Australia – New Workplace Relations System

The Deputy Prime Minister, the Hon Julia Gillard MP, today outlined details of the Federal Government’s new workplace relations system.  The new system has been developed in consultation with key stakeholders, including the business community, trade unions and the States and Territories.

The Deputy Prime Minister’s announcement today builds on earlier announcements.  These include:

• A strong safety net of 10 legislated National Employment Standards for all employees.
• A system of Modern Awards, tailored to the needs of particular industries and occupations.  The Australian Industrial Relations Commission published exposure drafts of a number of Modern Awards on Friday 12 September here.
• An enterprise-level collective bargaining system focused on promoting productivity.
• Unfair dismissal laws which balance the rights of employees to be protected from unfair dismissal with the need for employers, particularly small business, to fairly and efficiently manage their workforce.
• A ‘one-stop shop’, Fair Work Australia, for advice and support on all workplace relations issues and enforcement of legal entitlements.

The Government has committed to further consult with stakeholders and will ask the Committee on Industrial Legislation and state and territory government officials between 7 to 17 October 2008 to provide feedback on the draft legislation.

Legislation for the new workplace relations system is due to be introduced into the Parliament by the end of 2008 and will be subject to a Senate Inquiry.  The legislation is due to commence from 1 January 2010, however in today’s speech, the Deputy Prime Minister announced that the Government intends to commence key elements of the new system including the bargaining framework, unfair dismissal and associated protections on 1 July 2009, following passage of the Substantive Bill through the Parliament.

Government will introduce separate legislation in the first half of 2009 to set out transitional and consequential changes, which will explain how existing employers and employees move to the new workplace relations arrangements.

Existing minimum entitlements will continue to apply until the new safety net of Modern Awards and the National Employment Standards starts operation on 1 January 2010.

The Deputy Prime Minister also announced that Fair Work Australia will oversee the operation of the new legislation. There will be a short transition period where the AIRC and Fair Work Australia will operate concurrently, while the award modernisation task is completed.

Other key announcements made by the Deputy Prime Minister today include:

• Minimum Wages Panel: minimum wages and associated casual leave loadings will be reviewed every year by a specialist Minimum Wages Panel within Fair Work Australia.  The Panel will be headed by the President of Fair Work Australia and will comprise up to seven full and part-time members (both specialists and generalists). These members will be drawn from the wider community with relevant experience in social and economic policy.
• Review of Awards: Fair Work Australia will review Modern Awards every four years to ensure they are responsive to the needs of the economy and keep up with community standards of what constitutes a fair minimum safety net.  The first review is due to take place in 2014. This is intended to provide certainty for business and employees around revisions of the safety net.
• New bargaining system: the Government has placed an emphasis on enterprise-level collective bargaining.  Importantly, there will be a requirement for employers and employees to bargain in good faith for a mutually acceptable outcome. Where this can be demonstrated that good faith bargaining is genuinely not occurring on either side, Fair Work Australia will be able to make good faith bargaining orders that can direct parties to meet and engage in dialogue and negotiation; however it will not require parties to make concessions or to sign up to an agreement when they do not agree. The Deputy Prime Minister stated that compulsory arbitration will not be a feature of good faith bargaining.
• Agreement content: parties will be able to bargain over a wide range of content that properly relate to the work performed and the entitlements of employees in the workplace.
• Industrial action: the new laws will distinguish between protected industrial action which may occur during the bargaining period and unprotected industrial action taken outside of the bargaining period.  Such industrial action, including wild cat strikes or bans will not be allowed and employees will face a mandatory minimum deduction of four hours’ pay for any incident of unprotected industrial action.  It will be unlawful to pay or demand to be paid for this period. In the case of partial work bans, employers will be able to use their discretion to tolerate bans, stand down or lock out employees or issue a partial work notice and make deductions proportional to any work not performed. This will be able to be reviewed by Fair Work Australia.
• Multi-employer bargaining for the low paid: under the legislation, employees in industries such as child care, community work, security and cleaning (jobs typically either part-time or casual) may bargain on a multi-employer basis.  A union or bargaining representative will be able to apply to Fair Work Australia for entry into a new ‘low-paid stream’ to bargain with a specified list of employers. Protected industrial action will not be permissible under this situation, but representatives will be able to utilize Fair Work Australia’s good faith bargaining rules and powers of mediation and conciliation. Fair Work Australia will only be able to make a binding determination if the parties agree.
• Unfair dismissal: employees of a business of fewer than 15 employees will only be able to claim for unfair dismissal after they have been employed for at least 12 months.

Detailed information on the Government’s workplace relations approach can be found here.