By 1 July 2009, the Federal Industrial Relations System will be
operated and overseen by one body known as "Fair Work
Australia" (FWA). FWA will replace The Australian Industrial
Relations Commission, The Australian Industrial Registry, The
Australian Fair Pay Commission, The Australian Fair Pay Commission
Secretariat, Workplace Authority, Workplace Ombudsman and The
Australian Building and Construction Commission.
The key highlights of the new system which will be in place by 1
July 2009 include new bargaining rules in negotiating enterprise
agreements and reforms to unfair dismissal laws.
What will be the new bargaining rules?
The FWA will have greater powers in relation to the bargaining
process between employees, their unions and employers. The FWA will
ensure that the parties:
attend and participate in meetings at reasonable times;
disclose relevant information in a timely manner, subject to
appropriate protection for commercial in confidence
respond to proposals made by other parties in a timely
give general consideration to proposals and provide reasons for
refrain from capricious or unfair conduct that undermines
freedom of association of collective bargaining. Even though the
FWA has greater powers than the previous Australian Industrial
Relations Commission, it cannot force parties to make concessions
or sign up to an agreement that they do not agree with. The FWA can
however enforce orders to ensure the integrity and fairness of the
process if evidence is put forward that bargaining has not been in
good faith. This can include employees refusing to respond to
employer proposals to improve efficiency and productivity.
As the current Australian Industrial Relations Commission, the
powers of the FWA to arbitrate disputes will be limited and only
available in certain situations. For example, where industrial
action is posing a threat to safety and health or to the
The Unfair Dismissal Changes
Effective from 1 July 2009, the current rule that businesses
with fewer than 100 employees are exempt will no longer apply. The
new qualifying period will be 12 months for businesses with fewer
than 15 employees and 6 months for all other businesses. In
determining whether or not a business has 15 or more employees,
full time, part time and long term casual employees will be
included in the count.
Small businesses will be required to comply with a 'Small
Business Fair Dismissal Code' (Code). The Code sets out a fair
process in order to ensure that the dismissal of an employee is
fair in all the circumstances. The Code will be complied with
a warning based on a valid reason about the employee's
conduct or capacity has been given; and
a reasonable opportunity has been provided to the employee to
rectify the problem or improve their performance.
The Code does not stipulate a systematic process of providing a
certain number of warnings. The new FWA will also have an emphasis
on resolving alleged unfair dismissals through a mediation process,
with legal representation only being permitted in exceptional
circumstances. As per current law, the remedies for unfair
dismissal include re-instatement, or where re-instatement is not
practicable, the employee can be awarded up to 6 months
Other Changes to the New Industrial Relations System
The FWA will have the power to vary awards and make minimum wage
orders. Wages will also be set through a simple and fair safety net
process consisting of a National Employment Standard (NES). The
safety net will guarantee minimum entitlements for all employees
from 1 January 2010.
Like the current legislation, there will be protected and
unprotected industrial action. Where it is proposed that protected
industrial action will be taken, it can only be protected where it
has been approved by a secret ballot of a majority of employees.
Industrial action is not protected if it is taken before the
nominal expiry date of an enterprise agreement or where the parties
have not bargained in good faith. Where this occurs, employers will
be required to withhold 4 hours pay for unprotected industrial
action of up to 4 hours duration. Where unprotected action exceeds
4 hours, employers will be required to withhold payment for the
duration of the action.
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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