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Workplace Relations Amendment (Fair Termination) Bill 2003

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2002

 

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

WORKPLACE RELATIONS AMENDMENT (FAIR TERMINATION) BILL 2002

 

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment and Workplace Relations,

the Honourable Tony Abbott MP)



WORKPLACE RELATIONS AMENDMENT (FAIR TERMINATION) BILL 2002

 

 

OUTLINE

 

This Bill would amend the Workplace Relations Act 1996 (the WR Act) to:

 

(a)     insert new provisions into the Act excluding certain classes of employees from the operation of the termination of employment provisions, and repeal existing regulations that exclude certain classes of employees from the operation of the termination of employment provisions;

 

(b)    make some changes to the provisions excluding certain classes of employees from the operation of the termination of employment provisions, in particular to restore provisions excluding casual employees engaged for a short period (‘short-term casual employees’), following a decision of the Federal Court invalidating regulations that purported to exclude these employees ( Hamzy v Tricon International Restaurants t/as KFC [2001] FCA 1589);

 

(c)     validate the operation of regulations, purporting to exclude short-term casual employees from the termination provisions, that were declared invalid by the Federal Court. The validating provisions would operate from the time that the invalid regulations were purportedly made, to the time when the new provisions to exclude short-term casual employees from the termination provisions commence; and

 

(d)    insert new provisions into the Act requiring a fee to be paid when termination of employment applications are lodged, and providing for this fee to be indexed annually in line with movements in the Consumer Price Index.

 

FINANCIAL IMPACT STATEMENT

 

There will be no significant impact on Commonwealth expenditure.



NOTES ON CLAUSES

 

Clause 1 - Short title

 

This is a formal provision specifying the short title of the Act.

 

Clause 2 - Commencement

 

This clause specifies when various provisions of the Bill are proposed to commence.

 

Clauses 1 to 3 will commence on Royal Assent. 

 

Schedules 1 and 2 will commence on a day or days to be fixed by Proclamation. However, if the Schedules have not commenced within 6 months after Royal Assent, subsection 2(3) has the effect that the Schedules will commence on the first day following that six month period. 

 

Clause 3 - Schedules

 

Clause 3 provides that an Act or set of regulations specified in a Schedule to this Act is amended or repealed as set out in the Schedule, and that any other item in a Schedule operates according to its terms. 

 

The clause further provides that amendment of regulations by this Bill will not prevent the amended regulations being further amended or repealed by the Governor-General, and provides that, for the avoidance of doubt, regulations amended by the Act are still taken to be regulations.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                                       

 



SCHEDULE 1 - EXCLUSION OF CERTAIN EMPLOYEES FROM TERMINATION PROVISIONS

 

Part 1 - Amendments

 

Workplace Relations Act 1996

 

Item 1 - After section 170CB

 

1.1       This item would insert proposed section 170CBA, to exclude certain classes of employees from the operation of certain termination of employment provisions in Division 3 of Part VIA of the WR Act.  Subject to some minor amendments, the new provisions reflect the exclusions that are set out in regulations 30B and 30BA of the Workplace Relations Regulations 1996 (the WR Regulations).

 

1.2       Proposed subsection 170CBA(1) lists the kinds of employees that would be excluded from the operation of, in effect, all of the termination of employment provisions (including provisions about unfair dismissal and unlawful termination). The classes of employees to be excluded are:

 

·          employees engaged for a specified period of time;

 

·          employees engaged for a specified task;

 

·          employees who are on probation (as long as the length of the probation period is 3 months or less, or reasonable having regard to the particular employment);

 

·          casual employees engaged for a short period (‘short-term casuals’);

 

·          trainees who are employed under particular types of traineeship agreements, or who are employed under a traineeship for a specified period; and

 

·          non-award employees who earn more than a particular rate established in the WR Regulations.

 

1.3       This list corresponds to the list of employees currently excluded from the operation of the termination of employment provisions by regulation 30B of the WR Regulations, with the following differences:

 

·          the words ‘or a qualifying period of employment’ which appear in paragraph 30B(1)(c) of the WR Regulations would not be included in proposed new paragraph 170CBA(1)(c).  Subsections 170CE(5A) and (5B) of the WR Act deal with a ‘qualifying period of employment’ in relation to termination of employment that is harsh, unjust or unreasonable (referred to as ‘unfair dismissal’);

 

·          proposed new paragraph 170CBA(1)(d) and subsection 170CBA(3), which would exclude all short-term casual employees from the termination provisions, are different from the current short-term casual exclusion in paragraph 30B(1)(d) and subregulation 30B(3) of the WR Regulations. The current regulations exclude casual employees who have been working for their employer for less than 12 months from accessing termination of employment remedies. The proposed provisions to be inserted in the Act would exclude casual employees who have not been working on a regular and systematic basis for their employer for a sequence of periods of employment extending over a period of at least 12 months, or who do not have a reasonable expectation of continuing employment with their employer. This reflects the scope of the exclusion in the regulations that were declared invalid by the Federal Court in Hamzy v Tricon International Restaurants ; and

 

·          the reference to subsection 170CC(3) and (4) of the WR Act in subparagraph 30B(1)(f)(ii) of the WR Regulations would be replaced, in proposed subparagraph 170CBA(1)(f)(ii), with a reference to proposed subsections 170CBA(5) and (6), to reflect structural changes in the provisions as a result of moving the exclusions from the WR Regulations to the WR Act.

 

1.4       Proposed subsection 170CBA(2) provides that proposed subsection (1) does not apply to exclude an employee engaged under a contract of employment for a specified period of time, or for a specified task, from the termination of employment provisions, if the employee has been engaged under that kind of contract for the purpose (or a substantial purpose) of avoiding the employer’s obligations under the termination provisions. This subsection corresponds with subregulation 30B(2) of the WR Regulations.

 

1.5       Proposed subsection 170CBA(3) sets out which casual employees are excluded from the termination of employment provisions. As outlined above, a casual employee will be taken to be engaged for a short period, and therefore excluded from the termination provisions unless the employee has been engaged by their employer on a regular and systematic basis for a sequence of periods of employment during a period of at least 12 months; and the employee has, or would have had, a reasonable expectation of continuing employment with the employer.

 

1.6       Proposed subsections 170CBA(4), (5) and (6) would replace current subsections 170CC(2), (3) and (4) of the WR Act, which are being repealed (see Item 3 below). These provisions would explain in more detail which non-award employees are excluded from the termination of employment provisions.

 

1.7       Proposed subsection 170CBA(4) would specify that employees are to be taken not to be employed under award conditions if their employer is not bound by a federal award, certified agreement, Australian Workplace Agreement, or old IR agreement.

 

1.8       Proposed subsection 170CBA(5) would provide that non-award employees who are not paid on a commission or piece rate basis are excluded from the termination of employment provisions if their rate of remuneration exceeds the rate established under regulation 30BB of the WR Regulations.

 

1.9       Proposed subsection 170CBA(6) would provide that non-award employees who are paid on a commission or piece rate basis are excluded from the termination of employment provisions if their rate of remuneration (calculated in accordance with regulation 30BC of the WR Regulations) exceeds the rate established under regulation 30BB.

 

1.10     Proposed subsection 170CBA(7) would exclude certain classes of employees from the operation of sections 170CL and 170CM and Subdivisions D and E of Division 3 of Part VIA of the WR Act. Section 170CL requires an employer to notify Centrelink if they decide to terminate the employment of 15 or more employees for economic, technological, structural or other similar reasons. Section 170CM requires employers to provide employees with a minimum period of notice before terminating their employment. Subdivisions D and E allow the Commission to make orders about severance pay and consultation with representatives of employees (for instance, unions) in certain circumstances where an employer is terminating the employment of 15 or more employees.

 

1.11     Proposed paragraphs 170CBA(7)(a) to (c) set out the kinds of employees that would be excluded from the operation of these provisions:

 

·          casual employees (except ‘short-term casuals’ - these casuals would be excluded from the operation of sections 170CL and 170CM and Subdivisions D and E by proposed paragraph 170CBA(1)(d));

 

·          daily hire employees working in the construction industry;

 

·          weekly hire employees working in the meat industry, where their  employment is terminated due to seasonal factors.

 

1.12     This list corresponds to the list of employees that are currently excluded from the operation of those provisions by paragraphs 30BA(a), (b) and (d) of the WR Regulations.  The exclusion in paragraph 30BA(c) of the WR Regulations is now redundant, and would be repealed by Item 17 of the Bill.

 

1.13     Proposed subsection 170CBA(8) would make clear that if an employee could be excluded from termination of employment provisions by both proposed subsections 170CBA(1) and (7), the employee is taken only to be covered by proposed subsection 170CBA(1) and is therefore subject to the broader range of exclusions provided for by subsection 170CBA(1).

 

Item 2 - Paragraphs 170CCD(1)(a)(b)(c)

 

1.14     This item would repeal paragraphs 170CC(1)(a), (b) and (c), and would replace the current heading to section 170CC with a new heading “Regulations may provide for additional exclusions”.

 

Item 3 - Subsections 170CC(2),(3) and (4)

 

1.15     This item would repeal subsections 170CC(2), (3) and (4) of the WR Act. These provisions would be replaced by proposed subsections 170CBA(4), (5) and (6).

 

Item 4 - After section 170CC

 

1.16     This item would insert proposed section 170CCA. This provision would validate the operation of regulations excluding short-term casuals from the operation of the termination of employment provisions, which were ruled invalid by the Federal Court in Hamzy v Tricon International Restaurants .  The invalid exclusion was contained in paragraph 30B(1)(d) and  subregulation 30B(3) (as amended by Statutory Rules 1996 No. 307).

 

1.17     Proposed section 170CCA does not deem the invalid regulations to have been valid. Rather, it declares that the rights and liabilities of employers and employees are to be taken to have been as if the regulations had been validly made. This provision is designed to ensure that everyone is and was in the same position that they would be in, or would have been in, had the invalid regulations been validly made. However, this section would not affect the rights and liabilities of parties to proceedings which have been finally determined by a court or by the Commission before the commencement of this item, so far as the rights and liabilities that were the subject of the determination directly relate to the invalid regulations. 

 

Item 5 - Subsection 170CD(1)

 

1.18     This item would insert a proposed definition of ‘daily hire employee’ into subsection 170CD(1). This term is used in proposed section 170CBA. The proposed definition is the same as the definition of this term currently contained in subregulation 30A(1) of the WR Regulations.

 

Item 6 - Subsection 170CD(1)

 

1.19     This item would insert a new definition of ‘relevant training award’ into subsection 170CD(1). The term ‘relevant training award’ is used in the proposed definition of ‘traineeship agreement’ to be inserted into subsection 170CD(1) (see Item 9). The new definition refers to the current National Training Wage Award and future awards that may cover the same subject matter.

 

Items 7 and 8 - Subsection 170CD(1)

 

These items would insert proposed definitions of ‘State or Territory training authority’ and ‘trainee’ into subsection 170CD(1). These terms are used in proposed section 170CBA. The proposed definitions are the same as the definitions of these terms currently contained in subregulation 30A(1) of the WR Regulations.

 

Item 9 - Subsection 170CD(1)

 

1.20     This item would insert a proposed definition of ‘traineeship agreement’ into subsection 170CD(1). The proposed definition is similar to the definition of ‘traineeship agreement’ currently contained in subregulation 30A(1) of the WR Regulations, except that some minor changes have been made to reflect current arrangements in relation to vocational education and training. In particular:

 

·          paragraph (a) of the definition refers to the proposed new definition of ‘the relevant award’, rather than the National Training Wage Interim Award 1994, which has now been superseded;

 

·          the reference to NETTFORCE in the current definition in the WR Regulations has been deleted, as that body has been wound up and is no longer operating.

 

Item 10 - Subsection 170CD(2)

 

1.21     This item proposes to amend subsection 170CD(2) by deleting the words ‘Subdivision C, D and E of this Division’ and replacing them with the words ‘this Subdivision or Subdivision C, D and E’. This change is necessary so that expressions to be inserted into Subdivision A of Division 3 of Part VIA by this Bill would be taken to have the same meaning as those expressions in the Termination of Employment Convention, 1982, a copy of which is set out in Schedule 10 of the WR Act.

 

Workplace Relations Regulations 1996

 

Items 11 to 15 - Subregulation 30A(1) (definition of ‘daily hire employee’, ‘NETTFORCE’, ‘State or Territory training authority’, ‘trainee’ and ‘traineeship agreement’)

 

1.26     These items would amend subregulation 30A(1) of the WR Regulations by repealing the definitions of ‘daily hire employee’, ‘NETTFORCE’, ‘State or Territory training authority’, ‘trainee’ and ‘traineeship agreement’. Those definitions will no longer be required in the WR Regulations due to the proposed repeal of regulations 30B and 30BA.

 

Items 16 and 17 - Regulations 30B and 30BA

 

1.27     These items would repeal regulations 30B and 30BA of the WR Regulations. These regulations, which exclude certain classes of employees from certain termination of employment provisions, would be replaced with new provisions in the WR Act. However, no provision corresponding to paragraph 30BA(c) of the WR Regulations would be inserted into the WR Act, as the exclusions in this paragraph is now redundant:

 

·          Schedule X of the Maritime Industry Seagoing Award 1983 is no longer in force;

 

·          the system of engagement under Schedule X of the Maritime Industry Seagoing Award 1983 is no longer in operation; and

 

·          there are no employees whose employment is regulated by Schedule X of the Maritime Industry Seagoing Award 1983.

 

Items 18 and 19 - Regulation 30BB and 30BC

 

1.28     Proposed item 18 would amend regulation 30BB of the WR Regulations by replacing the words ‘paragraphs 170CC(3)(b) and (4)(b)’ with the words ‘paragraphs 170CBA(5)(b) and (6)(b)’. Proposed item 19 would amend regulation 30BC of the WR Regulations by replacing the words ‘paragraph 170CC(4)(b)’ with the words ‘paragraph 170CBA(6)(b)’.

 

1.29     These amendments are consequential amendments to reflect the proposed repeal of subsections 170CC(3) and (4) and the replacement of these provisions with new subsections 170CBA(5) and (6) (see Items 1 and 3 above).

 

Part 2 - Application provisions

 

Item 20 - Application of items 1 to 19 (other than item 4)

 

1.30     This item would provide that the amendments made by items 1 to 19, other than item 4, only apply in relation to terminations of employment that occur after the commencement of Schedule 1 to the Bill, whether or not the employment to which the termination relates started before or after that time. The amendment proposed by item 4 (inserting section 170CCA) would apply according to the terms described in the proposed section.

 

 

 

 



SCHEDULE 2 - FEES FOR LODGING TERMINATION APPLICATIONS

 

Workplace Relations Act 1996

 

Item 1 - After section 170CE

 

2.1       This item would insert proposed section 170CEAA, to require a person lodging a termination of employment application with the Australian Industrial Registry to pay a fee.

 

2.2       Proposed subsection 170CEAA(1) lists the applications in respect of which a fee is payable (applications made under subsections 170CE(1), (2), (3) and (4) of the WR Act).



2.3       Proposed subsection 170CEAA(2) provides that the amount of the fee is $50 if an application is lodged during the financial year in which the provision commences. Section 22 of the Acts Interpretation Act 1901 provides that the term ‘financial year’ means a period of 12 months beginning on 1 July.

 

2.4       Proposed subsection 170CEAA(3) provides for the calculation of the fee if an application is lodged in later financial years. The amount would be calculated by multiplying the fee that applied in the previous financial year by an indexation factor set out in proposed subsection 170CEAA(4). The amount would then be rounded to the nearest multiple of ten cents (and rounded up if the result is an amount ending in five cents). 



2.5       Proposed subsection 170CEAA(4) sets out the formula for calculating the indexation factor for the purposes of calculating the amount of the fee for lodging a termination of employment applications under proposed subsection 170CEAA(3).

 

2.6       The indexation factor would be obtained by dividing the sum of the All Groups Consumer Price Index Numbers for all four quarters in the year ending on 31 March preceding the financial year in which the application is lodged, by the sum of the All Groups Consumer Price Index Numbers for all quarters of the year ending on 31 March before that.

 

2.7       The intention is that the fee payable for lodging termination of employment applications should be adjusted at the start of each financial year to reflect movements (either upward or downward) in the Consumer Price Index during the previous year. The Consumer Price Index movements will be calculated based on the figures available for previous years ending in the March quarter, as Consumer Price Index numbers for the June quarter are generally not available until August each year, so would not be published in time to index the fee from 1 July.

 

2.8       Proposed subsection 170CEAA(5) provides that the indexation factor calculated under proposed subsection 170CEAA(4) would be rounded to three decimal places before it is applied in calculating the amount of the fee under proposed subsection 170CEAA(3).

 

2.9       Proposed subsection 170CEAA(6) provides that the indexation factor is only to be calculated with respect to the most recently published reference base of the Consumer Price Index, and that later substituting Consumer Price Index numbers are to be disregarded unless substituting numbers are issued to take account of changes in the Consumer Price Index reference base.

 

2.10     Proposed subsection 170CEAA(7) provides that an Industrial Registrar may exempt a person lodging a termination of employment application from paying the fee, if the fee would cause that person serious financial hardship.

 

2.11     Proposed subsection 170CEAA(8) provides that a fee paid for lodging a termination of employment application is to be refunded if the person making the application discontinues the application at least two days before the first proceedings in the Australian Industrial Relations Commission relating to the application are scheduled to begin.