LABOR AND WORKPLACE RELATIONS

A change of government was something that was expected from the weekend’s Federal election but what does it
mean for workplace relations?

The incoming Federal Labor Government has announced that it will introduce transitional legislation to amend the
current Workplace Relations Act 1996 (Cth) during Parliament’s first sitting in 2008. This is expected to be in
February 2008. The transitional legislation will address Australian Workplace Agreements (‘AWA’s’) with
employees; define the 10 minimum standards for employment which will override the current minimum entitlements
in the Australian Fair Pay and Conditions Standards and start the Australian Industrial Relations Commission
(‘AIRC’) on the award simplification process. The interim measures proposed for the transitional legislation appear
to reflect the policy document released in August 2007 “Forward with Fairness” policy implementation guide.

Subsequent legislation to give effect to the Labor Government’s full workplace policy will be enacted at a later date
to take effect from 1 January 2010.

THE PROPOSED TRANSITIONAL LEGISLATION AUSTRALIAN WORKPLACE AGREEMENTS

Existing AWA’s will continue to operate for their full terms. However, new AWA’s and any other form of statutory
individual agreement will not be allowed except as provided for in the transitional arrangements.

Transitional Arrangements for AWA’s

AWA’s lodged prior to the commencement of the Transitional Legislation will be able to operate for their full term.

Employers who have one or more employees employed under AWA’s as at 1 December 2007, will be able to continue
to offer AWA’s to new employees until 2010. The AWA’s for new employees will be known as Individual Transitional
Employment Agreements (‘ITEA’s’) and will expire on 31 December 2009. ITEA’s can only be made with:

• new employees where the employer has employees on AWA’s as of 1 December 2007; or

• existing employees employed under the terms of a current AWA as of 1 December 2007.

An ITEA cannot disadvantage the employee against either a Collective Agreement (should it apply in the workplace),
or the applicable award and the current Australian Fair Pay and Conditions Standard.

NATIONAL EMPLOYMENT STANDARDS

National Employment Standards will replace the current Australian Fair Pay and Conditions Standard and will include
10 provisions covering:

1. A 38 hour week plus reasonable additional hours;
2. Flexible work for parents
3. Annual leave of 4 weeks for full-time employees and 5 weeks for shift workers
4. Personal, carer’s and compassionate leave
5. Community service leave
6. Parental leave of up to 12 months unpaid with the right to request an additional 12 months’ unpaid (which an
employer cannot unreasonable refuse)
7. Guaranteed public holidays
8. Requirement to provide new employees with the Fair Work Information Statement providing particular
information about workplace rights
9. Notice of termination in accordance with length of service and age and the introduction of a universal standard
for severance pay
employment update
10. Nationally consistent long service leave entitlements

The National Employment Standards will most likely become effective from 1 January 2010.

AWARDS SIMPLIFICATION

Award modernisation will begin on 1 January 2008 and the modernised awards will be flexible and not proscriptive.

Modern simplified awards will include the following 10 allowable matters:

1. Minimum wages
2. Classification of employees
3. Work arrangements (rostering, hours of work, meal breaks, etc)
4. Consultation procedures (including dispute settling procedures)
5. Penalty rates
6. Provision of annualised salaries
7. Allowances
8. Leave
9. Superannuation
10. Overtime

As of 1 January 2010, Employees earning more than $100,000 will be classed as ‘award free’ but the National
Employment Standards will apply to them. The National Employment Standards will also apply to the modernised
simplified awards.

OTHER PARTS OF THE POLICY

It is unclear at what stage the following changes that are proposed in Labor Government’s workplace relations policy
will be introduced:

COLLECTIVE AGREEMENTS

Collective Union Agreements, Collective Agreements with employees and Greenfield agreements will exist under the
amended legislation. Changes will include:

• a nominal term of up to 4 years

• a system that will be designed to encourage collective bargaining

• parties will be able to be compelled to bargain in good faith

• agreements will not be limited by the rules around prohibited content

• a flexibility clause allowing for arrangements made between individual workers and their employer will be
required in all collective agreements

• employers and employer associations will receive financial assistance to assist with enterprise bargaining.
It will not be requirement that a union become involved in a non-union Collective Agreement.

INDUSTRIAL ACTION AND UNIONS

The current laws in relation to industrial action will broadly continue, for instance:

• As has been the case under WorkChoices, it will not be illegal for a union to bargain across several
enterprises, but it will be illegal to take strike action in support of pattern bargaining negotiations.

• The secondary boycott provisions in the Trade Practices Act will remain.

• Secret ballots will be required and industrial action will only be protected when related to a bargaining period.

• Employers affected by unprotected industrial action will be able to immediately approach a court to seek
orders as is the case under WorkChoices.

• The regime regarding the right of entry to businesses for trade union officials introduced under WorkChoices
appears to have been retained. These include that 24 hours notice must be given and that the union official
be a ‘fit and proper person’.

However, it is expected that union representation, organising and bargaining rights will be enhanced. 

UNFAIR DISMISSALS

There will be a number of changes to the unfair dismissals regime - in particular, in relation to the exemptions for
unfair dismissal proceedings. It is proposed that the exemption for employers with 100 or less employees from
unfair dismissal laws will be abolished and replaced with the following qualifying period exemptions:

• An employee will not be able to commence unfair dismissal proceedings where his/her employment is
terminated:

o in the first 12 months, if they are employed by an employer who has less than 15 employees; and

o in the first 6 months, if they are employed by an employer employing 15 or more employees.

Unfair dismissal claims will be heard by Fair Work Australia (see below) and speedy remedies of reinstatement or
monetary compensation, with no formal hearing, will be introduced. It is possible that lawyers may be excluded
from these proceedings.

A ‘fair dismissal code’ will be introduced which will be designed to assist small business in particular by helping them
understand their rights and obligations when dismissing an employee. If an employer follows the ‘fair dismissal
code’ the dismissal will be considered fair.

Reinstatement is to be the main remedy but this will not be ordered where it is considered not in the interests of the
employee or the business concerned.

FAIR WORK AUSTRALIA

A new regulatory body known as Fair Work Australia will be established as a ‘one-stop shop’ to replace each of the
current regulatory bodies and offices of the Australian Industrial Relations Commission – including the AIRC itself,
the Workplace Authority and the Workplace Ombudsman. This will not take effect until 1 January 2010.

1 JANUARY 2010

Legislation to give effect to the whole Labor Government ‘Forward & Fairness’ policy will be effective from 1 January
2010 and this will replace the transitional arrangements implemented in the meantime.

MAIN IMPLICATIONS FOR EMPLOYERS:

• The progress of the Transitional Legislation and the subsequent legislation will depend upon the position taken
by the Coalition and minor parties/independents in the Senate. The Coalition continues to hold a one seat
majority in the Senate until 1 July 2008 when the newly elected Senators will commence their terms. After
this it looks like the Coalition will have 37 seats; Labor 32 seats; the Greens 5 seats; Family First 1 seat and
an independent senator. All of which will lead to interesting times!

• Until the Transitional Legislation is past things should continue as usual, with one exception: if you are
considering using AWA’s with your employees then you should move very quickly to get them lodged. AWA’s
lodged before the Transitional Legislation is past will be able to run their full term (up to 5 years).

• The removal of the 100 employee exemption for unfair dismissal proceedings is not a surprise as general
consensus was that this threshold was too high. Preference would have been for it to be lowered to a more
reasonable threshold and allowed to remain in place. The removal of this threshold will mean employers will
need to follow a fair process when terminating employees.

• Employers need to ensure that they use the qualifying period to adequately assess the suitability of an
employee in order to avoid exposure to unfair dismissal proceedings.

If you would like further information in relation to the information provided in this Employment Update please
contact Aitken Legal.

This Update has been prepared by Aitken Legal. We recommend that you seek legal advice before applying the information to particular circumstances.