'Unfair dismissal laws to start early' plus more on laws: Gillard


'Unfair dismissal laws to start early' plus more on laws: Gillard

Labor’s unfair dismissal laws and the ‘good faith’ collective bargaining framework will come into operation six months earlier than the rest of the new IR system, Workplace Relations Minister Julia Gillard has announced.


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Labor’s unfair dismissal laws and the ‘good faith’ collective bargaining framework will come into operation six months earlier than the rest of the new IR system, Workplace Relations Minister Julia Gillard has announced.

Gillard told the national Press Club that those two elements of the new workplace relations system would begin operation on 1 July, 2009, with the rest starting on 1 January 2010.

Verbal warning, then dismissal

Gillard also announced a new streamlined method of dismissing unsatisfactory workers that abandons the old ‘three strikes and you’re out’ approach – at least in the context of dismissals by small business. Instead one verbal warning will be all that is necessary if small employers follow a simple Fair Dismissal Code.

There will also be a new method of penalising short term lawful and unlawful industrial action.

The current system of allowing a minimum four hours of docked pay for an illegal stop work will remain, however for lawful action only pay for the time actually taken off work will be deducted.

Partial pay deductions

Regarding partial work bans, employers will be able to use their discretion to either tolerate the bans; stand down or lock out employees; or issue a ‘partial work notice’ and make deductions proportional to any work not performed.

Fair Work Australia will be able to review whether the amount deducted is proportional, if required.

Unilateral lockouts banned

However, unlike WorkChoices, only employees can take strike action, with unilateral lockouts by employers banned.

‘As the ultimate response to industrial action, employers will be able to lock out employees,’ Gillard said. ‘But offensive, pre-emptive lockouts – taken by the employer when employees haven’t taken any industrial action – will no longer be permitted.’

New details announced

Among the new details announced by Gillard are:

Minimum wages panel

Minimum wages and associated casual leave loadings will be reviewed every year by a Minimum Wages Panel headed by the President of Fair Work Australia.

Review of awards

Fair Work Australia will review Modern Awards every four years to ensure they are responsive to the needs of the economy and are keeping up with community standards of what constitutes a fair minimum safety net. The first such review is set to take place in 2014 and will balance public interest, social and economic factors.

Outside these four-yearly reviews, awards will only be varied in limited circumstances, such as to remove ambiguity, uncertainty or discriminatory terms.

Good faith bargaining

Employers and employees will be required to bargain in good faith for a mutually acceptable outcome, but employers will not be obliged to make a collective agreement even if a majority of the employees want one.

If this does not happen, Fair Work Australia will be able to makegood faith bargaining orders that can direct parties to meet, disclose relevant information, consider proposals and respond to them, and refrain from unfair or capricious conduct.

Good faith bargaining will not require parties to make concessions, or to sign up to an agreement when they don’t agree.

Compulsory arbitration will not be a feature of good faith bargaining. Arbitration will be limited to exceptional circumstances only – where industrial action is causing a threat to safety or health, a threat to the economy, or significant harm to the parties.

Prohibited content

Labor has greatly reduced the number of prohibited content areas that WorkChoices banned from being included in agreements.

Under Labor all matters that properly relate to the work performed and the entitlements of employees in the workplace, as well as their effective representation, will be able to be the subject of bargaining.

Salary sacrifice arrangements, health insurance, child care and payroll deductions of union dues for union members will be able to be included.

However matters that are properly the prerogative of management – like decisions about closing an unprofitable plant or using a preferred supplier – will not be included in enterprise agreements.

Industrial action

Apart from the changes noted above, Labor will continue with the Howard Government’s tough anti-strike legislation.

Protected industrial action will be allowed in the course of bargaining, in accordance with strict rules, including a secret ballot of employees and three days’ notice of intention to take the action. 

‘Butunprotected industrial action will not be tolerated under any circumstances,’ Gillard said. Strike pay remains banned.

Multi employer bargaining

Low paid workers in industries such as child care, security and cleaning may be able to bargain on a multi-employer basis.

A union or bargaining representative will be able to apply to Fair Work Australia for entry into a new “low-paid stream” to bargain with a specified list of employers.

They will not be able to undertake protected industrial action, but they will be able to utilise Fair Work Australia’s good faith bargaining rules and powers of mediation and conciliation.

And Fair Work Australia will only be able to make a binding determination if the parties agree.

Unfair dismissal

Labor’s announced policy has been maintained, with employers with fewer than 15 employees able to dismiss a worker within the first 12 months without running foul of the unfair dismissal laws. For employers with 15 or more employees, the period is six months.

The new Dismissal Code simply requires the employer to:

  • give the employee a warning, based on a reason that validly relates to the employee’s conduct or capacity to do the job, and

  •  provide a reasonable opportunity for the employee to improve his or her performance.

‘Multiple warnings are not required,’ Gillard said. ‘There is no requirement for “three strikes and you’re out”. It is desirable, but not necessary, for a warning to be in writing.

‘As long as employers comply with this Code, the dismissal will be held to be fair. But if an employer doesn’t comply, and sacks a tried and tested employee harshly or unfairly, compensation will follow.’

Compensation is limited to six months’ salary, with the full amount only available for the most serious cases.

Independent umpire

Fair Work Australia will act as a ‘one stop shop’ industrial umpire to ensure compliance with new laws, with a new Inspectorate to investigate and enforce breaches, including where necessary through the courts.

Specialist Fair Work Divisions will be created in the Federal Court and the Federal Magistrates Court to hear matters that arise under the new laws.

Fair Work Australia will also have a Minimum Wage Panel to determine the minimum wage.

Freedom of association

Workers will be free to join a union and ‘make their own choice about whether or not to participate in activities like collective bargaining and protected industrial action’.

And it will be unlawful use threats, pressure, discrimination, inducements, victimisation or dismissal to stop workers making these choices.

It will also be unlawful for an employer to discriminate against workers who represent their colleagues in a dispute, or to sack or otherwise disadvantage an employee for making inquiries about their pay or entitlements.

Gillard conceded many of these rights already exist but said the new legislation will make them ‘easier to follow and simpler to enforce’.

More information

Further information on the new IR system can be found at this website.


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