WorkChoices
The Federal Government's WorkChoices legislation became law on 27th March 2006.
Its aim is to nationalise industrial relations into one single national system.
It is expected that WorkChoices will apply to approximately 85% of the workforce in Australia.
Previously each State had its own set of industrial relations legislation. This legislation will now only apply to a limited group of employees.
Due to constitutional limitations of the Federal Government under the Australian Constitution, the Federal Government's power to apply the WorkChoices legislation is limited to employees of ' trading and financial corporations ' , employees covered by a Federal award, all employees in Victoria and the Territories and all Federal Government employees.
WorkChoices does not apply to people employed by individuals, partnerships, associations and a not-for-profit corporations. These workers will be covered by State law.
On 14th November 2006 the High Court handed down judgment on a constitutional appeal by the Territories and States challenging the constitutional validity of the Commonwealth government's use of the power to make laws relating to trading corporations as the constitutional means for introducing WorkChoices.
The High Court held by a 5-2 majority that the legislation is valid in its entirety.
What does WorkChoices do?
WorkChoices establishes one national industrial relations system for employees employed by "Corporations".
WorkChoices eliminates various "supports" that the previous system provided to the trade union movement in particular a virtual monopoly in obtaining arbitrated outcomes in relation to industrial disputes and award making.
WorkChoices phases out existing awards: existing awards will remain for up to three years in relation to States and five years for unincorporated businesses under Federal awards.
- State award is now a "notional agreement";
- wage rates must comply with the Standard;
- certain conditions are preserved;
- certain conditions are protected;
- certain conditions are prohibited;
- the residue will remain.
A Fair Pay and Conditions Standard has been established to set national minimum wage and employment standards (the Standard). The Standard sets out minimum entitlements which prevail over any contract of employment or AWA (Australian Workplace Agreement). The Standard also applies to non-award employees for example managers and senior staff, employees covered by a new award or AWA.
WorkChoices imposes a number of minimum "preserved "conditions in every contract of employment as follows:
- annual leave -- 4 weeks, pro rata monthly at the basic rate
- personal/carer' s leave -- 10 days paid and cumulative leave
- Long service leave -- (unchanged)
- notice of termination
- Jury service
- superannuation (until the 30th of June 2008)
- parental leave (12 months unpaid leave)
- ordinary hours -- an employee in cannot be required to work more than 38 hours per week
WorkChoices provides for certain "protected" conditions in the contract of employment including rest breaks, incentive based payments and bonuses, annual leave loading, public holidays, monetary allowances, and earnings per overtime and shift work, penalty rates and other matters contained in the Regulations to the legislation
WorkChoices deals with prohibited content in workplace agreements. The following provisions are prohibited:
a clause
- prohibiting AWA's
- restricting contractors
- allowing industrial action
- allowing trade union training leave
- allowing bargaining fees
- allowing paid union meetings
- requiring collective agreement
These prohibitions to not relate to agreements in general and the parties are not generally banned from reaching agreement on prohibited content but simply from seeking it in a workplace agreement under the Act. This means the protected action can not be utilised to press claims for prohibited content and this is the prime aim of the prohibited content provisions.
These conditions are contained in detailed Regulations which accompany the Act.
Termination of employment:
The right to claim unfair dismissal is only available to employees earning less than $94,900 per and who are employed by a “Corporation” which employs more than 100 people except where the employee is terminated due to " genuine operational reasons " (redundancy). Unfair dismissal action is not available to employees employed for less than six months or seasonal employees.
Claims for unfair contract under section 106 Industrial Relations Act (New South Wales) are no longer available.
"Unlawful termination" action is still available to all where it relates to a dismissal on the grounds of sex, race, religion, pregnancy etc.
Wages
A Fair Pay Commission has been established to set and adjust basic pay rates.
State Award Employees: employees employed by a corporation who are covered by a State Award are covered by the award for a maximum life of three years after which time they will be subject to the Standard.
Workplace Agreements
WorkChoices pushes parties into making workplace agreements (AWA ). Industrial tribunals have lost power to make new awards (other than for those members of the workforce not employed by an employer covered by WorkChoices).
Workplace agreements may take the form of
- AWA’s
- Employee collective agreements
- Union collective agreements
- Union Greenfield agreements
- Employer Greenfield agreements
- Multiple business agreements
Workplace Agreements can be registered and given the force of law without having to be screened for compliance. Workplace agreements are lodged with the Employment Agency within 14 days. The employer must certify that the agreement complies with the legislation.
Individual agreements can be made and registered even though the relevant employment relationships are already regulated by awards or collective agreements which are still within their nominal terms of operation, and those individual agreements will be given overriding force.
WorkChoices is descriptive as to what the parties may include or exclude in their chosen form of agreement. See the prohibited and protected conditions earlier in this article.
Many employers may decide to ignore the availability of Workplace Agreements and simply proceed with ad hoc common law contracts.
Dispute Resolution
WorkChoices reduces the role of the Australian Industrial Relations Commission. It provides for Dispute Resolution and a Model Dispute Resolution Process. Where a dispute cannot be resolved at the workplace, the parties may use alternative dispute resolution processes and where parties cannot agree on ADRP a party may apply to the Industrial Relations Commission to have an ADRP conducted by the Commission.
Industrial Action
Industrial Action is given a wide definition and cannot be taken before termination of a normal Workplace Agreement. A secret ballot must be taken in respect of any proposed action and a majority vote must be obtained. At least half of the employees must be eligible to vote. Three days notice of the action will be required. The parties are to genuinely endeavour to reach agreement before industrial action can occur and no action will be permitted during the life of a Workplace Agreement even if the action relates to issues that are not covered by the agreement. Industrial action cannot be taken to support claims for prohibited content or to support "pattern bargaining" claims.
Transmission of business
Where there is a transmission of business, awards, agreements and AWA's will be binding on a new employer for up to 12 months where there is a "transferring employee". Accrued entitlements may also be transferred and parental leave will be transferred automatically. For all other entitlements, the old and new employer will be able to choose whether the new employer will assume liability for the entitlements. However, if the new employer does not accept liability, the old employer will remain responsible for any outstanding entitlements. The AIRC has a discretion to order that the new employer should not be bound by a collective agreement or award.
Since its introduction, the Legislation and Regulations have been amended three times and continue to reveal consequences for employers that are presumably unintended. These consequences relate to the way workers compensation, public holiday pay, sick , personal and annual leave are regulated. Changes introduced by the Standard involve a different method of calculation for payment of personal, carer’s and compassionate leave than for regular accrued annual leave.
For further information please contact Tony McMinn on (02) 9957 4501 or at acmcminn@rbhm.com.au
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