As the federal election looms closer, the focus on the industrial relations policies of the Coalition government and the Australian Labor party (ALP) becomes sharper. It has been suggested that the policies of the parties are converging. Are they? What will be the likely impact for employers if, as the polls predict, the ALP wins government?
What would a new ALP government intend for employers?
In April 2007, the ALP launched its Forward with Fairness industrial relations policy followed by the Forward with Fairness Policy Implementation Plan in August 2007. Major initiatives of the policy setting out the ALP’s plans for Australia’s industrial relations system include the following.
Fair Work Australia
A new body would be created called Fair Work Australia, referred to by the ALP as a ‘one stop shop’, to replace the Australian Industrial Relations Commission, the Australian Fair Pay Commission, the Workplace Authority, the Workplace Ombudsman and, over time, the Australian Building and Construction Commission (ABCC).
Fair Work Australia would, subject to constitutional limitations, perform administrative and judicial functions. Among other things, the hybrid body would be responsible for:
- resolving industrial disputes and making agreements
- prosecuting employers and other parties for breaches of legislation and industrial instruments
- hearing matters currently being dealt with by the Commission
- hearing unfair dismissal claims
- regulating particular industries, and
- informing and advising workplace participants on their rights and obligations under industrial relations laws.
Employee rights
The ALP’s industrial relations system is planned to be based on workplace rights including:
- collective bargaining
- freedom of association
- the right to representation, information and consultation in the workplace
- protection against unfair treatment
- access to an effective grievance and dispute resolution procedures
- freedom from discrimination, and
- equal remuneration for work of equal value.
National employment standards
Ten legislated national employment standards are proposed to apply to all employees. Current minimum standards introduced relate to:
- hours of work
- annual leave
- long service leave
- personal and carers’ leave, and
- notice of termination.
These minimum standards will be very similar to the ALP’s new standards. However, the new standards would also include new legislative entitlements, namely:
Redundancy pay - Employers of 15 or more employees will have to pay redundancy pay in line with the Commission’s 2004 Redundancy Test Case decision.
Parental leave - Each parent will be able to request separate periods of up to 12 months each in unpaid leave following the birth of their baby. An additional 12 months may be requested by one parent with refusal of such request to be made only on ‘reasonable business grounds’. This effectively extends the existing right to 12 months of parental leave to 36 months per child.
Flexible work for parents - Parents will have the right to request flexible work arrangements until their child reaches school age. Once again, employers may only refuse such a request on ‘reasonable business grounds’.
Community service leave - Employees will be entitled to leave for prescribed community service activities, such as paid leave for jury service and unpaid leave for emergency services duties.
Public holidays - Both national and state public holidays will be recognised. Employees who work on a prescribed public holiday will be compensated accordingly, e.g. by appropriate penalty rates.
Information in the workplace - A Fair Work Information Statement must be provided to all new employees. The statement will contain prescribed information about an employee’s workplace rights and entitlements.
New award standards
In addition to the 10 minimum legislative standards applying to all employees, certain industry-specific standards are also planned to be introduced. These standards are to be included in awards, tailored to the needs of particular industries and occupations related to:
- minimum wages
- provisions for minimum annualised wage or salary arrangements
- the type of work performed by employees
- arrangements for when the work is performed
- overtime rates
- penalty rates and applicable allowances
- leave
- superannuation, and
- dispute settling procedures.
The proposed award safety nets are only to apply to employees earning less than $100,000 annually.
Australian Workplace Agreements
Australian Workplace Agreements (AWAs) would be abolished. No new AWAs are to be allowed. Transitional arrangements, called Individual Transitional Employment Agreements (ITEAs), would be implemented for existing AWAs. Although all AWAs currently in place would continue to exist, employees covered by an AWA will move to an ITEA once that AWA has expired, until another industrial instrument comes into effect for that employee.
Collective bargaining
Collective bargaining, it seems, will take primacy over individual bargaining. Parties are to be required to bargain in good faith. Employers would be required to bargain collectively if the majority of employees at a workplace want to bargain collectively. Fair Work Australia will be responsible for ensuring that parties bargain in good faith and would administer the process.
Industrial action
Fair Work Australia would have the power to end industrial action and determine a settlement between parties.
It seems likely that the prohibition on protected action being taken during the nominal term of an agreement and the prohibition on protected action being taken in support of an industry-wide agreement will be retained while a new requirement that protected action is only taken by a party bargaining in good faith will be introduced.
Protected action would still require approval by secret ballot, administered by Fair Work Australia.
Unfair dismissal
Employees are not to be able to bring unfair dismissal claims in the first 12 months of employment, or if the employer employs 15 or more employees, in the first 6 months of service. This proposal differs from the current position under WorkChoices, where unfair dismissal claims are not allowed within a 6-month qualifying period, where a person is employed in a business of 100 employees or less or where a dismissal is for "genuine operational reasons".
Any unfair dismissal claims would be heard by Fair Work Australia, which would seek to either settle the dispute or make a decision on the claim where necessary. The remedy which would be made available in cases of unfair dismissal would be reinstatement or compensation where such remedy is not in the interest of the employee or employer’s business.
A proposed "Fair Dismissal Code" would also be established to meet the needs of small businesses. The intention appears to be that where a small business complies with the Code, a terminated employee will be unable to bring an unfair dismissal claim.
Building and construction industry regulation
Existing arrangements for the building and construction industry would be maintained, with the ABCC continuing to operate until 31 January 2010. However, a specialist division of Fair Work Australia that will deal with unlawful behaviour in the industry will then assume the responsibilities of the ABCC. The ABCC would retain its powers and resource allocation until that time.
What does it mean for employers?
While it is always dangerous to draw conclusions based on policy rather than law, it seems likely that if the ALP wins the next election, based on its current policy, some changes employers can realistically expect include:
- an increased emphasis on collective bargaining for workplace agreements
- an obligation to bargain in good faith
- a revived role for awards as safety nets
- new workplace rights for employees
- no more AWAs, and
- the potential for more unfair dismissal claims.
What should you do?
Employers should be reviewing their current industrial relations arrangements to make sure they have workplace agreements in place - for up to 5 years - that suit their particular business needs. Locking in agreements now makes sense to minimise the possibility of disruption from further legal changes.
