Australia: Workplace relations policy - what are the Federal Coalition's plans?

With the Federal Coalition having won the recent Federal election, attention will now turn to what they will do in the area of workplace relations. In the lead up to the election, the Federal Coalition repeatedly said that it would limit itself to the industrial relations policy it announced in May 2013.

If the Federal Coalition keeps this promise, it will essentially maintain the "Fair Work" industrial relations framework introduced by the previous Federal Government, but make what it sees as incremental improvements.

The Federal Coalition has stated that its proposed changes will be introduced into Federal Parliament within three months of it taking power.

What are the Federal Coalition's major proposals?

The Coalition has indicated that it intends to make the following changes:

General framework

  • Retain the basic "Fair Work" framework introduced by the previous Labor Federal Government, including the Fair Work Commission ("FWC").
  • Adopt some recommendations from the Fair Work Review Panel report (see our earlier article) which were not adopted by the previous Federal Government. These recommendations include:
    • clarifying the circumstances in which annual leave loading is payable on termination of employment
    • clarifying the interaction between workers compensation and annual leave, that is, whether annual leave accrues during a period of workers compensation
    • giving the FWC clearer powers to dismiss proceedings due to non-attendance of a party
    • requiring an employer and employee to have a meeting to discuss a request for extended unpaid parental leave, unless the employer has already agreed to the request
    • making it clear that it is the subjective intention of the person that took alleged adverse action that should be the central consideration of the reason for the alleged adverse action (although this is less important following the High Court of Australia's decision in Bendigo TAFE v Barclay – see our earlier article)
    • encouraging the expedition of a national long service leave scheme, and
    • recommending changes to the current "better off overall test" (which needs to be passed in order to make an enterprise agreement) to appropriately account for non-monetary benefits.
  • Initiate a Productivity Commission review into the operation and impact of the Fair Work laws, and ask that body to make recommendations on improving its operation, bearing in mind the need to ensure employees are protected and the need for businesses to be able to prosper and employ.

Paid parental leave scheme

  • Introduce a new paid parental leave scheme from July 2015 that will entitle mothers to 26 weeks' paid leave, at their full replacement wage or the national minimum wage (whichever is greater), up to a maximum wage/salary cap of $150,000 (with the total amount payable up to $75,000).
  • Fathers will be eligible for two of the 26 weeks as dedicated paternity leave, also at full replacement wages. Where a father is nominated as the primary care giver, they will receive paid leave at the lower of their or the mother's wage.
  • In contrast to the existing paid parental leave scheme, superannuation contributions will also be made during the paid leave period.
  • The payments will be made directly by the Federal Government, and not through employers as is the case with the existing paid parental leave scheme.

New bullying jurisdiction

  • Maintain Labor's workplace bullying changes set to take effect on 1 January 2014 (see our earlier article) but restrict access to the FWC to those workers who have first sought help, advice or assistance from a work health and safety regulator.
  • The changes will be expanded to cover the conduct of union officials towards workers and employers.

Compulsory superannuation contributions

  • Delay increases to compulsory employer superannuation contributions by two years (see our earlier article) by freezing the existing contribution level of 9.25% until 1 July 2016, when it will increase to 9.5%. The contribution rate will then incrementally rise until 2021-2022, when it will reach 12%.

New (or re-established) bodies and improving compliance

  • Consider the creation of an independent appeal jurisdiction to the FWC.
  • Re-establish the Australian Building and Construction Commission to absorb and enhance the operations of the Fair Work Building Industry Inspectorate, and amend the Building Code 2013 (issued in January 2013 by ex-Minister Shorten under the Fair Work (Building Industry) Act 2012 (Cth)) to limit restrictive work practices and perceived building union on government-funded projects. An amended Building Code may mean equivalent state procurement policies are abandoned, but an amended Building Code is likely to face court challenges if it affects content in construction industry enterprise agreements .
  • Create a Registered Organisations Commission to act as a watchdog over registered organisations, such as unions and employer associations, and which will be independent of, but operate within, the Fair Work Ombudsman ("FWO"). Related proposals include:
    • imposing duties and penalties on officers of registered organisations equivalent to those imposed on company directors, and
    • increasing financial disclosure obligations by requiring registered organisations to provide each member with a "written simple, one page pie-chart breakdown of their yearly expenditure on particular items, such as labour, advertising, capital, operating and political donations each year".
  • Review the need for the recently established Road Safety Remuneration Tribunal, while retaining other protections such as the National Heavy Vehicle Regulator (see our earlier articles – 19 September 2012 and 10 October 2012).
  • Assist small businesses to improve their understanding of the Fair Work laws through the FWO, and encourage greater compliance and education by providing potential immunity from FWO penalties for small business employers. Immunity will be provided when a small business employer pays or applies the wrong employment conditions, provided that the error is not deliberate and the employer previously sought FWO advice and help on the same issue.

Union rights of entry

  • Pare back existing union rights of entry to laws modelled on the pre-Fair Work regime. This will involve allowing unions to seek entry to a workplace if they:
    • are a party to an enterprise agreement which applies to the workplace
    • are a bargaining representative seeking in good faith to make an agreement to cover the workplace, and
    • there is evidence that union members in the workplace have requested their presence.
  • Where the workforce is covered by a modern award or the enterprise agreement in place does not bind the union, then the union will need to demonstrate that it has (or had) a lawful representative role in that workplace and there is evidence that workers/members have requested their presence.
  • Unions will still be able to enter a workplace to investigate breaches, to represent a member in a dispute over a modern award or enterprise agreement, or to investigate work health and safety breaches.
  • The FWC will have the power to determine disputes over workplace visit issues.

Enterprise agreements

  • Ensure that enterprise agreements cannot restrict the use of individual flexibility arrangements, though at the same time retaining the existing better off overall test, and requiring the notice period for terminating such arrangements to be extended to 13 weeks.
  • Provide that before an enterprise agreement is approved, unions will need to convince the FWC that their claims will not adversely affect productivity, and the FWC will need to be satisfied that parties have considered and discussed ways to improve productivity.
  • Require negotiations over enterprise agreements for new projects (greenfields agreements) to be conducted in good faith and completed within three months of them commencing, after which the FWC will have the power to make and approve the agreement if it is satisfied that it passes the better off overall test and is consistent with prevailing industry standards. Employers will only be required to negotiate with the union that will cover the majority of employees on-site.
  • Australian Workplace Agreements will not be reintroduced.

Protected action

  • Provide that protected industrial action can only occur if the FWC is satisfied that there have been genuine and meaningful talks between workers and businesses at the workplace, that the claims made by both parties are "sensible and realistic", and that the claims made will not affect productivity.
  • Provide that a protected action ballot order application can only be made where bargaining has commenced, either voluntarily or where a majority support determination has been made.

Other changes

  • It seems likely that the Human Rights and Anti-Discrimination Bill 2012 (Cth) will not be supported in its current form and may not be re-introduced into Federal Parliament.
  • Ensure that workers who are underpaid receive interest on the unpaid back pay held for them by the FWO, which is currently kept by the Federal Government.
  • Make no changes to unfair dismissal or transfer of business laws.

What do employers need to do?

To ensure their businesses are ready, employers should keep up to date with these proposed changes as they are implemented by the incoming Federal Government.

We will keep you informed of all major changes as they are more fully developed and implemented.

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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