1. Aboriginal Health & Medical Research Council WorkChoices
9 May 2006
Michael Brennan Senior Associate
Jaclyn Foley Solicitor

2. Introduction
Most significant change to Australia’s industrial relations system since the system of compulsory conciliation and arbitration was established 100 years ago
By using the Commonwealth’s power to regulate trading and financial corporations, the Government intends to create a unitary industrial relations system

3. Introduction (cont)
The Government has stated that the legislation will make Australia’s industrial relations simpler and fairer
However, the Act and Regulations are 1700 pages long and extremely complicated

4. Overview of Presentation
Today’s presentation will focus on the following areas:
national system
the new standard
changes to award system
the move from State to Federal regulation
changes to agreement making system
unfair dismissal
record keeping requirements

5. Who will be covered by the new system?
Constitutional corporations and their employees
A corporation is a constitutional corporation if its financial or trading activities are “significant”.
All employers and employees in Victoria
Organisations registered under the Workplace Relations Act
Employees and employers within a Territory

6. Who will be outside the new system?
Unincorporated associations and their employees (other than in Victoria)
Partnerships and their employees (other than Victoria)
Public service employers and employees (other than in Victoria)
A key change - more than 85% of the employed workforce will be covered by the new system and will be excluded from the State IR systems

7. What will remain covered by the State systems?
Occupational health and safety
Workers compensation
Long service leave
Discrimination and EEO

8. Australian Industrial Relations Commission (AIRC)
With limited exceptions, the AIRC will no longer exercise compulsory powers of conciliation and arbitration
It will instead provide voluntary dispute resolution services

9. Today I will be dealing with the substantial changes to federal awards from the WorkChoices legislation.
Accordingly to the Government’s WorkChoices’ Summary “we have too much red tape, too much complexity, and too much confusion”.
However, the WorkChoices Bill certainly does not reduce the complexity of awards. If any, it just made the minimum wages and award system more complex.
In a nut shell, awards will be of decreasing effect over time, thus creating incentives for employees to agree to workplace agreements or individual agreements with their employers.
The New Standard

10. Australian Fair Pay and Conditions Standard (Standard)
New concept – 5 minimum legislative entitlements
Minimum wages set and adjusted by the AFPC (FMW/APCS)
Maximum ordinary hours of work – 38 hours per week and reasonable additional hours
Annual leave – four weeks per annum
Personal and carer’s leave – 10 days per annum
Parental leave – 12 months unpaid
Significant change – applies to contracts of employment and all workplace agreements
These constitute the safety net.
The AFPC standards are the statutory minimum standards that apply to all employees of constitutional corporations.
The standards will underpin all awards and agreements.
The 5 standards are: 1. annual leave of 4 weeks, cumulative from year to year and payable on termination;
2. Personal and carer’s leave of 10 days per year with an additional 2 days unpaid carer’s leave. The personal leave may be taken as personal sick leave or carer’s leave. Although it is cumulative, a maximum of 10 days paid leave may be taken each year;
3. 12 months unpaid parental leave; and
4. Maximum ordinary hours of work of 38 hours per week averaged over 12 months plus reasonable additional hours which must be paid.

11. Australian Fair Pay Commission (AFPC)
Replaces the AIRC as the wage setting and wage review body
AFPC to determine the timing, scope and frequency of wage reviews, how they are conducted and when implemented
Can inform itself about its functions (including effect of its decisions)
The Australian Fair Pay Commission is a new body which replaces the AIRC as the wage setting and the wage review body.
The AFPC has been criticise as lacking the AIRC’s independence due to the following:
Unlike the AIRC, AFPC appointments are for a limited term; and
there is no guarantee of union representation on the AFPC (until now tripartisn has been a key agreement in the success of industrial democracy).
The AFPC has also been criticised as having a lack of transpancy in the manner in which it would come to its decisions.
Must give written decisions.
Decisions must be unanimous.
Instead of arbitrated wage decisions by the AIRC, wages will simply be determined by the AFPC, possibly but not necessarily, with consultation and pursuant to very general guiding principles.
So at this stage, not much is known about how and when wage reviews will be conducted.

12. Today I will be dealing with the substantial changes to federal awards from the WorkChoices legislation.
Accordingly to the Government’s WorkChoices’ Summary “we have too much red tape, too much complexity, and too much confusion”.
However, the WorkChoices Bill certainly does not reduce the complexity of awards. If any, it just made the minimum wages and award system more complex.
In a nut shell, awards will be of decreasing effect over time, thus creating incentives for employees to agree to workplace agreements or individual agreements with their employers.
Awards

13. AH & MRC – Award Coverage
Main Award – Health Services Union of Australia (Aboriginal & Torres Strait Islander) Award 2002 (Federal award)
Some AMS covered by state awards
We will look at what happens to:
Federal awards; and
State awards under WorkChoices

14. Changes to Federal Awards
The changes are:
rationalisation of all awards within 3 years to a limited number of industry-based awards (maybe)
simplifying awards by making all non-allowable matters unenforceable immediately on commencement of WorkChoices
permanent “removal” from award system once an employee’s employment becomes subject to an agreement made under the new legislation
limited powers of AIRC to make and vary awards
Awards no longer the vehicle for wages.
Awards no longer under pin agreements for purposes of the no-disadvantage test.
The 4,000 existing awards will be reduced to a small number, possibly 20, of industry based awards.
An award is displaced by an agreement once an employee becomes subject to an agreement. Once this happens, employees are permanently exercised from that award, and the award will never apply to them again even once the agreement is terminated.

15. Changes in Federal Awards (cont …)
Protected Award Terms v Preserved Award Terms

16. Content of Awards – Preserved Entitlements
“Preserved award terms”
Annual leave, personal and carer’s leave, parental leave (prevail over Standard if more generous)
Long service leave
Notice of termination
Jury service
Superannuation (until 30 June 2008)
No variation
Taken to be included in any replacement award (original coverage remains)
Preserved but frozen.
According to WorkChoices, although these entitlements are not allowable, they will be preserved in awards so employees “continue to enjoy the benefit of these provisions in their current awards”.
Included to cover employees with more beneficial entitlements in awards.
However, these entitlements are also covered by existing State legislation, so the effect of making them preserved is to further override the operation of the State legislation.

17. Protected Award Conditions
“Protected” award conditions - specified allowable conditions that are protected for employees entering into agreements :
rest breaks
incentive based payments and bonuses
annual leave loadings
monetary allowances
overtime and shift work loadings
penalty rates
Protected award conditions can be expressed excluded or modified by a Workplace Agreement
Relevant for agreement – making only.
Protected award conditions are allowable award matters which would otherwise remain in awards, however, their protected status is in respect of agreements. When parties enter into an initial agreement or any subsequent agreement, they must either include the protected award conditions or expressly exclude or modify them.

18. Transition of State Awards & Agreements
Today I will be dealing with the substantial changes to federal awards from the WorkChoices legislation.
Accordingly to the Government’s WorkChoices’ Summary “we have too much red tape, too much complexity, and too much confusion”.
However, the WorkChoices Bill certainly does not reduce the complexity of awards. If any, it just made the minimum wages and award system more complex.
In a nut shell, awards will be of decreasing effect over time, thus creating incentives for employees to agree to workplace agreements or individual agreements with their employers.

19. Transition of State Awards and Agreements
State awards and agreements applicable to constitutional corporations will “transfer” to the Federal system and become:
Notional Agreements Preserving State Awards
Preserved State Agreements
Binding on current parties to State agreements and those subject to State awards

20. Notional Agreements Preserving State Awards
Will cease to operate after 3 years or earlier if replaced by a new Federal agreement
No prohibition on industrial action during 3 year period
If not replaced – transition to Federal award (preserved award terms retained in new rationalised Federal award)
AFPC Standard applies (except hours of work) if more generous
Cannot contain “prohibited content”

21. Changes to Agreement Making System

22. Agreements - Overview Six types of “Workplace Agreements” AWAs
employee collective agreements
union collective agreements
union greenfields agreements
employer greenfields agreements
multiple business agreements

23. Content of Workplace Agreements
Required content:
Nominal expiry date – 5th anniversary from lodgment where agreement silent (12 months for Greenfields agreements)
Dispute settlement clause – model clause where silent
Express exclusion or modification of “protected award conditions” (if required):
public holidays, rest breaks, incentive based payments and bonuses, annual leave loadings, specified allowances, penalty rates, shift/overtime loadings, prescribed matters
AFPCS must be met during life of agreement
Employer must not be reckless as to lodgment of agreement containing prohibited content

24. Content of Workplace Agreements (cont)
Prohibited content:
restrictions on employing labour hire workers / contractors
prohibitions on AWAs
allowing for industrial action during the term of an agreement
providing for trade union training leave, bargaining fees to trade unions or paid union meetings
mandating union involvement in dispute resolution
providing that any future agreement must be a union collective agreement
providing a remedy for unfair dismissal
matters that do not pertain to employment relationship or allow or require breach of freedom of association

25. Making Agreements Key changes:
Similar procedures for AWAs and collective agreements
Employees to have seven days’ access to agreement and information statement
lodgment with OEA within 14 days of approval (together with declaration)
Notify employees of lodgment within 21 days (collective agreements only)
Agreement commences operation on day of lodgment (even if requirements not met)

26. Termination of Agreements
Workplace Agreements can be terminated after nominal expiry date:
by agreement
in accordance with terms (after NED)
upon 90 days’ notice (after NED)
Revert to Australian Fair Pay and Conditions Standard (plus protected Award Conditions)

27. Interaction of Industrial Instruments
AWAs will exclude both collective agreements and awards
Collective agreements will exclude awards (completely) but will not be able to exclude AWAs
Collective agreements - first in time prevails prior to nominal expiry date
New AWAs replace old AWAs

28. Transitional arrangements for current Federal Agreements
Pre-reform certified agreements continue to operate until replaced or terminated (in accordance with the old termination provisions)
Pre-reform certified agreements can be replaced prior to their nominal expiry date (however protected action cannot be taken until after that date)
Pre-reform certified agreements continue to prevail over awards to extent of inconsistency
Dispute resolution in accordance with old s170LW
Only content stripped is “anti-AWA” provisions
The Standard does not apply

29. Termination of Employment

30. Termination of Employment – Unfair dismissal
As a result of the changes, the following types of employees cannot make an unfair dismissal claim:
employees who have not completed the “qualifying period” of employment (extended from 3 months to 6 months)
employees dismissed for “genuine operational reasons” or for reasons that include “genuine operational reasons”, eg, redundancy
Employees employed by an employer with 100 employees or less
seasonal workers

31. Unfair Dismissal – Changes to the Commission’s Powers
Commission can determine extension of time and jurisdictional issues on the papers, that is, without a hearing
Commission may dismiss (without a hearing) an unfair dismissal claim on the basis that it is “frivolous, vexatious or lacking in substance”

32. Unfair Dismissal – Changes to the Commission’s Powers (cont)
An employer may apply for the dismissal of an unfair dismissal application on the basis that the employment was terminated for genuine operational reasons, or for reasons that include genuine operational reasons
If an employer makes such an application, the Commission must hold a hearing to determine the employer’s application before dealing with the matter any further

33. Termination of Employment - Compensation
In determining an amount that may be awarded to an employee, the Commission must have regard to:
the amount of any income earned by the employee between the date of termination and any order made for reinstatement
any misconduct of the employee that contributed to the employer’s decision to terminate the employee’s employment
Compensation may not include a component representing compensation for shock, distress, or humiliation, or other analogous hurt, caused to the employee by the manner of dismissal

34. Record Keeping Requirements

35. Record keeping requirements
Under the new regulations:
there are comprehensive record keeping obligations for all employees;
these cover; working hours, pay various forms of leave (including annual and personal leave), superannuation and termination of employment;
recent exclusion announced for employees not entitled to overtime and earning over $55,000 (hours of work records only)

36. Conclusion

37. Conclusion – What Does AH & MRC Need to do?
Assess your current position, that is, make sure you understand:
the scope of your State and Federal Awards and Agreements
when your Agreements expire
what will and will not be enforceable under your Awards and Agreements
what your various unions are likely to do or demand

38. Conclusion – Decide Future Direction
Will you observe pre-existing Award and Agreement obligations that are no longer enforceable?
Will you continue with past practices or are there opportunities to steer in a new direction?
What changes do you wish to bring about?