Labor’s first IR Bill - a closer look

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Labor’s first IR Bill - a closer look

Now that the first Labor Bill is likely to pass through Parliament by Easter a closer look at what the legislation contains is timely.

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Now that the first Labor Bill is likely to pass through Parliament by Easter a closer look at what the legislation contains is timely.

The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 was introduced into Parliament on 13 February 2008. The IR Minister and Deputy Prime Minister, Julia Gillard, outlined the impact of the legislation in her Second Reading speech. Here are some edited highlights from that speech.

‘AWAs

This bill provides that, from its commencement date, no-one will be able to make a new Australian workplace agreement.

AWAs that have already been made will continue until their nominal expiry date and beyond until the parties to the AWA make a decision about how best to manage their employment arrangement.

AWAs made before the commencement date [of the legislation] must be lodged within 14 days after the commencement date. Currently, workplace agreements take effect from the date that they are lodged with the Workplace Authority with the result that, where agreements fail the "fairness test", employers are confronted with complex calculations for expensive compensation payments.

Terminating a WorkChoices AWA

The scope to unilaterally terminate a WorkChoices AWA which has passed its nominal expiry date will be retained. This will allow employees to terminate an expired … WorkChoices AWA where doing so may result in their being covered by a more beneficial instrument.

ITEAs

Under this bill, ITEAs for existing employees and new collective agreements will only commence operation after the Workplace Authority Director has approved them on the basis that they pass the no-disadvantage test.

Greenfields agreements

However, to provide certainty for employers and new employees in the transition period, ITEAs for new employees, and employer greenfields or employer and union greenfields agreements, will commence operation when lodged with the Workplace Authority Director.

Of course, any agreement lodged after the commencement of this bill will cease to operate or will never operate if it fails the no-disadvantage test. For those agreements which have commenced upon lodgement and have subsequently failed the no disadvantage test, compensation may be payable to employees.

Terminating collective agreements

Under the bill, a collective agreement will only be able to be terminated where the parties agree, or by the Australian Industrial Relations Commission in circumstances where termination would not be contrary to the public interest. In making its decision under this provision, the commission would be required to have regard to all the circumstances of the case, including:

  • the views of each party bound by the agreement (including the employees subject to it) about whether it should be terminated; and
  • the circumstances of each party bound by the agreement, including the likely effect on each party of the termination of the agreement.

Terminating a pre-WorkChoices AWA

When an [individual] agreement is terminated, employees will be entitled to whatever award or workplace agreement would have applied to them but for the terminated agreement. For instance, when an AWA or ITEA is terminated, the employee will be covered by any relevant collective agreement operating in the workplace or the full award if there is no such agreement.

This reverses the previous government’s unfair rules that resulted in employees being stripped off their workplace agreement and reverting to only a limited number of conditions.

Pre-Work Choices Collective Agreements

The bill permits certain pre-WorkChoices certified agreements to be extended and varied on application to the Australian Industrial Relations Commission.

The commission will grant the application only if satisfied that the parties genuinely agree and the employees covered by the agreement approve.

To take advantage of this option, the government will require parties to the agreement not to have organised or engaged in industrial action or applied for a protected action ballot in relation to proposed industrial action from tomorrow, the day after the bill has been introduced.

This will avoid the parties to these agreements having to make new workplace arrangements under a transitional framework only to make new agreements once the government’s new fair and flexible workplace reforms come into effect.

Collective agreements generally

The government has decided to adopt the following recommendations arising from the parties at these meetings:

  • removal of the restriction on referencing other industrial instruments in agreements, which will simplify the drafting of agreements;
  • requiring workplace agreements be lodged with signatures attached to protect employees and ensure the correct agreements are lodged for review and approval by the Workplace Authority;
  • ensuring that most agreements will take effect from seven days from the date of the notice from the Workplace Authority Director advising an employer that the agreement has passed the no disadvantage test;
  • preventing the making of unilateral undertakings when agreements fail the no disadvantage test. If agreements are to be genuine agreements, any variation should have the agreement of both parties. The government has included streamlined approval rules for variations to agreements in these circumstances;
  • requiring the Workplace Authority Director to publish reasons where the Workplace Authority Director allows an agreement to pass the no disadvantage test where satisfied that, due to exceptional circumstances, it is not contrary to the public interest to do so (for example to deal with a temporary business crisis);
  • requiring the Workplace Authority to consult more widely when designating awards for the purposes of the no disadvantage test ...

NAPSAs, etc

[The bill also ensures] … that the transition period for a number of matters, including the automatic expiry of notional agreements preserving state awards - the so-called NAPSAs - old IR agreements, removal of superannuation as an allowable award matter and the transitional registration of organisations arrangements is extended to the end of the government’s transition period, 31 December 2009, to provide continuity and certainty during the transition period.

If the government had not made those arrangements, then a number of cut-off dates prescribed by WorkChoices would have brought these industrial instruments to an end - most particularly would have brought to an end the Notional Agreement Preserving a State Award on which so many employees rely for their industrial protection. It also would have removed superannuation as an allowable award matter.

These things, as I indicate, are the product of agreement from representatives of employees and employers working together.

Award modernisation

As part of the award modernisation process the Australian Industrial Relations Commission will be required to develop an award flexibility clause for inclusion in all awards.

This clause will, in combination with a simple, modern award arrangements enable employers and individual employees to make arrangements to meet their genuine individual needs so long as the employee is not disadvantaged.

$100,000 exemption

It is the government’s intention that employees earning above $100,000 per annum will be free to agree to their own pay and conditions without reference to awards. This will provide greater flexibility for common law agreements which have previously been required to comply with all award provisions, no matter how highly paid the employees.

A simple, modern award system with opportunities for individual flexibilities will remove the need for any individual statutory employment agreements and the associated complexity and bureaucracy attached to those agreements.

Business Advisory Group

I am pleased to report that the states and territories have wholeheartedly endorsed the key principles outlined in the government’s Forward with Fairness policy.

In the coming days I will also announce and chair the inaugural meetings of the government’s Business Advisory Group and, with my colleague the Minister for Small Business, Independent Contractors and the Service Economy, I will announce the details of the Small Business Working Group. …’

Details

The Workplace Relations Amendment (Transition to Forward with Fairness) Bill 2008 and related documents are at: http://parlinfoweb.aph.gov.au/piweb/browse.aspx?NodeID=34

The Second Reading Speech is at http://parlinfoweb.aph.gov.au/piweb/view_document.aspx?ID=2770361&TABLE=HANSARDR


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