The Fair Work Bill 2008

At a Glance

Late in November, the Deputy Prime Minister introduced the Fair Work Bill 2008 (The Bill) into the House of Representatives.

The Government's substantive bill gives effect to its industrial relations policy priorities announced over the last twelve months.

Fair Work Australia (FWA) will cover all workplace relations matters and replaces the seven current IR agencies including the Australian Industrial Relations Commission (AIRC), the Workplace Ombudsman and the Workplace Authority.

If you are interested in attending an IR briefing with the ARA on the challenges and risks to your business that will arise out of the Bill please email employmentrelations@retail.org.au

1. New Bargaining Framework

Unions will no longer need to lodge a notice with the tribunal to indicate that they will to formally bargain for a particular type of agreement.

2. Enterprise Agreements

Only enterprise (or collective) agreements can be registered with Fair Work Australia (FWA).

. There is no longer "employee collective agreements" or "union collective agreements".
. There are now only union greenfields agreements covering new businesses
. Collective agreements can also be made with multiple employers under the "single-interest" bargaining stream or low-paid bargaining stream.

3. Workplace Rights and Union Right of Entry

The Bill will continue to protect the right of workers to choose whether to belong to a union or not.

The Bill significantly enhances the powers of unions to enter a workplace. Unions will continue to have rights to enter the workplace to hold discussions with members and eligible non-unionised employees. Unions will now also have the right to inspect employment records of all employees in the workplace, this may extend to allow inspection of non-members employment records.

4. Unfair Dismissal

Under the new rules, the onus will be on employers to ensure they comply with a checklist of fair dismissal obligations. Small retailers will need to comply with the new 'Small Business Fair Dismissal Code' to demonstrate that a dismissal has been fair.

From 1 July 2009, an employee who has worked for an employer for at least 12 months, in a workplace with less than 15 employees, may make an unfair dismissal claim. An employee in any other business with at least six months service may make a claim. It is important for retail employers to understand that under new unfair dismissal laws regular casual workers are now counted as one full-time employee.

Employees will have to commence an unfair dismissal claim within seven days after being dismissed (in contrast to the current 21 day limit). The unfair dismissal process will be simplified and more informal, although lawyers and other paid agents will be allowed to represent parties with the permission of FWA.

The following employees will be exempt from unfair dismissal laws:

• High income employees (unless covered by award or agreement)
• Specified task, fixed time or seasonal employees
• Employees terminated on the basis of redundancy.

5. Default Bargaining Representative

The union will be the default bargaining representative for an employee in a workplace. An employer cannot refuse to recognise or bargain with a bargaining representative.

6. Workplace Agreements

All agreements made will be approved by Fair Work Australia, after being approved by a valid majority of workers. An agreement will only be approved if each and every employee is Better Off Overall as compared to their modern award conditions (unless 'exceptional circumstances' provisions are applicable).

Workplace agreements will be allowed to contain terms about anything that pertains to the employment relationship. This is a much broader concept than the current ban on prohibited content. However, agreements cannot have provisions that deal with "objectionable terms".

In addition, the Bill potentially introduces a form of pattern bargaining for the 'low paid' that will facilitate multi-employer bargaining for employees in low paid industries or occupations such as child care, aged care, security and cleaning.

As yet, there is no definition of "low-paid". Rather there is a list of criteria that must be taken into account before granting a union application. In effect this could encompass quite a significant proportion of smaller retailers.

7. National Employment Standards (NES)

The 10 National Employment Standards (NES) will mandate minimum employment conditions for all federal system employees covering matters such as pay, leave, requests for flexible working arrangements, redundancy pay, notice of termination requirements and hours of work.

The National Employment Standards will apply to employees not covered by an award or enterprise agreement and will allow:

• the averaging of working hours over a maximum period of six months;
• the cashing out of annual leave, provided the employee retains at least four weeks leave;
• agreements between an employer and employee about when and how paid annual leave may be taken;
• employers to give reasonable directions about the taking of paid annual leave; and
• the substitution of public holidays by agreement.

It is important for retail employers to be aware that, at the moment, the interaction between the NES Flexibility Clause and Collective Bargaining is unclear.

8. Industrial Action

Employers can now only take protected industrial action in response to employee action.

A union will only be able to take protected industrial action if approved by a secret ballot. However it is only necessary for 25% of employees on the roll plus one to vote in favour of the action rather than the current 50% plus. For a retail employer this means the support of only 26 out of 100 eligible employees is needed to invoke industrial action.

9. Stand Down

An employer can only stand down an employee on the basis of a breakdown of machinery if they can not reasonably be held responsible.

10. Transmission of business

The Bill proposes a collective agreement will be transferred with the sale of a business where three conditions are met:

. the transfer of the employee;
. the employee is performing the same or similar work after the transfer; and
. there is an appropriate connection between the outgoing and incoming businesses.

This will have major implications for outsourcing businesses and also general mergers and acquisitions.

More information coming soon

The Fair Work Australia Bill proposes far reaching changes to the workplace relations system and over the next few days the ARA will analyse the effect these changes will have on your business and the retail sector in particular.

The Senate has referred the provisions of the Fair Work Bill 2008 to the Senate Standing Committee on Education, Employment and Workplace Relations for report by 27 February 2009.

The closing date for written submissions is Friday, 9 January 2009. There are no specific terms of reference, with the Bill as a whole forming the basis for the inquiry.

We anticipate committee hearings in early to mid February 2009

At this stage, the Government is expecting:

• New unfair dismissal and collective bargaining rules - operating 1 July 2009.
• Balance of the new laws - to take effect on 1 January 2010.

If you would like the ARA to present to your management team on the challenges and risks to your business that will arise out of the Bill, please contact us on 1300 368 041 or email employmentrelations@retail.org.au