The Work Choices Legislation

1
The Work Choices Legislation

• Professor Andrew Stewart
• Flinders University Piper Alderman
• Jobs Australia seminar, Brisbane, 28 March 2006

2
The Work Choices legislation

• Workplace Relations Amendment (Work Choices) Act
  2005
• amends Workplace Relations Act 1996
• most of it took effect on 27 March 2006
• detailed regulations only just released
• under challenge by the States but assume its
  valid until High Court says otherwise
• long and hideously complicated!

3
Key changes

• Expansion of federal system
• New options for agreement-making
• New minimum standards
• Further restriction of awards
• Less controls on termination of employment
• Greater controls on unions
• Encouraging dispute resolution outside AIRC

4
Expanding the federal system

• Government is using corporations power to move
  towards a national system
• New federal system will cover
• all constitutional corporations (trading,
  financial and foreign corporations)
• plus other employers in Victoria and the
  Territories, and Commonwealth agencies

5
Are you in or out?

• In Queensland, a business or organisation will be
  a federal system employer if it is a trading
  corporation
• If not, it will be an excluded employer
• No direct effect on engagement of workers as
  contractors rather than employees
• but note new Independent Contractors Act still to
  come

6
What is a trading corporation?

• Must be an incorporated body
• proprietary company
• not-for-profit association incorporated under
  State incorporated associations legislation
• statutory authority incorporated under special
  legislation
• would include a corporate trustee
• but not an individual or a partnership

7
What is a trading corporation?

• Incorporated body must have significant trading
  activities
• under current law, purpose for which a body was
  formed is irrelevant
• hence non-profit bodies can be trading
  corporations
• eg local councils, public universities,
  hospitals, benevolent or charitable
  organisations, emergency services providers

8
What are trading activities?

• Any activity that involves some notion of buying
  or selling and that generates revenue
• Examples
• providing services to clients or customers, in
  return for a fee or charge
• providing services to members in return for a fee
• selling goods (inc food and drink, merchandise,
  etc)
• hiring out equipment

9
What are trading activities?

• More examples
• presenting performance or event and charging for
  admission
• fundraising
• deriving income from investments
• renting out property

10
What are trading activities?

• Receipt of funding (public or private) to provide
  services to public is not trading
• But a body funded in that way can still be a
  trading corporation if it obtains significant
  revenue from
• charge imposed on clients/customers to cover part
  of cost of providing services
• or other trading activities, even if non-core

11
The trading activities threshold

• In determining whether trading activities are
  sufficiently significant, consider
• importance of activities to what the body does
• percentage and size of revenue derived from those
  activities
• No bright line or magic number, all a matter of
  fact, degree and impression so very hard to get
  definitive advice

12
Transitional arrangements for federal system
employers

• Any federal award remains binding, but some
  provisions cease to be allowable
• Any existing federal agreement remains binding,
  but can be replaced by a new workplace agreement
  at any time

13
Transitional arrangements for federal system
employers

• Any State-registered agreement
• becomes a preserved State agreement enforceable
  under federal law
• includes any award provisions and certain
  entitlements under State legislation that applied
  at transition date
• prohibited content unenforceable
• for now, just anti-AWA terms
• operates until terminated or replaced

14
Transitional arrangements for federal system
employers

• If bound by State award alone
• State award deemed to become a notional
  agreement enforceable under federal law
• notional agreements also cover certain
  entitlements under State legislation, even for
  non-award employees
• prohibited content unenforceable
• for now just anti-AWA terms and certain
  restrictions on training arrangements
• notional agreements operate for 3 years unless
  replaced by new federal award or agreement

15
Transitional arrangements for excluded employers

• If covered by federal award (and not a State
  agreement), transitional award remains binding
  for up to 5 years
• Any federal agreement also expires after 5 years
• If covered only by State instruments, no change

16
Options for excluded employers

• Become a trading corporation and hence a federal
  system employer
• If bound by federal instrument
• escape from transitional award by making State
  agreement or applying to AIRC to be released from
  award
• terminate any federal agreement
• wait 5 years and fall back to State system

17
Operation of State laws

• Most State industrial laws can no longer apply to
  federal system employers
• includes Industrial Relations Act 1999 (Qld) and
  any awards made under it
• But some major exceptions

18
Operation of State laws

• State laws that can still apply to federal system
  employers include those on
• workers compensation
• OHS
• long service leave (but can be overridden by
  workplace agreements)
• discrimination
• training and apprenticeships (?)

19
Workplace agreements

• Easier to make, vary and terminate
• both AWAs and collective agreements now lodged
  with Employment Advocate, not AIRC
• no approval process as such, but penalties for
  false declarations
• for new business, project or undertaking,
  employer can make a greenfields agreement with
  itself!

20
Workplace agreements

• No-disadvantage test abolished, need only comply
  with statutory minimum conditions
• so possible now to offer agreements that reduce
  or remove award conditions (eg penalty rates,
  leave loadings, restrictions on scheduling of
  working hours, etc)
• Agreements always exclude awards, AWAs always
  exclude collective agreements

21
Workplace agreements

• An unresolved issue do the new provisions on
  workplace agreements apply to agreements never
  intended by the parties to be registered?
• if so, side agreements and other unregistered
  deals will be rendered unenforceable

22
Prohibited content for agreements

• Specified in regulations, including
• renegotiation of agreements
• restrictions on use of contractors or labour hire
  workers
• union training leave, paid union meetings,
  mandatory union involvement in dispute
  resolution, right of entry, deduction of union
  dues, info to unions about employees
• any remedy for unfair dismissal
• secrecy provisions re content of agreement
• discriminatory terms
• matters not pertaining to employment relationship
• Note penalty for even proposing prohibited content

23
New minimum standards

• Fair Pay and Conditions Standard, covering wages,
  hours, plus annual, personal and parental leave
• Applies to all employees working for federal
  system employers, except where
• contract or workplace agreement more favourable
  (as per rules set out in regulations)
• award or notional agreement has more favourable
  provisions on annual, personal or parental leave
• pre-reform federal agreement or preserved State
  agreement applies

24
Wages

• Basic rate of pay must be paid for all hours
  worked
• either old award rate (now preserved as an
  Australian Pay and Classification Scale or APCS)
• or otherwise federal minimum wage (12.75 p/hour
  for adults)
• both subject to updating by Fair Pay Commission
• plus at least 20 loading for casuals (or higher
  if set by an APCS and agreement doesnt specify
  otherwise)
• if no frequency of pay set by agreement or APCS,
  employee must be paid fortnightly

25
Hours of work

• Maximum of 38 ordinary hours per week (or
  averaged over agreed period of up to a year)
• but employee can also be required or requested to
  work reasonable additional hours
• No guarantee of compensation for working overtime
  or antisocial hours
• depends on terms of applicable agreement or award

26
Annual leave

• 4 weeks annual leave, plus extra week for some
  shiftworkers
• Up to 2 weeks can be cashed out on written
  request from worker, but only pursuant to a
  workplace agreement
• any provision in an agreement providing for
  accrued leave to be foregone other than in
  accordance with Act is prohibited content

27
Personal and parental leave

• Personal leave
• 10 days paid sick leave/carers leave per year
• extra 2 days unpaid carers leave per year if
  needed
• 2 days paid compassionate leave per occasion (eg
  family bereavements)
• 12 months unpaid parental leave

28
Other new minimum conditions

• Public holidays
• employee entitled to take a day off on public
  holidays
• but may be requested by employer to work, and
  must establish reasonable grounds for refusal
• not applicable where pre-reform federal agreement
  or preserved State agreement applies
• Meal breaks
• employee must not be required to work for more
  than 5 hours continuously without unpaid 30
  minute meal break
• not applicable where award or statutory agreement
  applies

29
Protected conditions

• Certain award conditions apply unless (except in
  the case of outworkers) explicitly overridden by
  workplace agreements
• public holidays
• rest/meal breaks
• bonuses and incentive payments
• annual leave loadings
• some allowances
• penalty rates, shift/overtime loadings

30
Awards

• Reduced scope and coverage
• fewer allowable matters
• changes take effect as from commencement date,
  even prior to new round of simplification by AIRC
• Award Review Taskforce to look at
  rationalisation of awards
• Minister to decide on recommendations, AIRC to
  implement them
• no new awards without Ministers request
• may eventually lead to small number of industry
  awards, each applying by common rule

31
Non-allowable award matters

• Matters no longer allowable include
• wage rates, classifications, casual loadings (?
  APCSs)
• certain types of allowance
• redundancy pay for employers with less than 15
  workers
• effective as from date of assent to Work Choices
  Act
• restrictions on use of contractors or labour hire
  workers
• union training or dispute resolution leave, union
  picnic days, mandatory union involvement in
  dispute resolution
• conversion of casuals to another type of
  employment
• restrictions on range or duration of training
  arrangements

32
Non-allowable award matters

• Matters no longer allowable for new awards, but
  existing provisions preserved
• annual leave
• personal/carers leave
• parental leave
• long service leave
• notice of termination
• jury service
• superannuation (until 30/6/08)

33
Removing award coverage

• Awards may cease to apply if
• workplace agreement registered
• expired workplace agreement is terminated
• employees revert to minimum standards plus
  protected award conditions only
• transmission of business
• award (or agreement) only applies to transferring
  employees, not to new employees hired by
  transmittee, and then only for 1 year

34
Termination of employment

• No unfair dismissal claims against federal system
  employers with 100 or fewer employees
• excluding casuals with less than 12 months
  service
• related corporations (but not other related
  entities) counted together for this purpose
• For larger federal system employers
• 6 month qualifying period for unfair dismissal
  claim
• no claim for genuine operational reasons
  dismissal

35
Termination of employment

• Changes do not affect claims for
• unlawful termination under WR Act
• these provisions apply to all employers
• claims under other legislation (eg
  anti-discrimination laws)
• common law claims for breach of contract
• Excluded employers may remain subject to unfair
  dismissal claims under State law

36
Restricting unions

• Greater controls on right of entry to workplaces
  for union officials, even under State OHS laws
• Greater controls on industrial action
• limitations on right to take protected (ie
  lawful) action when negotiating new agreement
• much easier for employers (or third parties) to
  get even protected action stopped

37
Dispute resolution

• AIRC will lose most of its powers of compulsory
  arbitration
• Dispute resolution provisions in awards to be
  replaced by model dispute resolution process
• provides for mediation/conciliation as a final
  step, unless parties agree that dispute be
  arbitrated
• parties can choose either private provider or
  AIRC, but AIRC is the default
• AIRC may be forced to charge for its services