FAIR WORK ACT
The Australian Labor Party has now made good on its promises to roll back Work Choices and to introduce its "Forward with Fairness" policy. Recently both houses of Parliament passed the Fair Work Bill albeit with some significant amendments.
Most of the provisions in the Fair Work Act 2009 ("the Act") are expected to commence on 1 July 2009. However, important parts of the Act will not commence until 1 January 2010.
From 1 January 2010, the National Employment Standard ("NES") will be introduced. The NES will add a number of new standards to its predecessor, the Fair Pay and Conditions Standard. In particular, employers will need to accommodate, or at least consider, requests for flexible working arrangements from working parents with young children and those with children under 18 who have a disability.
The other big change is the introduction of a standard relating to redundancy payments. However, that aspect of the NES will not apply to Small Business Employers (those with 15 or fewer employees), fixed term employees, casual employees and in circumstances where employees are terminated for serious misconduct.
The Fair Work Act will see the re-introduction of unfair dismissal rights for most employees. Under Work Choices, businesses with fewer than 100 employees were not subject to unfair dismissal claims. Now, under the Fair Work Act, most federal system employees will have access to unfair dismissal rights. However, where a Small Business Employer can show that it complied with the Small Business Fair Dismissal Code then a dismissal will not be deemed to be unfair.
Until 1 January 2011 the definition of a Small Business Employer will be limited to 15 full time equivalent positions rather than 15 employees as a simple head count.
Pursuant to a request from Julia Gilliard, the Minister for Employment and Industrial Relations, the AIRC has undertaken a process of award modernisation. The modern awards are intended to come into force as and from 1 January 2010.
Each modern award will contain an award flexibility clause. Under this clause, an employer and an individual employee may agree to vary the award in relation to when work is performed, over time rates, penalty rates, allowances and leave loading. However the employee will need to be better off overall.
The Fair Work Act does not provide for individual workplace agreements beyond those individual agreements that might be created pursuant to award flexibility clauses. Accordingly, the introduction of this legislation will probably see a revival in the use of common law contracts of employment for those employees who are not covered by modern awards.
The Fair Work Act will provide for the making of enterprise agreements and there are new rules relating to workplace bargaining and union right of entry.
The Act also introduces a new test for determining whether or not there has been a transmission of business. The new test focuses on there being a similarity in the work performed by the employees rather than looking at whether a business or part of a business has been transferred.
From June 2009, MDRN Solicitors will be conducting a series of seminars on the introduction of the Fair Work Act. If you would like to attend one of these seminars, then you can make a booking by clicking here.
WORKPLACE REGULATION – CHANGING ATTITUDES
In February 2009, an Adelaide cleaning company and its sole director were fined a total of $288,000.00 for failing to pay two cleaners less than $4,000.00. This penalty is a record for the Federal Workplace Ombudsman.
In the circumstances of this particular case, the cleaning company and its director had been investigated in 2006 over workplace breaches and the director was warned that any repetition would result in legal action.
In commenting on the penalty Federal Workplace Ombudsman, Nicholas Wilson, said that the Court was sending a strong message to all employers that complying with their legal responsibilities to their workforce was an obligation, not an option – even in times of financial difficulty.
This decision is certainly indicative of the way that the Federal Government is now enforcing the Workplace Relations Act (soon to be Fair Work Act).
Before the introduction of Work Choices, enforcement agencies were relatively poorly funded. Compliance strategies were based on persuasion and education rather than resort to prosecution. The courts imposed relatively low penalties against non-complying employers.
Since the introduction of Work Choices compliance strategies have changed as the regulators have become better funded and more independent. Penalty provisions have steadily been broadened and were extended to allow for the prosecution of persons "involved" in contraventions (i.e. directors and managers of corporations). The compliance strategy moved to one whereby if an offender does not promptly respond to, or overtly resists, requests to comply more formal legal sanctions are implemented.
The Workplace Ombudsman's litigation policy is publicly available on their website.
When breaches are reported the Workplace Ombudsman will seek to remedy the breach without resorting to litigation by sending a Breach Notice or by issuing an infringement notice (e.g. for breaches of record keeping requirements). Litigation is pursued when it is in the public interest to do so and the breach is not trivial or minor.
Under the Fair Work Act the Workplace Ombudsman will be replaced by the Office of the Fair Work Ombudsman within Fair Work Australia. Inspectors will have even wider powers and enforceable undertakings and compliance notices are expressly recognised as enforcement options. The Fair Work Divisions of the Federal Court and Federal Magistrates Court will have a greater range of remedies that might be applied to rectify a breach of the Fair Work Act.
It is likely that enforcement action will steadily pick up as the Federal Government devotes more financial resources than ever before to the new workplace regulator. The pecuniary penalties that will be imposed upon recalcitrant employees are only going to increase over time.
Is your business complying with the Workplace Relations Act (soon to be Fair Work Act)? Are you paying your employees what they are entitled to? How would your business fair if it were audited by the Workplace Ombudsman or Fair Work Australia?
CHANGES TO THE WORKPLACE HEALTH AND SAFETY ACT 1995
The Workplace Health and Safety and Other Legislation Amendment Act 2008 will see some significant changes to workplace health and safety in Queensland.
The most significant change is that qualified Workplace Health and Safety Representatives will be allowed to issue Provisional Improvement Notices ("PIN") after consultation with employers.
A PIN can be issued by a Workplace Health and Safety Representative where they believe, on reasonable grounds, that an employer is breaching or has breached a provision of the Workplace Health and Safety Act 1995 or Regulations in circumstances that make it likely that the breach will continue or be repeated. A PIN can only be issued after consultation with the employer about remedying the breach or likely breach.
The provisions relating to the issuing of a PIN will commence on a date to be announced once industry has had sufficient time to develop workplace procedures and deliver training to Workplace Health and Safety Representatives. It is likely that the provisions will commence in or about mid to late 2009.
It is important that employers consider the adequacy of existing policies and procedures relating to consultation with Workplace Health and Safety Representatives and if they do not have such policies and procedures they should be put in place in anticipation of these significant changes to the law.
NEW SUPERANNUATION GUARANTEE RULING
The ATO has released Superannuation Guarantee Ruling SGR 2009/2 which explains the meaning of "Ordinary Time Earnings". Ordinary Time Earnings are used to calculate the contributions necessary to satisfy an employer's obligation to pay superannuation to eligible employees.
The ruling makes it clear that payments for work performed during hours outside an employee's ordinary hours of work are not Ordinary Time Earnings.
It is necessary to examine the relevant award or workplace agreement to determine what "ordinary hours of work" are but this will not necessarily be determinative of that issue.
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