Fair Work Australia: are we there yet?

Analysis

Fair Work Australia: are we there yet?

A notable feature of the progress of the new Fair Work legislation has been the absence of much detail about the functions and powers of Fair Work Australia, the new body that will be established to oversee the legislation.

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A notable feature of the progress of the new Fair Work legislation has been the absence of much detail about the functions and powers of Fair Work Australia (FWA), the new body that will be established to oversee the legislation.
 
Some information has been released gradually, notably a Fact Sheet in September, but it was also evident that we would have to wait for the Bill itself before some questions could be answered. Now that the Bill is available, this article revisits those questions raised in the past to assess whether the answers have been revealed.
 
Powers of FWA
 
The list of powers and functions of Fair Work Australia is extensive, because it is intended to replace no less than seven current institutions:
  • Australian Industrial Relations Commission (AIRC)
  • Australian Industrial Registry
  • Australian Fair Pay Commission (AFPC)
  • Australian Fair Pay Commission Secretariat
  • Workplace Authority (WA)
  • Workplace Ombudsman (WO)
  • Australian Building and Construction Commission (ABCC) — this will operate within the Office of the Fair Work Ombudsman.
 
Part 5–1 of the Bill sets out the following functions and powers:
  • 'dealing with' industrial disputes
  • 'providing assistance and advice about, and undertaking activities to promote' its functions and activities
  • 'providing administrative support'.
 
FWA members’ functions include: approval of enterprise agreements, review and variation of awards, issuing good- faith bargaining orders, handling unfair dismissal claims, mediation and dispute resolution, issuing orders relating to industrial action and making workplace determinations (arbitrating the content of enterprise agreements in certain circumstances where negotiations have stalled).
 
Powers will include ordering and conducting compulsory conferences between the parties, mediating and ascertaining whether a majority of employees want to collectively bargain.
 
Fair Work Ombudsman
 
The Fair Work Ombudsman (FWO) is a separate office within FWA. Fair Work Inspectors report to the FWO. FWO powers include 'promoting and maintaining compliance with the Act' as well as educative and advice functions.
 
The main questions raised by lawyers and other commentators before the Bill was introduced concerned the powers FWA and the FWO would actually have, and how it would exercise them in practice. From the Bill and Explanatory Memorandum, we can deduce the following:
  • The FWO can inquire into or investigate any act or practice that may breach either the Act, a related instrument (such as an award or agreement) or a safety net contractual entitlement (ie a contractual term that relates to a provision of a modern award or the NES).
  • The FWO can institute court proceedings or apply to the FWA to enforce any of the provisions listed in the previous sentence.
  • It can represent employees in proceedings related to the above issues in order to promote compliance.
  • It can refer matters to other relevant authorities.
  • It also seems likely that the FWO could bring an equal remuneration claim on behalf of a group of unequally remunerated employees seeking an equal remuneration order.
 
Inspectors
 
The FWO also oversees the work of Fair Work Inspectors. Inspectors will be required to carry a photographic identity card and will have the powers to enter and inspect workplaces to determine whether breaches of the Act or other relevant instruments (as noted above) have occurred. The scope of this includes the National Employment Standards, award and enterprise agreement provisions, workplace determinations, national minimum wage orders and equal remuneration orders.
 
If an Inspector believes a breach has occurred, he or she can issue a compliance notice or apply for an order to the affect that a breach of a civil remedy provision of the Act has occurred, which attracts a financial penalty on the employer. The Inspector applies to either the Federal Court, Federal Magistrates Court or a relevant state or territory court for the order. Court orders may take the form of either compliance directives or financial compensation for anyone who has suffered loss because of the breach.
 
However, as an alternative to applying for an order, an Inspector can accept a written undertaking by the employer to remedy the breach (eg to pay back-pay to employees). This undertaking then becomes enforceable if it is not complied with, but is intended to allow employers to remedy the situation without becoming subject to legal proceedings. An undertaking cannot be accepted after a compliance notice has already been issued.
 
Courts
 
The Federal Court and Federal Magistrates Court will gain new Fair Work Divisions. These Divisions will be able to make orders to remedy breaches of the legislation, deal with small claims (up to a limit of $20,000) and enforce safety net entitlements, the NES and award entitlements. The Fair Work Divisions will act as the enforcement arms of FWA.
 
To summarise the above, it is now clear that the office of the FWO, as part of FWA, does have extensives power to enforce compliance with the Act backed by financial penalties against employers for non-compliance. Potentially, it also  has proactive powers if it were to exercise its education and compliance promotion functions with its capacity to represent employees.
 
FWA orders
 
The Bill contains many provisions that allow FWA to make various orders. Orders may be issued in relation to bargaining, dismissal, industrial action, right of entry and stand-downs.
 
FWA can also make 'determinations' to resolve a matter, so it can effectively arbitrate matters.
 
FWA cannot enforce orders or determinations itself, these require the affected party to implement court proceedings, or for the FWO to implement them on the party’s behalf. As noted above, enforcement will be via the Fair Work Divisions of the courts.
 
Dealing with' matters
 
Parties can make applications to FWA to deal with various matters. The scope of FWA’s powers allows it to grant interim orders or dismiss matters. It also has powers to conduct conferences and formal hearings.
 
Section 595 of the Bill describes the scope of 'dealing with' matters. FWA can only arbitrate a matter if another provision of the legislation explicitly authorises it to do so, for example to arbitrate a dispute relating to the bargaining process as provided by s240. It has a wide scope to 'deal with' matters in 'non-arbitration' ways, such as conciliation, mediation and making recommendations. But, as noted above, orders and decisions of FWA are not enforceable by FWA itself — court proceedings must be implemented to enforce them.
 
FWA is prevented from dealing with disputes over whether an employer had reasonable business grounds for refusing an employee’s request to be granted flexible working arrangements (under s65 of the Bill) or to extend an entitlement to unpaid parental leave (s76).
 
Lawyers
 
Parties can be represented by lawyers at matters before FWA only if FWA grants permission to do so. It can only do so if it believes legal representation will expedite resolving the matter or if there are 'fairness-related' reasons why a party should be represented. Matters before FWA will usually be handled by a conference rather than a hearing, apart from minimum wage reviews.
 
Public hearings
 
Other than a general provision that hearings will be conducted in 'public' (subject to various exceptions), the Bill does not indicate where they will be conducted. It is not clear, therefore, whether they could be conducted at the employer’s work site, or confined to FWA offices.
 
There is, however, a provision in the Bill that Rules may set out how FWA conferences and other functions may be conducted, and it is feasible that this is how the matter will be clarified.
 
Offices
 
Earlier information released about FWA indicated that its structure would include a large number of regional offices, to make FWA more accessible to employers and employees. The Bill makes no reference to such a structure, so it is still unclear what powers and authority staff in regional offices will have. For example, will they be able to 'deal with' matters as described above, such as conducting onsite conferences and hearings, or will their functions be limited to the information and assistance-type roles?
 
Appeals
 
There has been conjecture as to whether FWA decisions and orders would be appealable. Section 604 provides that decisions can be appealed against if FWA grants permission for an appeal. FWA must grant an appeal if it is in the 'public interest' to do so, but otherwise has discretion whether to allow an appeal.
 
FWA can order the stay of its decision pending the outcome of an appeal. It can refer matters to a Member of FWA, other than Minimum Wage decisions. Appeals will be held by either a Full Bench, the President or Deputy President of FWA. It can refer questions of law to the Federal Court. Procedural Rules and Regulations may set out the technicalities for lodging and processing an appeal (eg forms to use).
 
FWA expertise?
 
Some commentators have also questioned the likely qualifications and workplace relations expertise of FWA Members. Their concerns related to the role of FWA as both an administrative and judicial body, and the fact that it would be taking over the functions of a wide range of disparate existing bodies (see list above).
 
Sections 626 (and following sections) of the Bill set out minimum qualifications and experience required for the appointment of Members, the Workplace Ombudsman, Commissioners and Minimum Wage Panel Members, which should ensure that these concerns are addressed.
 
Actual appointments to the above positions have not yet been announced, although the Minister has said that the current AIRC members will be appointed to FWA.
 
Other issues
 
Questions have also been raised before the Bill was introduced regarding FWA powers and functions in relation to specific issues such as dismissal claims and good-faith bargaining procedure. These questions will be discussed in forthcoming articles on those specific topics.
 
Summary
 
Some of the questions raised have been answered in the Bill, others not. They may have to await Regulations (and, perhaps, Procedural Rules), when the legislation is passed, and/or further announcements by the Government when it begins to actually establish FWA. The Bill gives FWA wide scope to determine its own procedures through its rules.
 
 
Source: Mike Toten, HR writer.
 
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