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Workplace Relations Amendment (Protecting Small Business Employment) Bill 2004

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2002-2003-2004

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

WORKPLACE RELATIONS AMENDMENT (PROTECTING SMALL BUSINESS EMPLOYMENT) BILL 2004

 

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(Circulated by authority of the Minister for Employment and Workplace Relations, the Hon Kevin Andrews MP)

 

 

 



WORKPLACE RELATIONS AMENDMENT (PROTECTING SMALL BUSINESS EMPLOYMENT) BILL 2004

 

 

OUTLINE

 

The Bill would amend the Workplace Relations Act 1996 (WR Act) to protect small business employers from redundancy payments that would otherwise adversely impact on the capacity of small businesses to provide employment. 

 

On 26 March 2004, the Australian Industrial Relations Commission (the Commission) handed down a test case decision (PR032004) which determined that the exemption of businesses with fewer than 15 employees from redundancy pay obligations should be removed.  The Commission decided that the redundancy pay scale determined in 1984 for larger businesses should now apply to small businesses.  The scale ranges from 4 weeks’ pay after one year of service to eight weeks’ pay after four years of service.  

 

The Australian Government opposes any attempt to apply redundancy pay obligations on employers who employ fewer than 15 employees.  To achieve this, the Bill:

 

·         would amend paragraph 89A(2)(m) of the WR Act to limit the allowability of redundancy pay to employers of 15 or more employees; and

·         provides that any variations to awards, made after the 26 March 2004 redundancy test case decision and imposing redundancy pay obligations on employers who employ fewer than 15 employees, have no effect; and

·         excludes constitutional corporations which employ fewer than 15 employees from redundancy pay obligations which may be imposed by State laws or State awards.  However, the Bill will not remove redundancy pay obligations that were imposed by a State law or State award before 26 March 2004. 

 

The Workplace Relations Amendment (Award Simplification) Bill 2002 presently before Parliament also proposes an amendment to paragraph 89A(2)(m).  The Bill proposes amendments in four schedules to take account of all contingencies with respect to the commencement of either or both of these Bills.

 

Schedule 1 - would operate if this Act receives Royal Assent before the commencement of Schedule 1 to the Workplace Relations Amendment (Award Simplification) Act 2004 ;

Schedule 2 - would operate if Schedule 1 to the Workplace Relations Amendment (Award Simplification) Act 2004 commences before this Act receives Royal Assent;

Schedule 3 - would operate where this Act receives Royal Assent and then later Schedule 1 to the Workplace Relations Amendment (Award Simplification) Act 2004 commences;

Schedule 4 - provides any entitlement to a redundancy payment that arose before the commencement of a Schedule to this Act is not affected.

 

 

FINANCIAL IMPACT STATEMENT

 

The Bill has no financial impact on the Commonwealth Budget.



 

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 Act are proposed to commence.  The effect of this clause is that:

 

·         Schedule 1 to the Act would come into operation on the day the Act receives the Royal Assent but only if the Workplace Relations Amendment (Award Simplification) Act 2004 does not commence first.

 

·         Schedule 2 to this Act would come into operation on the day the Act receives the Royal Assent but only if the Workplace Relations Amendment (Award Simplification) Act 2004 commences before this Act.

 

·         Schedule 3 to this Act would commence immediately after the commencement of Schedule 1 to the Workplace Relations Amendment (Award Simplification) Act 2004 but only if this Act commences first.

 

·         Schedule 4 to this Act would come into operation on the day the Act receives Royal Assent.

 

·         Clauses 1 to 3 which would commence on the day on which the Act receives Royal Assent.

 

Clause 3 - Schedule(s)

 

Clause 3 provides that an Act 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.

 

 



SCHEDULE 1 - AMENDMENTS OF PRE-AWARD SIMPLIFICATION LAW

 

Workplace Relations Act 1996

 

Item 1 - Paragraph 89A(2)(m)

 

1.1         This item would amend the WR Act to replace existing paragraph 89A(2)(m).

 

1.2         Proposed paragraph 89A(2)(m) would make redundancy pay by an employer of 15 or more employees an allowable award matter.

 

1.3         This means that redundancy pay by an employer of fewer than 15 employees would not be an allowable award matter.

 

Item 2 - Subsection 89A(7)

 

1.4          This item would amend the WR Act to omit “Subsection (1)” from subsection 89A(7) and substitute it with “Subject to subsection (7A), subsection (1)”.

 

1.5         This amendment is consequential to item 3 which would insert proposed subsection 89A(7A).

 

Item 3 - After subsection 89A(7)

 

1.6         This item would insert proposed subsection 89A(7A) to the WR Act.

 

1.7         Proposed subsection 89A(7A) would have the effect that an exceptional matters order would not be able to be made about redundancy pay by an employer of fewer than 15 employees.

 

Item 4 - After subsection 89A(8)

 

1.8         This item would insert proposed subsection 89A(8A) to the WR Act.

 

1.9         Proposed subsection 89A(8A) is an interpretative provision for proposed paragraph 89A(2)(m) and proposed subsection 89A(7A).

 

1.10       Proposed paragraph 89A(8A)(a) sets out the time - the relevant time - at which it is to be worked out whether a particular employer employs 15 or more employees or fewer than 15 employees for the purposes of paragraph 89A(2)(m) and subsection 89A(7A).

 

1.11       That time is either when notice of redundancy is given by the employer or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

1.12       Proposed paragraph 89A(8A)(b) provides that a reference to employees in either proposed paragraph 89A(2)(m) or proposed subsection 89A(7A) includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the relevant time.  A reference to employees also includes any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 



Item 5 - After section 153

 

1.13       This item would amend the WR Act to insert proposed section 153A.

 

1.14       Proposed subsection 153A(1) provides that a constitutional corporation which employs fewer than 15 employees is not required to make redundancy payments to its employees where a State law or State award would otherwise require the constitutional corporation to make such payments.

 

1.15       Proposed paragraph 153A(2)(a) sets out the time - the relevant time - at which it is to be worked out whether a particular corporation employs fewer than 15 employees for the purposes of proposed subsection 153A(1) .

 

1.16       That time is either when notice of redundancy is given by the corporation or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

1.17       Proposed paragraph 153A(2)(b) provides that a reference to employees in proposed subsection 153A(1) includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the relevant time.  A reference to employees also includes any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 6 - At the end of section 170FA

 

1.18       This item would amend section 170FA to include proposed subsections 170FA(3) and (4).

 

1.19       Proposed subsection 170FA(3) provides that the Commission must not make an order to give effect to Article 12 of the Termination of Employment Convention in relation to the matter of redundancy pay by an employer of fewer than 15 employees.

 

1.20       Proposed paragraph 170FA(4)(a) sets out the time - the relevant time - at which it is to be worked out whether an employer employs fewer than 15 employees for the purposes of subsection 170FA(3).

 

1.21       That time is either when notice of redundancy is given by the employer or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

1.22       Proposed paragraph 170FA(4)(b) provides that a reference to employees in proposed subsection 170FA(3) includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the same time.  A reference to employees also includes any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 7 - Application

 

1.23       This item provides that the amendments contained in items 1 to 4 of this Schedule would apply where the Commission is:

 

·                                                  dealing with industrial disputes by arbitration; and

·                                                  making an award or order about the prevention or settlement of industrial disputes; and

·         varying an award or order that would involve maintaining the settlement of industrial disputes;

 

after the Schedule commences whether the industrial dispute arose before or arises after the Schedule has commenced.

 

1.24       This item also provides that the amendment made by item 5 applies to:

 

·         a State law or State award made after the commencement of the Schedule that has the effect of imposing redundancy pay obligations on constitutional corporations that employ fewer than 15 employees; and

·         a State law or State award made before or after the commencement of the Schedule that is amended or varied after the commencement of Schedule and has the effect of imposing redundancy pay obligations on constitutional corporations that employ fewer than 15 employees.

 

1.25       This item also provides that item 6 would apply where the Commission is making orders after the Schedule commences.

 

Item 8 - Transitional - awards and orders of the Commission

 

1.26       This item provides that if, during the period from 26 March 2004 until this Schedule commences, the Commission made an award or order that had the effect of requiring an employer of fewer than 15 employees to pay redundancy pay, or if the Commission varied an award or order that was made before or during that period to that effect, then from the commencement of this Schedule such an award or order ceases to have that effect.

 

1.27       This item sets out the time - the relevant time - at which it is to be worked out whether an employer employs fewer than 15 employees for the purpose of the transitional provisions.

 

1.28       That time is either when notice of redundancy is given by the employer or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

1.29       This item also provides that a reference to employees in the transitional provision includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the relevant time.  A reference to employees also includes any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 9 - Transitional - State laws and State awards

 

1.30       This item deals with a State law or award that is made, amended or varied during the period from 26 March 2004 until the Schedule commences and which has the effect of requiring a constitutional corporation employing 15 or fewer employees to pay redundancy pay.  This item provides that such a law or award ceases to have effect from the commencement of this Schedule. 

 



SCHEDULE 2 - AMENDMENT OF POST-AWARD SIMPLIFICATION LAW, WHERE THAT LAW HAS ALREADY COMMENCED

 

Workplace Relations Act 1996

 

Item 1 -Paragraph 89A(2)(m)

 

2.1         This item would amend the WR Act to replace the paragraph 89A(2)(m) which had been inserted by Schedule 1 of the Workplace Relations Amendment (Award Simplification) Act 2004 (the Award Simplification Act).

 

2.2         Proposed paragraph 89A(2)(m) would make payments by an employer who employs 15 or more employees in relation to a termination that is at the employer’s initiative and on the grounds of operational requirements, an allowable award matter.

 

2.3         This means that such payments by an employer of fewer than 15 employees is a not an allowable award matter.

 

Item 2 - Subsection 89A(7)

 

2.13     This item would amend the WR Act to omit “Subsection (1)” from subsection 89A(7) and substitute it with “Subject to subsection (7A), subsection (1)”.

 

2.14     This amendment is consequential to item 3 which would insert proposed subsection 89A(7A).

 

Item 3 - After subsection 89A(7)

 

2.6         This item would insert proposed subsection 89A(7A) to the WR Act.

 

2.7         Proposed subsection 89A(7A) would have the effect that an exceptional matters order would not be able to be made about payments by an employer of fewer than 15 employees in relation to a termination that is at the employer’s initiative and on the grounds of operational requirements.

 

Item 4 - After subsection 89A(8)

 

2.15     This item would insert proposed subsection 89A(8A) to the WR Act.

 

2.16     Proposed subsection 89A(8A) is an interpretative provision for proposed paragraph 89A(2)(m) and proposed subsection 89A(7A).

 

2.17     Proposed paragraph 89A(8A)(a) sets out the time - the relevant time - at which it is to be worked out whether a particular employer employs 15 or more employees or fewer than 15 employees for the purposes of paragraph 89A(2)(m) and subsection 89A(7A).

 

2.18     That time is either when notice of the termination is given by the employer, or when the termination occurs, whichever happens first.

 

2.19     Proposed paragraph 89A(8A)(b) provides that a reference to employees in either proposed paragraph 89A(2)(m) or proposed subsection 89A(7A) includes a reference to the employee who is terminated and any other employee who is terminated at the relevant time.  A reference to employees also includes any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 5 - After section 153

 

2.20     This item would amend the WR Act to insert proposed section 153A.

 

2.21     Proposed subsection 153A(1) provides that a constitutional corporation which employs fewer than 15 employees is not required to make redundancy payments to its employees where a State law or State award would otherwise require the constitutional corporation to make such payments.

 

2.22     Proposed paragraph 153A(2)(a) sets out the time - the relevant time - at which it is to be worked out whether a particular corporation employs fewer than 15 employees for the purposes of proposed subsection 153A(1).

 

2.23     That time is either when notice of redundancy is given by the corporation or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

2.24     Proposed paragraph 153A(2)(b) provides that a reference to employees in proposed subsection 153A(1) includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the relevant time.  A reference to employees also includes any casual employee who, at the relevant time, has been engaged by the corporation on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 6 - At the end of section 170FA

 

2.25     This item would amend section 170FA to include proposed subsections 170FA(3) and (4).

 

2.26     Proposed subsection 170FA(3) provides that the Commission must not make an order to give effect to Article 12 of the Termination of Employment Convention in relation to the matter of redundancy pay by an employer of fewer than 15 employees.

 

2.27     Proposed paragraph 170FA(4)(a) sets out the time - the relevant time - at which it is to be worked out whether an employer employs fewer than 15 employees for the purposes of subsection 170FA(3).

 

2.28     That time is either when notice of redundancy is given by the employer or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

2.29     Proposed paragraph 170FA(4)(b) provides that a reference to employees in proposed subsection 170FA(3) includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the relevant time.  A reference to employees also includes a reference to any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 7 - Application

 

2.30     This item provides that the amendments contained in items 1 to 4 of this Schedule apply where the Commission is:

 

·         dealing with industrial disputes by arbitration; and

·         making an award or order about the prevention or settlement of industrial disputes; and

·         is varying an award or order that would involve maintaining the settlement of industrial disputes;

 

after the Schedule commences whether the industrial dispute arose before or arises after the Schedule has commenced.

 

2.31     This item also provides that the amendment made by item 5 applies to:

 

·         a State law or State award made after the commencement of the Schedule that has the effect of imposing redundancy pay obligations on constitutional corporations that employ fewer than 15 employees; and

·         a State law or State award made before or after the commencement of the Schedule that is amended or varied after the commencement of Schedule and has the effect of imposing redundancy pay obligations on constitutional corporations that employ fewer than 15 employees.

 

2.32     This item also provides that item 6 applies where the Commission is making orders after the Schedule commences.

 

Item 8 - Transitional - awards and orders of the Commission: period from 26 March until commencement of award simplification amendments

 

2.33     This item provides that if during the period from 26 March 2004 until the Award Simplification Act commences, the Commission made an award or order that had the effect of requiring an employer of fewer than 15 employees to pay redundancy pay, or varied an award or order that was made before or during that period to that effect, then from the commencement of this Schedule such an award or order ceases to have that effect.

 

2.34     This item sets out the time - the relevant time - at which it is to be worked out whether employer employs fewer than 15 employees for the purposes of this transitional provision.

 

2.35     That time is either when notice of redundancy is given by the employer or by the employee who becomes redundant, or when the redundancy occurs, whichever happens first.

 

2.36     This item also provides that a reference to employees in this transitional provision includes a reference to the employee who becomes redundant and any other employee who becomes redundant at the relevant time.  A reference to employees also includes a reference to any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 9 - Transitional - awards and orders of the Commission: period from commencement of award simplification amendments until commencement of this Schedule

 

2.37     This item provides that if during the period from the commencement of the Award Simplification Act until the commencement of this Schedule, the Commission made an award or order that had the effect of requiring payments by an employer of fewer than 15 employees in relation to a termination that is at the employer’s initiative and on the grounds of operational requirements or varied an award or order that was made before or during that period to that effect, then from the commencement of this Schedule such an award or order ceases to have that effect.

 

2.38     This item sets out the time - the relevant time - at which it is to be worked out whether employer employs fewer than 15 employees for the purposes of this transitional provision.

 

2.39     That time is either when notice of termination is given by the employer or when the termination occurs, whichever happens first.

 

2.40     This item also provides that a reference to employees in this transitional provision includes a reference to the employee whose employment is terminated and any other employee whose employment is terminated at the relevant time.  A reference to employees also includes a reference to any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee. 

 

Item 10 - State laws and State awards

 

2.41     This item deals with a State law or award that is made, amended or varied during the period from 26 March 2004 until the Schedule commences and which has the effect of requiring a constitutional corporation employing 15 or fewer employees to pay redundancy pay.  This item provides that such a law or award ceases to have effect from the commencement of this Schedule. 



SCHEDULE 3 - AMENDMENT OF POST-AWARD SIMPLIFICATION LAW, WHERE THAT LAW HAS YET TO COMMENCE

 

Workplace Relations Act 1996

 

Item 1 - Paragraph 89A(2)(m)

 

3.11     This item would amend the WR Act to replace paragraph 89A(2)(m) that had been inserted by Schedule 1 of this Act.

 

3.12     Proposed paragraph 89A(2)(m) would make payments by an employer who employs 15 or more employees in relation to a termination that is at the employer’s initiative and on the grounds of operational requirements an allowable award matter.

 

3.13     This means that such payments by an employer of fewer than 15 employees would not be an allowable award matter.

 

Item 2 -  Subsection 89A(7A)

 

3.11     This item would insert proposed subsection 89A(7A) to the WR Act to replace subsection 89A(7A) that had been inserted by Schedule 1 of this Act.

 

3.12     Proposed subsection 89A(7A) would have the effect that an exceptional matters order would not be able to be made about payments by an employer of fewer than 15 employees in relation to a termination that is at the employer’s initiative and on the grounds of operational requirements.

 

Item 3 -Subsection 89A(8A)

 

3.11     This item would insert proposed subsection 89A(8A) to the WR Act to replace subsection 89A(8A) that had been inserted by Schedule 1 of this Act.

 

3.12     Proposed subsection 89A(8A) is an interpretative provision for proposed paragraph 89A(2)(m) and proposed subsection 89A(7A).

 

3.13     Proposed paragraph 89A(8A)(a) sets out the time - the relevant time - at which it is to be worked out whether a particular employer employs 15 or more employees or fewer than 15 employees for the purposes of paragraph 89A(2)(m) and subsection 89A(7A).

 

3.14     That time is either when notice of the termination is given by the employer, or when the termination occurs, whichever happens first.

 

3.15     Proposed paragraph 89A(8A)(b) provides that a reference to employees in either proposed paragraph 89A(2)(m) or proposed subsection 89A(7A) includes a reference to the employee who is terminated and any other employee who is terminated at the relevant time.  A reference to employees also includes a reference to any casual employee who, at the relevant time, has been engaged by the employer on a regular and systematic basis for at least 12 months, but does not include any other casual employee.

 



Item 4 - Application

 

3.11     This item inserts application provisions that are to the same effect as the Award Simplification Act.

 

3.12     T his item proposes that the amendments made by items 1 to 3 of this Schedule would apply in relation to an industrial dispute that the Commission began to deal with before the commencement of the Schedule, or begins to deal with after commencement of the Schedule.



SCHEDULE 4 - PROTECTION OF EXISTING ENTITLEMENTS

 

 

Item 1 - Protection of existing entitlements

 

4.1         This item ensures that nothing in a Schedule to the Act or an amendment made by a Schedule to the Act would effect any entitlement to a redundancy or termination payment that had arisen before the commencement of that Schedule.

 

4.2         This means that if a person had been made redundant or had been terminated at the employer’s initiative and on the grounds of operational requirements and had therefore become entitled to a payment before the relevant Schedule to the Act commenced, then the entitlement to that payment is not affected.