What Labor victory means for IR and employment law


What Labor victory means for IR and employment law

With the victory of the Federal Labor Party on 24 November Australia's IR and employment law will change, but the changes may not be immediate and they are likely to be phased in over some years.


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With the victory of the Federal Labor Party on 24 November Australia's IR and employment law will change, but the changes may not be immediate and they are likely to be phased in over some years.

The ALP tactics are unclear but there may be a move to introduce legislation as early as possible and force the Coalition to declare its future position on WorkChoices and the Labor proposals.

The new Senate will not be in place until 1 July 2008 so any noteworthy changes will be delayed until at least then if the ALP meet opposition in Parliament. The balance of power in the new Senate is likely to reside with the Family First senator and Nick Xenophon from South Australia.

The details of any proposed Labor amendments are not available but the election campaign provided insights into what might happen.


For example, under Labor, AWAs will become redundant, but Employee Collective Agreements will remain valid, and in time may require the addition of a new individual flexibility clause. Such a clause would be to facilitate an employer and an individual employee agreeing to make a flexibility arrangement for family-friendly work arrangements and performance pay.

AWAs are to be abolished but there will be two transitional provisions - existing AWAs will be allowed to run their course, and Individual Transitional Employment Agreements are to be allowed (expiring 31 December 2009) to cater to workplaces that require time to move away from individual arrangements.

Other foreshadowed legislative changes

Other foreshadowed legislative changes are likely also to lead to changes in areas such as performance and misconduct, work/ life balance, parental leave, recruitment, leave, and redundancy.

However Prime Minister Elect, Kevin Rudd has vowed he won’t let the more radical Greens anywhere near his Government’s IR policies.

The Greens want more trade union access to workplaces and the scrapping of all AWAs, even those legally signed prior to the election.

Awards and agreements

The ALP also noted in the course of the campaign that employees earning more than $100,000 will be totally exempt from award conditions. In addition, the current restrictions on entry to the workplace by union officials will continue and unions will not have to be told of negotiations for non-union agreements in their industrial areas.

As well, in a move that could make union officials even more upset, Labor's new Fair Work Australia authority will provide staff to assist employees to negotiate non-union collective agreements.

The authority will also provide funding to employer organisations to enable them to assist their members with collective enterprise bargaining.

The $100,000 threshold for award coverage will be welcomed by the major mining companies who have strongly lobbied to maintain their current flexible AWA system, which basically exempts them from union interference.

Although Labor has pledged that it will abolish AWAs, it has said that since many employees entered into them in good faith - and many have known no other industrial instrument - existing AWAs will be able to run their term for up to five years.

Opting out of AWAs

However, it will allow for the creation of 'individual transition employment agreements' (ITEAs) to supplant current AWAs during their term provided employees are not disadvantaged against the relevant award or enterprise agreement.

An ITEA can be made between an employer who has any employee engaged on an AWA as at 1 December 2007, with a new employee or an existing employee whose terms and conditions are governed by an AWA. It will have a nominal expiry date of 31 December 2009 and must not disadvantage the employee compared to an applicable collective agreement, applicable award or the Australian Fair Pay and Conditions Standard (AFPCS).

This may enable unions to move into areas where workers have been particularly hit by tough AWAs (including those not now coming under the Fairness Test) and offer to negotiate an ITEA on their behalf, however it is not clear whether protected industrial action will be permitted in negotiating an ITEA.

This is one of the few potential loopholes offered to unions, which will still be banned from taking industrial action in support of pattern bargaining.

Safety net

Labor has promised to set up a universal safety net of 10 National Employment Standards. These are:

  1. Hours Of Work
  2. Parental Leave
  3. Flexible Work For Parents
  4. Annual Leave
  5. Personal, Carers And Compassionate Leave
  6. Community Service Leave
  7. Public Holidays
  8. Information In The Workplace
  9. Notice Of Termination And Redundancy
  10. Long Service Leave

The existing award system will be simplified and 'modernised' to 10 basic award conditions, which are in addition to the 10 National Employment Standards.

This award process (under existing law) would commence on 1 January 2008 and Labor intends that it will be completed within two years, to commence on 1 January 2010.

New-style awards

The 10 matters that will be allowable under the new-style awards will be:

  1. Minimum wage (including skill based classifications)
  2. Type of work performed (permanent or casual)
  3. Hours of work
  4. Overtime rates
  5. Penalty rates
  6. Annualised salaries
  7. Allowances
  8. Leave and leave loadings
  9. Superannuation
  10. Dispute settling procedures

Flexibility in awards

Areas of flexibility which are to be allowed in awards include matters such as rostering and hours of work, all-up rates of pay, and arrangements to allow employees to start and finish early to collect children from school without the employer having to pay additional penalty rates for early starts.

Labor will also ensure there is individual flexibility for employees covered by collective agreements, however these must be 'genuinely' agreed by both employer and employee and the arrangements must be in writing and given to the employee.

Unfair dismissals

The exemptions from unfair dismissal legislation for employers with fewer than 100 employees will be abolished, but employers with fewer than 15 employees cannot be subject to a claim unless the employee has been employed for 12 months.

Labor plans special help for young workers

Labor will introduce special protections for young workers. Labor's Fair Work Australia workplace relations system will include young worker liaison officers in each State, special training for staff in local offices throughout Australia to deal with the problems of young workers, and a Young Workers Toolkit to provide employment-based information.

Labor aims for 'harmonised and reformed' national OHS system

Labor's OHS proposals include: Comcare to be reformed, a cooperative approach to harmonised OHS laws with the States, and a new national body to oversee workplace safety matters and legislation.

It also sees a return to official trade union involvement as they will be consulted, along with employers, at all levels of the new OHS system. It may also possibly see unions winning back the right to nominate OHS delegates to Commonwealth workplace OHS committees.

Gillard rules out paid paternity leave

Labor IR spokeswoman, Julia Gillard, has ruled out introducing a mandatory paid paternity leave provision, but will encourage employers to be more supportive after childbirth.

ABCC to stay until 2010

Rudd and Gillard also confirmed that the Australian Building Construction Commission arrangements will remain until 31 January 2010, when it will be transferred to Fair Work Australia.

Snapshot - Coalition and ALP on IR

The positions of the major parties on industrial relations leading up to the election was summarised in this table.

More detail

More detail on Labor's IR proposals can be found at this website.


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Rudd's new IR system tramples over unions

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