Professor Andrew StewartUniversity of Adelaide & Piper Alderman

8th Annual Workforce ConferenceMelbourne, 22 September 2009

The Fair Work safety netA two part ‘safety net’ of minimum

conditions under the Fair Work Act 2009, to commence on 1 January 2010National 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 netPlus national minimum wage orders

for award-free workers to be set by FWA Minimum Wage Panel

under FW Act Pt 2-6first annual wage review in 2010, to

take effect on 1 Julyby 1 July 2011, there must be a

minimum wage for juniors and traineesTPCA Act Sch 9 cl 4

Transitional arrangementsAustralian Fair Pay Conditions Standard

in Part 7 of Workplace Relations Act 1996 continues until end of 2009TPCA Act Sch 4 cl 2

Minimum wages set under Part 7 Div 2 continue into 2010 and beyond, until displaced by modern awards or NMWOsTPCA Act Sch 9 cl 5

Transitional arrangementsUntil 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 Victoriapresumably to be revealed in

forthcoming amendments to FW Act

Preparing for the NESAffected employers need to review

existing employment arrangements and ensure NES compliance by 1 January 2010applies to all employees, including

executivesunlike AFPCS, no exemption where old

agreements deal with matters covered by NES

Preparing for the NESKey new entitlements/obligations

right to request flexible working arrangementsparents eligible if they have children below

school age or with a disabilityrefusal by employer can be disputed, but

only if employer has agreedextended (unpaid) parental leave

if refused, agreed dispute resolution only

Preparing for the NESKey new entitlements/obligations

(cont’d)cashing out annual leavedirecting when annual leave is takenunpaid compassionate leave for casualscommunity service leave

voluntary emergency management activities

jury service

Preparing for the NESKey new entitlements/obligations

(cont’d)redundancy pay

based on 2004 federal award standardsusual exceptions for casuals, fixed term

contracts, etcFair Work Information Statement

new employees only

Accrued entitlements‘Service’ defined in FW Act s 22General 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 entitlementsSpecial 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 modernisationThe 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 modernisationProgress 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’ awardnote challenge of framing coverage of

miscellaneous awardon track for 2010 start, but ongoing

adjustments can be expectedplus review after first 2 years (TPCA Act Sch 5 cl

6)

Transitional arrangementsModel/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 arrangementsUnder default arrangements

most modern award provisions commence on 1 January 2010

but for minimum wage rates, loadings and penalty ratessix 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 arrangementsTwo 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 awardsExcluded from current modernisation

processNo 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 2013FWA’s discretionto modernise or not to modernise?

Award modernisationAn 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?