The Fair Work Act 2009 (FW Act) commences operation
from tomorrow and introduces major changes to employment laws which
will affect all Australian businesses.
Do you fully understand how it will affect your business?
Is your business ready for the changes?
All employers should be reviewing all aspects of their workplace
relations operations to ensure they comply with the new laws. This
includes contracts of employment, position descriptions, policies
and procedures, and practices such as agreement making.
The key changes to be aware of are:
All employers will be covered by unfair dismissal
laws. The exemption for small
businesses (with 100 employees or less) has been removed. A Fair
Dismissal Code will apply, with compliance offering a defence for
small (employers with less than 15 employees) employers.
Redundancies will be more difficult to
implement. The test for what is a "genuine
redundancy" is narrower and there is an obligation to explore
redeployment opportunities – including with associated
entities – before terminating a person's
AWAs and ITEAs will be abolished (from 1 January
2010). The only option for employers in most cases to
avoid the inflexibility of awards will be enterprise (collective)
Employers (and unions) must bargain in "good
faith" when negotiating an enterprise (collective)
agreement. This is potentially the most material change
and strategies should be developed by employers to ensure
Greater role for unions in collective
bargaining. In many cases, unions will be involved in
bargaining in the workplace by default.
Increased union rights of entry. Unions will
have a greater capacity to enter workplaces in which they have had
no prior involvement.
More onerous transfer of business rules.
Parties to sales of businesses and other transactions need to be
aware of the new rules applying to the transfer of employees in
these cases. The focus of the new rules is whether there has been a
transfer of work between two employers and the reason for the
connection between the two employers. The application of these
rules is likely to be far wider than is presently the case and will
have ramifications for both current and transferring
Further changes take effect from 1 January 2010, introducing a
new minimum "safety net" of employment entitlements
comprising the National Employment Standards (applicable to all
employees) and modern awards (applicable to employees by industry
or occupation). The new modern awards will contain a flexibility
clause which will enable an employer and employee to agree on
arrangements to meet the genuine needs of both the employer and
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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