Australia: Fair Work Act changes in response to Panel recommendations

Last Updated: 23 December 2012
Article by Alison Baker, Mark Dunphy and Karl Rozenbergs

The Fair Work Amendment Act 2012 (Amendment Act) received Royal Assent on 4 December 2012. The Amendment Act is the Government's first tranche response to recommendations made by the Fair Work Review Panel in its June 2012 report on the operation of the Fair Work Act 2009 (Cth) (FW Act).

The Amendment Act gives effect to around one third of the Panel's recommendations to reform and improve workplace relations under the FW Act. It also implements the Government's response to the Productivity Commission's Report into Default Superannuation Funds in Modern Awards.

What are the key changes?

Procedural amendments and Fair Work Australia (from 1 January 2013)

  • Changing the name of Fair Work Australia to the Fair Work Commission (FWC).
  • Aligning the time limits for lodging unfair dismissal claims and general protections claims involving dismissal at 21 days.
  • Strengthening the FWC's power to order costs against a party in unfair dismissal matters, where the FWC is satisfied that the party's unreasonable act or omission has caused the other party to incur costs. This will capture a broad range of conduct, including a failure to agree to terms of settlement that could have led to discontinuation of the application.
  • Enabling the FWC to dismiss an unfair dismissal application where the applicant pursued a claim in an improper or unreasonable manner. This may include an unreasonable failure to attend a FWC conference or hearing or an unreasonable failure to comply with a FWC direction or order.

Superannuation funds and modern awards (from 1 January 2014)

  • Establishing a process for the FWC to review default super fund terms in modern awards every four years. This amendment does not affect the ability of employers and employees to agree to include a specific default fund in an enterprise agreement regardless of whether that fund is included in the applicable modern award.
  • Enabling the FWC to dismiss an application to vary, revoke or make a modern award that is not made in accordance with the FW Act, that is frivolous or vexatious or has no reasonable prospect of success.

Enterprise agreements (from 1 January 2013)

  • Confirming that enterprise agreements cannot include an opt out clause (through which an employer can agree with an individual employee that an agreement will not apply to them) and cannot be made with a single employee.
  • Requiring an employer to issue the notice of representational rights at the commencement of bargaining only in the statutory form set out in Schedule 2.1 of the Fair Work Regulations 2009 (Cth).
  • Relaxing the rules for scope orders, so the applicant need only show they have taken 'reasonable' steps to notify the other bargaining representatives of the reasons for the application.

What does this mean for employers?

  • Employees will now need to elect whether to issue an unfair dismissal or a general protections claim (rather than one followed by the other).
  • This should result in fewer general protections claims that would be better dealt with as unfair dismissal applications and remove situations where applicants who do not believe they have been afforded enough money at conciliation can discontinue their case and make a general protections claim instead.
  • More claims for unfair dismissal or general protection claims involving dismissal should be resolved at conciliation.
  • Employers engaged in or considering commencing bargaining for an enterprise agreement will need to factor in these changes from 1 January 2013.
  • Employers will need to 'watch this space' for further amendments, as the Government is currently in consultation regarding a second piece of legislation to implement further recommendations of the Panel. These include facilitating the use of individual flexibility agreements and requiring bargaining for an agreement to have commenced before a union can take protected industrial action.

Workplace Gender Equality

The Workplace Gender Equality Act 2012 (the WGE Act) came into force on 6 December 2012. The WGE Act amends the existing Equal Opportunity for Women in the Workplace Act 1999 (Cth) to focus on closing the gap between men and women's participation in the workforce, and introduces a new reporting framework to the renamed Workplace Gender Equality Agency (Agency).

What does this mean for employers?

  • All non public sector employers with 100 or more employees (including employees of subsidiaries) (relevant employers) must report annually to the Agency. Reports can be submitted online.
  • The reporting period runs for the 12 month period from 1 April to 31 March, and reports are due between 1 April and 31 May each year.
  • Whereas relevant employers currently have to report on 'employment matters', under the new regime, employers will be required to report against Gender Equality Indicators (GEIs).
  • Consequences of non compliance are that:
    • the Agency may name a non-compliant employer in its report to the Minister and by any other electronic means (e.g on the Agency's website);
    • employers may not be eligible to tender for Commonwealth and some State government contracts or for some Commonwealth grants or other financial assistance.

Gender Equality Indicators and Minimum Standards

In order to achieve more consistency in reporting across industries, the Minister will specify matters that must be reported against each GEI for the 2013/2014 reporting period onwards. GEIs will relate to:

  • gender composition of the workforce;
  • gender composition of governing bodies (including board of directors, trustees, management committees or other governing authority);
  • equal remuneration between women and men;
  • availability of flexible work arrangements and arrangements supporting employees with family/caring responsibilities;
  • consultation with employees on gender equality issues;
  • any other matters specified by the Minister.

The Minister will also set minimum standards for each GEI to apply from the 2014/2015 reporting period in consultation with the Agency and any other stakeholders. From the 2014/2015 reporting period, if a relevant employer does not meet a minimum standard and does not improve by the end of two further reporting periods, it may be deemed to be non compliant.

What you need to do next

For the 2012/2013 reporting period:

Relevant employers are only required to lodge a report with the Agency comprising a workforce profile in the same format as was submitted under the predecessor legislation, the Equal Opportunity for Women in the Workplace Act 1999 (Cth) with no salary data required. Relevant employers must also comply with the notification and access requirements.

These notification and access requirements are as follows:

  • inform the employees and members or shareholders that the employer has lodged its report with the Agency and advise how the report may be accessed;
  • provide access to the report to employees and members/shareholders (eg through a link on the website or intranet);
  • inform employee organisations with members in the workplace that the report has been lodged within 7 days after lodging the report;
  • inform employees and relevant employee organisations they can comment on the report to the employer or the Agency. There is no time limit when comments can be provided, however any comments submitted within 28 days after the report has been submitted can be taken into account by the employer in providing additional information to the Agency or by the Agency in requesting additional information from the employer.

For the 2013/2014 reporting period onwards:

Relevant employers:

  • must submit a report against a set of standardised GEIs;
  • must comply with the notification and access requirements;
  • reports must be signed by the CEO or highest ranking corporate officer or administrator in charge of management of an organisation.

For the 2014/2015 reporting periods and onwards:

Relevant employers must comply with the same requirements as in 2013/2014 but also meet minimum standards set by the Minister.

Review of federal discrimination laws

The Federal Government has released the draft consolidation legislation of the five existing federal anti-discrimination Acts, the Human Rights and Anti-Discrimination Bill 2012 (Bill). The Bill is now subject to public consultation and stakeholders can provide submissions on the Bill by 21 December 2012 as part of this process through this web link

The Bill will replace the Disability Discrimination Act 1992 (Cth), the Racial Discrimination Act 1975 (Cth), the Sex Discrimination Act 1984 (Cth), the Age Discrimination Act 2004 (Cth), and the Australian Human Rights Commission Act 1986 (Cth).

The major reforms include:

  • introducing a single simplified test for discrimination apply to all protected attributes;
  • introducing new protected attributes including protections against sexual orientation and gender identity discrimination and extension of protections against relationship discrimination to same-sex couples in any area of public life;
  • streamlining the approach to exceptions, including a new general exception for justifiable conduct (and removing a number of current exceptions that fall within this concept);
  • introducing voluntary measures that businesses can take to assist their understanding their understanding of legislation and reduce discrimination;
  • streamlining the complaints process, including shifting the burden of proof to the respondent and making each party bear its own costs as a default position; and
  • rationalising some of the functions of the Australian Human Rights Commission.

The Senate Committee is due to report on the Bill by 18 February 2013, and we will keep you updated with changes.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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