What major changes should an employer make to their operations now that we have the Fair Work Act?

The much debated new legislation is now with us.
The usual suspects from the “dispute industry” have had their say.

For example, life will apparently never be the same because union officials can come to a place of business on a minimum of 24 hours notice (and maximum of 14 days notice) and address the staff (or more exactly, those who want to be addressed), in an assigned room, at lunch time. Nothing may be done to either encour-age or discourage staff from attending during said lunch time.

For most workplaces, though, this “change” (like many of the others) is completely irrelevant. For many years, the reality has been that the only workplaces that actually have “industrial relations” (either good or bad) with unions, are those where the employer positively chooses to have them. It’s not a matter of “pro or against”, but simply a fact which reflects the declining role of trade unionism in the community.

The Opposition tell us that the new legislation and the thinking behind it will cost thousands of jobs. The Government tell us that many wrongs have now been righted.

Let’s look at some facts, and spot the differences.

Workchoices is gone.

This is the main theme. Workchoices enabled collective agreements and registered individual agreements which undercut award conditions.
During the period of the operation of this function – March 2006 to May 2007, some did. Most did not. It was not readily seen by most employers, during the boom that was then going on, how cutting pay and conditions was a prudent way to attract and retain staff.

McArdle Legal, Employment Lawyers Sydney
www.mcardlelegal.com.au

Then, Workchoices was cancelled. Not by the ACTU, not by Julia Gillard, but by John Howard. In May 2007, when panicked by the community reaction to legislation which was specifically intended to make his very constituency (“the Howard battlers”) poorer, he introduced the “Fairness Test”. This “new” test was in all practical ways, exactly the same as the “No-Disadvantage Test”, which had been abolished just 14 months before, when Workchoices commenced. It prevented awards being undercut. John Howard, workers’ saviour.

The John Howard “Fairness test” is for all intents and purposes, identical to the Julia Gillard “Better Off Overall “ test. That is, you can’t use registered agreements to undercut awards. Except for that “14 month attack” by the Liberal party on the very people who kept electing them, you never could. The non-union agreement regime was first introduced by the Keating Government in 1994, with a “No Disadvantage” test, and it has been in place ever since, except for that period of folly.

So, the new Act continues the “post-Workchoices” system introduced (albeit in response to opinion polls ) by John Howard.

Collective agreements are still going to be largely non-union. AWAs have gone, but personal “flexibility agreements” have replaced them. Really, not much has changed.

National Minimum Standards and what can go in Awards

Workchoices ads back in ’06 and ’07 made much of the “minimum standards” and “guarantees”. Annual leave, personal leave, 38 hour week (albeit with many, many exceptions) etc.

National Employment Standards have now replaced them. These are the same, but with two “additions”.

One, an employer has to give a new employee an “information statement”. A form.

Two, where an employer has more than 15 employees, and redundancy occurs, they have to pay out a for-mula that is based on the award standard that exists anyway. No effect at all if the employee is covered by an award. If they are not covered by an award, then, yes, there is now a redundancy obligation. HOW-EVER, the “accrual” commences from zero, next January. If an employee has been working for an em-ployer with more than 15 employees for, say, 10 years, and they have been one of the few Australians with no previous access to a redundancy scheme, then under the new “standard”, their entitlement will commence next January at nothing, and grow annually. A rather small “revolutionary change”, you might say.

Workchoices restricted what could go in awards. As far as changes go, Fair Work hasn’t done much here either. The only additional things that can be included in awards are an entitlement to agree on flexibility (couldn’t you do that before?), defined ordinary hours of work (not new), rates of pay for piece workers, provisions for those entitled to five weeks annual leave, and automatic variation of allowances.

The award system has had a large group cut from it. That is anyone paid over $108,300 indexed annually. Doctors (employed ones), pilots, headmasters, oil refinery operators. Such people will be “covered” by awards if they are already, or if the new “modern awards” embrace what they are doing, but the awards will not “apply” to them. That actually means that, unlike before June 30 this year, such people will not have access to underpayment of award claims. Other than that, they will have a very much “not different” experience. Outside the state public service, it is not usual to see persons on “high middle incomes” and above “fighting it out before the Commission”, anyway. These “high income earners” are still covered by the wrongful dismissal jurisdiction, though (see below).

A lot of politico speak about not much, one would think.