What December '06 changes to WorkChoices mean

Analysis

What December '06 changes to WorkChoices mean

The latest amendments to the WorkChoices legislation cover a broad range of matters including: agreements and agreement making; cashing out paid personal/carer's leave; redundancy provisions in agreements; pay for paid personal leave; annual leave and shift workers; accruing paid leave under the Standard; accruing paid leave when on unpaid authorised leave or unauthorised leave; stand down; and the application of state law.

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The latest amendments to the WorkChoices legislation cover a broad range of matters including: agreements and agreement making; cashing out paid personal/carer's leave; redundancy provisions in agreements; pay for paid personal leave; annual leave and shift workers; accruing paid leave under the Standard; accruing paid leave when on unpaid authorised leave or unauthorised leave; stand down; and the application of state law.

The amending legislation takes effect from 12 December 2006.

In some circumstances the effect of the changes is retrospective.

The major changes are outlined below. These changes only affect employers covered by WorkChoices.

Agreements and agreement making

Waiving access to the Information Statement and providing copies of AWAs are covered.

Waiving access to the Information Statement

When making, varying or terminating a workplace agreement the employer is required to give the affected employee(s) a copy of the relevant information statement at least seven days before the agreement, variation or termination is to be approved. This may now be waived provided:

  • the employee or each employee affected employee agrees; and
  • the agreement to the waiver is in writing, dated and signed by each affected employee.

This means that either or both the information statement and a copy of the draft agreement can be waived provided the proper procedure is followed.

Copies of AWAs

As soon as practicable after lodging an AWA with the Employment Advocate the employer must give the affected employee a copy of the AWA as lodged.

Cashing out paid personal/carer's leave

A workplace agreement can provide that an employee can request to cash out untaken paid personal/carer's leave accrued under the Standard so long as

  • the provision requires the employee to apply to cash the untaken leave out in writing; and
  • the employee is left with a minimum credit of 3/52nds of his or her nominal hours (15 days for full time employees) following the cashing-out.

Redundancy provisions in agreements

Where the employer terminates an agreement (workplace agreement under WorkChoices, a pre-reform certified agreement or AWA or a preserved state agreement) which contains redundancy provisions, those redundancy provisions are preserved for employees who were employed when the agreement was terminated, until the earlier of 12 months from the date the agreement was terminated;

  • the employee leaves; or
  • another workplace agreement is made.

Where there is a transmission of business these protected redundancy provisions transmit to the new employer if an employee with preserved redundancy provisions transfers and this must be notified to the Employment Advocate.

Pre-WorkChoices Agreements and other industrial instruments

A pre-reform certified agreement is now read in conjunction with any preserved state agreement or NAPSA - see details below. Also note that until this amendment the Standard did not apply to an employee who was employed under a pre-WorkChoices agreement (pre-reform certified agreement or AWA or a preserved state agreement).

Pre-reform Certified Agreements and AWAs and State Derived Instruments

This amendment operates retrospectively from 27 March 2006 but any breach incurred between then and 12 December 2006 cannot be prosecuted.

A pre-reform certified agreement is now read in conjunction with any preserved state agreement or NAPSA (any terms of which applied under the agreement prior to WorkChoices) and the certified agreement prevails where there is an inconsistency.

Similarly, a pre-reform AWA is read in conjunction with any NAPSA (any terms of which applied under the agreement prior to WorkChoices) and the AWA prevails where there is an inconsistency.

This means that a pre-reform AWA made in NSW with an employee who would have been covered by a state award would not derive any conditions from the award (because an AWA excluded the award) but may derive terms from the (NSW) Annual Holidays Act 1944.

[The DEWR disagrees with the two paragraphs immediately above. The Department contacted WorkplaceInfo and commented:

'Applying [WorkChoices amendments] to the example set out [above], an employee in NSW covered by a pre-reform AWA that is silent on annual leave but who relied on the Annual Holidays Act for their annual leave entitlement immediately before the commencement of WorkChoices, would continue to be entitled to that annual leave entitlement, but as a preserved term of their NAPSA.

Because the pre-reform agreement did not deal with annual leave (leaving this matter to State legislation), the Standard applies in respect of annual leave and will operate unless the entitlement to annual leave under the NAPSA (derived from the AH Act) is more generous than the Standard.

In this case, as the entitlement under the NAPSA is equal to, but not more generous than, the entitlement under the Standard, the employee will derive their annual leave entitlement from the Standard (to the exclusion of the NAPSA, including any associated administrative or machinery provisions).']

Pre-WorkChoices Agreements and the Standard

This amendment operates retrospectively from 27 March 2006 but any breach incurred between then and 12 December 2006 cannot be prosecuted.

Until this amendment the Standard did not apply to an employee who was employed under a pre-WorkChoices agreement (pre-reform certified agreement or AWA or a preserved state agreement).

The Standard comprises five matters (basic rates of pay and casual loadings; maximum ordinary hours; annual, personal and parental leave). If the pre-WorkChoices agreement does not deal with one or more of these matters that part of the Standard will apply to these employees.

It is important to properly understand what matters are covered by the pre-WorkChoices agreement. For example, a pre-reform AWA in NSW may be silent about annual leave which means (because of the change discussed above) that annual leave conditions under the (NSW) Annual Holidays Act 1944 apply. In this case that pre-reform AWA does deal with annual leave and the annual leave provisions of the Standard would not apply.

The operation of the Standard

Leave, frequency of payments and public holidays provisions are all affected by the amendments.

Accruing paid leave under the Standard

Accrual of paid leave (annual leave, paid personal/carer's leave) is based on the number of "nominal hours" which the employee works in each 4 weekly period. Following this change an employee cannot accrue more than an average of 38 nominal hours per week, even if the employee regularly works more than that number of hours.

When an employee who regularly works more than 38 hours per week takes paid leave they are also entitled to take leave for their regular additional hours which would have been worked during the period of leave, but these are not required to be paid hours.

Hours which have been accrued prior to 12 December 2006 cannot be deducted.

Pay for paid Personal Leave

The definition of (minimum) pay has been standardised. Minimum pay for paid personal leave (personal/carer's leave, compassionate leave), and pay when a pregnant employee cannot be transferred to safe work, is the employee's basic hourly rate. This definition of pay already applies to paid annual leave.

Annual leave and shift workers

The amending legislation provides for regulations which can exclude specified classes of employees from the definition of "shift worker" in the act. An excluded class of employees would not have an entitlement to the additional week of annual leave (the additional 1/52nd of nominal hours worked).

Until any regulations are made there is no change from the current situation.

Accruing paid leave under the Standard and unpaid leave or unauthorised Leave

Periods of unauthorised leave and authorised unpaid leave do not count as service for the accrual of paid leave under the Standard (annual leave, paid personal carer's leave).

Frequency of payment of wages

If a contract of employment or a workplace agreement provides that an employee must be paid no less frequently than monthly it will replace a pay frequency term in a pay scale. Where a pay scale does not have a pay frequency provisions, or an employee is under the Federal Minimum Wage, rather than a pay scale, a contract or workplace agreement can provide for pay frequency. If it does not do so the default minimum of fortnightly in arrears would apply.

What is a Public Holiday?

The definition of public holiday has been changed to include a day which is substituted for a public holiday. This means that an employee can reasonably refuse to work on the specified public holiday and the substituted day.

Stand down

An employee may be stood down without pay for a period during which he or she cannot be usefully employed because of

  • a strike;
  • a breakdown of machinery; or
  • a stoppage of work for which the employer cannot reasonably held responsible

The period of stand down does not break continuity of service and counts as service for all purposes.

If there is an industrial instrument (pre- or post- WorkChoices agreement, award or NAPSA) which provides a right to stand down in the same circumstances its provisions will continue to apply unless they require the employer to obtain an order from an industrial tribunal. In this case the new provisions under WorkChoices will apply.

It is an offence to stand down an employee without pay unless the stand down complies with these new provisions under WorkChoices or the relevant industrial instrument.

Related

Latest WorkChoices amendments receive assent

 

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