On 27 March 2006, significant changes were introduced to the Workplace Relations Act 1996 (Cth) (Act) by what is now known as "WorkChoices”. Since 27 March 2006, the Federal Government has progressively modified parts of the WorkChoices amendments. The latest changes commenced on Monday 7 May 2007, although amendments were only introduced to federal parliament on 28 May 2007. The main change is the creation of a new "Fairness Test” to be applied to certain workplace agreements lodged on or after 7 May 2007.
The Fairness Test
The Federal Government has introduced a new Fairness Test, which operates in a similar manner to the old "no disadvantage test”, which applied prior to the commencement of WorkChoices. The Fairness Test applies to workplace agreements lodged on or after 7 May 2007. Workplace agreements lodged before this time will not be affected.
The Fairness Test applies to all Australian Workplace Agreements (AWAs) covering employees earning less than $75,000 per annum in industries covered by an award where the AWA removes or changes any protected award condition.
The Fairness Test will also apply to collective agreements for employees covered by an award where the workplace agreement removes or changes any protected award condition.
Protected award conditions include:
- penalty rates, including penalty rates for working on public holidays and weekends
- shift and overtime loadings
- monetary allowances
- annual leave loadings
- public holidays
- rest breaks, and
- incentive based payments and bonuses.
In establishing what is "fair compensation”, the Workplace Authority will consider the work obligations of the employee and where appropriate, other factors such as the industry, location and economic circumstances of the business and the specific employment circumstances or opportunities of the employee. It will also take into account all relevant working arrangements and entitlements, including family-friendly conditions.
If a workplace agreement is lodged by an employer with the Workplace Authority and does not pass the Fairness Test, the employer and employee will have 14 days to make the agreement "fair”. The Workplace Authority will provide advice on why the workplace agreement is not fair and how it could be altered to make it fair. An employee will be able to be represented by their bargaining agent. It will also provide the employer with details of the amount of any back pay due to the employee. Back pay will apply from the date the agreement was lodged with the Workplace Authority. The Workplace Ombudsman will have the power to recover any back pay due to employees.
If the required changes to the workplace agreement are not made the agreement will be void. In these circumstances, employees will be covered by the workplace arrangements that previously applied to them (or in the case of new employees, the workplace arrangements that would have applied to them but for the void agreement).
The Workplace Authority will offer a pre-lodgement assessment of proposed assessments against the Fairness Test to help employers and employees meet the new standard.
Further dismissal and duress prohibitions
Employers will be prohibited from dismissing an employee because their workplace agreement does not meet the Fairness Test.
In addition, to strengthen the existing protections prohibiting an employer from forcing an employee to accept a workplace agreement, employers will be prohibited from forcing an existing employee to agree to remove or vary a protected award condition.
Name changes
The Office of the Employment Advocate will be renamed the Workplace Authority. It will also be given additional responsibilities which will include applying the Fairness Test, providing information and advice and a pre-lodgement facility in relation to workplace agreements.
The Office of Workplace Services will be renamed the Workplace Ombudsman. It will be given a greater role in ensuring employers comply with their legal obligations by, for example, conducting random audits of employers.
Transmission of business
The transmission of business requirements already provide that an employer who takes over a business cannot require an employee to sign an AWA as a condition of continued employment. The new rules will strengthen and clarify this obligation.
