The Fair Work Act and Your Station

CBAA Conference, Brisbane 20 November 2009

Michael Pegg

Managers manage

Manager

Outline

1. Contracts2. State and federal systems3. National Employment Standards4. Awards & Agreements5. Unfair dismissal and other adverse

actions

Common Law Contract of Employment

• Intent • Offer of work• Acceptance• Consideration ($) in exchange for

work• Employee vs Volunteer

Rights and Responsibilities

Employer Employee

Provide work Obediance - Work as directed

Pay Competence & care

Safe workplace Work safely

Good & considerate Good faith – Honesty, loyalty & cooperation

State and Federal Systems

• Historically complex mix of systems• Got more complex in 2006 –

“Corporations power”– Non profit community organisations – Trading? Incorporated?

• Moving to national system 2010-2011?

State Referrals

• In 1996, Victoria referred some of its powers to make laws about IR to the federal parliament– Consequence is no state system– Avoid jurisdictional complications because

corporation status not relevant

• Qld, NSW, Tas, and SA are referring in 2010, subject to Senate passage of federal legislation

• WA has decided not to refer

State ReferralsLocation Constitutional

trading corporation

Not Constitutional trading

corporationACT, NT, Vic Federal system Federal system

NSW, Qld, SA & Tas Federal system State system 2009

Federal system from 1 January 2010; transitional arrangements

WA Federal system State system

Key elements of Fair Work

• National Employment Standards (NES)• Modern awards• Agreements• Termination of employment & adverse

actions

The Hierarchy of Conditions

NES

Modern award Conditions Modern award Pay

Collective Agreement

Contract of employment

HR Policies

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National Employment Standards (NES)

• Basic entitlements• Take effect 1 January 2010• Enshrined in legislation and override

awards and agreements (except some pre-reform agreements)

NES – existing federal standards

• Max working hours – 38 hour week plus reasonable additional hours

• Annual leave• Personal/carer’s & compassionate

leave• Parental leave• Plus new provisions…

NES – new provisions

• Public holidays• Long service leave• Flexible work arrangements for parents of

pre-school children• Community service leave (emergency,

jury)• Notice of Termination & Redundancy pay

(>15 employees)• Fair Work Information Statement

NES – Selected issues (1)

• Annual leave – Cashing out (if allowed by award/agreement)

provided 4 weeks balance maintained– Pro rata accrual after 1 month

• Personal/Carer’s leave– 10 days personal/carer’s, plus 2 days per

occasion compassionate– Modern awards may provide cashing out

provided 15 days balance maintained

NES – Selected issues (2)

• Parental leave – 12 months plus right to request further 12

months unpaid leave

• Flexibility requests– Includes pre-school children & disabled

children under 18 yo– Written request– 21 days to respond in writing - reasonable

business grounds

NES – Selected issues (3)

• Community service leave– Emergency management activity

• Notice, evidence• Unpaid

– Jury service• Based on common award provisions • Paid (less jury pay)• Up to 10 days

Award Modernisation

• Fewer awards, industry-based and common rule

• Operate by common rule from 1 January 2010

• Transitional provisions• Most federal system employees covered by

an award (even if previously award free)• Some exceptions eg if paid above $108,300

(indexed)

Content of Modern Awards

• Build on NES, with industry specific standards,• Plus a range of other items such as:

– Wages, allowances and penalty rates– Types of employment– Superannuation– Industry specific arrangements for working hours

• Flexibility arrangements on better off basis• Consultation, representation and disputes

Which Modern Awards?

Determined case by case – Possibilities (Subject to finalisation by end of 2009):

• Clerical– Office staff and managers

• Broadcasting and Recorded Entertainment??– Technicians, engineers??

• Commercial Sales??– Sponsorship?? (note limits on commissions)

• Miscellaneous

Agreements

• “Better Off Overall Test”(BOOT)• Most prohibited content no longer prohibited• Individual flexibility and consultation on

change• Notification time - 14 days to advise

representational rights, prior to 7 day approval period

• Good faith bargaining• Multiple business agreements and “low paid

bargaining stream”

BOOT

• BOOT – Employees better off overall compared to a “reference instrument”

• Reference Instrument – Award that applies– Relevant state long service leave

legislation– In conjunction with NES

Bargaining Options

• Rely on award– May be easiest option if limited

resources– Modernisation– Recruitment & Retention

• Common law contracts or policies for over award conditions– Easier than collective bargaining

• Collective Bargaining

Unfair Dismissal

Remedy for harsh, unjust or unreasonable termination of employment

Remedies include: Reinstatement Compensation of up to 26 weeks pay

Historically, about 90% of claims are settled informally

Unfair Dismissal - Exemptions

From 1 July 2009, all federal employees able to lodge claims except:

Non-award employees paid >$100,000 (2007 dollars indexed);

Employees with less than 6 months service, provided that for a small employer (fewer than 15 EFT employees until 1 January 2011, then just 15 employees), 12 months service is required;

Other standard exemptions eg short term casuals Genuine redundancy

Genuine Redundancy

• Job is no longer required to be done by anyone because of changes in operational requirements

• Obligations to consult, under award or enterprise agreement, have been complied with

• It was not reasonable to redeploy – positive obligation to explore options

Process – Unfair Dismissal

• Federal claims need to be lodged within 14 days of dismissal

• FWA emphasis on speedy and informal resolution with >80% settled at conciliation

• Employer may be represented by employer organisation (eg by Jobs Australia), but private lawyers need to seek leave to appear

Natural Justice

• State allegations – valid reason• Fair investigation• Opportunity to respond/explain• Consequences made clear if not resolved• Right to representation (particularly if

termination considered)• Even if considering summary dismissal –

natural justice first

Outcomes of Disciplinary Process

Not determined until after process

• No further action – best case scenario• Informal warning• Written warning (with review period if

performance issue)• Termination with notice, or without notice if

serious misconduct – worst case scenario– indicator of possible problem with recruitment, selection,

training, performance management or organisational culture

Alternative Remedies

• Unlawful termination - Prohibited reasons such as: – Temporary absence due to illness or injury– Race, sex, political beliefs etc– Failure to provide required notice

• Onus on employer to rebut claim• General protection against adverse action,

including prior to termination• Also - Anti- discrimination, breach of contract

Adverse Actions

• Remedy from Fair Work Australia if subject to any adverse action on prohibited (ie discriminatory) grounds

• Includes adverse actions such as – Refusal of training opportunities– Changes in hours– Refused promotion

• Similar to existing anti-discrimination laws, but potentially faster remedies

Managing Change

Employer Rights• to determine how job is done and by

whom• to decide how to run their organisationConstrained by• Industrial and other legislation• Employee responses• Management strategy

Key Elements of Process

• Information• Consultation – before finalising decisions

about structure– Modern award requirement and – Evidence based decision making

• Explore alternatives to termination, such as reduced hours, retraining, redeployment

• Fair process for selecting retrenchments• Appropriate support for affected

employees

Contact Jobs Australia

• Michael Pegg– Phone: (03) 9349 3699– Phone: (1800) 060 098– Fax: (03) 9349 3655– Email: mpegg@ja.com.au