- Transfer of business
- Extension of union officials' right of entry under the Fair Work Bill 2008
Transfer of business
The Fair Work Bill 2008 (Cth) introduces significant changes to the transmission of business laws which currently exist. The Bill introduces a new test for determining whether a transfer of business occurs for the purposes of determining whether certain industrial instruments transmit to a new employer. The aim of these provisions is to ensure that enterprise agreements and certain modern awards that covered employees of an "old" employer continue to cover those employees if they are offered and accept employment with the "new" employer.
The circumstances in which a transfer of business occurs are broader than the transmission of business provisions in the Workplace Relations Act 1996 (Cth). In particular, the Bill shifts the traditional focus away from looking at whether a business has been taken over in some way to whether there has been a transfer of work between two employers and the connection between the two employers.
In particular, under the Bill, a transfer of business will occur when:
- an employee's employment with an old employer is terminated (for any reason including a resignation by the employee);
- within 3 months of the termination, the employee becomes employed with a new employer;
- the work the employee does for the old and new employer is the same or substantially similar; and
- there is a particular 'connection' between the old and new employer.
There will be a connection between an old and new employer where:
- there is a transfer of assets between an old and new employer or their associated entities and the new employer or its associated entity owns or has the beneficial use of some or all of the assets that belonged to the old employer or associated entities and that relate to or are used in connection with the transferring work;
- outsourcing or insourcing of work between an old and new employer where employees are being transferred to continue performing that work; or
- there is a transfer of employees from one related entity to another.
Other significant changes
Under the Bill, transmitted industrial instruments will now apply indefinitely until terminated or replaced by another instrument (this was the position pre-Workchoices). A transmitted industrial instrument will prevail over any other industrial instrument which applies to the new employer in respect of work performed by the transferring employee.
New non-transferring employees who are engaged to perform the transferred work alongside transferring employees will be covered by the transferable instrument where there is no other modern award or enterprise agreement that applies to them. This is an exemption to the rule that transferable instruments only cover transferring employees.
The circumstances in which a transfer of business may occur are
substantially broader under the Bill. Employers will not be able to
avoid the application of industrial instruments by transferring
employees between related entities and the new laws may inhibit new
employers taking on employees from old employers where new
employers do not wish to be bound by the old employers'
industrial instrument for an indefinite period.
article by Nadine Zets
Extension of union officials' right of entry under the Fair Work Bill 2008
The Fair Work Bill 2008 proposes to significantly extend the right of union officials' to enter work premises. Under the Bill, a union official holding an entry permit will be able to enter work premises to:
- hold discussions with employees who perform work on the premises and who are entitled to be represented by the union; and
- investigate a suspected contravention of a "fair work instrument" where the contravention relates to or affects a member of the union who performs work on the premises provided that the union is entitled to represent the member.
A fair work instrument includes a modern award, an enterprise agreement, a workplace determination and a Fair Work Australia order.
The Bill proposes to broaden union officials' right of entry in a number of ways including:
- allowing union officials to enter work premises to hold discussions with employees when the union is not a party to or bound by fair work instrument that applies to the employees (under WorkChoices, there is no such right of entry unless the union is a party to or bound by an applicable industrial instrument); and
- if a union official reasonably suspects that a contravention of a fair work instrument is occurring or has occurred which affects a member of the relevant union, the union official may inspect the employment records of union members and non-members while investigating the breach (under WorkChoices, a union official could only inspect members' records unless the Commission ordered otherwise).
However, a number of important elements of WorkChoices are proposed to be retained including:
- the requirement for an union official exercising a right of entry to hold a permit;
- the requirement for the union official exercising a right of entry to provide 24 hours notice to the employer that they are going to exercise their right of entry; and
- the ability for an employer to reasonably restrict the location and route a union official can use and take to meet with employees
At this stage, the Opposition Shadow Minister for Employment and Workplace Relations, Michael Keenan MP, has stated that he has concerns about the proposed changes to right of entry laws, and that the Opposition may seek changes in the Senate once the Senate Committee has reviewed the FW Bill. We will let clients know of any further development in this area.
Article by Michael Cooper and Mark Santi
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