Australia: Labor´s Promised IR Legislation Introduced Today: Fair Work Bill

Last Updated: 2 December 2008

The Federal Government's long-expected Fair Work Bill 2008 (Cth) has now been introduced into Federal Parliament, with certain elements expected to take effect from 1 July 2009.

Employee entitlements

National Employment Standards - As previously announced, ten minimum employee entitlements will apply to most Australian workplaces from 1 January 2010. These will replace the existing Australian Fair Pay and Conditions Standard, under which there are five minimum employee entitlements.

Modern Awards - The Bill provides that Modern Awards, which the Australian Industrial Relations Commission is in the process of developing pursuant to the transitional Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 (Cth), will be reviewed every four years. Outside of these reviews, awards will be able to be varied in limited circumstances. Those bound by Modern Awards will have the benefit of a clause enabling them to agree on flexible arrangements. Modern Awards will not cover employees earning over $100 000 per annum.

Minimum rates of pay - These will be included in Modern Awards. However, Fair Work Australia (FWA), the Government's promised "one-stop shop" for industrial matters, will also annually review minimum wages. FWA's review must have regard to a range of economic and social factors. Updated rates of pay will take effect on or before 1 July each year.

Collective bargaining

Good faith bargaining - FWA will have the power to compel parties to bargain for industrial agreements in good faith. This may include requiring parties to meet, disclose information, consider and respond to proposals and refrain from capricious conduct that undermines freedom of association or collective bargaining. However, parties will not be required to make concessions or sign agreements they do not support. FWA will be able to impose fines for breaches of good faith bargaining, and where there is a serious or persistent breach, FWA may make a determination.

Special provisions for low paid workers - FWA will also be able to assist low paid workers with minimal bargaining power to make agreements with multiple employers through compulsory conferences and good faith bargaining orders. Such workers include young people, newly arrived migrants, and casual or part-time employees. Where bargaining agents are genuinely unable to reach agreement, FWA will also have the power to order arbitration to resolve the dispute. This will only be allowed where employment conditions are substantially the same as in the relevant safety net provisions, the arbitration is in the interests of promoting future enterprise agreement and productivity, and where the determination is in the public interest.

Industrial action - Most of the provisions introduced by the previous government have been retained, including the requirement that employees must, in secret ballots, approve taking industrial action before such industrial action can commence.

Termination of employment

Unfair dismissal - Under WorkChoices, employees who work for businesses that employ fewer than 100 employees cannot bring an unfair dismissal claim. The new Bill removes this exemption. It also adjusts the length of service required of employees before they are able to access unfair dismissal protection to:

  • six months for businesses that employ 15 or more employees; and
  • 12 months for smaller businesses.

Employees will generally have only seven days to make an unfair dismissal claim. However, this can be extended by FWA in certain circumstances. Claims will be determined by a conference that FWA conducts between the parties or by a hearing. The Bill also provides for the "Fair Dismissal Code", which sets out a checklist procedure that, if followed, will exempt small businesses from unfair dismissal claims.

Fair Work Australia

Fair Work Australia's Alternative Dispute Resolution Powers - FWA will replace the plethora of bodies that currently administer the Workplace Relations Act (WRA). It will have an array of powers to resolve disputes arising under the WRA including conciliation, mediation, compulsory conferences and power to inform itself about the circumstances and make recommendations. It will also be able to make binding decisions in respect of unfair dismissal. The new Bill provides that one party alone may request FWA's involvement.

New Fair Work Divisions of the Federal Court and the Federal Magistrates Court - To overcome the potential constitutional problems of having administrative and judicial functions in the same body, FWA will have divisions in the Federal Court and Federal Magistrates Court. These divisions will exercise judicial power including in a new informal small claims jurisdiction for claims up to $20 000. It will also adjudicate cases involving failures to comply with an award or NES obligation. These divisions will have the power to make "any order they consider appropriate" to remedy a breach and to issue injunctions to prevent breaches.

What's next?

The Government is expected to introduce transitional and consequential legislation during March - April 2009. This will enable the operation of FWA, the new bargaining rules together with the unfair dismissal laws and their associated protections to take effect as intended from 1 July 2009.

It is also intended that the other substantive changes will commence on 1 January 2010.

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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