Transition Bill opens door for new IR system on 1 July


Transition Bill opens door for new IR system on 1 July

IR Minister Julia Gillard has introduced a Transition Bill into Parliament today, which will allow the new Fair Work Australia system to begin in its entirety — except for the NES and award modernisation — on 1 July this year.


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IR Minister Julia Gillard has introduced a Transition Bill into Parliament today, which will allow the new Fair Work Australia system to begin in its entirety — except for the NES and award modernisation — on 1 July this year.
However, that depends on the Fair Work Bill passing through the Senate over the next 24 hours, which is still a doubtful proposition.
In introducing the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009, Gillard again called on the Coalition and the independent Senators to allow the Fair Work Bill to pass.
Gillard said the Transition Bill repeals the current Workplace Relations Act 1996 other than Schedule 1(which deals with registered organisations) and Schedule 10 (which deals with transitional registered associations).
End of WorkChoices
‘With the abolition of the remainder of that Act, we will see the final removal of the unfair Work Choices system that the Australian electorate rejected at the last election,’ she said.
Gillard said the Bill includes ‘sensible and practical’ transitional provisions for movement into the new system, and covers issues including:
  • preservation of existing workplace instruments and setting out how these interact with the new system, including the new NES and modern awards
  • arrangements to enable bargaining under the new system to commence in an orderly way
  • arrangements for the transfer of assets, functions and proceedings from Workplace Relations Act institutions to Fair Work Australia (FWA) and the Fair Work Ombudsman
  • consequential amendments to other Commonwealth legislation considered essential to the operation of the Fair Work Bill (being the creation of the Fair Work Divisions of the Federal Court of Australia and the Federal Magistrates Court of Australia).
Second transition Bill coming
Gillard said a further Bill will deal with the consequential amendments to all other Commonwealth legislation, which is likely to involve amendments to over 70 Commonwealth Acts.
The second Bill will also deal with any state referrals of power that have been completed by that time. The intention is to introduce the second Bill into the Lower House in the week commencing 25 May 2009.
Gillard anticipated a Senate inquiry into the legislation and that both Bills could be dealt with together in the Senate.
Minimum rate of pay
She said the Transition Bill will provide that employees must receive at least the minimum rate of pay contained in a modern award from 1 January 2010.
‘This means that from 1 January 2010, Australian employees who were required to make “take it or leave it” sub-standard AWAs under WorkChoices will receive the benefit of the ten minimum National Employment Standards where their current agreement contains inferior conditions and minimum “safety net” Wages,’ she said.
‘FWA will have scope to make orders to “phase in” minimum wages in exceptional circumstances, such as where it is satisfied that such measures are necessary to ensure the ongoing viability of a business.’
Take-home pay not reduced
Gillard said the Transition Bill would also ensure that no employee’s take-home pay is reduced as a result of the transition to a modern award from 1 January 2010.
‘In these circumstances, FWA will be able to make a take-home pay order that remedies a reduction in an employee’s take-home pay that has resulted from award modernisation,’ she said.
‘An order can be made for an individual employee or for a group and can be made on the application of an organisation representing those employees.'
‘However, FWA must not make a take-home pay order where it is satisfied the employee has been adequately compensated for the reduction in other ways.'
‘A take-home pay order will not form part of any future “better off overall” test for agreement making against the modern award. However, an employee will not lose the benefit of the take-home pay order if an enterprise agreement starts to apply to the employee.’
Transition rules for existing agreements
The Transition Bill includes rules in relation to the treatment of existing industrial instruments in the new system, including:
  • Agreements (including AWAs) will continue to operate past their nominal expiry date until terminated in accordance with the current rules for termination or until replaced by a new enterprise agreement made under the new bargaining framework.
  • Award-based instruments (such as unmodernised awards, notional agreements preserving state awards and pay scales) will cease once they are replaced by modern awards.
  • Parties to enterprise awards and notional agreements preserving State awards derived from State enterprise awards will be able to apply to FWA to have their enterprise award modernised and integrated into the modern award system.
  • Australian Fair Pay and Conditions Standard, including pay scales and minimum wage guarantees and other minimum entitlements (eg notice of termination and public holidays) will continue until the NES and modern awards commence on 1January 2010.
Bargaining rules
The Transition Bill also sets rules for transitional bargaining and agreement making, including:
  • Employees on individual statutory agreements will be able to agree with their employer to bargain a collective agreement which, if approved, would see their individual agreements terminated.
  • The new bargaining framework under the Fair Work Bill (including the good-faith bargaining requirements) will operate from commencement of the new system. FWA will be able to take account of the history of bargaining between the bargaining participants when exercising its functions and discretion under these rules.
  • Until the NES and modern awards are operational on 1 January 2010, the testing of new enterprise agreements against the no-disadvantage test will be undertaken using an appropriate reference instrument (eg an un-modernised award).
Demarcation disputes
FWA will also be able to make representation orders in case of demarcation disputes among unions, including demarcations derived from state or federal award coverage.
The Bill also overcomes the problems state-registered organisation were facing in operating in a national IR system.
The provisions in the Bill:
  • extend the existing transitional registration provisions in Schedule 10 to the Workplace Relations Act for five years; and
  • allow state registered associations that meet specified criteria to be recognised in the federal system, while retaining state registration.
Phasing-in period
The Bill also spells out the five-year ‘phasing-in’ period for any differences between pay rates current state awards and the new federal standard in a modernised award.
There will be a ‘bedding down’ review of modernised awards after two years of operation.
The Bill also replaces the Workplace Ombudsman with the Fair Work Ombudsman, appoints all full time AIRC members to Fair Work Australia, and creates Fair Work Divisions of the Federal Court and the Federal Magistrates Court.
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