‘WorkChoices’ was introduced in March 2006 and enabled employers and employees through Workplace Agreements to modify or exclude certain ‘protected award conditions’ including penalty rates, overtime and other allowances.
This effectively meant that, provided employees agreed, an AWA or Collective Agreement could remove all penalty, overtime and allowance payments without offering any extra pay by way of hourly rate.
Under the old system all Agreements were monitored under the no disadvantage test. Under WorkChoices that test was abolished.
On Friday 4 May 2007 the Federal Government announced significant further amendments to the Workplace Relations Act 1996 which will, in effect, impose a new no disadvantage test to be known as the ‘Fairness Test’.
Agreements lodged between 26 March 2006 and 4 May 2007 will not be affected by these changes.
However, any employer entering into a Workplace Agreement from 7 May 2007 must consider their agreement in the light of the new Fairness Test.
The new test will be applied to all AWAs or Collective Agreements:
- covering employees earning less than $75,000 per year;
- for employees who would otherwise be covered by an award; and
- which seek to modify or remove protected award conditions.
Protected Award conditions are:
- penalty rates, including for working on weekends and public holidays;
- shift and overtime loadings;
- monetary allowances;
- annual leave loadings;
- public holidays;
- rest breaks; and
- Incentive based payments and bonuses.
The Office of the Employment Advocate will be renamed the Workplace Authority. It will check each agreement against the Fairness Test.
The Fairness Test will operate in a similar fashion to the old no disadvantage test, checking any monetary and non monetary benefits which offset the modification or removal of a protected award condition.
If an agreement fails to meet the Fairness Test standard the Employer and Employee will be given 14 days to amend the agreement.
Many employers use template agreements. It is important that these are checked against the new fairness test prior to lodgement with the Workplace Authority.
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.
