Rudd Government IR Reform Agenda
You are here:The Workplace Relations Minister, Julia Gillard, has released details about the Government's intentions for further changes to our Industrial Relations laws.
The Workplace Relations Minister, Julia Gillard, has released more details about the Government's intentions for the future of Industrial Relations.
The policies were announced by the Minister on 17 September 2008 at an address to the National Press Club.
The Minister re-stated the Government's view that that one of the most important elements of the new workplace relations system is the safety net provided by the 10 minimum National Employment Standards. For employees earning under $100,000 pa the Standards will be complemented by modern awards tailored to specific industries or occupations.
Other key proposals include:
Fair Work (FWA)
The Government intends to establish a one-stop shop to bring together many of the current institutions. The FWA will take over the functions of the Australian Industrial Relations Commission and Registry, Australian Fair Pay Commission, the Workplace Authority, the Workplace Ombudsman and the Australian Building and Construction Commission.
It is also planned to create a Fair Work Court which would be an independent judicial division of FWA. The Fair Work Court would be set up as divisions of the Federal Court and the Federal Magistrates Court.
Minimum Wage Setting
Minimum wage setting will be taken over by the Minimum Wage Panel within Fair Work Australia. Its decisions will take into account a range of important relevant factors, including the needs of the low paid and the performance and competitiveness of the national economy. Any changes to minimum rates will take effect from 1st July every year.
Content of Agreements
The proposed system means that parties will be able to bargain over a far wider range of content than they can at present under Work Choices. All matters that properly relate to the work performed and the entitlements of employees in the workplace, as well as many previously prohibited matters regarding union representation, will be able to be the subject of bargaining.
ERS Comment: we see the new ability for unions to be able to bargain over previously prohibited matters such as trade union leave and union encouragement clauses, but also important cost impactors such as use of contractors and labour hire companies.
Whilst militant unions might see the latter items in particular as big wins for the union movement, the could also possibly interrupt much of the progress Australia has made in labour market efficiency in recent years if employers are bludgeoned into accepting restrictions on the use of outside labour.
Bargaining
There will no longer be a distinction between employee and union collective agreements. A "majority test" will determine whether negotiations for a collective agreement will occur in a workplace.
Where parties are not acting in good faith during negotiation of a workplace agreement, Fair Work Australia will be able to make orders to "ensure the integrity and fairness of the bargaining process." Enforcement of orders will be possible through the Fair Work Division of the Federal Court or Federal Magistrates Court.
The Minister said that compulsory arbitration "will not be a feature of good faith bargaining."
ERS Comment: whilst arbitration of bargaining disputes will be limited to "exceptional circumstances" only -i.e. where industrial action is causing a threat to safety or health, a threat to the economy, or significant harm to the parties - we see the last item in particular as opening the door to greater involvement of Fair Work Australia in dispute than under Work Choices.
Industrial Action
Protected industrial action will be allowed in the course of bargaining as at present, in accordance with strict rules, including a secret ballot of employees and 72 hours notice of intention to take the action.Where, under Work Choices, there was a minimum of 4 hours pay deducted for any industrial action, the deduction for protected action will only be proportional for the actual stop work period.
For unprotected industrial action, the minimum four hours deduction will remain.
ERS Comment: the ability of unions to take short, sharp industrial action by strategic groups of workers at times calculated to cause an employer maximum damage, with only small losses of pay, may turn the balance in favour of unions in some bargaining disputes.
Multi-Employer Bargaining
Multi -employer bargaining will be introduced in an initiative designed to benefit low paid workers. Unions with relevant coverage, or a bargaining agent, will be able to apply to Fair Work Australia to bargain with a specified list of employers to be covered by the one agreement. After consideration of a number of factors, Fair Work Australia will determine if the proposed bargaining is in the public interest.
Individual employers can seek exemption from the process if they feel they should not be included.
Unfair Dismissals
Under the proposed legislation, employees of a small business (defined as fewer than 15 employees) will only be able to claim for unfair dismissal after they have been employed for at least 12 months. To dismiss someone ‘fairly' after 12 months, small employers will have to comply with a Fair Dismissal Code for Small Business.
Employees can be summarily dismissed without reference to the Code for serious misconduct such as theft, fraud, violence where reported to the Police, and also serious breaches of Occupational Health and Safety procedures.
For other dismissals to be justified the Code requires the employer to give the employee a warning, based on a reason that validly relates to the employee's conduct or capacity to do the job; and provide a reasonable opportunity for the employee to improve his or her performance.
Larger businesses will not be able to rely on the Code and their employees will be entitled to make a claim after only 6 months, as at present.
Dismissed employees will have seven days to lodge an unfair dismissal claim with Fair Work Australia. If an employee's unfair dismissal claim is upheld the tribunal will have the power to order compensation of up to six month's pay, or reinstatement in limited circumstances, as at present.
Timetable for introduction
It is planned to introduce the bargaining framework and unfair dismissal changes from 1st July 2009, with the whole system fully operational by 1st January 2010. The Minister proposes to introduce the legislation by the end of this year.
ERS Comment: the legislation still has to pass through the Senate, where minor parties such as the Greens can control the outcome of votes of that chamber. Importantly, they will almost certainly hold out for more union-centric changes in what could become an important test of the Government's commitment to its pre-election policies.
Further information
The Government has supplied a number of Facts Sheets on aspects of the proposed new system. Of course, ER Strategies' clients are also welcome to contact us to discuss specific matters of concern, or to further assist them to develop their employee relations strategies as a result of the Government's announced changes.
