Workers

Employers First concerns about the likely content of the Fair Work Australia Bill (see special edition Adviser October 2008) have now been confirmed with the introduction of the Bill into the Federal Parliament. In this feature article we analyse the key features of the Bill and the changes it will make to the workplace if it becomes law.

Worst fears confirmed

There is much to be concerned about in the Bill, which has the clear potential to reintroduce inflexible workplace laws, returning us to the unfair dismissal regime of the 1990s and the economically damaging collective bargaining environment of the early 1980s, which resulted in considerable job loss.

Fair Work Australia

The centrepiece of the new system is to be the all-powerful Fair Work Australia (FWA) which will have extensive powers over every aspect of the industrial relations system. It will:

The Bill authorises FWA to deal with disputes about

FWA will have general powers such as conciliation, mediation, recommendations and compulsory conferences, and the power to make binding decisions in certain circumstances. FWA will not make binding decision on award and agreement disputes unless both parties agree.

Collective bargaining—open door for unions

Collective bargaining is a key focus of the proposed legislation, with a considerably expanded role for unions and new right of entry provisions. A union will need only one member in a workplace—who requests them to act as a ‘bargaining agent’—to become involved in enterprise agreement negotiations, or to apply to be covered by the agreement.

Unions are to have right of entry to a workplace where the employees are doing work which the union is eligible to cover; they do not need to have any actual members present at the workplace. They will also be able to inspect the records of employees who are non-members.

The combination of greater union power through right of entry and bargaining agent rights means that non-union agreements are likely to be restricted. While the focus of bargaining is said to be at the enterprise level, the proposed legislation makes it possible for unions to negotiate agreements with multiple employers. Multi-enterprise agreements can be made between two or more employers and groups of their employees. Other than in the low-paid bargaining stream, employers must voluntarily agree to bargain together for a multi-enterprise agreement.

‘Low wage’ multi employer bargaining

Multiple employer bargaining is specifically provided for the so called ‘low wage sector’. Bargaining agents may apply to FWA a low paid authorisation which will allow FWA to ‘facilitate’ bargaining for a specified list of employers. It means that unions in ‘low wage sectors’ can negotiate on a multiple employer/industry wide basis, and in the event of agreement not being reached, Fair Work Australia can intervene and make an arbitrated determination (i.e. arbitration of over award wages and conditions).

There is no definition of ‘low paid’ in the Bill, so there is the possibility of this bargaining system being further extended, depending on how FWA decides an application meets the criteria for a low paid authorisation.

In this multi-layered system of employee protection the National Employment Standards and the provisions of modern awards already protect all workers, including low paid workers. Now there will be the added ‘protection’ of arbitrated over award payments and conditions for the low paid. Given the persistence of comparative wage justice and the maintenance of relativities there will inevitably be flow-on effects of wage and conditions outcomes from one sector to another, just as there will be flow-on effects between arbitrated agreements and negotiated agreements.

Wider range of matters to be negotiated

The content of agreements has also been widened. The Bill expands what can be included to encompass the relationships between an employer, employee and unions. For example, union consultation clauses, leave to attend union training, and union involvement in dispute resolution can be negotiated. The Bill also makes it clear that provisions for payroll deductions for union dues can be included in agreements.

The Explanatory Memorandum to the Bill says permitted matters for agreements would include those specifying staffing levels, terms and conditions for engaging casual, labour hire or contract workers, converting casual employees to permanent and preventing employers from seeking a contribution from employees for losses due to personal injuries.

Enterprise agreements must contain a ‘flexibility term’ allowing individual flexibility arrangements, a dispute resolution process involving FWA or an ‘independent body’, including an employee representative, and consultation provisions.

Before certifying an agreement FWA must be satisfied the majority of employees agree to it and that each employee will be better off overall than under their current arrangements.

Good faith bargaining

Where an employer refuses to bargain, and a majority of employees want to negotiate an enterprise agreement, those employees or their bargaining agent may approach FWA for a determination that there is majority employee support for an enterprise agreement. If FWA finds that there is, the employer will be required to bargain collectively.

The extensive good faith bargaining requirements contained in the Bill, and the powers given to FWA to enforce them, will have a big impact on how agreements are negotiated. Good faith bargaining requirements will apply where single enterprise agreements are being negotiated. They will require parties to:

There will no doubt be disputes as to what conduct amounts to a failure to bargain in good faith. The Bill allows bargaining orders to be made where a party fails to bargain in good faith and, if a ‘serious breach’ declaration is made, FWA can arbitrate an outcome.

Unfair dismissal

The six-month qualifying period remains before an employee can claim unfair dismissal, with a new 12-month qualifying period applying to small business employers. However the small business exemption has been reduced from employers with less than 100 employees to employers with up to 14 employees. These small employers will need to comply with the Small Business Fair Dismissal Code to avoid an unfair dismissal claim.

The current ‘genuine operational reasons’ exemption will apply only to redundancy, and only if it was not ‘reasonable’ to redeploy the employee in the business or an associated entity.

An employee will be ‘genuinely’ redundant only if:

Next steps

So far as the Federal Government is concerned, the Bill sets out the intended form of the new industrial relations system. The Bill has been passed by the lower house and is now subject to a Senate Inquiry. This will take place early in the New Year with the Senate due to report on 27 February 2009. Employers First will be making a submission to the Inquiry and, among other matters, we will be expressing our concern at the Bill’s significant shift from our present industrial relations settings and its clear potential to move us back to the damaging industrial conditions experienced in the past.

The Government also intends to introduce a transitional and consequential amendments Bill in March.

 

 

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