WORKPLACE RELATIONS REFORM - WHAT'S IN THE PIPELINE
A massive overhaul of the workplace relations system is currently being
contemplated by the Federal Government. No draft legislation has yet been
published but information is available on some of the proposed changes(1). The
Government advises that one of its main objectives is to create a simpler
workplace relations system which is less costly for small business and with less
red tape.(2). In this edition of Employment Alert, we review some of the areas
where change is being contemplated.
Overview of the proposed changes
Some of the proposed changes include:
Australian Fair Pay Commission (AFPC) - it is intended that this new
body will be established to set minimum wage rates including wage rates within
awards. As a result, the Australian Industrial Relations Commission will be
stripped of its power to set minimum wages and will no longer adjudicate over
the safety net review cases. If all goes according to the Federal Government's
plan, the AIRC will have delivered its final national wage case decision on 7
June 2005, when it ordered a $17 per week across-the-board wage increase(3).
Minimum conditions of employment - the Government intends to set out
in legislation key minimum conditions of employment such as annual leave,
personal/carer's leave (including maternity leave) and maximum ordinary hours of
work. These conditions together with the minimum wages set by the AFPC will form
the Australian Fair Pay and Conditions Standard.
Australian Fair Pay and Conditions Standard - this standard will
replace the no-disadvantage test and will be the new test for all agreements.
Change in agreement making - it is intended that the Office of the
Employment Advocate will review all collective and individual agreements. One of
the effects of this will be that the AIRC's powers to approve certified
agreements will discontinue. Agreements will take effect from the date of
lodgement as opposed to the date of certification or approval and all agreements
will be able to run for up to 5 years.
The impact of these changes insofar as AWAs are concerned, is that future
AWAs need only to include:
- a rate of pay for ordinary hours that is not less than the rate set by the
AFPC; and
- provisions corresponding to the minimum standards contained in the
legislation(4).
As a result, award rights such as overtime, redundancy pay, long service
leave, rights to study leave, lunch breaks/tea breaks and leave loading would
all be removed(5) - and nor would the employer need to provide a trade-off where
such a benefit is not included in an AWA (as is currently the case).
Allowable award matters - the Government intends to reduce the number
of allowable award matters in awards by removing matters which relate to jury
service, notice of termination, long service leave and superannuation. These
matters are covered by existing legislation. It is also intended that a task
force be established to rationalise existing awards and award classification
structures.
Unfair dismissal - the Government proposes to exempt businesses which
employ up to 100 employees from unfair dismissal laws. It is uncertain whether
and how the exemption will apply if the employer is bound by a federal award
either directly or via the common rule award system (currently, the law provides
that employees who are covered by an industrial instrument have automatic access
to the AIRC for unfair dismissal). It is also proposed that an employee will be
required to serve a qualifying period of six months (as opposed to the current
three months) before they can pursue an unfair dismissal remedy.
Redundancy payments - the Government proposes to exempt small business
from making redundancy payments.
Abolition of State industrial relations systems - The Federal
Government intends to establish a unified national workplace relations system
which will replace the six different workplace relations systems currently in
operation in Australia. Victoria is not directly affected by this proposal as in
1996 the Victorian Government referred most of its industrial relations powers
to the Commonwealth Government. This allowed for the establishment of a single
framework of laws regulating industrial matters in Victoria through the
Workplace Relations Act 1996(6).
Prime Minister Howard maintains that a single set of national laws on
industrial relations '…is the next logical step towards a workplace relations
system that supports greater freedom, flexibility and individual choice … this
is not about empowering Canberra. It is about liberating workplaces from Colac
to Cooktown' (7).
The Prime Minister's views are not shared by all, however. At the 3 June 2005
meeting of the Council of Australian Government (COAG), the Commonwealth
proposed that COAG agree to work towards achieving a uniform national system of
workplace relations through referrals of the necessary constitutional power from
the States to the Commonwealth. The States responded by advising that they would
not refer their powers8. The Federal Government intends to pursue its plans for
a national workplace relations system further by relying on the corporations
power. This could result in a constitutional challenge in the High Court of
Australia.
Conclusion
While many employers and employer organisations are enthusiastic about the
proposed changes, others are deeply concerned about the Federal Government's
intentions. The final package of reforms may look somewhat different from those
currently being discussed as it is possible that in order to secure certain key
reforms, the Government may trade-off or amend others which are lower on its
agenda. Nevertheless, it is hard to see where effective opposition to the
Government's proposals will come from after the Government gains control of the
Senate on 1 July 2005.
We will keep a close watch on developments and will report back on these
matters in future editions of Employment Alert.
Peter Andrew, Consultant Tel: (03) 9843 2108 Email:
pandrew@mooreslegal.com.au
Frances Anderson, Lawyer Tel: (03) 9843 2122 Email:
fanderson@mooreslegal.com.au
