Introduction
On 17 December 2003, the Workplace Relations Amendment (Improved Protection
for Victorian Workers) Act 2003 received royal assent. The Act came into
operation on 1 January 2004 and will have a significant effect on workplace
relations law in Victoria, particularly in relation to workers entitlements.
The Act makes two major changes in relation to the conditions of Victorian
workers. Firstly, the Act expands the entitlements available to Victorian
Workers under Schedule 1A of the Workplace Relations Act ("WRA"). Secondly, it
allows the Australian Industrial Relations Commission ("AIRC") to declare that
any term of an existing federal Award can be a 'common rule' in Victoria.
Expanded Schedule 1A
Schedule 1A of the WRA sets out the minimum terms and conditions of
employment for Victorian workers in the absence of separate State legislation.
The provisions in relation to annual leave have been clarified and the
provisions in relation to sick leave have been expanded.
Annual Leave
The basic entitlement of four weeks leave per year has not changed. However,
it is now clear that annual leave is calculated by taking the usual number of
ordinary hours worked by the employees and multiplying by four. If the
employee's ordinary hours vary, then the average number of ordinary hours worked
is used to calculate their leave entitlement.
Rules about the accrual, payment, and taking of annual leave have also been
set out.
Annual leave:
- Accrues on a pro-rata basis and is cumulative.
- Is credited on the anniversary of an employee's employment.
- Counts as service for all purposes.
- Is to be paid at the rate that, immediately before the leave is taken, is
the employee's ordinary hourly rate of pay.
- Is to be paid when the employee takes annual leave or leaves his or her
employment, as the case may be.
- Must be taken within twelve (12) months after the end of the year in which
it accrues unless the employee and employer have agreed otherwise.
- Must be taken by an employee when directed to take it by the employer, if
the employer directs the employee to do so because the employer shuts down his
or her business for a period.
Personal Leave
Sick leave has now been incorporated into the wider category of personal
leave. The basic entitlement to personal leave is one day for each completed six
weeks in the first twelve months of employment and eight days per year
thereafter. Unused personal leave accrues from year to year. Part-time employees
accrue personal leave on a pro-rata basis. Personal leave can be used as either
sick leave or carer's leave. Carer's leave enables an employee to take time off
to care for a member of their immediate family who is ill. However, only five
days per year can be taken as carer's leave. The balance, plus any accrual, is
reserved for sick leave. The legislation makes it clear that an employer can
require the employee to provide a medical certificate or statutory declaration
evidencing their illness or the illness of the person they are caring for. It is
also clear that employees can not be on sick leave and workers' compensation at
the same time.
Bereavement Leave
A new category of leave called "bereavement leave" has been included in
Schedule 1A. Employees are now entitled to take up to two days paid bereavement
leave on the death of an immediate family member.
Common Rule Awards
Common rule Awards cover all employees in a particular industry or who
perform a particular type of work.
The WRA has been amended to allow the AIRC to make common rule Awards
covering Victorian employees. This gives the potential to bring all Victorian
employees within the Federal Award safety net. Accordingly, wage differentials
between Federal Award and non-Federal Award Victorian employees will almost
certainly disappear. It also means that more generous Federal Award provisions
in relation to over time, penalty rates and leave loading will be a reality for
Victorian employees not currently covered by a Federal Award.
While the AIRC is able to start hearing common rule applications from 1
January 2004, there is a 12 month transitional provision in the legislation,
which means that no common rule awards will come into effect until 1 January
2005. The 12 month transitional period is designed to give employers an
opportunity to prepare for any new common rule arrangements.
Conclusion
Common Rule Awards
For employers not currently caught by the Federal Award system, these
amendments to WRA will mean that they now have to contend with a new range of
entitlements for employees if Awards are declared to be "common rules" for their
industry.
Employers engaging employees who are already under the Federal Award system
will be familiar with some or all of these Award entitlements. However, all
employers should now be vigilant to ensure they comply with relevant common rule
Awards.
Schedule 1A
The changes to Schedule 1A provide greater clarity and increase the benefits
to employees. Employers should ensure contractual provisions in relation to
accrual and taking of leave are consistent with Schedule 1A.
Peter Andrew
Senior Lawyer
Moores Legal
The Industrial Relations and Employment Law team at Moores Legal is
available to assist you on any employment issue. For advice and assistance in
this area, please contact Peter Andrew, Leanne Tully or Frances Anderson at
Moores Legal on 9898 0000.
