Transmission of business interrupted

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Transmission of business interrupted

The Federal Workplace Relations Transmission of Business Bill 2002 went back to the House of Representatives yesterday after the Senate passed the Bill with Democrat and ALP amendments.

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The Federal Workplace Relations Transmission of Business Bill 2002 went back to the House of Representatives yesterday after the Senate passed the Bill with Democrat and ALP amendments.

The Bill sought to amend the Workplace Relations Act to empower the AIRC to prevent new employers being bound by existing certified agreements as a result of a transmission of business; or to order that a new employer only be bound to an existing agreement for a specified extent or period.

The Government didn’t accept the Democrat and ALP amendments and would be reintroducing the Bill in three months time.

Agreement to unwind

The Democrat’s main amendment sought to limit the circumstances in which the AIRC could prevent a certified agreement that bound an outgoing employer of a business from being transferred to the new employer of a business.

The AIRC would have been able to prevent the new employer from being bound by the existing certified agreement, if the new employer and other parties to the existing certified agreement agreed to forgo the existing arrangement.

In situations where the majority of employees wanted to remain under the existing certified agreement, but the new employer did not, the AIRC could prevent the new employer being bound. But it would have to be satisfied that:

  • any variation to employees’ circumstances did not disadvantage the employees; or
  • the variation was part of a reasonable strategy to manage a short-term crisis and to assist in the revival of the business.

A variation would be deemed to disadvantage employees if it reduced the overall terms and conditions under the existing certified agreement.

When making an order, the AIRC would have to take into account how new terms and conditions effected employees, and also consider the length of time remaining on the agreement.

According to Senator Andrew Murray for the Democrats, ‘Certified agreements are for a maximum of three years. In most cases new owners of businesses can wait out the unexpired portion of the agreement before negotiating new agreements.

‘In some circumstances, this is not possible and the AIRC should be able to intervene.

‘The amendments to the Bill provide clearer criteria under which review may take place. I hope the Government will accept them.’

Broadening definitions

The main ALP amendment sought to widen the test for determining if a new employer was a successor, assignee or transmittee of the whole or part of a business in situations where there was an existing award or an existing certified agreement.

The amendment addressed the similarities in activities carried out by employees under the outgoing employer and the new employer; and whether the relevant business activities of the outgoing employer were substantially the same as the relevant business activities of the new employer.

The greater the similarities, the more likely the new employer would be bound by the existing agreement.

When determining whether to make an order that an award did not bind or partially bind a new employer the AIRC would have to consider:

  • if the new employer was already bound by an award;
  • the activities performed by the employees;
  • if the employees would be disadvantaged; and
  • the effect such an order would have on productivity.

The ALP was also seeking amendments to the binding of existing awards and agreements as they related to ships involved in the coasting trade.

For more information go to the Parliament of Australia website


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