Australia: ALP Industrial Relations Policy - ´Junking´ Or Only ´Massaging´ Workchoices?

Last Updated: 24 November 2007
Article by Peter Punch and Mick Sheils

Now that there has been a change of Federal Government, attention needs to be given to what changes in industrial relations law are on the horizon.

Peter Punch and Mick Sheils give an outline and general commentary on the major changes proposed by the ALP during the election campaign.

Firstly, the ALP promised the following major changes if elected:

Significantly, under an ALP Government:

  • The Howard Government’s Work Choices laws will be abolished;
  • Australian Workplace Agreements will be scrapped (although not immediately); and
  • Employees will have rights if dismissed unfairly.
The ALP has said that its new industrial relations will have the following key aspects:


  1. Hours of Work. Standard working week for full time employees of 38 hours. Employees may be required to work additional hours, but cannot be required to work unreasonable additional hours.
  2. Parental Leave. A guarantee that both parents have the right to separate periods of up to 12 months of unpaid leave.
  3. Flexible work for parents. A right for parents to request flexible work arrangements until their child reaches school age.
  4. Annual leave. All full time non casual employees will be guaranteed 4 week’s paid annual leave each year. Part time employees will be entitled to 4 week’s annual leave paid pro rata. Shift workers will be entitled to an additional paid week of annual leave.
  5. Personal, Carers and Compassionate leave. This form of leave will remain unchanged from that provided under Work Choices.
  6. Community Services leave. Employees will be entitled to leave for prescribed community service activities, for example paid leave for jury service and reasonable unpaid leave for emergency services duty.
  7. Public Holidays. As with WorkChoices, where an employee works on a public holiday, they will be paid an appropriate penalty rate of pay or other compensation. This will be set out in the applicable award.
  8. Information in the workplace. Employers must provide all new employees with a Fair Work Information Statement containing information about rights and entitlements, including where to go for further information and assistance.
  9. Termination of employment and redundancy. Again, as with work Choices, employees who are made redundant and who are in a workplaces with 15 or more employees will also be entitled to redundancy pay (determined by the Australian Industrial Relations Commission in the 2004 Redundancy Test Case).
  10. Long Service Leave. Labor proposes (with the state) to develop a national long service leave entitlement system. In the transitional period, Labor has guaranteed that long service leave accrued will be protected in the transition to nationally consistent long service leave entitlements so Australian employees are not disadvantaged.
Labor believes that awards are an important safety net and an effective floor for collective bargaining. Collective agreements will be able to override award entitlements provided the agreement means employees are genuinely better off overall.

In addition to the legislated minimum standards listed above Labor proposes that awards may only contain a further 10 minimum employment standards as follows:-

  1. Minimum wages. This will include skill based classifications and career structures, incentive based payments and bonuses, wage rates and other arrangements for apprentices and trainees.
  2. The type of work performed, for example whether an employee is permanent or casual, and the facilitation of flexible working arrangements, particularly for workers with family responsibilities, including quality part time employment and job sharing;
  3. Arrangements for when work is performed, including hours of work, rostering, rest breaks and meal breaks;
  4. Overtime rates for employees working long hours;
  5. Penalty rates for employees working unsocial, irregular or unpredictable hours, on weekends or public holidays, and as shift workers;
  6. Provision for minimum annualised wage or salary arrangements that have regard to the pattern of work in an occupation, industry or enterprise as an alternative to the payment of penalty rates, with appropriate safeguards to ensure individual employees are not disadvantaged;
  7. Allowances including reimbursement of expenses, higher duties and disability based payments;
  8. Leave, leave loadings and the arrangements for taking leave;
  9. Superannuation; and
  10. Consultation, representation and dispute settling procedures.
Flexibility in the workplace
. Labor proposes genuine flexibility for both employers and employees. Its plan has three main elements:
  • More flexible common law agreements for employees earning $100,000 or more per year (as the award system will not apply);
  • Instigation of a model flexibility clause in the award system but with a strong safety net which will prevent award conditions being stripped away; and
  • Enterprise agreements will also have flexibility clauses.
Australian Workplace Agreements (AWAS)
While Labor proposes the abolition of AWAS it will not do so immediately. It proposes a two part transitional arrangement as follows:-
  • Existing AWAS will be able to continue to operate for their full term; and
  • In addition, for those businesses currently using AWAS, during the two year transition period to the full implementation of Labor’s new industrial relations system in January 2010, individual transitional employment agreements can be made available for new employees or those already on AWAS. These finite transitional employment arrangements must ensure that employees are not disadvantaged against the relevant award or enterprise agreement.
    Collective Agreements
    Collective enterprise bargaining will be a feature of Labor’s industrial relations system.

    No matter whether employees are union members with coverage in that particular workplace or not, they will be free to voluntarily agree to bargain together in good faith.

    In circumstances where an employer commences a genuinely new business and they have not yet engaged any employees, the employer and a relevant union may bargain for a collective greenfields agreement for the new business. Alternatively, employees may be employed on or above Labor’s safety net. This contrasts to the current situation under Work Choices whereby an employer setting up a greenfields site can effectively bargain with himself for the terms and conditions of employment to be applied to employees.

    Collective agreements need not comply with every condition in a relevant award as long as the agreement means employees are better off overall against the safety net.

    It is also proposed that Fair Work Australia (replacing the AIRC and other statutory offices) may facilitate multi employer collective bargaining for low paid employees who have not historically had access to the benefits of collective bargaining, such as employees in the community services sector, cleaning and child care industries.

    Fair Work Australia
    Labor proposes that a new independent umpire, Fair Work Australia, will be created to oversee its new industrial relations policy. This new body will incorporate the AIRC and all statutory bodies created by WorkChoices and be accessible to all Australian employers and employers.

    Fair Work Australia will be responsible for a range of functions, including:

    • Assisting parties to resolve workplace grievances;
    • Resolving unfair and unlawful dismissal claims;
    • Facilitating collective bargaining and enforcing good faith bargaining;
    • Reviewing and approving collective agreements;
    • Adjusting minimum wages and award conditions;
    • Monitoring compliance with and ensuring the application of workplace laws, awards and agreements; and
    • Regulating registered industrial organisations.
    Fair Work Australia will also have a telephone information service, and will publish workplace information on its website. It will act informally and, in most cases, lawyers will not be necessary.
    Unfair Dismissal
    Under Labor’s policy a simple system for resolving unfair dismissals is proposed. In determining who can bring an unfair dismissal claim the following will apply:-
    • In a workplace with more than 15 staff, the claimant must be employed for 6 months.
    • In a workplace with less than 15 staff, the claimant must be employed for 12 months.
    • If not covered by an award, the employee must be earning an annual remuneration of less than $98,200 (to be indexed)
    • A claim for unfair dismissal must be made usually within 7 days of the dismissal, to ensure where appropriate, reinstatement remains a viable option.
    • Fair Work Australia will review and call the parties together to determine the matter.
    • Fair Work Australia may deal with the matter at a local office in a regional or suburban area or at the workplace.
    • Fair Work Australia will be determine if the dismissal was unfair, considering all the circumstances, including the conduct of the parties.
    • The parties may be represented or have a support person present, however both parties will need to respond directly to questions from Fair Work Australia.
    Unlawful Dismissal
    Labor will also ensure that, if the termination is due to an employer avoiding their obligations under the Act, then the termination will be deemed to be unlawful.
    Building and Construction Industry
    The current Australian Building and Construction Commission arrangements will remain in place until the 31st of January 2010. Specifically the ABCC will retain all its current powers and its full resources for this period.
    Independent Contractors
    Labor’s policy on this subject is that independent contractors are for small businesses that should be regulated by commercial law and not industrial law, and that the strong freedom of association provisions that Labor will recognise for employees will extend to contractors, so that they cannot be forced to join unions or give preference to unionists etc. Furthermore, Labor proposes low costs dispute resolution for contractors, as the current remedy for such circumstances involves potentially costly litigation.
    Our Comments
    The implementation of Labor’s industrial relations policy may depend very much upon the eventual makeup of the Senate.

    However, we make the following comments.

    1. Compared to the revolutionary changes of WorkChoices, the ALP proposals are modest in many respects.
    2. The ALP policy seeks to reverse or substantially modify important aspects of WorkChoices, but there is nothing to suggest a reversion to the Federal and State industrial relations systems that prevailed prior to WorkChoices.
    3. Importantly, Labor intends to build on the “breakthrough” to a National industrial relations system stared by the WorkChoices system, yet implementing a structure that is clear and simple. The establishment of such a structure will require a measure of co operation from the State Governments, but the degree of compromise required will not be substantial
    4. Labor’s policy to allow common law contracts of a certain monetary value to override award conditions, coupled with the relatively generous transitional arrangements for existing AWAs, means there may not be any significant reduction in the availability of individual agreements, particularly where the employees have bargaining power.
    5. Interestingly, the ALP will retain WorkChoices’ limitations on union activity – including the prohibition on pattern bargaining, the limitations on union right of entry to premises and the retention of the ABCC (at least for three years).
    6. The ALP’s policy on unfair dismissal will need an increase in the availability of claims, while imposing limitations, including preclusion periods. Obviously they realises that the unfair dismissal regimes that prevailed prior to WorkChoices was resented by employers, large and small.
    7. The ALP’s will establish “Fair Work Australia” which might simply turn out to be a “rebadged” Australian Industrial Relations Commission. The multiplicity of the functions does give rise to questions but there can be no doubt that the new Agency will have some of the important functions of the AIRC invested in it – such as award making and the setting of minimum wages, and dealing with unfair dismissal claims.
    8. While the ALP seems to recognise the emergence of independent contractors as a “class”, the only major difference (although a necessary one) in the ALP Policy is the establishment of a low cost dispute resolution mechanism.
    Generally speaking, the ALP Policy seeks to pinpoint the major problem areas in WorkChoices and changes them, while embracing some of the central elements of it.

    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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