calls on the Government to implement this promise according to its terms.’

Exceptional award matters

The Bill contains a list of matters that may be dealt with in awards. While the ACTU welcomes the fact that this list is broader than was previously the case, it is concerned that there is no capacity for the Commission to include matters that may, on an exceptional basis, be relevant to a particular industry.

Sex scenes

‘Examples include the regulation of nudity and simulated sex scenes which traditionally appeared in the Actors Feature Film Award 1979, and the regulation of driving safety contained in the Transport Industry - Mutual Responsibility For Road Safety (State) Award (NSW).'

‘The ACTU considers that the Commission should have the discretion to include such matters in awards where the circumstances of the industry or sector warrant.’

Pay Scales

The ACTU expressed concerns about extending pay scales to new employers, pointing out that the Bill would remove the power of the Fair Pay Commission to make new pay scales.

‘This process is so technically complex that this power has never been exercised, and the ACTU welcomes the abolition of these highly complex provisions,’ the submission says.

‘However, the abolition of the power to make new pay scales leaves a significant gap whereby there is no agency charged with responsibility for extending the scope of a pay and classification Scale to new employers.'

‘Current pay scales only bind employers who were bound by State or federal wage instruments (such as awards) in 2005. Businesses that have opened since then (outside of the common-rule-award jurisdictions) are not bound by these pay scales, and are only required to pay their employees the federal minimum wage ($13.74 per hour).'

‘Under the Bill as it presently stands, this situation will remain until at least 2010, when modern awards will begin to regulate wages. The ACTU considers this to be highly undesirable, as it leaves an unequal playing field in place for two years.’

New businesses

The ACTU recommends that the Workplace Authority should have the power, upon application of an employer, employee or organisation, to direct that a new business in a sector which is ‘usually’ regulated by awards is bound to observe the pay scale derived from the relevant award.

‘This borrows from the current regime, where the Workplace Authority is already responsible for determining which sectors are "usually" regulated by an award, as part of its administration of the fairness test.'

‘Alternatively, the power could be given to the Australian Industrial Relations Commission to direct, when roping a new employer into an existing award (under section 557) to order that the employer also be bound by the pay scale that was derived from the award.’

Despite these criticisms, the ACTU generally welcomes the legislation, particularly the abolition of future AWAs.

However, it is not convinced of the need for Individual Transitional Employment Agreements, saying common law agreements could replace the need for them and provide sufficient flexibility for employers.


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