Workplace landscape — what’s happening in 2012?

Analysis

Workplace landscape — what’s happening in 2012?

Here’s an overview of the employment-related developments and changes that are anticipated to occur in 2012.

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Here’s an overview of the employment-related developments and changes that are anticipated to occur in 2012.

A number of important matters will (or may) occur in the area of workplace relations in 2012. These include:
  • a review of modern awards; review of the Fair Work Act 2009
  • the Annual Wage Review
  • changes to superannuation
  • changes to paid parental leave (PPL) scheme
  • abolishing the Australian Building and Construction Commission
  • establishing Road Safety Remuneration Tribunal
  • commencement of harmonised Work Health and Safety (WHS) legislation in some jurisdictions
  • a legislative amendment to Tas long service leave entitlements.

A number of Bills affecting employment conditions were recently introduced to Federal Parliament, which, if passed, are expected to commence operation some time in 2012.

There is also a reminder here of those matters that change annually — for example, transition to modern awards process; high income threshold.

Review of all modern awards

On 17 November 2011, Fair Work Australia (FWA) issued a Statement that deals with the review of all modern awards (other than modern enterprise awards and state reference public sector modern awards, as required by the Fair Work (Transitional and Consequential Amendments) Act 2009.

The Review must occur as soon as practicable after the second anniversary of the Fair Work (safety net provisions) commencement date. The commencement date of the safety net provisions was 1 January 2010, therefore, FWA must conduct the Review as soon as practicable after 1 January 2012.

FWA may also review transitional arrangements in modern awards, although this can only be done where the relevant modern award contains a term that provides for such a review. Such a term is usually contained in the ‘Commencement and Transitional’ clause of a modern award (eg cl 2 of the Clerks — Private Sector Award 2010).

The review will be conducted by members of FWA sitting alone to deal with awards, including transitional provisions where appropriate, on an individual basis. A Full Bench may be constituted to deal with a matter or matters of general significance. The review will be based mainly on applications to vary modern awards. In some cases, FWA may also propose variations. It is likely that these proposed variations will be limited to technical and drafting matters.

Where, in relation to a particular modern award, there is no application to vary and FWA does not propose any variations, in normal circumstances there will not be any public proceedings in relation to the review of that modern award. Any application to vary a modern award should be filed by Thursday, 8 March 2012.

After 8 March 2012, a procedure and a timetable will be adopted, which are appropriate to the circumstances — including the nature of any proposed variations. It seems likely that most applications will not look to make significant changes to existing provisions.

Employers may seek to modify the standard award individual flexibility arrangements provisions but the ACTU has signalled that it wishes to pursue junior wage rates and ‘secure employment’ issues later in 2012, instead of as part of the review.

Annual Wage Review 201112

The Minimum Wage Panel will conduct hearings in relation to the 2011–12 Annual Wage Review of minimum wage rates under modern awards, the national minimum adult wage and the national minimum wage for apprentices and junior employees who are award/agreement free.

Any increase in minimum wage rates determined by the Minimum Wage Panel will be operative from the first pay period to commence on or after 1 July 2012.

Review of Fair Work Act

Early in 2012 the Federal Government will review the operation of the Fair Work system.

The Government has announced the terms of reference for the review of the Fair Work Act 2009, to be conducted by Reserve Bank board member John Edwards, former Federal Court judge Michael Moore and Sydney University Emeritus Law Professor Ron McCallum.

In announcing the terms of reference, IR Minister Bill Shorten said the government believes the Fair Work Act is working well, ‘but there is always room for improvement’.

Terms of reference

The panel, which will be required to report by 31 May next year, will examine and report on the extent to which the Fair Work legislation is operating as intended including:
  • the creation of a clear and stable framework of rights and obligations that is simple and straightforward to understand
  • the emphasis on enterprise-level collective bargaining underpinned by simple good faith bargaining obligations and related powers of Fair Work Australia
  • the promotion of fairness and representation at work
  • effective procedures to resolve grievances and disputes
  • genuine unfair dismissal protection
  • the creation of a new institutional framework and a single and accessible compliance regime
  • any differential impacts across regions, industries occupations and groups of workers including (but not limited to) women, young workers and people from non-English speaking backgrounds
  • areas where the evidence indicates that the operation of the Fair Work legislation could be improved consistent with the objects of the legislation.
The review will not report on those matters to be addressed in a separate review of modern awards by Fair Work Australia.

For more information see: McCallum on panel for review of Fair Work Act 
 
Superannuation

In November, a tranche of legislation was introduced to Federal Parliament during 2012 regarding superannuation, including an increase in the superannuation guarantee change (SGC), the setting up of ‘MySuper funds’, the introduction of ‘SuperStream’ and changes to payslip regulation with respect to payslips.

Superannuation Guarantee Charge (SGC)

The government introduced the Superannuation Guarantee (Administration) Amendment Bill 2011 providing for an increase to the SG levy from its current 9% to 12% in incremental steps from 1 July 2013 and 1 July 2019.

The Bill also removed the age cap (currently 70) on SG contributions, from 1 July 2013.

MySuper funds

MySuper funds is a default investment product with special rules that need the approval of the Australian Prudential and Regulatory Authority (APRA).

MySuper will not give rise to new funds and it can be expected that many of today’s funds will seek approval of a MySuper product.

Under the Bill, MySuper products will be available from 1 July 2013 and from 1 October 2013 a default employer’s contributions (contributions which are not directed into an employee’s chosen fund, or a fund prescribed by an agreement) will have to be paid into a fund offering a MySuper product (even where this is inconsistent with an award or contract term).

SuperStream

A more immediate issue for employers, however, is the proposed introduction of SuperStream.

SuperStream is the name given by the Cooper committee recommendations directed to removing as much manual processing from the superannuation system as possible and making information and money transfers as automatic as possible.

Conceptually, under SuperStream, a fully enabled employer could enrol a new employee in the default fund directly out of its employee records (or set up contributions with a chosen fund) without having to re-key or transfer the information to a new ‘document’ to send to the fund.

Contributions and accompanying information would come directly out of the employer’s records and accounts and go to the bank and to the fund.

The money coming into the fund’s bank from the employer’s bank would re-link with the transmitted contributions information.

The timetable for SuperStream is:
  • 1 January 2012: relevant standards for rollovers and contributions published
  • 1 July 2013: APRA funds to be rolled-over, enrolments and contributions compliant
  • 1 July 2014: large-medium employer contributions SuperStream compliant
  • 1 July 2015: small employer contributions SuperStream compliant.

As indicated in the timetable, the implementation of SuperStream will not commence until July 2013.

Payslips

Last year, the Federal Government announced its intention to legislate so that employees will receive information on their payslips about the amount of superannuation actually paid into their accounts (and notification from their superannuation fund if regular superannuation payments cease) as part of its election policy.

The policy sought to address the problem that members were not aware their superannuation contributions were not being made for a long period after the event.

The government’s response to the Consultative Group’s recommendations was that a reporting requirement would be introduced transitionally:

  • 1 July 2012: payslips to report the expected date the contribution will be paid
  • 1 July 2013: employers to report actual contributions made and information about the fund into which contributions are made (subject to their being no significant payroll system costs).

Draft exposure legislation can be expected by early in the new year.

Current payslip regulations require the employer to report either the contribution entitlement that has accrued over the pay period or the amount of each contribution made during the period and the name

Paid Parental Leave Amendment Bill

In November, the Federal Government introduced the Paid Parental Leave and Other Legislation Amendment (Consolidated) Bill 2011

Under the current Paid Parental Leave Act, an employee may attend the workplace and perform paid work on up to 10 different occasions during the period of parental leave so as to ‘keep in touch’ with the workplace and to facilitate her/his return to work. KIT days cannot be accessed less than 14 days after the birth of the child, and they must be by agreement of both the employee and employer. The Bill alters this minimum to 42 days unless the employer requests a KIT day earlier, but no earlier than 14 days after the birth of the child.

Under the Fair Work Act, unpaid parental leave under the NES is ended by returning to work.

A new s79A would allow for KIT days and provides that although KIT days must be paid they do not break the continuity of unpaid parental leave and nor do they add to the amount of unpaid parental leave an employee can take. Where the second twelve months of unpaid parental leave is accessed, another up to 10 KIT days becomes available.

The Bill also varies the NES to provide that:

  • an employer and an employee can agree to start unpaid parental leave under the NES more than 6 weeks ahead of the expected date of birth
  • in the event of a still birth, the mother may request to return to work earlier than planned with 4 weeks of notice, or if the leave has not started it can be cancelled.

and inserts a note at s536 of the Fair Work Act drawing attention to the need under the Paid Parental Leave Act for the payslip to specify the employee is receiving parental pay.

Abolishing the Australian Building and Construction Commission (ABCC)

In November, the Federal Government introduced the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Bill 2011 to amend the Building and Construction Industry Improvement Act 2005 (BCII Act) to reduce its penalties, dis-establish the Australian Building and Construction Commissioner and establish a new Office of the Fair Work Building Inspectorate with its own powers. The Bill confines unlawful industrial action or prohibited practices to those under the Fair Work Act and replaces the BCII Act penalties with those under the Fair Work Act (a two-thirds reduction).

Long Service Leave Act  Tasmania

An amendment has been made to the Tas Long Service Leave Act 1976 with respect to when long service leave can be taken by an employee. The amendments will be effective from 1 July 2012. The amendment does not apply to mining employees.

The new long service provisions will be:

  • 8.66 weeks of long service leave in respect of the first 10 years of continuous employment with the employer 
  • 4.33 weeks of long service leave in respect of each additional 5 years of continuous employment.

The amendment does not affect the rate at which long service leave is accrued, which works out at 0.8667 weeks of per year of service.

The amendment includes transitional arrangements to provide some staggering of the taking of long service leave. Under these arrangements:

  • workers who have completed 12 or more years of continuous employment as at 1 July 2012 will immediately be able to take their long service leave, subject to the needs of the employer’s establishment.
  • workers who, as at 1 July 2010, have completed 9 or more years but less than 12 years of continuous employment with the employer will have to wait until 1 July 2013 before they can take their leave (subject to the needs of the employer’s establishment).

This does not prevent an employee with 120 or more years of continuous employment (or their personal representatives) from receiving their long service leave entitlements in the event the employee leaves their employment or dies during the period of 1 July 2012 to 1 July 2013.

Current long service leave entitlements under this Act are:

  • 13 weeks of long service leave in respect of the first 15 years of continuous service with the employer
  • 8.66 weeks of long service leave in respect of each additional 10 years of continuous service.

All other provisions under the Act remain unchanged.

Road Safety Remuneration Tribunal

The Federal Government tabled legislation in November to establish a national road safety remuneration system comprising a Road Safety Remuneration Tribunal (RSRT) and a separate education and compliance framework.

The object of the Road Safety Remuneration Bill 2011 is to ensure that drivers in the road transport industry do not have remuneration related incentives to work in an unsafe manner.

The proposed RSRT is intended to commence on 1 July 2012. Road transport industry is defined by reference to the industry coverage of the four relevant transport modern awards (as in force on 1 July 2012):

The RSRT would comprise members of FWA and independent health and safety experts.

The Bill establishes the RSRT to inquire into ‘sectors, issues and practices’ of the industry and determine mandatory minimum rates of pay and remuneration related conditions Road Safety Remuneration Orders for employee and contract drivers.

The government has indicated that where the tribunal determines that a sector of the industry has poor safety outcomes as a result of low remuneration, the tribunal will be able to make a Road Safety Remuneration Order (RSRO) to improve the on-road safety outcomes for drivers operating in that sector. RSROs would apply in addition to existing rights and conditions of contract, award or agreement.

The Bill operates concurrently with relevant state law and also provides for ‘road transport collective agreements’ between contract drivers and a principal. The RSRT would also be able to settle disputes between drivers, their hirers or employers and participants in the road transport industry supply chain about remuneration and related conditions in so far as they provide incentives to work in an unsafe manner. Orders, together with RSROs and safe remuneration approvals, would be enforceable by the Fair Work Ombudsman and relevant unions.

Harmonised Work Health and Safety legislation

The harmonised Work Health and Safety (WHS) legislation is set to commence in five out of nine jurisdictions (ie Commonwealth, New South Wales, Queensland, Northern Territory and Australian Capital Territory) commencing from 1 January 2012.

The model Work Health and Safety Act (revised 23 June 2011), Regulations (approved by the WRMC in August 2011) and Mining Regulations (draft) are available via the Safe Work Australia website, as are the draft model WHS Codes of Practice (some of which have been endorsed by SWA) and a raft of guidance material. Some of the model Codes are still being finalised.

Transitional provisions  modern awards

Most modern awards contain transitional provisions, which is the amount representing the difference between an employee’s minimum wage under the applicable award or NAPSA as at 31 December 2009 and the appropriate wage rate under the applicable modern award (either higher or lower) as at 1 January 2010.

This ‘transitional amount’ is subject to a phasing-in period, adjusted on 1 July each year and will cease on 1 July 2014.

The minimum wage is adjusted (up or down) by a percentage of the transitional amount plus any amount awarded in the Annual Wage Review (first pay period on or after 1 July each year).

The phasing-in percentage applied to the transitional amount will be adjusted to 40% from 1 July 2012 (currently 60%).

High income threshold

Under unfair dismissal law, certain categories of employee are excluded from making an application of unfair dismissal to FWA.

One such category is an employee who is not covered by a modern award or enterprise agreement whose annual rate of earnings exceeds the high income threshold (currently $118,100 a year).

The threshold is adjusted on 1 July each year in accordance with the Fair Work Regulations.

High income employees who are covered by a modern award can agree to avoiding or modifying the award.

Source: Paul Munro, IR Consultant.
 
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