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Preparing for the New Safety Net. Professor Andrew Stewart University of Adelaide & Piper Alderman 8th Annual Workforce Conference Melbourne, 22 September 2009. The Fair Work safety net.

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preparing for the new safety net

Preparing for the New Safety Net

Professor Andrew Stewart

University of Adelaide & Piper Alderman

8th Annual Workforce Conference

Melbourne, 22 September 2009

the fair work safety net
The Fair Work safety net
  • A two part ‘safety net’ of minimum conditions under the Fair Work Act 2009, to commence on 1 January 2010
    • National Employment Standards (NES) for all national system employees (Pt 2-2)
    • standardised and simplified ‘modern awards’ for most such employees (Pt 2-3)
      • currently being created by AIRC under WR Act 1996 Pt 10A, continued in effect by TPCA Act (Fair Work (Transitional Provisions and Consequential Amendments) Act 2009) Sch 5
the fair work safety net3
The Fair Work safety net
  • Plus national minimum wage orders for award-free workers
    • to be set by FWA Minimum Wage Panel under FW Act Pt 2-6
    • first annual wage review in 2010, to take effect on 1 July
    • by 1 July 2011, there must be a minimum wage for juniors and trainees
      • TPCA Act Sch 9 cl 4
transitional arrangements
Transitional arrangements
  • Australian Fair Pay Conditions Standard in Part 7 of Workplace Relations Act 1996 continues until end of 2009
    • TPCA Act Sch 4 cl 2
  • Minimum wages set under Part 7 Div 2 continue into 2010 and beyond, until displaced by modern awards or NMWOs
    • TPCA Act Sch 9 cl 5
transitional arrangements5
Transitional arrangements
  • Until modern awards take effect, ‘award-based transitional instruments’ can continue (TPCA Act Sch 3)
    • ie, pre-reform federal awards, NAPSAs
  • Query arrangements for State reference employers outside Victoria
    • presumably to be revealed in forthcoming amendments to FW Act
preparing for the nes
Preparing for the NES
  • Affected employers need to review existing employment arrangements and ensure NES compliance by 1 January 2010
    • applies to all employees, including executives
    • unlike AFPCS, no exemption where old agreements deal with matters covered by NES
preparing for the nes7
Preparing for the NES
  • Key new entitlements/obligations
    • right to request flexible working arrangements
      • parents eligible if they have children below school age or with a disability
      • refusal by employer can be disputed, but only if employer has agreed
    • extended (unpaid) parental leave
      • if refused, agreed dispute resolution only
preparing for the nes8
Preparing for the NES
  • Key new entitlements/obligations (cont’d)
    • cashing out annual leave
    • directing when annual leave is taken
    • unpaid compassionate leave for casuals
    • community service leave
      • voluntary emergency management activities
      • jury service
preparing for the nes9
Preparing for the NES

Key new entitlements/obligations (cont’d)

redundancy pay

based on 2004 federal award standards

usual exceptions for casuals, fixed term contracts, etc

Fair Work Information Statement

new employees only

accrued entitlements
Accrued entitlements
  • ‘Service’ defined in FW Act s 22
  • General rules for pre-NES service (TPCA Act Sch 4 cl 5)
    • service with an employer before 1 January 2010 generally counts towards NES entitlements
    • but where employee has already had the benefit of an entitlement, they cannot ‘double count’
accrued entitlements11
Accrued entitlements
  • Special rules
    • employee carries over whatever annual leave or paid personal/carer’s leave entitlements they have accrued before NES (TPCA Act Sch 4 cl 6)
      • but if leave taken after 1 January 2010, NES rules apply (eg as to cashing out, notification, etc)
    • for redundancy pay, pre-NES service counted only if employee had some entitlement as of 31 December 2009 (TPCA Act Sch 4 cl 5)
      • including under an award, agreement or employment contract
award modernisation
Award modernisation
  • The challenge for the AIRC
    • review around 1700 awards/NAPSAs that apply to more than one business
    • standardise and simplify, to reduce number of awards and eliminate State/Territory-based differences in wages and conditions
    • avoid disadvantaging employees or increasing costs for business
    • complete process by end of 2009
award modernisation13
Award modernisation
  • Progress to date
    • 93 awards either ‘finalised’ or issued in exposure draft, for Stages 1 to 3
    • 30 more industries/occupations still to be dealt with in Stage 4, plus ‘miscellaneous’ award
      • note challenge of framing coverage of miscellaneous award
    • on track for 2010 start, but ongoing adjustments can be expected
      • plus review after first 2 years (TPCA Act Sch 5 cl 6)
transitional arrangements14
Transitional arrangements
  • Model/default transitional provisions announced in [2009] AIRCFB 800 (2 September 2009)
  • Some awards will have different arrangements, or move to modern award conditions immediately
transitional arrangements15
Transitional arrangements
  • Under default arrangements
    • most modern award provisions commence on 1 January 2010
    • but for minimum wage rates, loadings and penalty rates
      • six month ‘grace period’
      • phasing up or down of each rate or loading in 5 instalments from 1 July 2010, where significant discrepancy with transitional instrument
transitional arrangements16
Transitional arrangements
  • Two big queries about default provisions
    • no reductions in take-home pay
      • supplements protection offered by TPCA Act Sch 5 Pt 3
      • but is the protection automatic, or only on application to FWA?
    • how they apply to new businesses
      • commencing after 1 January 2010
      • commencing between 27 March 2009 and 1 January 2010
enterprise awards
Enterprise awards
  • Excluded from current modernisation process
  • No new enterprise awards from now on (except in Victorian public sector)
  • Parties can ask FWA to modernise existing enterprise awards (TPCA Act *)
    • unmodernised awards to expire at end of 2013
    • FWA’s discretion
    • to modernise or not to modernise?
award modernisation18
Award modernisation
  • An assessment of the process
    • The inevitable problems (and complaints) when standardising and simplifying
    • Government intervention – help or hindrance?
    • An encouragement to make enterprise agreements?
    • Is it worth the pain?