IR law changes: start preparing for 2010

Analysis

IR law changes: start preparing for 2010

The 'transitional' changes to the federal Workplace Relations Act commenced on 28 March 2008, but the changes due to commence on 1 January 2010 are far more substantive. HR practitioners should start now to look at how their employers can prepare for, and take advantage of, those changes.

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The 'transitional' changes to the federal Workplace Relations Act commenced on 28 March 2008, but the changes due to commence on 1 January 2010 are far more substantive. HR practitioners should start now to look at how their employers can prepare for, and take advantage of, those changes.

What will change in 2010?

The Government will introduce legislation later this year to implement the changes, and has set a commencement date of 1 January 2010. At the time of preparing this article, most of the changes exist in draft form, with precise final details awaiting the introduction of the Bill. Briefly, the main changes will be:

  • Replacement of the Australian Industrial Relations Commission and Workplace Authority with an 'umbrella' organisation to be called Fair Work Australia. This will have implications for the lodgment and administration of agreements, regulation of awards and procedures for settling disputes (eg over dismissal).
  • Replacement of the Australian Fair Pay and Conditions Standard (AFPCS) with a broader set of National Employment Standards (NES). These currently exist in draft form and are discussed further below.
  • Awards will be modernised and simplified - a promise that was also made when Work Choices was introduced. The Australian Industrial Relations Commission is expected to produce a series of model award clauses between now and 2010.
  • Changes will be made to the coverage and procedures relating to dismissal. A Fair Dismissal Code will be developed, to be used as a model for appropriate dismissal procedures.
  • There will be further changes to the types of employment agreements available. The 'transition' legislation has implemented some temporary and transitional arrangements that will last until 31 December 2009, and also implemented the 'no-disadvantage' test that has replaced the Fairness Test that existed in the latter days of WorkChoices.
  • Provisions relating to right of entry and industrial disputes will change.

Implications for HR: both compliance and proactive planning

As with the transitional changes, the first step for HR needs to be a compliance audit of current employment arrangements versus what will be required. In particular, you need to review the following:

  • performance management and termination policies, for compliance with the Fair Dismissal Code and other provisions
  • compliance with any changes to award entitlements
  • various employment entitlements need to be compared with the National Employment Standards when they are finalised, because these will become the minimum entitlements for all employees (see further discussion below)
  • ensure that the people who have to deal with disputes and right of entry requests are up to speed with the changes.

Once these steps are completed, HR should be looking at the opportunities the changes may present their business in terms of employment strategies and policies. This involves looking at workforce trends and profiles that will be occurring in 2010, and how to take advantage of them.

National Employment Standards (NES)

The proposed NES are somewhat broader than the current AFPCS. HR practitioners should pay particular attention to the following issues:

  • Hours of work: The current 'averaging' of hours provisions will be removed from the Act, but it will be possible for an award to contain averaging provisions.
    If you currently have non-award employees on averaging provisions, you may need to review those arrangements and look for new ones that can meet both parties’ needs. The Government has not, as yet, clarified its position on the application the NES has to non-award employees.
  • The option of flexible work arrangements for parents: Employees with pre-school age children can apply to work under flexible arrangements, and an employer can only refuse the request on 'reasonable business grounds'.
  • Parental leave entitlements: These will be extended.
  • Annual leave: There will be no provisions for 'cashing out' annual leave in the Act, but awards and collective agreements may provide for it. (Note: The current arrangements for cashing out leave require the employee to decide each year whether he/she wishes to cash out annual leave. Again the position of non-award employees is unclear.)
  • Community service leave: This is a new standard that covers jury service and unpaid emergency service leave. You will need to examine your current policies for these issues and ensure they cover at least the minimum requirements set by the proposed standard.
  • Long-service leave: Initially, the provisions will reflect those of the relevant State and Territory long-service leave Acts. Note: some of these Acts, however, have more generous provisions than others, and the Government has hinted that it will examine the idea of a national long-service leave standard. If that occurs, it is most likely to be based on the most generous provisions. HR practitioners should look at the long-service leave accruals of employees, and it may be advisable to encourage them to take their leave before 2010.
  • Notice of termination and redundancy pay: Again, it is important to ensure that current employment contracts and agreements at least comply with the minimum standard.

Other provisions

Prohibited content

Another issue that will affect employment entitlements is the proposed removal of the 'prohibited content' provisions that currently exist under WorkChoices. Many of those provisions can be lumped into the category of 'anti-union' measures. Deductions of union membership fees from payroll is one example. The provisions will be replaced by a requirement that award and agreement provisions simply be 'lawful'. The requirement that they 'pertain to the employment relationship' will also still apply.

Other 'prohibited content' provisions that will be removed include placing restrictions on the use of independent contractors and labour-hire employees at the workplace. If your business uses many such workers at present, be prepared for the possible need to negotiate over future arrangements, and perhaps prepare a 'contingency plan' as well.

It is possible that unions and/or employees may seek to have some of the former 'prohibited content' provisions reinserted into awards and agreements after 2010. If this seems likely to occur, you should do some research and have your response ready when the bargaining process commences.

Same-sex couples

The Government has also indicated that it will examine the possibility of separate legislation providing equal entitlements for same-sex couples. This may affect NES entitlements such as parental leave and flexible work requests.

Study your workforce profile

Of all the NES provisions, those relating to parental leave and flexible work options are the most likely to cause problems. Study the demographics of your workforce, and what its profile will look like by 2010. In particular, focus on employees who are parents. You will need to be very careful drafting their employment documents, both to accommodate requests for flexible work options and to deal with their employment issues as soon as their children reach school age.

Another issue is that the NES flexible work options, and wider scope of provisions possible for awards and agreements, may mean that your organisation may receive more requests for 'flexibility' than it can cope with, eg requests to work from home or vary working hours.

Granting some requests but refusing later ones, even on the basis of business needs, has the potential to create turnover issues and possible claims, eg discrimination. Again, studying workforce demographics in advance may give you a better idea of what the business is in a position to allow or disallow. (Note: 'Flexibility' is an important retention tool as well, and there are drawbacks in knocking back requests.)

Agreement 'flexibility' clauses

All new agreements will be required to have a 'flexibility' clause that allows for 'individual' arrangements to be made with specific employees.

Full details of this clause are awaiting introduction of the Bill, but it can be expected to cover issues such as rostering or working at home. It appears that this clause will place some obligation on employers to reasonably consider individual arrangements proposed by employees, but again we need to see the Bill first.

What if there are employees on AWAs?

Making new Australian Workplace Agreements (AWAs) has now been abolished. Employers that had AWAs in place before this happened can put new employees on Individual Transitional Employment Agreements (ITEAs) until 31 December 2009, but after that, and after existing AWAs are terminated, they will have to place all employees under one of the new arrangements.

Where AWAs and ITEAs have been used because they cater for individual circumstances better than an award or collective agreement, you should start evaluating the following options:

  • whether the 'flexibility' clauses in collective agreements will be broad enough to cover the circumstances you wish to accommodate
  • if an employee earns more than $100,000 per year, whether the proposed new common law individual contracts are a better option. (Note: These contracts, like all other employment arrangements, need to comply with the NES.)

Start work now

January 2010 might seem a long way off at present, and we don’t yet have all the precise details of the changes. However, employees, line managers and unions will start asking questions before then, and your approach should be to take advantage of the new arrangements where you can, rather than merely cope/comply with them. That requires long-term planning.


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