The safety net under Fair Work legislation

Analysis

The safety net under Fair Work legislation

The proposed Fair Work legislation will make some significant changes to the safety net underpinning the making of new awards and agreements.

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The proposed Fair Work legislation will make some significant changes to the safety net underpinning the making of new awards and agreements.
 
Dick Grozier, director of Australian Business Industrial, notes that under Part 2–2 of the Bill all federal system employees will be under the National Employment Standards (NES) and many will also be under a modern award. The NES contain most of the components of the current 'Australian Fair Pay and Conditions Standards' together with a range of other conditions, some of which are new.
 
Significant changes
 
Significant changes include:
  • Maximum weekly hours: Modern awards or enterprise agreements can provide for hours to be averaged over a cycle, employees not under an award or agreement can average hours over a period of not more than six months.
  • Requests for flexible working arrangements: A right for an employee who is eligible for unpaid parental leave and who is responsible for the care of a pre-school child to request in writing a change to their working arrangements to assist them to care — the employer must respond in writing within 21 days and may only refuse on reasonable business grounds.
  • Parental leave and related entitlements: A right for an eligible employee to request up to an additional 52 weeks of unpaid leave, which can only be refused on reasonable business grounds or, if both parents are working, a right for the second parent to request up to 12 months of unpaid parental leave following the first parent's leave.
  • Annual leave: The four weeks (five weeks for certain shift workers) of annual leave per year of service accrues continuously on the basis of service and there is no four-weekly accrual/monthly reporting cycle; modern awards and enterprise agreements can provide for cashing out untaken annual leave; award/agreement-free employees can agree to cash out leave provided a minimum of four weeks remains.
  • Personal/carer's and compassionate leave: Casual employees have an entitlement to unpaid compassionate leave; modern awards or enterprise agreements can provide for cashing out untaken personal/carer's leave.
  • Community service leave: Non-casual employees are entitled to top-up pay when required for jury duty (to a maximum of 10 days for any one period of service); and to unpaid leave when required for emergency services duties.
  • Long-service leave: The same as at present except that because it is part of the NES it cannot be traded-off in an agreement.
  • Public holidays: The Queen's Birthday has been added to the public holidays list and part-days gazetted in a region are now recognised under the proposed legislation.
  • Notice of termination and redundancy pay: An employer must give an employee written notice of termination before terminating him or her except where the employee is a casual, engaged for a specified period, fixed task or a season or under a traineeship, or where the dismissal is for serious misconduct; employees terminated for redundancy are entitled to up to 16 weeks of severance pay depending on length of service except when they have less than 12 months of service, the employer employs fewer than 15 employees, the employee was employed for a specified task, period, under a traineeship or apprenticeship or for seasonal work, the employee is a casual; severance pay may not apply if the employee transfers with a business or turns down comparable employment; modern awards can expand on these entitlements.
  • Fair work information statement: An employer must give each employee a copy of a prescribed Fair Work Information Statement as soon as practicable after the employee starts, but not more than once in a 12-month period.
 
First finalised awards
 
Award modernisation is proceeding now. The first finalised modern awards are expected on 19 December 2008 including the modern awards for clerical work, hospitality industries and metals.
 
Award modernisation is not expected to be completed until late 2009.
 
Modern awards
 
The NES and modern awards are scheduled to come into effect on 1 January 2010.
 
High-income employees
 
In some cases, modern awards will cover employees who receive high wages. Where a high-income employee is covered by a modern award, the employer may give the employee a written 'guarantee of annual earnings' and also advise the employee that the modern award does not apply to him/her during the period of the 'guarantee of annual earnings'. To employ outside the award in this way, the guaranteed earnings must exceed the 'high income threshold' (which was $100,000 at August 2007 and is indexed). The employee's earnings are wages, deductions directed by the employee and agreed value of non-monetary benefits but do not include payments not able to be determined in advance or superannuation guarantee contributions.
 
 
Source: Dick Grozier, director of Australian Business Industrial (affiliated with NSW Business Chamber).
 
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