Fair Work Act: employer-focused reforms underway


Fair Work Act: employer-focused reforms underway

The Abbott Government is expected to introduce legislation this week to reform the Fair Work Act in line with its election commitments. At the same time, the Productivity Commission’s review of the Act is about to get underway.


Get unlimited access to all of our content.

The Abbott Government is expected to introduce legislation this week to reform the Fair Work Act (FWAct) in line with its election commitments. At the same time, the Productivity Commission’s review of the Act is about to get underway.
Assessing the impact of FWAct amendments
The Department of Employment released an Options-stage Regulation Impact Statement (RIS) on Friday examining the Government’s proposed amendments to the Fair Work Act in order to implement its election promises.
The Options-stage RIS provides the Department’s assessment of the impact of the proposed changes, although it notes that further consultation will occur prior to a Details-stage RIS in the future.
The Options-stage RIS assesses:
  • the impact of introducing good faith bargaining arrangements and time limits for greenfield agreements;
  • amendments to union right of entry laws;
  • expansion of the application of Individual Flexibility Agreements (IFAs);
  • reinstatement of the position that was in place prior to the FWAct so that annual leave loading is only payable on termination if expressly provided for in the relevant industrial instrument;
  • transfer of business;
  • legislating that a meeting must take place between the employer and employee to discuss a request for extended unpaid parental leave before it can be refused.
Greenfield agreements
The Government’s intention is that good faith bargaining rules — modelled on s228 of the FWAct — will be introduced to greenfields agreement negotiations.
Employers will be able to take a proposed greenfields agreement to the Fair Work Commission (FWC) for approval after three months of bargaining, in the situation where agreement has not been reached in that time.
An additional new requirement for approval will be that the FWC must be satisfied that the agreement provides for pay and conditions that are consistent with the prevailing standards and conditions within that industry.
Union right of entry
The Government’s policy is to reduce the circumstances in which unions can enter workplaces for discussion purposes.

The FWC’s powers to deal with disputes about the frequency of right of entry visits will be strengthened by allowing it to make orders to resolve such disputes when satisfied there has been an excessive number of right of entry visits to a workplace.
The amendments introduced by the previous government last year via the Fair Work Amendment Act 2013 allowing union officials by default to hold discussions in lunch or meal rooms and requiring employers to facilitate transport to, and/or accommodation at, remote sites where no other transport or accommodation is available, will be repealed.
Union officials will be required to have an entry permit issued by the FWC which will include a personal photograph, so that employers may verify the identity of persons seeking to enter their workplace.
Wider application of IFAs proposed
It is proposed that Individual Flexibility Agreements (IFAs) will be able to be negotiated directly between an employer and employee about a wider range of Award entitlements without the need for enterprise agreements.
Currently, IFAs are limited to a specific list of matters set out in applicable instruments, such as an Award or enterprise agreement. It has been suggested that the proposed changes will, for example, allow an employee and employer to agree to trade penalty rates for more flexible working hours to enable the employee to better meet their family commitments.
Annual leave loading
The Government intends to restore the situation regarding payment of leave loading on termination that was in place prior to the Fair Work Act.
Currently, s90(2) of the FWAct states that in relation to any untaken paid annual leave, employers must pay to the employee, on termination the amount that would have been payable to the employee had the employee taken that period of leave. Included in this is leave loading, if the employee is entitled under an industrial instrument to this loading.
Because s90(2) forms part of the NES, this means leave loading must be paid on termination to employees regardless of any provisions to the contrary in the relevant industrial instrument.
Employees will be paid annual leave loading on termination for any period of untaken annual leave only when this is expressly provided for under the applicable modern award or enterprise agreement. Employees will still be entitled to be paid for outstanding annual leave.
Transfer of business
Specifically, employees who voluntarily transfer between two associated business entities will be subject to the terms and conditions of employment provided by the new employer without the employer being required to seek an order from the Fair Work Commission.
The aim is to reduce red tape and costs associated with an employer having to comply with a new industrial instrument that transfers with the transferred employee or the alternative of having to seek an order from the Fair Work Commission to stop an instrument transferring.
Extended parental leave request
The Government’s intention is to introduce a requirement that an employer must discuss in person an employee’s request for an additional 12 months’ unpaid parental leave after an initial 12 months’ leave. The employer will still retain the right to refuse the request on reasonable business grounds but the intention of the meeting is for the employer to clearly explain the business reasons for its decision to the employee.
Fair Work Act review in preparation
The Government is also in the final stages of preparation for the Productivity Commission to review the Fair Work Act.
Prior to the 2013 Federal election, the Government promised a fair and genuine independent review of the Act, including the former Labor Government's changes that took effect in July last year and January this year.

The terms of reference for the proposed review and who will be appointed to sit on the panel have not as yet been finalised.

Source: WorkplaceInfo with Australian Business Lawyers & Advisors.
Post details