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Workplace Relations Amendment (Work Choices) Bill 2005

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2004-2005

 

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

HOUSE OF REPRESENTATIVES

 

 

 

 

 

 

 

WORKPLACE RELATIONS AMENDMENT (WORK CHOICES) BILL 2005

 

 

EXPLANATORY MEMORANDUM

 

 

 

 

 

 

 

 

 

 

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



WORKPLACE RELATIONS AMENDMENT (WORK CHOICES) BILL 2005

 

OUTLINE

This Bill will amend the Workplace Relations Act 1996 (the WR Act) to create a more flexible, simpler and fairer system of workplace relations for Australia.  The Bill will carry forward the evolution of Australia’s workplace relations system to improve productivity, increase wages, balance work and family life, and reduce unemployment.

The major reforms to be implemented by the Bill will:

·                simplify the complexity inherent in the existence of six workplace relation jurisdictions in Australia by creating a national workplace relations system based on the corporations power that will apply to a majority of Australia’s employers and employees;

·                establish an independent body called the Australian Fair Pay Commission (AFPC), to set and adjust minimum and award classification wages, minimum wages for juniors, trainees/apprentices and employees with disabilities, minimum wages for piece workers and casual loadings;

·                enhance compliance with the WR Act;

·                enshrine in law minimum conditions of employment (annual leave, personal/carer’s leave (including sick leave), parental leave (including maternity leave) and maximum ordinary hours of work), which, along with the wages set by the AFPC, will be called the Australian Fair Pay and Conditions Standard (the Standard) and will apply to all employees in the national system;

·                place a greater emphasis on direct bargaining between employers and employees by replacing the certification and approval process for making agreements with a simpler streamlined lodgment only process;

·                improve regulation of industrial action while protecting the right to take lawful industrial action by requiring the Australian Industrial Relations Commission (AIRC) to determine and application for an order to stop or prevent unprotected industrial action within 48 hours, requiring secret ballots before protected industrial action, expanding the grounds on which the AIRC can suspend or terminate a bargaining period, and creating a new power for the Minister for Employment and Workplace Relations to suspend or terminate a bargaining period in particular circumstances;

·                retain a system of awards that will be simplified to ensure that they provide minimum safety net entitlements;

·                provide for the transfer of industrial instruments to a successor, assignee or transmittee employer, for a maximum period of 12 months (with the exception of Australian Pay and Classification Scales) and to oblige new employers to give notification to transferring employees.  Additionally, to provide for the transfer of certain entitlements accrued under the Standard to a successor, assignee or transmittee employer;

·                protect certain award conditions (public holidays, rest breaks (including meal breaks), incentive-based payments and bonuses, annual leave loadings, allowances, penalty rates, and shift/overtime loadings) in the agreement making process so that these conditions can only be modified or removed by specific provisions in an agreement;

·                preserve specific award conditions (long service leave, superannuation, jury service and notice of termination) for all current and new award reliant employees, and permit other award conditions (annual leave, personal/carer’s leave, parental leave) to apply to current and new award reliant employees if they are better than the conditions provided in the Standard;

·                encourage employers and employees to resolve their disputes without the interference of third parties by introducing a model dispute settlement procedure that includes a range of dispute settling options for all award and Standard reliant employers and employees, and employers and employees covered by agreements that do not contain dispute settling procedures;

·                improve protections for employers and employees by extending the compliance regime in the WR Act to cover the Standard, agreement making, and State award and agreement reliant employers and employees that are brought into the national system; and

·                put in place comprehensive transitional arrangements for employers and employees entering the federal system and employers and employees currently in the federal award system who will not be covered by the new federal system.

FINANCIAL IMPACT STATEMENT

The Government’s proposed workplace relations reforms will move towards a national workplace relations system for the first time and significantly simplify the workplace relations system.

 

Estimated costs associated with the proposed workplace relations reforms are as follows:

 

2005-06 (mill)

2006-07 (mill)

2007-08 (mill)

2008-09 (mill)

Total (mill)      

Compliance

$13.3

$46.5

$41.9

$39.8

$141.5

Agreement Making

$6.7

$14.8

$18.3

$21.8

$61.5

WorkChoices Advertising Campaign

$44.3

 

 

 

$44.3

WorkChoices Information and Education

$10.8

 

 

 

$10.8

Australian Fair Pay Commission

$5.8

$7.7

$7.8

$7.8

$29.1

Awards Review Taskforce

$7.4

$1.7

-

-

$9.0

WorkChoices Legislation Development & Implementation

$58.5

$30.4

$21.1

$21.2

$131.3

Unlawful Dismissal

$4.0

$11.5

$6.8

$6.4

$28.6

Dispute Resolution

$0.7

$2.1

$3.4

$5.2

$11.4

Australian Industrial Relations Commission

$1.9

$1.4

-$3.9

-$6.1

-$6.7

Attorney General’s Department

$5.3

$7.8

$7.8

$7.8

$28.8

Estimated costs:

$158.7

$123.9

$103.2

$103.8

$489.6

 

Final details of these costs will be considered in the Additional Estimates context and will be outlined in appropriation Bills and the Department of Employment and Workplace Relations’ Portfolio Additional Estimates Statements when published later this year.

 

 

 



REGULATION IMPACT STATEMENT

Background

Since coming to office in 1996, the Australian Government (the Government) has significantly reformed the federal workplace relations system to introduce flexibilities and reduce third party intervention.  These reforms have contributed to increased productivity and economic prosperity.  However, further Government reform initiatives are required to meet the economic challenges confronting Australia, such as the aging Australian workforce.

Despite the WR Act going some way towards achieving a less prescriptive and more centralised approach to workplace relations, the system still confers significant rights on third parties over and above the rights of employers and employees.  It places artificial demands on workplaces and creates barriers to opportunities for genuine direct employer/employee relationships.  Application of the federal workplace relations laws is still dependent on interpretation by the Australian Industrial Relations Commission (AIRC), with intervention by unions, which may override the wishes of employees in a workplace.  The current system still imposes a complex and costly regulatory burden on employers and employees, resulting in a negative impact on productivity and employment. 

While the primary focus of the federal workplace relations system is on workplace agreements underpinned by a minimum safety net, it is not a genuine safety net.  The current process for reviewing the safety net is subject to AIRC arbitration and union intervention.  Unions invariably make ambit claims to raise award wages and conditions above the level which represents a real and effective safety net.  The current safety net of complex and prescriptive awards can act as a disincentive to agreement making.  There is still a need for establishing genuine minimum standards, over and above which employers and employees at workplace level should be free to negotiate further wages and conditions through simplified agreement making processes without the interference of third parties. 

The existing system of six different industrial relations systems creates confusion for enterprises with workplaces in more than one state, resulting in compliance obligations under different industrial laws.  The limitations of operating with six different systems have been recognised by numerous stakeholders and commentators from a wide political spectrum for many years.

These problems were recently noted by the International Monetary Fund, which commented: [1]

Further reforms of industrial relations are needed to expand labor demand and facilitate productivity gains Labor market reforms to date have substantially reduced rigidities, but centralised awards still set minimum working conditions in 20 areas through the requirement that conditions in collective and individual contracts not fall below those in awards - the no disadvantage test - and large employers face up to six different industrial relations systems at the Federal and State levels.

Australia currently has over 130 different pieces of employment related legislation, over 4000 different awards and six different workplace relations systems operating across the country.  There are too many rules and regulations that make it too hard for many employees and employers to get together and reach agreement.  There is also too much red tape, too much complexity, and too much confusion. 

Agreement Making and Productivity

Award wages and conditions form a complex safety net against which employers must negotiate productivity improvements through agreement making.  This complicated threshold can act as a disincentive for agreement making and therefore inhibit productivity growth.  The chart below shows a reduction in award reliance has had a significant effect on productivity growth.

Award-reliance by industry as at May 2004 and labour productivity growth by industry June 1990 to June 2004.

Source:  ABS Employee Earnings and Hours, May 2004 (Cat No 6306.0), Table 15; ABS AusStats, National Accounts (Cat No 5204.025).

2.                The following chart shows the number of current federal agreements and the number of employees covered since March 1997.

Source: Workplace Agreements Database, DEWR

It is clear that agreement making is fairly cyclical with peaks in the number of federal agreements current in each quarter.  Agreement numbers and employee coverage within the private sector continue to grow.  Individual bargaining allows businesses to tailor arrangements to their needs.  Negotiations at workplace level can result in agreements that accommodate productivity offsets, while the award system does not.

The first chart shows a strong correlation between productivity growth and the use of workplace agreements in an industry.  However, the chart below shows that there are tentative signs of easing in productivity growth.  This chart shows average annual productivity growth in each ‘growth cycle’ since 1965.

Source: ABS Cat No 5204.0, Australian System of National Accounts

 

Current AIRC agreement making processes are time consuming and expensive for businesses.  Further reform is required to drive increased agreement making, facilitate greater flexibility, and increase productivity. 

An example of the high cost of AIRC processes is the current practice of conducting formal hearings to vet all collective agreements, despite the fact that this is not a legislative requirement.  An instance of where a formal hearing would not have been necessary involves Gibbo’s Bulk Haulage (GBH) who lodged an application to certify an agreement on 14 July 2003.  GBH is a business based in Coolaman, New South Wales.  The AIRC held a hearing into the matter on 7 August 2003 which required a company director, an employee and the company’s representative to travel to Sydney.  It also meant that GBH could not use one of its trucks that day, causing a loss of income.  The AIRC hearing lasted seven minutes and neither the company director nor the employee representative were asked to say anything. 

The only result was a request for further information.  GBH supplied that information and the AIRC later certified the agreement after a further hearing on 24 September 2003.  The Government’s view is that there was no need for GBH to waste the time and resources involved in hearings into this agreement. 

Objective

The Government’s objective is to move towards a national framework for workplace relations in Australia with the aim of raising productivity and hence living standards.  The national framework should be structured to reduce unnecessary restrictions on labour market flexibility and reduce the burden on employers and employees in complying with workplace relations regulation.  The Government considers that increased labour market flexibility and reduced regulation will contribute to greater productivity.

Options

One option (Option A) would be to maintain the status quo and not introduce further reforms beyond meeting the Government’s election commitments and legislative measures that have previously been either stalled or rejected by the Senate.  This option would represent a modest achievement but would not go far enough.  For instance, it would not address the complexity arising from having six different workplace relations systems operating across the country.

The preferred option (Option B) is to establish a more flexible workplace relations framework which revises methods of setting minimum wages, simplifies agreement making processes and the safety net which underpins agreement making, while retaining appropriate protections for employees.  This option will:

·                move Australia towards one, simple national system of workplace relations, relying primarily on the corporations power of the Constitution;

·                establish the Australian Fair Pay Commission (AFPC) to protect minimum and award classification wages;

·                enshrine a set of key minimum conditions of employment in federal legislation for the first time;

·                introduce the Australian Fair Pay and Conditions Standard (the Standard) to protect workers’ wages and conditions in the agreement-making process;

·                simplify the workplace agreement-making process;

·                provide modern award protection for those not covered by agreements;

·                provide a more flexible framework for dispute resolution;

·                better balance the unfair dismissal laws; and

·                expand and improve the federal union right of entry regime.

Under this option, awards and the AIRC will continue to operate.  The AIRC will concentrate on what should be its key role - the resolution of disputes.   

Impact Analysis

Option A - Status Quo

Costs and benefits to business

There is limited benefit to business if the status quo is maintained.  Business would benefit from the measures already contained in legislation that the Government will reintroduce into Parliament and the delivery of election commitments.  Many business groups have indicated that these measures, while worthwhile, do not go far enough in achieving a genuinely flexible Australian workplace relations system.  For a number of years, business groups have strongly maintained that the current system is unwieldy, costly and unnecessarily bureaucratic.  They have consistently called for further deregulation of the labour market and simplification of procedures.

There are costs to business if the current system is maintained without further reforms, not least having to deal with six separate industrial relations systems.  The award system is very complex for business.  For example, there are approximately 4,000 federal and state awards, and employers often have to grapple with multiple state and federal awards applying to the one business. 

With the rise of the internet and other communications media, even small businesses can operate across state boundaries, while some larger businesses have to deal with all six different systems.  Small businesses particularly struggle with the current workplace relations system, as they do not have the large human resources infrastructure to deal with the complex and costly procedures imposed by current labour regulation.

Costs and benefits to employees

The current workplace relations system will be detrimental to employees over the longer term by failing to stimulate further productivity growth and perpetuating barriers to labour market participation.  Continued reform will unlock further gains in productivity and promote employment growth.  Wage setting arrangements which pay greater attention to economic considerations are likely to facilitate entry into the labour market for the more disadvantaged job seekers.  A failure to reform Australia’s wage setting arrangements will see many unemployed persons continue to effectively be locked out of the labour market.

The complexity of the current system also means that many employees are unaware of their current minimum entitlements.  In addition, retaining the current certification/approval process means that employees will continue to experience uncertainty arising from processing delays.  To the extent that this (combined with the retention of the No Disadvantage Test (NDT)) creates disincentives for agreement-making, employees may also lose out on benefits that result from having industrial instruments which can be tailored to reflect their particular needs and circumstances.

Costs and benefits to Government

There is only a modest benefit if the status quo is maintained.  While this option would see some further flexibilities in the workplace through implementation of the Government’s election commitments and the reintroduction of legislative measures previously stalled in the Senate, fundamental barriers to further productivity improvements and job growth would remain.  This would compromise the Government’s overall workplace relations reform agenda.

The cost of maintaining the current system without further reforms will be a continuing disincentive to bargaining, and for those employers and employees, continuing reliance on an outdated and complex award system for determining wages and conditions in Australia. 

Summary

The Government and businesses favour further deregulation to create flexibilities, modify outmoded forms of determining wages and conditions, and simplify procedures for agreements.  While some employees may benefit in the short term if the status quo is maintained, there will be longer term costs to productivity, labour market entry and employment growth.

Option B - A New Workplace Relations system: Work Choices

Move towards one, simple national system of workplace relations, relying on the corporations power of the Constitution

Costs and benefits to business

This option would deliver a unified national system for most employers - a reform that business groups have consistently called for.  The multiple jurisdictions create complexity and uncertainty around coverage and compliance. 

The present system, with state and federal jurisdictions, does not make it clear for employers whether state or federal industrial instruments apply to their employees. [2]   It is at present also possible for employers to be subject to both state and federal industrial instruments in respect of particular types of employees.  Determining appropriate coverage and managing employees in different jurisdictions is an administrative cost to employers.

The ABS provides clear evidence of the confusion caused by the present workplace relations system.  It does not publish separate statistics on federal and state award coverage because employers are unable to reliably determine which award jurisdiction covers their employees. 

The present system also encourages ‘jurisdiction shopping’ on the part of unions to avoid legislative restrictions.  For example, differing federal and state right of entry provisions, which permit union access to workplaces can be exploited to circumvent access restrictions in a particular jurisdiction. 

Use of the corporations power, together with other heads of power such as the Territories power and powers referred by Victoria, to expand the federal system would mean that up to 85 per cent of Australian employees would be covered by the federal system [3]

The remaining 15 per cent of employees would continue to be covered by their respective state jurisdictions.  However, it is possible that states might subsequently choose to refer their powers to the Commonwealth, as maintaining state jurisdictions for such a low proportion of workers may be too costly and difficult.

The corporations power will also introduce a more precise test for determining whether a business falls within the federal workplace relations system, this will make the issue of jurisdiction much more transparent for employers.

If legislated, the proposed reforms would expressly state an intention to ‘cover the field’ thereby ousting any conflicting state law.  The states would be limited to regulating only those employers which do not come within the scope of the corporations power, the Territories power, the power covering Commonwealth employees, or the Victorian referral of industrial relations powers.

Forty-nine per cent of small businesses employing staff are currently incorporated and would benefit from coming under the federal system, which would create a single, easy to understand, and less costly system for complying with minimum wages and conditions and procedures for lodging agreements.  The Victorian referral of power and the use of the Territories power in the Australian Capital Territory and Northern Territory, means that federal coverage of small business employees will be increased even further.

Costs and benefits to employees

Many employees currently do not know which award applies to them, or in which jurisdiction they may seek redress for an employer’s non-compliance with award provisions.  Approximately 50 per cent of Australian workers are currently covered by the federal system.  By introducing one set of minimum standards of which employees and employers alike may be aware, through expanded coverage of the proposed federal system, a further 35 per cent of employees would enjoy the benefits of a single, simple system for setting minimum wages and conditions and processing agreements.

Those remaining 15 per cent of employees not covered by the federal system will still be covered by the relevant state jurisdiction.  However, it is hoped that states may subsequently decide to refer their workplace relations powers to the Commonwealth.

Costs and benefits to Government

The Government would benefit from making considerable progress towards a unified workplace relations system, covering up to 85 per cent of the Australian workforce [4] .  A unified system would ideally be established by the states referring their powers in this area.  However, failing that, the Government can rely on the corporations power to ‘cover the field’ as far as possible.  ‘Covering the field’ to oust state laws was canvassed by the then Minister for Employment and Workplace Relations and Small Business, the Hon Peter Reith MP, in 2000, and the Government has attempted to use the corporations power in a number of Bills to expand federal coverage in discrete areas.

The Government’s proposed workplace relations reforms will, among other things, move towards a national workplace relations system for the first time and significantly simplify the workplace relations system.

The reforms will complement other key Government initiatives such as welfare to work reform by providing enhanced scope for individuals returning to the labour market to negotiate working arrangements to suit their circumstances and improved employment opportunities through a stronger economy.  The reforms will also decrease the regulatory burden on business, particularly small business.

Summary

Assuming that the states do not agree to refer their workplace relations powers to the Government, Option B would rely on the corporations and other powers to extend the coverage of the federal workplace relations system to cover up to 85 per cent of Australian workers [5] .  The result would be a single national set of minimum wages and conditions for the overwhelming majority of Australian employees.  The system would significantly reduce the current regulatory burden on business, and bring a further 35 per cent of Australian employees under one single fair and balanced workplace relations system.

Establish the Australian Fair Pay Commission to protect minimum and award classification wages

Under Work Choices the Government will:

·                establish the AFPC independent of the Government to set and adjust minimum and classification wages, minimum wages for juniors, trainees/apprentices and employees with disabilities, minimum wages for piece workers and casual loadings;

·                guarantee that previously award based classification wages cannot fall below the level set after inclusion of any increase determined by the 2005 Safety Net Review, although they will be capable of upwards adjustment by the AFPC; and

·                ensure that the AFPC will meet its primary objective of promoting the economic prosperity of the people of Australia by having regard to:

-               the capacity for the unemployed and low paid to obtain and remain in employment;

-               employment and competitiveness across the economy;

-               providing a safety net for the low paid; and

-               providing minimum wages for junior employees, and employees to whom training arrangements apply to ensure those employees are competitive in the labour market.

Costs and benefits to business

Businesses will benefit from a clearer and simpler system of wage setting.  At present the minimum rates of pay are set out in awards and can differ markedly between different industries.  Under the proposed reforms the AFPC will set and adjust minimum and classification wages for juniors, trainees/apprentices and employers with disabilities, minimum wages for piece workers and casual loadings.  This will provide a more streamlined classification wages structure and will give businesses greater certainty about the appropriate rate of pay for their employees.

In addition, the more consultative approach of the AFPC should lead to decisions which better reflect the needs of all interested stakeholders, including the unemployed.

A cost to businesses will be the need to be conscious of changes to the minimum wages as set and adjusted by the AFPC.  However, this does not represent an additional regulatory burden on businesses, as businesses that employ award reliant employees must already be conscious of changes to the minimum wage that occur through the annual Safety Net Review case.

In fact, changes to the minimum wage will be easier to follow under Work Choices as minimum wages will change at the same time for all federal employees, and notice of this change will be widely communicated by the AFPC.  In contrast, under the present system awards must be individually varied to take into account changes to the minimum wage, and this may occur at any point in time.  As a result of this process, employers and employers must be constantly alert for changes to the award.

Costs and benefits to employees

The Government has guaranteed that minimum and classification wages in awards will be protected at the level set after the increase from the AIRC’s 2005 Safety Net Review.  Minimum wages and award classification wages will not fall below this level.

Establishing genuine minimum wages and conditions will assist in achieving increased labour market participation.  At present, low skilled workers or the unemployed may be priced out of the labour market.  Australia has the highest ratio between the minimum wage and median wage in the OECD - currently 58.8 per cent.  Our minimum wage is significantly higher than a number of similar countries including New Zealand (53.6 per cent), the UK (43.2 per cent), Canada (39.5 per cent), and the US (32.2 per cent). [6]   Furthermore, Australia has thousands of minimum wages through the award system.  Wage increases achieved through safety net adjustments, unlike those achieved through agreement-making, are not based on productivity improvements.  Moreover, large award wage increases can adversely impact upon employment opportunities for unemployed people and the low paid, pricing them out of the labour market. 

In 2004, the Government undertook a longitudinal study to examine long term outcomes for clients of its employment assistance programs.  The study particularly examined how disadvantaged people fare in the labour market up to two years after assistance has ceased.  This study confirmed a key finding of a body of related studies in that a substantial number of low paid workers do move to higher paying jobs over time - ‘in the case of more disadvantaged job seekers, taking even low paid, casual jobs will increase their chances of finding better paid, more permanent employment’. [7]

Data from the Household Income and Labour Dynamics in Australia survey show that of employees aged 21 years and older who were in low paid jobs in 2001, 37 per cent were in higher paid jobs in 2002 and 43 per cent were in higher paid jobs in 2003.  Of employees who were in low paid jobs in 2001 and 2002, 31 per cent were in higher paid jobs in 2003.  Less than 20 per cent of all employees were in low paid jobs in 2003. [8]

By introducing a genuine safety net, based on minimum standards set by the AFPC and through legislation, more jobs will be available, allowing new entrants and returning and low skilled workers enhanced access to the labour market.  This will in turn provide a stepping stone for low paid workers to move into higher paying jobs over time.

Costs and benefits to Government

The AFPC represents a long overdue shift from the historically adversarial process for wage setting in Australia.  At present, the process for varying minimum wages is the AIRC’s annual Safety Net Review case.  This process involves the AIRC making its decision about minimum wages based on the submissions of interested parties.  Rather than arbitrary and artificial claims between employer organisations and unions, the AFPC will adopt a consultative approach with all interested stakeholders. 

The Government, and the economy as a whole, will benefit from the less adversarial approach to wage setting as it will take greater account of the needs of low wage workers and the unemployed and will encourage further employment growth.  In this way, the creation of a genuine minima may also help reduce associated welfare costs.

A cost to the Government will be the establishment and ongoing costs of the AFPC.  Although, there will also be cost savings for the Government as the AIRC will no longer need to run its annual Safety Net Review

Summary

A new independent body called the AFPC will be established.  The primary objective of the AFPC will be to promote economic prosperity and job creation for the people of Australia.  The AFPC will set and adjust minimum and classification wages for juniors, trainees/apprentices and employers with disabilities, minimum wages for piece workers and casual loadings.

Enshrine a set of key minimum conditions of employment in federal legislation for the first time

Under Work Choices the Government will ensure that all federal employees are entitled to the following key minimum conditions of employment which will be set in legislation:

·                at least 4 weeks paid annual leave per year;

·                at least 10 days paid personal/carer’s leave (including sick leave) after 12 months of service;

·                at least 52 weeks of unpaid parental leave (including maternity leave) at the time of the birth or adoption of a child; and

·                a maximum of 38 ordinary hours of work per week.

Costs and benefits to business

Businesses will benefit from increased certainty about their obligations, as these key minimum conditions of employment will be enshrined in federal legislation for the first time.  This will create a consistent federal standard for all businesses within the federal workplace relations system.

This proposal may create additional costs for businesses as they will be required to meet the key minimum conditions of employment.  However, the Government believes these costs are appropriate as the key minimum conditions of employment represent a genuine safety net of employment conditions that should be guaranteed for all employees.  In addition, these costs will be offset by the fact that employers will have a simpler system for agreement making.  Under Work Choices the complex and subjective NDT will be replaced with the Standard thereby providing a much clearer and simpler test for agreement making.

Costs and benefits to employees

Employees will benefit from guaranteed minimum conditions of employment which will be enshrined in federal legislation.  This legislative approach will ensure that no employee can receive less than the minimum conditions set under Work Choices.  In addition, where an award reliant employee’s conditions of employment are more generous than the legislative minima, the employee will continue to receive the more generous entitlement.  This will apply to both current and future employees who are employed under a particular award.

Costs and benefits to Government

The provision of legislated key minimum conditions of employment will be a cost neutral proposal for the Government. 

Summary

The Government will enshrine in law key minimum conditions of employment: annual leave, personal/carer’s leave (including sick leave), parental leave (including maternity leave) and maximum ordinary hours of work.  Employees will be guaranteed these key minimum conditions of employment, and award reliant employees (both current and new) will also retain the benefit of more generous award provisions.

Introduce the Australian Fair Pay and Conditions Standard to protect workers’ wages and conditions in the agreement-making process

Under Work Choices the Government will:

·                provide that the minimum conditions of employment together with wages as set by the AFPC, will no longer be ‘allowable award matters’ but instead form the basis of a minimum employment standard for all employees in the federal jurisdiction - the Standard; and

·                provide that the Standard will replace the current NDT for all collective and individual agreements with no capacity to ‘trade off’ these minimum employment standards, other than the ability to cash out up to two weeks worth of annual leave entitlement in any one year.

Costs and benefits to business

A new system of setting minimum wages and conditions will benefit business.  The system will be considerably less complicated and bureaucratic, with employers having to be cognisant of only one set of standards rather than numerous prescriptive awards.  Replacing the NDT with a clearer set of minimum wages and conditions will remove a significant layer of complexity with regards to agreement making, and will provide additional incentives to negotiate at the enterprise or workplace level.  Under the current NDT, individual conditions of employment may be lower than an award standard but overall the agreement must not reduce award standards. 

A further benefit for employers will be enhanced choice and flexibility in agreeing directly with employees their workplace pay and conditions beyond the minimum standards.  Agreement-making at the workplace level is particularly suited to tailoring working arrangements in ways that assist employees to balance work and family, free from the one-size-fits-all constraints of award prescription.  An increasing number of organisations have found that agreement-making under the Workplace Relations Act 1996 (WR Act) provides a wide variety of options for new and innovative initiatives that benefit both employees and the business.

Business may feel that the proposal does not go far enough in deregulating the workplace relations system.  Many business groups have called for more radical cutting back of allowable award matters, or for the abolition of awards altogether.  However, the proposed reform represents an evolutionary approach which provides flexibility and reduces complexity while retaining appropriate employee protections.

Costs and benefits to employees

Employees will benefit from the enhanced choice and flexibility available when agreeing with their employer about workplace pay and conditions beyond the minimum standards.  Agreement-making at the workplace level is particularly suited to tailoring working arrangements in ways that assist employees to balance work and family, free from the one-size-fits-all constraints of award prescription.  An increasing number of organisations have found that agreement-making under the WR Act provides a wide variety of options for new and innovative initiatives that benefit both employees and the business.

As at 30 June 2005, 94 per cent of employees covered by certified agreements were covered by an agreement with at least one family friendly or flexible hours provision, and 79 per cent were covered by an agreement with at least three such provisions [9] .  Over 70 per cent of Australian Workplace Agreements (AWAs) approved in 2002-2003 contained at least one provision relating to either family friendly leave or family friendly flexible work arrangements.  Of these agreements, more than half had three or more such provisions.  Agreement-making is also delivering tailored working arrangements to the employees who value them most.  For example, women covered by certified agreements and AWAs are more likely to have access to family friendly provisions than men. [10]

Aside from providing enhanced options for flexible conditions, the new system will be easier to understand and will be widely promoted through a comprehensive education campaign.

The new system will also be underpinned by employee protections.  The WR Act currently provides an extensive compliance regime to ensure that employees get their correct terms and conditions of employment as set out in awards, collective agreements and AWAs.  The compliance regime allows specified persons (usually employers, employees, unions or inspectors) to enforce civil penalties and/or recovery of underpayments where employees are not properly paid.  The legislation will extend this compliance regime to include enforcing the Standard.

A cost to employees will be the changing basis for the safety net of wages and conditions.  The safety net is currently based on the award system but under Work Choices will be based on the wages and conditions contained within the Standard.  This change will mean that employees will have a different basis for agreement making and agreements will no longer be required to address all of the allowable award matters. 

However, the Standard will provide a clearer basis for agreement making than the present NDT.  The Standard will continuously apply to an agreement, whereas the NDT applies only at the time of certification.  This means that under the Standard no employee can lawfully receive less than the set minimum wages and conditions, while under the NDT an agreement could comply with its requirements at the time of certification but fall below the minimum standard over the life of the agreement. 

In addition, under the NDT all conditions of employment are tradeable, whereas under the Standard these conditions will be enshrined in legislation and in general cannot be traded off as part of an agreement.  An exception to this rule is the entitlement to four weeks annual leave, of which, two weeks may be cashed out per year, solely at an employee’s request.

Critics of the reforms may argue that employees will be disadvantaged by the proposed safety net.  However, the reforms will ensure a genuine safety net of conditions exists to underpin agreement making.

On top of the legislated conditions of employment, key award conditions will also be protected under Work Choices, these conditions are:

·                public holidays;

·                rest breaks (including meal breaks);

·                incentive-based payments and bonuses;

·                annual leave loadings;

·                allowances;

·                penalty rates; and

·                shift / overtime loadings.

These key conditions will be protected and will only be able to be changed or removed in an agreement where they are expressly changed or removed by an agreement approved by an employee (in the case of an AWA) or group of employees (in the case of a collective agreement).  Where an agreement does not specifically alter or remove these protected conditions, the relevant award provision will be read into the agreement.

This protection will supplement the Standard and ensure that employers and employees give due consideration to the protected award conditions when making their agreement. 

Costs and benefits to Government

The Government and the Australian economy will benefit from introducing this proposed reform.  Reducing award matters and having minimum wages and conditions set and adjusted by the AFPC and through legislation will result in a genuine safety net, applying to all employees in the federal jurisdiction.  Replacing the current, global NDT with a set of simple and easily comprehended minima will also help the Government clearly communicate to employers and employees the minimum wages and conditions which Australian workers are entitled to receive. 

Summary

Introduction of the Fair Pay and Conditions Standard will result in a significant simplification of the agreement making process by replacing the current complex and confusing NDT.  Business and employees would benefit from this simplified process which would create a genuine minimum safety net. 

Simplify the workplace agreement-making process

Under Work Choices, the Government will replace the current time consuming and legalistic agreement certification and approval process with a streamlined, simpler and less costly lodgment based process to be administered by the Office of the Employment Advocate (OEA).

Costs and benefits to business

Business will benefit from replacing the current agreement approval processes with a single, cheap and administratively straight-forward lodgment-only process for all agreements - collective and individual - with the OEA.  This was originally included in the Workplace Relations and Other Legislation Amendment Bill 1996 but omitted in order to secure passage of the legislation.  While there is no statutory requirement for the AIRC to hold formal hearings for agreement certification, it has become practice.  Unnecessary formal hearings are disruptive and costly for business.  Small businesses might sometimes have to close for a day to attend proceedings (refer paragraphs 13 and 14).  Employer groups have often identified simplified agreement making processes as essential in reducing the regulatory burden on business.

Average processing times by the AIRC for certified agreements is 26.7 days.  Sixty-seven per cent of AWAs lodged with the OEA are approved within 20 working days.

A lodgment only process with the OEA will address the unnecessary administrative burden, reduce lengthy processing times, and provide a greater incentive for employers and employees to embrace agreement making.  No approval process would be required, however, agreements will need to comply with the Standard.  To ensure employee entitlements are protected, an improved compliance regime will also be introduced as part of the legislation.

In addition, under Work Choices, the OEA will assume responsibility for explaining agreements to employees.  This was previously a responsibility of the employer and could represent a significant regulatory burden as employers were required to have regard to the individual needs of employees when explaining the content of new agreements.  As the OEA will now take on this function, the proposed reforms will further reduce the regulatory burden of agreement making for businesses.

Costs and benefits to employees

Employees will also benefit from a simplified agreement lodgment process.  Agreements will come into effect much more quickly and will have to meet a clear, single set of minima, that is, the Standard.  The new system will be easier to understand and will be widely promoted through a comprehensive education campaign.

Costs and benefits to Government

The current agreement approval process is bureaucratic, requiring an application for certification to the AIRC.  Agreements have to be assessed and approved by the AIRC against a number of factors, including the NDT based on any federal or state award covering the employees and any other federal, state or territory law.  AWAs are assessed and approved by the OEA, and similarly, a number of factors are considered including the NDT based on awards.

A simplified lodgment process administered by one body, the OEA, will considerably simplify the current process.  A simplified lodgment process will remove previous administrative disincentives to agreement making and encourage employers and employees to tailor their working arrangements to their own needs and circumstances.  This will benefit the Government through increased productivity growth when compared to productivity levels in award reliant industries.  In turn, productivity growth can lead to increased employment growth and eventually increased taxation revenue for the Government and reduced welfare expenditure.

Summary

Simplified agreement approval processes in the new system will significantly reduce the amount of time and level of bureaucracy associated with agreement making.  This will particularly benefit small businesses, which generally lack the capacity of their larger counterparts to absorb the costs of highly prescriptive regulation, such as, by allocating a dedicated human resources infrastructure. 

Provide modern award protection for those not covered by agreements

Under Work Choices the Government will:

·                establish the Award Review Taskforce to examine and report to Government on an approach to award rationalisation (including consideration of how that process could best be coordinated with award simplification).

·                preserve key award conditions covering annual leave, personal/carer’s leave and parental leave, for current and future award reliant employees, so that these employees will continue to enjoy these preserved award conditions if they are more generous than the Standard.

·                preserve key award conditions covering superannuation (until 30 June 2008), long service leave, jury service and notice of termination, for current and future award reliant employees.

Under Work Choices, awards can continue to contain provisions dealing with the following matters:

·                ordinary time hours of work and the times within which they are performed, rest breaks, notice periods and variations to working hours;

·                incentive-based payments and bonuses;

·                annual leave loadings;

·                public holidays;

·                ceremonial leave;

·                allowances;

·                loadings for working overtime or shift work;

·                penalty rates;

·                redundancy pay for employers with 15 or more employees;

·                stand-down provisions;

·                dispute settling procedures;

·                type of employment, such as full-time employment, casual employment, regular part-time employment and shift work; and

·                conditions for outworkers, including non-conditions provisions such as chain of contract arrangements, registration of employers, employer record keeping and inspection.

Changes to allowable award matters - The following matters will be allowed in awards consistent with the list set out above, but with some change from current arrangements, including:

·                public holidays - awards will be allowed to provide for those public holidays declared by or under a law of a state or territory to be observed generally within that state or territory, or a region of that state or territory.  However, the definition of public holidays will be refined to exclude inappropriate holidays in awards, such as union picnic days. 

·                redundancy pay - redundancy pay will be allowable only in cases of genuine redundancy.

·                part-time employment - all awards under Work Choices must contain provisions permitting the employment of regular part-time workers. 

·                awards to provide minimum entitlements - the new legislation will specify that awards will provide a safety net of basic minimum entitlements.   

·                outworker conditions - outworkers’  pay will be removed from awards and be set and reviewed by the AFPC. 

-               The Government will also retain additional award protections for outworkers.  All outworker provisions that do not relate to pay (including chain of contract arrangements, registration of employers, employer record keeping and inspection) will remain in awards as allowable award matters.  Maintaining such matters in awards is designed to avoid any potential problems that could place these workers at a disadvantage. 

-               The workplace relations legislation will provide that the relevant award outworker provisions form the ‘minimum’ for agreements between an employer and an outworker (that is, the relevant award outwork provisions will be read into agreements). 

·                facilitative provisions - an award may include facilitative provisions that allow agreement at the workplace or enterprise level, between employers and employees (including individual employees), on how a term in the award is to operate.  For example, employers and employees can agree on variations to the spread of daily hours in a particular enterprise .  While this flexibility is supported at the workplace level and facilitative provisions will be retained, the Government believes that, where possible, these matters are best addressed through agreement making such as collective agreements or AWAs.  In addition, the new workplace relations legislation will specify that facilitative provisions must not require majority agreements (thus enabling agreement between an employer and an employee). 

·                allowances - allowances will be defined to specify that awards may only contain monetary allowances in particular instances, such as where the allowance reimburses the employee for expenses incurred in the course of employment.

·                incidental matters - the  AIRC will be able to include provisions in an award that are incidental to allowable matters where these provisions are essential for making a particular provision operate in a practical way, including machinery provisions (for example, definitions, titles, commencement dates, parties bound). 

Cost and benefits to business

A modern system of award protection will benefit business and employees.  Award rationalisation and simplification is a necessary step as awards remain overly prescriptive and detailed documents which are difficult for employers and workers to understand.  Further award simplification is also needed to ensure that awards provide a true safety net of minimum conditions for award reliant employees.

Businesses in particular will benefit from increased surety about employee entitlements, as at present it can be very difficult to determine how a particular entitlement should be calculated.  This uncertainty may lead to inadvertent breaches of award conditions.  The proposed reforms will more clearly set out which employment conditions can be included in awards and will reduce the unnecessary proliferation of awards so that the relevant award can be more easily identified.

A cost for business will be the initial increase in administrative costs, as the employer must keep aware of changes to the award system.  However, this administrative burden should only exist while the award rationalisation and simplification processes are being carried out and it is no more onerous than the current requirement to keep abreast of award variations.

Cost and benefits to employees

Employees will benefit from increased surety about their entitlements.  At present it can be difficult for employees to determine which award, if any, applies to the work that they do.  The Award Review Taskforce will make recommendations to Government about rationalising the number of awards, so that employees can determine with ease which award applies to their personal circumstance.  This will not be an exercise in cutting award conditions.

A potential cost to employees might be the changing range of allowable award matters.   However, under Work Choices employees will still be able to enjoy the benefits of their award conditions, as well as, the protection of legislated conditions of employment.

Cost and benefits to Government

The Government will benefit from the effects of award simplification and rationalisation.  Awards are currently overly prescriptive and can act as a barrier to effective workplace bargaining, this in turn may lead to a less efficiently functioning labour market and reduced productivity growth for the economy. 

The award rationalisation and simplification processes will be undertaken by the AIRC, following Government consideration of recommendations by the Award Review Taskforce.  A cost to Government will be the expense of resourcing these bodies, however the benefits of reform outweigh these administrative costs.

Summary

Awards have become overly complex and difficult for employers and employers to understand or interpret.  The Government will ensure that the award system is reviewed so that it can maintain relevance in a modern workplace relations system. 

Promote responsible bargaining through a more flexible framework for dispute resolution

Under Work Choices the Government will:

·                facilitate greater choice about how to resolve workplace level disputes; and

·                provide more effective regulation of industrial action - balancing the right to take protected industrial action when bargaining against protecting the legitimate interests of affected parties.

The Government’s proposal will facilitate employers and employees resolving disputes between themselves.  Where this fails they should choose how best to manage a dispute.  The Government will:

·                include a model Dispute Settling Procedure (DSP) in the legislation for employers and employees to use when resolving their workplace disputes.  The model DSP will be included in all awards as well as agreements which are lodged without their own DSP; and

·                establish a system of registered private alternative dispute resolution (ADR) providers that will support genuine choice between the AIRC’s dispute settling expertise and other dispute resolution specialists. 

The model DSP sets out a ‘staged’ approach to dispute resolution commencing with workplace level discussions and proceeding to ADR if the matter remains unresolved.  ‘ADR’ includes mediation, conciliation, and assisted negotiation.  The employers and employees can choose between referring a matter to a private ADR provider or to the AIRC for assistance. 

Disputes about the application of the award are dealt with under a DSP that is set out in the award.  Under Work Choices, DSPs for disputes about the application of the award will remain an allowable matter, but be standardised using the model DSP to ensure that employers and employees are responsible for settling such disputes.  The model DSP will replace all award DSPs from the commencement of the new legislation.  This will mean that from the commencement of the new legislation, disputes about the application of awards will be settled using the model DSP. 

The model DSP will also apply to disputes about the Fair Pay and Conditions Standard.

The model DSP will apply to disputes about the application of an AWA or a collective agreement where that agreement is lodged with the OEA without its own DSP (as a DSP is a compulsory content requirement).

In relation to industrial action, the legislation will ensure that the AIRC will continue to supervise protected industrial action.  The AIRC will retain its powers to issue orders to prevent or stop unprotected industrial action. 

However, legislation will require that the AIRC hear and determine an application for such an order in a maximum of 48 hours.  If the AIRC cannot determine the application to stop or prevent industrial action in that time it will be required to issue an interim order, unless it is contrary to the public interest.

The WR Act will be amended to require secret ballots before protected industrial action can be taken.  Employees or the union or unions will apply to the AIRC for a secret ballot order.  The AIRC will be able to make such an order only if the employees or union are genuinely trying to reach agreement with the employer, and if no pattern bargaining is taking place. 

Protected action can only be taken by:

·                a union that is a negotiating party to the proposed agreement; or

·                a member of a union who is employed by the employer and will be subject to the proposed agreement; or

·                an officer or employee of a union acting in that capacity; or

·                an employee who is a negotiating party to the proposed agreement.   

To maintain the integrity of workplace agreements, Work Choices will make it clear that industrial action is prohibited during the life of an agreement.

The WR Act will be amended to require the AIRC either to suspend or terminate a bargaining period on particular grounds.  In general, the existing grounds set out in the WR Act will be retained.

One existing ground for terminating a bargaining period will be removed.  That is where the bargaining period relates to employees covered by a former paid rates award as these have been phased out under the WR Act.  Three new grounds will be added:

·                suspension or termination if ‘pattern bargaining’ is taking place;

·                a cooling-off suspension where this would assist the parties to resolve the matters at issue; and

·                a suspension where third parties are threatened with significant harm from industrial action.

The AIRC will be required to suspend or terminate a bargaining period if one of the relevant grounds applies but will retain its discretion to choose suspension or termination.  If a bargaining period is terminated because it threatens life, personal safety, health or welfare of the population or is likely to cause significant damage to the economy, the matter will be referred to the AIRC for a Workplace Determination.  The AIRC will be required to consider AFPC determinations with respect to wages.  In addition, to encourage agreement making, the range of other matters that the AIRC could consider when making Workplace Determinations will be limited to a list set out in the legislation.

The Minister for Employment and Workplace Relations will be permitted to issue a Declaration where protected industrial action threatens life, personal safety, health or welfare of the population or is likely to cause significant damage to the economy.  This new remedy is similar to state essential services legislation, and will ensure the Government can respond to industrial action taken by parties covered by Work Choices that has significantly damaging and wide-ranging effects on essential services. 

Cost and benefits to business

Businesses will benefit from the proposed emphasis on dispute resolution at a workplace level.  This will allow businesses to reduce their reliance on institutionalised dispute resolution processes and will ensure that they have a say in how workplace conflict is managed and resolved.  Businesses will be able to choose between a greater variety of dispute resolution processes (including mediation) rather than the more formal AIRC processes.

In the event that a dispute escalates and industrial action is taken, businesses will also benefit from the better regulation of industrial action to balance the rights of the bargaining parties against the legitimate interests of affected parties.  This will particularly be the case for businesses providing essential services that will benefit from the provisions allowing the Minister to terminate protected action threatening the Australian economy or population.

While businesses may chose to pay for dispute resolution services from a private practitioner, the Government will assist in this respect by subsidising alternative dispute resolution services delivered by registered providers.

Cost and benefits to employees

Employees will be able to have a greater say regarding the manner in which disputes are resolved.  This is because the legislation will recognise a broader range of dispute resolution mechanisms.  The Government will also provide subsidies where the parties opt for a registered provider, thereby facilitating access to private alternative dispute resolution services and providing a genuine choice between the AIRC and non-AIRC practitioners.

Also, as consumers of essential services, employees will benefit from measures to mitigate disruption caused by protected industrial action.

A potential cost to employees is that the proposed system will include a number of measures to protect the legitimate interests of parties affected by industrial disputation.  This may constrain protected industrial action in some instances.  However, the Government believes this is a necessary balance between the right to take protected industrial action when bargaining and the interests of affected parties.

Cost and benefits to Government

The proposed reforms will benefit the Government by promoting more harmonious employment relationships, which in turn should lead to greater economic productivity.  It will also benefit the Government by encouraging parties to resolve disputes at the workplace level and assisting to minimise the incidence of economically and socially damaging disputation. 

A cost to Government will be the establishment and maintenance of a register of dispute resolution providers.  A further cost will also be the provision of subsidies to eligible parties who choose to use a provider listed on the register.  However, these costs will be balanced by reduced expenditure on AIRC dispute resolution processes.

Summary

The proposed reforms will facilitate greater choice about how to resolve workplace level disputes and will provide more effective regulation of industrial action.

Better balance the unfair dismissal laws

Under Work Choices the Government will:

·                exempt businesses with up to, and including, 100 employees from the operation of unfair dismissal laws, as the costs of unfair dismissal cases weigh more heavily on small and medium businesses than on larger businesses;

·                better balance the unfair dismissal laws for businesses with over 100 employees so that employees covered will be required to have been employed for six months before they can pursue an unfair dismissal remedy.  This is an extension of the current three month qualifying period; and

·                streamline measures to help ease the burden of unfair dismissal on businesses by allowing the AIRC to conduct specific matters ‘on the papers’, that is, without a formal hearing.

Cost and benefits to business

Small to medium businesses will greatly benefit from the proposed reforms to unfair dismissal laws, as the proposed exemption will reduce the costs of recruitment or termination for these businesses.  These costs weigh more heavily on small to medium businesses than on larger businesses as they often do not have the necessary expertise or resources to successfully deal with an unfair dismissal claim. 

A recent survey of 900 businesses conducted by Australian Business Limited shows that employers are paying former employees $5000 - $25,000 rather than defend themselves against speculative and vexatious claims.

A study by Benoit Freyens and Paul Oslington shows that the average cost of contested dismissals can reach almost $15,000 or 35.7 per cent of annual wage costs.  These are costs small and medium sized businesses can ill afford. [11]

The Sensis Business Index for August 2005 confirms that current unfair dismissal laws are a major annoyance for small and medium businesses and inhibit jobs growth.  In total, over the past year, 28 per cent of small businesses have not hired additional employees due to fear of unfair dismissal action.  Over the past year, 20 per cent of small businesses have faced some sort of unfair dismissal action.  Half of these were threatened with action, the other half actually faced action. [12]

The MYOB Australian Small Business Survey for September 2005 similarly shows that 33 per cent of small businesses agree the current unfair dismissal laws were a reason for not recruiting staff. [13]

The results from both the Sensis Business Index and MYOB Australian Small Business Survey reinforce the importance of reforming Australia’s cumbersome unfair dismissal system which is inhibiting jobs growth.

Businesses with more than 100 employees will also benefit from the proposed reforms.  The Government will better balance the unfair dismissal laws so that employees covered will be required to have been employed for six months before they can pursue an unfair dismissal remedy.  This is an extension of the current three month qualifying period and will allow businesses more time to assess whether an employee is suitable for their business.

Businesses will also benefit from a more streamlined approach to processing unfair dismissal claims.  The AIRC will be able to deal with certain matters ‘on the papers’, that is, without a formal hearing and terminations which occur on the ground of operational requirements (redundancy) will be excluded from the unfair dismissal regime (but not from the unlawful terminational regime).  This will reduce the costs of unfair dismissal applications and allow for more timely processing of claims.

A cost to business of the proposed unfair dismissal law exemptions is that employees might instead attempt to make unlawful dismissal claims.  However, the reasons for dismissal which would be considered unlawful are already clearly prescribed within the Workplace Relations Act 1996 and will not be changed as a result of the reforms.  Therefore, businesses should already be aware of their obligations under the unlawful dismissal provisions. 

The Government will also provide $5 million for a ‘best practice’ education and training program on fair and proper employment termination practices.  This will assist employers to understand their obligations under the reformed unfair and unlawful termination of employment provisions.

Cost and benefits to employees

The proposed exemptions will reduce barriers to job creation and will benefit potential employees who may have previously been excluded from the labour market. 

Research by the Melbourne Institute of Applied Economic and Social Research at the University of Melbourne, released in October 2001, found that the present unfair dismissal laws made it difficult for the most vulnerable job seekers to find work. [14]

The research, commissioned by the Department of Employment and Workplace Relations, surveyed some 1802 small and medium businesses with less than 200 employees. 

The research showed that dismissal laws contributed to the loss of about 77, 000 jobs from businesses which used to employ staff and now no longer employ anyone.

However, the impact on jobs growth would appear to be greater than the estimates in this study as the figures do not take into account jobs that have been lost by businesses which have reduced their workforce due to the laws, but still have employees.  Nor do they include jobs which would have been created if there were no unfair dismissal laws.

The survey also showed that the laws impact negatively on the most disadvantaged job seekers.  It found that businesses were now less inclined to hire young people, the long-term unemployed, and those with lower levels of education, turning instead to casuals and others on fixed term contracts or longer probationary periods.

Employees will also benefit from a more streamlined approach to processing unfair dismissal claims.  The AIRC will be able to deal with certain matters ‘on the papers’, that is, without a formal hearing.  This will reduce the costs of unfair dismissal applications and allow for more timely processing of claims.

A cost to employees is that some employees will no longer be able to seek remedies for unfair dismissal if they are employed by a business with up to, and including, 100 employees.  However, it is important to note that employees will continue to enjoy protection against unlawful dismissal.  It will remain unlawful to dismiss an employee on the grounds of race, colour, sex, age, union membership, pregnancy, family responsibilities and a range of other factors.  An employer will still be prohibited from dismissing an employee due to the employee holding a position as a health and safety representative or being involved with a health and safety complaint or investigation.  Freedom of association laws will continue to ensure that an employer cannot dismiss, or otherwise victimise, an employee because he or she is, or is not, a member of a union.  Anti-discrimination laws will continue to protect workers against discrimination and harassment in the workplace. 

Cost and benefits to Government

The Government, along with the economy as a whole, will benefit from reforms to unfair dismissal laws.  The Government believes that the time and cost of defending an unfair dismissal claim, even one without merit, can be substantial and these costs discourage employers from putting on more staff, because they fear that if the employee turns out to be unsuitable the employer may face an unfair dismissal claim without merit.  Providing exemptions from unfair dismissal laws for businesses with up to 100 employees will remove this barrier to employment growth among small to medium businesses and could lead to a reduction in the rate of unemployment.

The Government will also benefit from a more streamlined approach to unfair dismissal processing as certain applications will be able to be dealt with ‘on the papers’, that is, without a formal hearing.  This will lead to reduced Government expenditure on AIRC unfair dismissal processing.  However, this saving will be balanced by an increase in the number of unfair dismissal applications as more employees will be covered by the federal workplace relations system.

Summary

The Government will introduce an exemption from unfair dismissal laws for businesses with up to, and including, 100 employees, as the costs of unfair dismissal claims weigh more heavily on smaller businesses which may not have the necessary expertise or resources to deal with an unfair dismissal claim.  The Government will allow larger businesses more time to assess whether an employee is suitable for their business, by requiring that an employee must have been employed for at least six months before an unfair dismissal claim can be made.  The Government will also streamline the unfair dismissal application process by enabling the AIRC to deal with certain applications ‘on the papers’.

Expand and improve the federal union right of entry regime

Right of entry provisions will be changed so as to:

·                tighten the requirements for the granting of an entry permit, including introducing a ‘fit and proper person’ test;

·                cover the field using the corporations and territories powers so that for businesses in the new system, right of entry can only be exercised under the new legislation;

·                make it clear there is no right of entry for discussion purposes where all employees are on AWAs;

·                only allow entry to investigate a breach of an AWA if the employee party to the AWA provides written consent;

·                require a union official to provide to the employer particulars of a breach that he or she is proposing to investigate;

·                confirm a union official can only access the records of union members when investigating a breach, unless an order is made by the AIRC that non-member records can be inspected; and

·                require a union official to comply with a reasonable request by an employer that the meeting or interview should be conducted in a particular room or areas of the premises and that a specified route should be taken to that venue.

The new legislation will allow for union entry permits to be either suspended or made subject to limiting conditions by the AIRC in addition to the current power to revoke a permit. 

The grounds on which a permit may be revoked will be expanded.  The revocation or suspension of a permit will be mandatory in cases where the permit holder has:

·                been found by the AIRC to have breached the prohibition on making misrepresentations about his or her powers under their right of entry permit;

·                had their right of entry under a state law cancelled, suspended or has been disqualified from exercising or applying for right of entry under a state law;

·                been ordered to pay a penalty in respect of a contravention of the right of entry provisions; and

·                when exercising a right of entry under an Occupational Health and Safety (OHS) law engaged in conduct that was not authorised by that law.

Instances of systematic abuse of right of entry laws will be limited.  The AIRC will be given the ability to make orders if it is satisfied that a union or one of its officials has engaged in improper conduct.  The type of orders the AIRC may make include revoking or suspending all permits that have been issued in respect of the union or imposing limiting conditions on some or all of the permits. 

The right of entry provisions will still allow a union permit holder entry for OHS purposes under state legislation where the union official has a federal right of entry permit and the official has complied with all requirements of the relevant state OHS legislation. 

The conscientious objection provisions of the WR Act will also be improved.  The current WR Act requires the Industrial Registrar to issue a conscientious objection certificate to an employer whose conscientious beliefs do not allow them to belong to an association.  Where an employer holds a conscientious objection certificate, unions cannot exercise right of entry to hold discussions with employees provided certain conditions are met. 

One of the conditions for obtaining a conscientious objection certificate is that all the employer’s employees must agree to the certificate being issued.  This is an unreasonable restraint on the exercise of the conscientious objection and the Government is proposing to remove this restriction.

Cost and benefits to business

This option will deliver a net benefit to business.  Constitutional corporations that are currently subject to union entry under multiple federal and state industrial laws and/or instruments will be covered by a single, national right of entry scheme, affording them greater certainty as to their rights and responsibilities.  Under this option, employers and occupiers of premises will be protected from union officials exploiting regulatory overlap to ignore certain statutory responsibilities or unlawfully exercise additional rights.  Better controls on permits and an enhanced compliance regime, encompassing a range of new civil penalty provisions, will help ensure that right of entry is exercised responsibly within the new system.   

This option will reduce the extent of disruptive union entry into Australian workplaces, contributing to more productive, profitable and higher pay enterprises.  This objective will be achieved by improving clarity and strengthening control and compliance mechanisms within the new system, in the manner discussed above, and by imposing further explicit limitations on entry.  For example, unions will be required to demonstrate reasonable evidence of a suspected breach affecting their membership prior to entry.  Where the union entry is for the purposes to holding discussions with employees, employers and occupiers will have greater control regarding the location of the discussions, while the AIRC will have the power to make orders addressing excessive or disruptive recruitment conduct. 

Cost and benefits to employees

This option will benefit employees.  Providing for the AIRC to make orders in relation to excessive or disruptive recruitment conduct will help to protect employees’ rights to freedom of association, by preventing instances of harassment to take out or retain union membership during repeated workplace visits. 

Where entering to investigate a suspected breach, union officials’ access to non-member records would be restricted, in most instances.  This is consistent with the Government’s view that unions should operate as membership-based service organisations.  It should help unions to provide better services to their members, while ensuring the privacy of non-members.  The Office of Workplace Services (OWS) will investigate breaches affecting non-members. 

Cost and benefits to Government

The option seeks to expand the federal right of entry regime by ‘covering the field to the exclusion of state industrial laws and instruments.  This could see some costs shifted from state governments to the Australian Government.  For example, there may be requirement to administer an increased number of federal permits.  This option also introduces new statutory functions for federally funded bodies, including the AIRC (eg issuing orders for abuse of the permit system); the Industrial Registrar (eg approving entry notices, undertaking ‘fit and proper person’ tests in relation to permit issue); and the Federal Court (issuing interim injunctions to prevent breaches of new and existing civil penalty provisions). 

Costs should be more than fully offset by an extensive range of anticipated benefits to the Australian Government and economy, in respect of this option.  Benefits may include savings derived from reduced regulatory overlap, and the administration of a simpler and more harmonious regime.  Increased certainty regarding rights and responsibilities, and more responsible use of permits, should help to avoid right of entry disputes.  The option would also reduce unnecessary and disruptive union entry to workplaces, resulting in more productive, profitable and higher pay enterprises.

Summary

This option is expected to reduce the extent of disruptive union entry into Australian workplaces, contributing to more productive, profitable and higher pay enterprises, to the benefit of employers , employees, and Government.

Impact on Small Business

Small business will benefit significantly from Option B, in that it will introduce a simple and more universally applicable and understood set of minimum wages and conditions, as opposed to the myriad of state and federal awards that currently exist.  This will facilitate compliance.  This will greatly simplify the negotiation of agreements, thereby increasing small business access to the flexibilities to be gained by tailoring arrangements to the needs of the workplace.  In addition, a lodgment-only process for all agreements will remove a significant layer of complexity and will reduce the uncertainty and frustration caused by processing delays.

Following the reforms, it is estimated that the federal system will cover up to 85 per cent of employees [15] .  About 15 per cent of employees, mainly those employed by small non-incorporated businesses, will not be covered by the federal legislation relying on the corporations power.  Unincorporated businesses currently in the federal system will be able to remain covered by federal provisions based on the conciliation and arbitration power for a transitional period of up to five years while they consider whether to incorporate and remain in the federal system, or move into the relevant state system.  This will help ensure minimum disruption and loss of flexibility for those employers and their employees.  However, it is important to note that 49 per cent of small businesses that employ staff are already incorporated and small businesses operating with the ACT, NT or Victoria will also fall within the federal jurisdiction [16] .

To ensure that small business operators are not confused by the proposed changes, a targeted awareness and education campaign (developed by the Department of Employment and Workplace Relations in consultation with the Office of Small Business) will be undertaken.  Additional assistance and advice will be available through the OEA, the Department of Employment and Workplace Relations, and employer organisations.

Consultation

There has been informal consultation with a large number of key stakeholders.  They include a range of industry organisations and individual enterprises, unions, and legal firms.  Business groups have generally called for a unified system, further simplification of awards and simplified agreement processes.  Some have suggested more radical reform.  Unions have generally called for retention of the current system, with no contraction of the AIRC’s role and no further reduction in allowable award matters. 

The proposed changes to the workplace relations system were discussed with State and Territory Ministers at the August 2005 meeting of the Workplace Relations Ministers Council and the June 2005 meeting of the National Workplace Relations Consultative Committee.  Further consultation about the proposed reforms is scheduled to take place at a meeting of the Committee on Industrial Legislation (COIL) in November 2005. 

Conclusion and Recommended Option

The underlying principle of the Government’s workplace relations reform agenda since 1996 has been the establishment of a genuine safety net, with the actual conditions of employment negotiated at the workplace through agreement between employers and employees.  Unfortunately, the current safety net is not a genuine one and agreement making remains overly costly and bureaucratic.

The reforms proposed in Options B will balance employee rights with sound economic management.  They will deliver a much simplified system based on a genuine safety net of minimum wages and conditions.  They will reduce unnecessary regulation and make significant progress towards implementing a single, unified workplace relations system for Australia.

The recommendation to Parliament is that Option B be agreed.

Transitional Arrangements

As a result of the legislation, all employees of constitutional corporations currently covered by state industrial relations systems will move into the federal system.  The terms of former state awards and agreements will become enforceable under the federal system as transitional agreements. 

Former state agreements will operate under federal legislation in a similar way to federal agreements.  They will keep their nominal expiry date, and will continue to operate until terminated or replaced by a new agreement. 

Some content in former state agreements, such as union preference clauses, that is currently prohibited, or inhibits the ability of the parties to bargain, will be prohibited.

Constitutional corporations that have employees with terms and conditions covered by a state award will have their awards preserved as transitional agreements between the relevant employers and employees.  However, where employees on former state awards have conditions less than the Fair Pay and Conditions Standard, the more generous conditions will apply.  This will protect the existing terms and conditions of employment of employees currently covered by state awards other than prohibited content.  These transitional agreements will cease to operate after three years. 

There will be a separate transitional system for employers and employees currently in the federal system where the employer will not be covered by the new federal system.

This transitional system will operate for a period of five years and be based on the conciliation and arbitration power for a limited period.  This transitional arrangement will provide employers that are unincorporated businesses currently in the federal system a chance to decide whether they want to incorporate and remain in the federal system.

Current federal collective agreements in settlement of an industrial dispute will continue to operate after commencement of the new system.  These agreements will run for up to five years.  Non-constitutional corporations that are part of the transitional system will not be able to negotiate new agreements in the new national system.

At the end of the transitional period transitional agreements will cease to operate, and any unincorporated business remaining in the federal system will automatically revert to the relevant state industrial relations system. 

Awards that bind a non-constitutional corporations will become ‘transitional’ awards at the commencement of the new system.  The transitional awards will apply only to non-constitutional corporations covered by awards in the current federal system.

At the end of the transitional period transitional awards covering will cease to operate, and any unincorporated business remaining in the federal system will automatically revert to the relevant state industrial relations system. 

Implementation and Review

The proposal requires substantial amendment to the WR Act.  The Department of Employment and Workplace Relations will monitor and evaluate the effect of such legislative change.

Broadly speaking, implementation will require carefully developed transitional arrangements which focus on guaranteeing employee protections and a comprehensive targeted communication strategy to widely publicise the reforms.

 



NOTES ON CLAUSES

Clause 1 - Short title

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

Clause 2 - Commencement 

2.         This clause would specify when the various provisions of the Bill are proposed to commence.  The time of commencement for particular provisions would be set out in a table in subclause 2(1). 

3.         Item 1 of the table would provide that the preliminary provisions of the Bill (short title, commencement and effect of Schedules) would commence on Royal Assent.

4.         Item 2 of the table would provide that Schedule 1 (which contains the principal amendments of the WR Act) would commence on a single day to be fixed by Proclamation.  However, if any provisions in Schedule 1 are not proclaimed to commence within six months of the Act receiving Royal Assent, they would commence on the day following that period of six months.  It is expected that Schedule 1 would be proclaimed to commence before the expiration of the 6 month period.

5.         Item 3 of the table would provide that Schedule 2 would commence in the same way as Schedule 1.  It is intended that this Schedule would be proclaimed to commence prior to the reform commencement (ie before Schedule 1 and the principal amendments to the WR Act commence).  This would allow state registered associations to transitionally register before the substantive changes to the WR Act commence.  As some or all of their members would become covered by the federal system, this would enable the associations to represent those members under the federal system from the reform commencement.

6.         Item 4 of the table would provided that Schedule 3 (school-based trainees) would commence in the same way as Schedule 1.  It is expected that this Schedule would be proclaimed to commence on 1 January 2006.  This is to ensure that the provisions are operational for the 2006 school year.

7.         Item 5 of the table would provide that Part 1 of Schedule 4 to the Bill (power to make transitional and consequential regulations) would commence on Royal Assent.  This would enable the making of regulations which need to be made so that they can commence at the same time as other provisions of the Bill. 

8.         Item 6 of the table would provide that Part 2 of Schedule 4 to the Bill (transitional, application and savings provisions) would commence at the same time as Schedule 1 to the Bill. 

9.         Item 7 of the table would provide that Schedule 5 (renumbering of the Act) would commence in the same way as Schedule 1.  It is expected that Schedule 5 would be proclaimed to commence before the expiration of the 6 month period but after the commencement of any amendments made to the Act by regulations.

10.       Subclause 2(2) would provide that Column 3 of the table contains additional information that is not part of the amendment Act.  Information in this column could be added to or edited in any published version of this Act. 

Clause 3 - Schedule(s)

11.       This clause would provide that an Act that is specified in a Schedule is amended or repealed as set out in that Schedule, and any other item in a Schedule operates according to its terms. 



Schedule 1 ~ Main Amendments

Item 1 - section 3

1.                   Proposed item 1 would repeal section 3 in the pre-reform Act and replace it with a new principal object section.

Proposed section 3 - Principal object

2.                   Proposed section 3 would describe the principal object of the Workplace Relations Act 1996 (WR Act) that reflects the proposed more flexible, simpler and fairer system of workplace relations for Australia

Item 2 - Section 4

3.                   Proposed item 2 would repeal section 4 in the pre-reform Act and replace it with a new definitions section. 

4.                   Proposed subsection 4(1) would provide that in this Act the following definitions apply unless a contrary intention appears.  This means that the replacement definitions in subsection 4(1) would apply across the whole Bill unless expressly or impliedly displaced by the context in which they are used. 

5.                   Proposed subsection 4(1) contains a number of proposed ‘sign post’ definitions including those relating to agreements, awards and the Standard.  These definitions would refer the reader to particular provisions which provide substantive definitions.

6.                   Proposed ‘sign post’ definitions relating to awards include definitions for:

·                allowable award matters;

·                award rationalisation request;

·                award simplification process;

·                pre-reform award;

·                preserved award entitlement;

·                preserved award term.

7.                   Proposed ‘sign post’ definitions relating to the Standard include definitions for the:

·                APCS;

·                Australian Fair Pay and Conditions Standard (the Standard);

·                new APCS;

·                preserved APCS.

8.                   Otherwise, only key definitions are explained below.  The definitions appear in alphabetical order in the Bill.  The key definitions that are explained here are in alphabetical order.

Definitions - Section 4(1)

9.                   The proposed definition of applies to employment generally is used in the definition of State or Territory industrial law in subsection 4(1) and in paragraph 7C(1)(a) (which would exclude the operation of such laws to employers and employees within the general constitutional coverage of the amended WR Act).  The definition would be used for the purpose of describing certain State and Territory laws.  It would identify a State or Territory law that applies to all employers and employees in the relevant State or Territory even though:

·                for constitutional reasons, the law does not or is not intended to apply to certain employers and employees (for instance, employers and employees bound by federal awards or Commonwealth employers and employees);

·                some categories of employers and employees are excluded from the operation of the law (for instance, by industry sector or by classification of employee);

·                the law applies to other persons (for instance, independent contractors or industrial arbitrators); or

·                an exercise of power under the law does not affect all the employers and employees (or other persons) to whom the law applies (for instance, an exercise of power to make an award or to dismiss an unfair dismissal application).

10.               The proposed definition would encompass laws such as the industrial relations Acts named in paragraph (a) of the definition of State or Territory industrial law in subsection 4(1), a long service leave law applying to all employers and employees subject to exclusions (such as for public sector employers and employees), a law applying minimum conditions of employment for the relevant State or Territory and a law that provides leave entitlements to all employees except casual employees.

11.               The proposed definition would not encompass a law which, for instance, applies only to an industry sector (such as a law regulating employment conditions in the coal mining industry or a public sector employment law) and to a law that regulates only one employer and its employees (such as a law establishing a body corporate and making provision for the determination of conditions of employment of employees of that body corporate).

12.               The proposed definition of Australian-based employee would be used for the purposes of the provisions of the amended WR Act which would give extraterritorial operation to provisions of the amended WR Act (see proposed section 7AA). 

13.               Proposed paragraph (a) of the definition would specify as an Australian-based employee an employee whose primary place of work is in Australia, or in Australia’s exclusive economic zone or in, on or over Australia’s continental shelf (as defined in subsection 4(1)).  The expression ‘primary place of work’ would not be defined.  An Australian-based employee would be an employee working primarily (although not necessarily exclusively) in Australia or the defined areas of Australian waters.

14.               Proposed paragraph (b) of the definition would specify as an Australian-based employee a Commonwealth employee or an employee of a Commonwealth authority (as defined in subsection 4(1)).  An exception would be made for employees engaged outside Australia and the external Territories to perform duties outside Australia and those Territories (for instance, locally engaged staff engaged under section 74 of the Public Service Act 1999 ).

15.               Proposed paragraph (c) of the definition would specify as an Australian-based employee an employee prescribed by the regulations as an Australian-based employee.  This would allow regulations to be made in cases where, for instance, there is doubt about whether the primary place of work of a class of employees is in Australia.

16.               The proposed definition of Australian employer would be used for the purposes of the provisions of the amended WR Act which would give extraterritorial operation to provisions of the amended WR Act (see proposed section 7AA). 

17.               Proposed paragraphs (a) to (e) of the definition would specify as Australian employers the Commonwealth and the entities listed in the definition of employer in proposed subsection 4AB(1) which are formed in Australia.  Proposed paragraph (f) of the definition would specify as an Australian employer an employer that carries on activities in Australia (or Australia’s exclusive economic zone or continental shelf) whose central management and control is in Australia.  The employers who would be covered by paragraphs (a) to (f) of the definition would be the employers within the general constitutional coverage of the amended WR Act who have a substantial connection with Australia.

18.               Proposed paragraph (g) of the proposed definition would authorise the making of regulations to prescribe an employer as an Australian employer.  This would allow regulations to be made to prescribe employers as Australian employers in other cases where it is considered desirable that the amended WR Act should apply to the employers as Australian employers on the basis of a connection with Australia. 

19.               The proposed definition of Australia ’s continental shelf would be used for the purposes of the provisions of the amended WR Act which would give extraterritorial operation to certain provisions of the amended WR Act (see proposed section 7AA and the proposed definitions of Australian-based employee and Australian employer ). 

20.               The proposed definition of Australia ’s exclusive economic zone would be used for the purposes of the provisions of the amended WR Act which would give extraterritorial operation to certain provisions of the amended WR Act (see proposed section 7AA and the proposed definitions of Australian-based employee and Australian employer ). 

21.               The proposed definition of award at subsection 4(1) is an award made by the AIRC under section 118E or a pre-reform award.

22.               The proposed definition of Commonwealth authority would define the expression to mean both a body corporate established for a public purpose under a Commonwealth law and a body incorporated under a law in which the Commonwealth has a controlling interest.  The proposed definition would be used in a number of provisions of the amended WR Act, including the definition of employer in proposed subsection 4AB(1) (specifying the employers who would fall within the general constitutional coverage of the amended WR Act).

23.               The proposed definition of constitutional corporation would define the expression to mean a corporation to which paragraph 51(xx) of the Constitution (the corporations power) applies.  The corporations power applies to a trading or financial corporation formed within the limits of the Commonwealth and to a foreign corporation.  The proposed definition would be used in a number of provisions of the amended WR Act, including the definition of employer in proposed subsection 4AB(1) (specifying the employers who would fall within the general constitutional coverage of the amended WR Act).

24.               The proposed definition of constitutional trade or commerce would define the expression to mean trade or commerce between Australia and a place outside Australia, among the States, between a State and a Territory, between 2 Territories or within a Territory.  This is trade and commerce to which paragraph 51(i) of the Constitution applies (the interstate and overseas trade and commerce power), and trade and commerce which the Commonwealth can regulate under section 122 of the Constitution (the Territories power).  The proposed definition would be used in the definition of employer in proposed subsection 4AB(1) (specifying the employers who would fall within the general constitutional coverage of the amended WR Act).

25.               The proposed definition of Peak Council would be a    national or State council or federation that is effectively representative of a significant number of organisations representing employers or employees in a range of industries.  The only change from the existing definition in the WR Act is the addition of the words 'or State'.  This would enable State council or federations who meet the requirements of this definition to have the same rights in relation to the representation of parties before the AIRC, as set out in section 42 of the WR Act, as national councils or federations.

26.               The proposed definition of State or Territory industrial law in subsection 4(1) would be used in the provision of the amended WR Act excluding the operation of certain State and Territory laws (see proposed paragraph 7C(1)(a)) and in other provisions of the amended WR Act, including provisions dealing with union right of entry and preserved State instruments.  It would identify certain State and Territory laws dealing wholly, or in a substantial aspect, with industrial matters, and laws prescribed for the purposes of the definition.

27.               Paragraph (a) of the proposed definition would specify the present industrial relations Acts of those States that have not referred industrial relations power to the Commonwealth, as amended from time to time (see section 10A of the Acts Interpretation Act 1901 ).

28.               Paragraph (b) of the proposed definition would specify any State or Territory Act which applies generally to employers and employees in the State or Territory (and not, for instance, only to a particular industry sector - see the proposed definition of applies to employment generally ) and which has a main purpose of regulating industrial matters (such as settling industrial disputes, regulating industrial action, determining minimum or other terms and conditions of employment, providing for employment agreements and regulating termination of employment or freedom of association). 

29.               Paragraph (c) of the proposed definition would specify legislative instruments (such as regulations) made under a State or Territory Act described in either paragraph (a) or paragraph (b) of the definition of State or Territory industrial law

30.               Paragraph (d) of the proposed definition would authorise the making of regulations to prescribe a State or Territory law (whether an Act or other law, and including a provision of a law) as a State or Territory industrial law

Item 3 - After section 4

31.               This item would insert new sections 4AA, 4AB and 4AC which are explained below.

New section 4AA - Employee

32.               Proposed subsection 4AA(1) would operate in conjunction with proposed section 4AB (which defines employer for the purposes of the amended WR Act) to provide the constitutional underpinnings for much of the amended WR Act.  Subsection 4AA(1) would define an employee for the purposes of the amended WR Act as, in essence, an individual so far as he or she is employed by an employer.  Subsection 4AB(1) would define employer as listed persons or entities whose industrial rights and obligations can be regulated by the Commonwealth.  Subsection 4AA(1) would therefore define employee as a person employed by one of the persons or entities listed in proposed subsection 4AB(1). 

33.               Much of the amended WR Act (for example, the provisions in relation to the Standard, awards, agreement making and unfair dismissal, and most of the industrial action provisions) would operate by reference to the meanings of employer and employee in proposed sections 4AA and 4AB.  In the substantive provisions, industrial rights and obligations would be imposed on employers and employees (such as the Standard), and references to employer and employee would have the meaning given by subsections 4AA(1) and 4AB(1).  By this mechanism, the provisions imposing the industrial rights and obligations would be confined to regulation of rights and obligations within Commonwealth legislative power.

34.               The legislative note to subsection 4AA(1) would make clear that the definition of employee in that subsection (read with the definition of employer in subsection 4AB(1)) would not cover all of the employees whose industrial rights and obligations would be regulated by the amended WR Act.  Part XV would extend the application of the amended WR Act to employees and employers in Victoria who would not fall within the definitions in subsections 4AA(1) and 4AB(1) (supported by the industrial relations powers referred to the Commonwealth by the Commonwealth Powers (Industrial Relations) Act 1996 (Vic)).

35.               Proposed subsection 4AA(2) would provide an exception to the meaning of employee given by subsection 4AA(1).  It would provide that a reference to employee would have its ordinary meaning if the reference is listed in clause 2 of Schedule 1.  This list would be able to be amended by regulations (see proposed clause 5 of Schedule 1). 

36.               The list would be included in the amended WR Act because the word employee would be used in a range of contexts in the amended WR Act and, in some of those contexts, the word would be used in its ordinary meaning of a person employed by another person or an entity. 

37.               For instance, Part IX (Right of entry) and Part XA (Freedom of association) would use the words in their ordinary meaning because they operate in relation to premises and conduct respectively (not employers and employees) and the constitutional support for those Parts depends on limitations within those Parts as to the premises and conduct regulated by those Parts.  Thus the meaning of employer and employee would not be, and would not need to be, limited to the meaning given by proposed subsections 4AA(1) and 4AB(1). 

38.               Other examples of the use of the word ‘employee’ in its ordinary meaning would be references to State or Territory laws dealing with employees, and references to associations or organisations of employees.  In both cases, the reference would be to employees generally, not to employees of the employers listed in proposed subsection 4AB(1).

39.               The list in clause 2 would be used to clarify the intention in some cases of use of the ordinary meaning of employee , but not in every case where the word is not used in its constitutionally linked meaning.  Proposed subsection 4AA(2) would be expressed not to limit the circumstances in which a contrary intention may appear for subsection 4AA(1) purposes.  In many instances, the context in which the word employee is used would indicate a sufficiently clear contrary intention for the purposes of subsection 4AA(1) so that the word would in any case be construed according to its ordinary meaning. 

40.               In addition, in some parts of the amended WR Act (such as Part VIA in relation to unlawful termination and Part XV in relation to Victoria), employee would in any case be defined differently for the purposes of the provisions in question (generally because the constitutional support for the provisions would not be the same as for most of the amended WR Act).  In those cases, a contrary intention for the purposes of subsection 4AA(1) would be expressed.

41.               Whether or not employee is used in the constitutionally linked meaning or the ordinary meaning, proposed section 4AA would provide that employee extends to a person usually employed (in the ordinary sense) and does not extend to a person on a vocational placement (see proposed subsections 4AA(1), (3) and (4)). 

New section 4AB - Employer

42.               As explained in relation to proposed section 4AA, proposed section 4AB would operate in conjunction with proposed section 4AA (which would define employee for the purposes of the amended WR Act) to provide the constitutional underpinnings for much of the amended WR Act.  Proposed subsection 4AB(1) would define employer as listed persons or entities whose industrial rights and obligations may be regulated by the Commonwealth.  The inclusion of the persons and entities listed in subsection 4AB(1) would rely on the corporations power (paragraph 51(xx) of the Constitution), the Commonwealth’s power to regulate Commonwealth employers and employees, the trade and commerce power (paragraph 51(i) of the Constitution) and the Territories power (section 122 of the Constitution). 

43.               Legislative note 1 to proposed subsection 4AB(1) would note that, for the purposes of proposed paragraph 4AB(1)(f), Australia includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands.  This means that the definition of employer would not extend to an employer carrying on an activity in an external Territory unless the employer falls within one of the paragraphs of proposed subsection 4AB(1) other than paragraph (f). 

44.               Legislative note 2 to proposed subsection 4AB(1) would perform the same function as the legislative note to proposed subsection 4AA(1).

45.               Proposed subsection 4AB(2) would perform the same function, in relation to employer , as corresponding subsection 4AA(2) performs in relation to employee .  The explanatory notes in relation to subsection 4AA(2) apply equally to the operation of subsection 4AB(2).

46.               Whether or not employer is used in the constitutionally linked meaning or the ordinary meaning, proposed section 4AB would provide that employer extends to a person or entity who is usually an employer (in the ordinary sense) (see the references to ‘usually employs’ in each paragraph of proposed subsection 4AB(1), and proposed subsection 4AB(3)).

New section 4AC - Employment

47.               Proposed subsection 4AC(1) would provide that, subject to a contrary intention, employment means employment of an employee by an employer where employee and employer have their constitutionally linked meaning (the meanings given by subsections 4AA(1) and 4AB(1)).

48.               Proposed subsection 4AC(2) would perform the same function, in relation to employment , as corresponding subsections 4AA(2) and 4AB(2) perform in relation to employee and employer .  The explanatory notes in relation to subsection 4AA(2) apply equally to the operation of subsection 4AC(2).

Item 4 - Section 4A

49.               Section 4A presently gives effect to Schedule 1B to the WR Act.  Section 4A would be repealed and replaced with a new provision that would give effect to Schedule 1B and to the new Schedules to the WR Act.  The note explains the subject matter of each Schedule. 

Item 5 - Sections 5 and 5AA

50.               This item would repeal sections 5 and 5A of the WR Act.  Those provisions extend the operation of the present provisions of the WR Act in reliance on the interstate trade and commerce power in paragraph 51(i) of the Constitution.  Under the amended Act, the trade and commerce power would be attracted by paragraph (d) of the definition of employer in subsection 4AB(1).

Item 6 - Section 7

51.               This item would insert new sections 7 and 7AA which are explained below.

Section 7 - Modifications for Christmas Island and Cocos (Keeling) Island

52.               Proposed section 7 would authorise the making of regulations modifying the operation of the amended WR Act to the Territories of Christmas Island and Cocos (Keeling) Islands.  This would enable a modified workplace relations regime to be applied in those Territories if circumstances in those Territories make modification necessary or desirable. 

53.               Under the present WR Act, section 7 provides an equivalent regulation making power in relation to Christmas Island but not Cocos (Keeling) Islands.  The proposed provision would extend the power to make modifications of the WR Act for Cocos (Keeling) Islands.  This would mean that the capacity to modify the WR Act would be available for both external Territories to which the WR Act applies.  Where appropriate, the same modifications could be made for both Territories, although the regulation making power would extend to making different modifications for each Territory or making modifications for one but not the other.

54.               Proposed section 7 would not expressly extend the amended WR Act to Christmas Island (as it does under the present WR Act).  The amended WR Act would apply to persons, acts, omissions, matters and things in Australia, including Christmas Island and Cocos (Keeling) Islands (see legislative Note 1 to proposed subsection 7AA(1)).  It is not necessary to make provision to extend the amended WR Act to Christmas Island or Cocos (Keeling) Islands.

New section 7AA - Extraterritorial application

55.               In the absence of express provision, the amended WR Act would generally apply only to persons, acts, omissions, matters and things in and of Australia.  Australia, for this purpose, includes the coastal sea and Christmas Island and Cocos (Keeling) Island (see legislative Note 1 to proposed subsection 7AA(1)).   

56.               Various provisions of the Bill would extend the application of the amended WR Act to persons, acts, omissions, matters and things outside Australia.  Proposed subsection 7AA(1) would insert a table showing the provisions which would be given extraterritorial application and identifying each extraterritorial application provision.

57.               Broadly, the scheme of the extraterritorial application provisions would be to apply minimum Australian terms and conditions of employment (the Standard and awards) to Australian-based employees of Australian employers who are outside the Australian exclusive economic zone and continental shelf.  But the provisions would also allow workplace agreements to be made by Australian employers with non-Australian-based employees, and by non-Australian employers with Australian-based employees, wherever the work was to be performed.  In those cases, the Standard would apply in respect of that employment. 

58.               Equal remuneration orders would be available in relation to remuneration regulated by Australian law or a contract made in Australia.  Termination of employment remedies would be available to an Australian-based employee wherever the termination conduct occurred.  Freedom of association remedies would be available in relation to conduct by a registered organisation or an Australian-based employee (or a group including either of these) which adversely affects an Australian employer, and in relation to conduct by an Australia employer (or a group including an Australian employer) which adversely affects an Australian-based employee.  Right of entry by workplace inspectors and unions, and industrial action remedies, would not be available outside Australia and Australia’s exclusive economic zone and continental shelf.

59.               The extraterritorial application of the amended WR Act would be within recognised limits under international law - that is, in general terms, there must be a sufficient connection between the law and Australia.  However, as with any extraterritorial application of law, an inconsistency might arise between the provisions of the amended WR Act and the legislation of a country outside Australia in whose territory work was performed.  In those circumstances, it may not be possible to enforce the provisions of the amended WR Act. 

60.               Special provision would be made for application of the amended WR Act in the waters of the Australian exclusive economic zone and continental shelf.  The extraterritorial extensions would apply in the exclusive economic zone only to employees of Australian employers.  However, regulations could extend the operation of provisions of the amended WR Act to other employees in the exclusive economic zone.  In making regulations, account would be taken of Australia’s international law obligations in relation to foreign-flagged ships and foreign-registered aircraft.

61.               Any extraterritorial application of the provisions of the amended WR Act to employees in, on or over the continental shelf beyond the exclusive economic zone would be prescribed by regulation.  In making regulations, account would be taken of Australia’s international law obligations in relation to foreign-flagged ships and foreign-registered aircraft and its obligations in relation to matters concerning the continental shelf (including under agreements with other countries in relation to particular areas of the continental shelf).

62.               Provisions of the amended WR Act (sections 89C and 115B) would also authorise the making of regulations to dis-apply the Standard or awards (or both) to employees in Australia on the basis of insufficiency of connection between the employment and Australia (for example, flight crew of a foreign airline who transit in and out of Australia).

63.               Proposed subsections 7AA(2) and (4) would authorise the making of regulations modifying the operation of the amended WR Act to all or parts of Australia’s exclusive economic zone or the continental shelf beyond the exclusive economic zone.  This would enable a modified workplace relations regime to be applied in those areas of waters if the circumstances in those areas make modification necessary or desirable.  The modifications could be made in relation to different parts of the exclusive economic zone and continental shelf (see proposed subsections 7AA(3) and (5)).

64.               Proposed subsection 7AA(6) would define modifications to include additions, omissions and substitutions so that a broad range of modifications would be authorised by subsections 7AA(2) and (4).

65.               Proposed subsection 7AA(6) would also provide a specific definition of this Act for the purposes of section 7AA.  This is because the definition of this Act in subsection 4(1) (which would otherwise apply) does not extend to the Registration and Accountability of Organisations Schedule and regulations made under it.  The specific definition would ensure that subsections 7AA(2) and (4) would authorise modifications of that Schedule and those regulations.

Item 7 - Section 7B

Item 8 - At the end of section 7B

66.               Item 7 would make a minor amendment consequential on the amendment made by Item 8.

67.               Item 8 would insert a proposed subsection 7B(2) that deals with the application of Criminal Code

68.               Proposed subsection 7B(2) would displace the application of Part 2.7 of the Criminal Code to the extent that Part 2.7 would otherwise be relevant to the amended WR Act.  Part 2.7 provides for the geographical jurisdiction applicable to offences under Commonwealth laws.  Proposed section 7AA and the extraterritorial application provisions mentioned in that section, and proposed subsections 86(6) and (7), would implement a scheme for the extraterritorial application of the amended WR Act.  That scheme would be appropriate to the workplace relations regime that would exist under the amended WR Act.  That scheme would extend to the offence provisions of the amended WR Act and it would not be necessary or appropriate to rely on the operation of Part 2.7 of the Criminal Code in relation to the application of those provisions.

Item 9 - At the end of Part I

69.               This item would insert new sections 7D, 7D and 7E which are explained below.

New section 7C - Act excludes some State and Territory laws

70.               Proposed section 7C would ensure that the amended WR Act would operate to the exclusion of present and future State and Territory industrial regimes in their application to employers and employees who would fall within the general constitutional coverage of the amended WR Act (that is, employers and employees within the meaning of proposed subsections 4AA(1) and 4AB(1)). 

71.               This object would be achieved, first, by the exclusion by  proposed paragraph 7C(1)(a) of  a State or Territory industrial law in its application to constitutionally covered employers and employees. 

72.               The proposed definition of State or Territory industrial law in subsection 4(1) would specify the present industrial relations Acts of the States by name, and paragraph 7C(1)(a) would exclude those Acts in their application to constitutionally covered employers and employees.

73.               The proposed definition would also specify any State or Territory Act which applies generally to employers and employees in the State or Territory and which has a main purpose of regulating industrial matters (such as settling industrial disputes, regulating industrial action, determining minimum or other terms and conditions of employment, providing for employment agreements and regulating termination of employment or freedom of association).  Paragraph 7C(1)(a) would therefore also exclude the application (to constitutionally covered employers and employees) of State or Territory Acts, other than the Acts mentioned by name in the definition of State or Territory industrial law , that deal wholly with the regulation of industrial matters or contain substantial provision for the regulation of industrial matters.

74.               The proposed definition of State and Territory industrial law would also specify legislative instruments (such as regulations) made under a State or Territory Act (mentioned by name or not) described in the definition, and State or Territory laws prescribed for the purpose.  These laws would therefore also be excluded by paragraph 7C(1)(a) in their application to constitutionally covered employers and employees.

75.               Proposed paragraphs 7C(1)(b), (c), (d) and (e) would exclude the application of State or Territory laws dealing with certain other industrial matters in their application to constitutionally covered employers and employees.  The excluded laws would be laws applying to employers and employees generally which deal with forms of leave other than long service leave and laws providing for equal remuneration and unfair contracts remedies and for union right of entry.  These exclusions would apply to any provision of an Act or other law (such as regulations).  They would apply even if the law was not, or was not contained in, a State or Territory industrial law as defined in subsection 4(1).

76.               The Commonwealth Powers (Industrial Relations) Act 1996 (Vic) would not be excluded by the operation of proposed subsection 7C(1).  That Act would not itself regulate workplace relations and would not be a State or Territory industrial law .  In any case, subsection 7C(1) would exclude State and Territory laws only so far as they would otherwise apply in relation to a constitutionally covered employee or employer.  The referral of matters to the Commonwealth by the Victorian Commonwealth Powers Act does not apply to employees or employers whether constitutionally covered or not (it provides powers to the Commonwealth) but, in any case, the Victorian Commonwealth Powers Act refers matters only to the extent not otherwise within Commonwealth legislative power (and constitutionally covered employers and employees are within Commonwealth legislative power).

77.               Proposed subsection 7C(2) would make clear that certain State or Territory laws that might otherwise be excluded in their application to constitutionally covered employers and employees would be intended to apply to constitutionally covered employers and employees. 

78.               Proposed paragraph 7C(2)(a) specifies a law dealing with the prevention of discrimination or the promotion of EEO (or both) as a law which would not be excluded by proposed subsection 7C(1).  But this would apply only where the law is not itself, or is not contained in, a State or Territory industrial law (as defined in subsection 4(1)).  The proposed paragraph would, for instance, save the application (to constitutionally covered employers and employees) of State and Territory anti-discrimination legislation (such as the Anti-Discrimination Act 1977 (NSW) and the Equal Opportunity Act 1994 (WA)).  However, it would not, for instance, save the application to those employers and employees of provisions contained in State industrial relations Acts which prohibit termination of employment on the grounds of sex, race, pregnancy or the like.

79.               The reference to EEO in proposed paragraph 7C(2)(a) would be read in its ordinary meaning which is ‘a government policy to ensure that people with equal ability to do a job will have an equal chance of being hired for or promoted to it, meaning that extraneous factors such as sex, race, ethnic origin or marital status will not influence their chances of recruitment or promotion’ ( Macquarie Dictionary , revised 3 rd edition). 

80.               Proposed paragraph 7C(2)(b) would authorise the making of regulations to prescribe a law (whether an Act or other law, and including a provision of a law) of a State or Territory as a law which is not excluded by proposed subsection 7C(1).

81.               Proposed paragraph 7C(2)(c) would provide that a law dealing with a matter described in proposed subsection 7C(3) (a non-excluded matter ) would not be excluded by proposed subsection 7C(1).

82.               Proposed subsection 7C(3) would list a range of non-excluded matters including, for instance, workers compensation, occupational health and safety, long service leave, jury service leave and industrial action affecting essential services.  Laws dealing with those matters regulate relationships between employers and employees and, in the absence of the proposed subsection, some of these laws would, and others might, have been excluded in their application to constitutionally covered employers and employees by proposed subsection 7C(1).  Paragraph 7C(2)(c), read with subsection 7C(3), would ensure that laws dealing with the non-excluded matters would apply to constitutionally covered employers and employees.

83.               The legislative note to subsection 7C(3) would deal with union right of entry under a State or Territory occupational health and safety law.  Paragraph 7C(1)(e) would exclude State or Territory laws providing for union right of entry.  However, paragraph 7C(2)(c), read with paragraph 7C(3)(c), would save State or Territory laws dealing with occupational health and safety, including union right of entry under an occupational health and safety law.  The legislative note would note that, despite this, union right of entry under a State or Territory occupational health and safety law would be subject to the requirements imposed by proposed Part IX.

84.               The application to constitutionally covered employers and employees of laws described in proposed subsection 7C(2) (including laws dealing with the non-excluded matters) would be subject to proposed subsection 7C(4) (regulations), proposed section 7D (exclusion by award or workplace agreement) and inconsistent provisions elsewhere in the amended WR Act.

85.               Proposed subsection 7C(4) would authorise the making of regulations to prescribe a State or Territory law as a law which is excluded by the operation of the amended WR Act.  This provision would allow a law to be prescribed for the purpose of exclusion without prescribing it as a State or Territory industrial law (a definition which would be used in the amended WR Act in contexts other than that of excluding State and Territory laws). 

86.               Proposed subsection 7C(5) would provide a specific definition of this Act for the purposes of section 7C.  This is because the definition of this Act in subsection 4(1) (which would otherwise apply) does not extend to the Registration and Accountability of Organisations Schedule and regulations made under it.  The specific definition would ensure that State or Territory laws could be excluded by that Schedule and those regulations.

New section 7D - Awards, agreements and Commission orders prevail over State and Territory laws etc

87.               Proposed subsection 7D(1) would provide that an award or workplace agreement prevails over a State or Territory law, a State award or a State employment agreement to the extent of any inconsistency.  For this purpose a ‘State award’ includes an award, order, decision or determination of a State industrial authority (see definitions of State award and State industrial authority in subsection 4(1)). 

88.               This subsection would indicate the Parliament’s intention that the provisions of the amended WR Act which authorise the making of the instruments covered by subsection 7D(1) authorise exhaustive regulation of the subject-matter dealt with by those instruments to the exclusion of State or Territory law, State awards and State agreements.  To the extent that such a law, award (including order etc) or agreement is not excluded by the operation of section 7C, its operation would be excluded by an inconsistent award or workplace agreement made under the amended WR Act. 

89.               For instance, proposed paragraphs 7C(2)(c) and 7C(3)(e) would provide that a State or Territory long service leave law would not be excluded in its application to a constitutionally covered employer and employee.  However, if the employer is bound by a federal award which gives the employee a long service leave entitlement, the award entitlement would prevail over the State or Territory law.

90.               Another instance would be a workplace agreement which made provision for a dispute resolution process in respect of a dispute arising under the workplace agreement.  The process in the agreement would prevail over any State or Territory law that purported to provided a different mechanism for resolving a dispute arising out of the workplace agreement (such as provisions for conciliation and arbitration of an industrial dispute in a law applying only to an industry sector).

91.               Proposed subsection 7D(2) would ensure that, despite proposed subsection 7D(1), an award or workplace agreement would operate subject to State or Territory laws dealing with specified matters, that is occupational health and safety, workers compensation, apprenticeship and matters as prescribed.

92.               Proposed subsection 7D(3) would make provision similar to proposed subsection 7D(1) in relation to an order of the AIRC made under Part VIA of the amended WR Act (equal remuneration and termination orders).  The subsection would indicate the Parliament’s intention that Part VIA authorises the AIRC to make orders which operate to the exclusion of State or Territory laws, State awards and State employment agreements.  Thus, for instance, an order of the AIRC in an unlawful termination proceeding would prevail over an order of a State or Territory court or tribunal in relation to the same termination (under, for instance, an anti-discrimination law).

New section 7E - Act may exclude State and Territory laws in other case

93.               Proposed subsection 7E(1) would indicate that proposed sections 7C and 7D do not comprehensively state the Parliament’s intention in relation to the interaction between the amended WR Act and State or Territory law and instruments. 

94.               As the legislative note to subsection 7E(1) would make clear, there would be other provisions of the amended WR Act that would provide expressly for the relationship, in particular circumstances, between provisions of the amended WR Act and State or Territory law and instruments. 

95.               In addition, subsection 7E(1) would make clear that:

·                where no express provision is made about the relationship between the amended WR Act and State or Territory law and instruments, other provisions of the amended WR Act might nevertheless, by implication, leave no room for the operation of State or Territory law; and

·                the existence of sections 7C and 7D should not affect the drawing of that implication.

96.               Subsection 7E(2) would provide a specific definition of this Act for the purposes of section 7E.  This is because the definition of this Act in subsection 4(1) (which would otherwise apply) does not extend to the Registration and Accountability of Organisations Schedule and regulations made under it.  The specific definition would ensure that subsection 7E(1) would apply to that Schedule and those regulations.

Item 10 - After Part 1

97.               This item would insert a new Part 1A in the WR Act to make provision for the Australian Fair Pay Commission (AFPC).

Part 1A - Australian Fair Pay Commission

98.               This Part would provide for the establishment of the AFPC.  The AFPC will set and adjust:

·                the standard Federal Minimum Wage;

·                special Federal Minimum Wages for junior employees, employees with disabilities or employees under training arrangements;

·                basic periodic rates of pay and basic piece rates of pay payable for APCS classification levels; and

·                casual loadings.

Division 1 - Preliminary

Section 7F - Definitions

99.               Proposed section 7F would provide various definitions for Part 1A.  Only key definitions are explained here.

100.           AFPC would mean the Australian Fair Pay Commission established under proposed section 7G.

101.           Wage review would mean a review conducted by the AFPC to determine whether it should exercise any of its wage-setting powers.

102.           Wage-setting decision would mean a decision made by the AFPC in the exercise of its wage-setting powers.

103.           Wage-setting function would be defined by proposed section 7I.

104.           Wage-setting powers would be defined to mean the powers of the AFPC under Division 2 of Part VA.

Division 2 - Australian Fair Pay Commission

105.           This Division would establish the AFPC and set out its powers and functions, including its wage setting functions and parameters and provide for the arrangements for the appointment and entitlements of the AFPC Chair and AFPC Commissioners.

Subdivision A - Establishment and functions

Section 7G - Establishment

106.           Proposed section 7G would establish the AFPC and provide that it consists of the AFPC Chair and four AFPC Commissioners.

Section 7H - Functions of the AFPC

107.           Proposed section 7H would set out the functions of the AFPC.  Broadly, these are to exercise its wage-setting function (defined in proposed section 7I), any other functions conferred on the AFPC, and promoting understanding of matters related to these functions.

Subdivision B - AFPC’s wage-setting function

Section 7I - AFPC’s wage-setting function

108.           Proposed section 7I would set out the AFPC’s wage-setting function which is to conduct wage reviews, and exercise its wage-setting powers as necessary depending on the outcomes of these wage reviews. 

109.           The legislative note would explain that the wage-setting powers are set out in Division 2 of Part VA.

Section 7J - AFPC’s wage-setting parameters

110.           Proposed section 7J would provide that the objective of the AFPC is to promote the economic prosperity of the people of Australia having regard to:

·                the capacity of the unemployed and low paid to obtain and remain in employment;

·                employment and competitiveness across the economy;

·                providing a safety net for the low paid; and

·                providing minimum wages for junior employees, and employees to whom training arrangements apply and employees with disabilities that ensure those employees are competitive in the labour market.

Section 7K - Wage reviews and wage-setting decisions

111.           Proposed section 7K would outline the operation of the AFPC in relation to its wage-setting function.  Subsection 7K(1) would provide that the AFPC may determine the timing, scope and frequency of wage reviews, the manner in which wage reviews are to be conducted and when wage-setting decisions are to come into effect.  Subsection 7K(2) would provide that for the purposes of performing its wage-setting function the AFPC may inform itself in any way it thinks appropriate, including by:

·                undertaking or commissioning research;

·                consulting with any other body, person or organisation; or

·                monitoring and evaluating the impact of its wage-setting decisions.

112.           Subsection 7K(3) would provide that subsections 7K(1) - (2) would have effect subject to the WR Act and any regulations made under the Act.  Subsection 7K(4) would require the AFPC’s wage-setting decisions to be expressed as decisions of the AFPC as a body, to be in writing and include reasons.  It would also make clear that a wage-setting decision is not a legislative instrument.

Section 7L - Constitution of the AFPC for wage reviews

113.           Proposed section 7L would provide that for the purposes of exercising its wage-setting powers the AFPC must be constituted by the AFPC Chair and four AFPC Commissioners. 

114.           However, subsection 7L(2) would provide that if the AFPC Chair considers it necessary due to the unavailability of an AFPC Commissioner, the AFPC may be constituted by the AFPC Chair and not less than two AFPC Commissioners. 

115.           Subdivision D (AFPC Chair) and Subdivision E (AFPC Commissioners) set out additional requirements concerning appointments to the AFPC.

Section 7M - Publishing wage-setting decisions etc.

116.           Proposed section 7M would provide that the AFPC must publish its wage-setting decisions and may publish other information about wages or its wage-setting function.  Subsection 7M(3) provides that the publication may be done in a way the AFPC considers appropriate. 

Subdivision C - Operation of the AFPC

Section 7N - AFPC to determine its own procedures

117.           Proposed section 7N would provide that the AFPC may determine the procedures it would use in performing its functions, subject to Subdivision B of this Division and any procedures prescribed by regulations. 

Section 7O - Annual report

118.           Proposed section 7O would require the AFPC to provide an annual report on the operation of the AFPC to the Minister for presentation to Parliament.  The report would be prepared as soon as practicable after the end of each financial year. 

119.           It is envisaged that this report and the annual report by the AFPC Secretariat under section 7ZJ would be published and presented to Parliament concurrently.

Subdivision D - AFPC Chair

Section 7P - Appointment

120.           Proposed section 7P would provide for the AFPC Chair to be appointed by the Governor-General by written instrument.  Subsection 7P(2) would provide that the AFPC Chair can be appointed on either a full-time or part-time basis for the period (not exceeding 5 years) specified in the instrument of appointment.

121.           Subsection 7P(3) would require that the AFPC Chair have high levels of skills and experience in business or economics.  Section 33 of the Acts Interpretation Act 1901 provides that appointment includes re-appointment.

Section 7Q - Remuneration

122.           Proposed section 7Q would provide for the Remuneration Tribunal to determine the remuneration of the AFPC Chair.  In the absence of a determination, the AFPC Chair would be paid the remuneration and allowances that are prescribed.

123.           Subsection 7Q(3) would provide that this section has effect subject to the Remuneration Tribunal Act 1973 .  This will ensure that general provisions of that Act are not displaced by this section.

Section 7R - Leave of absence

124.           Proposed section 7R would provide that if the AFPC Chair is appointed on a full-time basis the Remuneration Tribunal is to determine his or her recreation leave entitlements. 

125.           The Minister may grant a full-time AFPC Chair leave of absence, other than recreation leave, on such terms and conditions as he or she determines. 

126.           Subsection 7R(2) would allow the Minister to grant a part-time AFPC Chair leave of absence, including recreation leave, on such terms and conditions as he or she determines.

Section 7S - Engaging in other paid employment

127.           Proposed section 7S would require a full-time AFPC Chair to obtain approval from the Minister before engaging in other paid employment. 

Section 7T - Disclosure of interests

128.           Proposed section 7T would require the AFPC Chair to give the Minister notice in writing of all financial or other interests that could conflict with the proper performance of the AFPC Chair’s duties. 

Section 7U - Resignation

129.           Proposed section 7U would provide that the AFPC Chair may resign by written notice given to the Governor-General and sets out when the resignation takes effect.

Section 7V - Termination of appointment

130.           Proposed subsection 7V(1) would allow the Governor-General to terminate the appointment of the AFPC Chair if the AFPC Chair:

·                becomes bankrupt or takes specified steps related to insolvency; or

·                contravenes, without reasonable excuse, the requirement to disclose to the Minister any interest that could conflict with his or her duties (proposed section 7T); or

·                has or acquires interests (including by being an employer or employee) that the Minister considers could conflict unacceptably with the proper performance of his or her duties; or

·                in the case of a full-time AFPC Chair, is absent from duty (except on authorised leave) for 14 consecutive days or for 28 days in any 12 month period, or engages in other paid employment without the Minister’s approval (proposed section 7S); or

·                in the case of a part-time AFPC Chair, is absent from duty (except on authorised leave) to an extent that the Minister considers excessive.

131.           Subsection 7V(2) would allow the Governor-General to terminate the AFPC Chair’s appointment for misbehaviour or on the ground of physical or mental incapacity.  To avoid doubt, subsections 7V(3)-(4) would set out certain limitations on termination on the ground of physical or mental incapacity.

Section 7W - Other terms and conditions

132.           Proposed section 7W would provide that the AFPC Chair holds office on the terms and conditions that are determined by the Minister in relation to matters not covered by the WR Act.

Section 7X - Acting AFPC Chair

133.           Proposed section 7X would provide that the Minister may appoint a person who meets the requirements set out in subsection 7P(3) as an acting AFPC Chair when necessary, including on a recurring basis.  Subsection 7X(2) would provide that any act done under such an appointment is not to be invalid only because of a defect or irregularity in connection with the appointment.

Subdivision E - AFPC Commissioners

Section 7Y - Appointment

134.           Proposed section 7Y would provide for an AFPC Commissioner to be appointed by the Governor-General by written instrument.  Subsection 7Y(2) would provide that an AFPC Commissioner is to be appointed on a part-time basis for the period (not exceeding four years) specified in the instrument of appointment.  Subsection 7Y(3) would require that an AFPC Commissioner have experience in one or more of the areas of business, economics, community organisations or workplace relations.  Section 33 of the Acts Interpretation Act 1901 provides that appointment includes re-appointment.

Section 7Z - Remuneration

135.           Proposed section 7Z would provide for the Remuneration Tribunal to determine the remuneration of an AFPC Commissioner.  In the absence of a determination, an AFPC Commissioner would be paid the remuneration and allowances that are prescribed.  Subsection 7Z(3) would provide that this section has effect subject to the Remuneration Tribunal Act 1973 .  This will ensure that general provisions of that Act are not displaced by this section.

Section 7ZA - Leave of absence

136.           Proposed section 7ZA would provide that the AFPC Chair may grant an AFPC Commissioner leave of absence on such terms and conditions as he or she determines.

Section 7ZB - Disclosure of interests

137.           Proposed section 7ZB would require an AFPC Commissioner to give the Minister notice in writing of all financial or other interests that could conflict with the proper performance of his or her duties.

Section 7ZC - Resignation

138.           Proposed section 7ZC would provide that an AFPC Commissioner may resign by written notice given to the Governor-General and sets out when the resignation takes effect.

Section 7ZD - Termination of appointment

139.           Subsection 7ZD(1) would allow the Governor-General to terminate the appointment of an AFPC Commissioner if the AFPC Commissioner:

·                becomes bankrupt or takes specified steps related to insolvency; or

·                contravenes, without reasonable excuse, the requirement to disclose to the Minister any interest that could conflict with his or her duties (proposed section 7ZB);

·                has or acquires interests (including by being an employer or employee) that the Minister considers could conflict unacceptably with the proper performance of his or her duties; or

·                is absent from duty (except on authorised leave) to an extent that the Minister considers excessive.

140.           Subsection 7ZD(2) would allow the Governor-General to terminate an AFPC Commissioner’s appointment for misbehaviour or on the ground of physical or mental incapacity.  To avoid doubt, subsections 7ZD(3) - (4) would set out certain limitations on termination on the ground of physical or mental incapacity.

Section 7ZE - Other terms and conditions

141.           Proposed section 7ZE would provide that an AFPC Commissioner would hold office on the terms and conditions that are determined by the Minister in relation to matters not covered by this Act.

Section 7ZF - Acting AFPC Commissioners

142.           Proposed section 7ZF would provide that the Minister may appoint a person who meets the requirements set out in subsection 7Y(3) as an acting AFPC Commissioner when necessary, including on a recurring basis.  Subsection 7ZF(2) would provide that any act done under such an appointment is not to be invalid only because of a defect or irregularity in connection with the appointment.

Division 3 - AFPC Secretariat

143.           This Division would establish the AFPC Secretariat as a separate statutory agency to assist the AFPC and provide for appointment of the Director of the Secretariat and the engagement of staff and consultants.

Subdivision A - Establishment and function

Section 7ZG - Establishment

144.           Proposed subsection 7ZG(1) would establish the AFPC Secretariat. 

145.           Subsection 7ZG(2) would provide that the AFPC Secretariat consists of the Director and the staff of the Secretariat.

Section 7ZH - Function

146.           Proposed section 7ZH would provide that the function of the AFPC Secretariat is to assist the AFPC in the performance of its functions. 

Subdivision B - Operation of the AFPC Secretariat

Section 7ZI - AFPC Chair may give directions

147.           Proposed section 7ZI would allow the AFPC Chair to give directions to the Director of the Secretariat about the performance of the function of the AFPC Secretariat and require the Director to comply with such directions. 

148.           To avoid doubt, subsection 7ZI(3) would provide that the AFPC Chair cannot give directions in relation to the performance of functions or powers by the Director under the Financial Management and Accountability Act 1997 or the Public Service Act 1999 .

Section 7ZJ - Annual report

149.           Proposed section 7ZJ would require the Director of the Secretariat to provide an annual report on the operation of the AFPC Secretariat to the Minister for presentation to Parliament.  The report must be prepared as soon as practicable after the end of each financial year.   

150.           It is envisaged that this report and the annual report by the AFPC under section 7O would be published and presented to Parliament concurrently.

Subdivision C - The Director of the Secretariat

Section 7ZK - Appointment

151.           Proposed section 7ZK would provide for the Director of the Secretariat to be appointed by the Minister by written instrument. 

152.           Subsection 7ZK(2) would provide that the Director of the Secretariat is to be appointed on a full-time basis for the period (not exceeding five years) specified in the instrument of appointment.

Section 7ZL - Remuneration

153.           Proposed section 7ZL would provide that the Remuneration Tribunal is to determine the remuneration of the Director of the Secretariat.  In the absence of a determination, the Director of the Secretariat would be paid the remuneration and allowances that are prescribed. 

154.           Subsection 7ZL(3) would provide that this section has effect subject to the Remuneration Tribunal Act 1973 .  This would ensure that general provisions of that Act are not displaced by this section.

Section 7ZM - Leave of absence

155.           Proposed section 7ZM would provide for the Remuneration Tribunal to determine the recreation leave entitlements of the Director of the Secretariat.

156.           Subsection 7ZM(2) would allow the Minister to grant the Director of the Secretariat leave of absence, including recreation leave, on such terms and conditions as he or she determines.

Section 7ZN - Engaging in other paid employment

157.           Proposed section 7ZN would require the Director of the Secretariat to obtain approval from the Minister before engaging in other paid employment. 

Section 7ZO - Disclosure of interests

158.           Proposed section 7ZO would require the Director of the Secretariat to give the Minister notice in writing of all financial or other interests that could conflict with the proper performance of his or her duties. 

Section 7ZP - Resignation

159.           Proposed section 7ZP would provide that the Director of the Secretariat may resign by written notice given to the Minister and sets out when the resignation takes effect.

Section 7ZQ - Termination of appointment

160.           Proposed subsection 7ZQ(1) would allow the Minister to terminate the appointment of the Director of the Secretariat if the Director of the Secretariat:

·                becomes bankrupt or takes specified steps related to insolvency; or

·                contravenes, without reasonable excuse, the requirement to disclose to the Minister any interest that could conflict with his or her duties (proposed section 7ZO); or

·                has or acquires interests (including by being an employer or employee) that the Minister considers could conflict unacceptably with the proper performance of his or her duties; or

·                engages in other paid employment without the Minister’s approval (proposed section 7ZN); or

·                is absent from duty (except on authorised leave) for 14 consecutive days or for 28 days in any 12 month period.

161.           Subsection 7ZQ(2) would require the Minister to terminate the Director of the Secretariat’s appointment if the Minister is of the opinion that the Director’s performance has been unsatisfactory for a significant period of time.

162.           Subsection 7ZQ(3) would allow the Minister to terminate the Director of the Secretariat’s appointment for misbehaviour or on the ground of physical or mental incapacity. 

163.           To avoid doubt, subsections 7ZQ(4) - (5) would set out certain limitations on termination on the ground of physical or mental incapacity.

Section 7ZR - Other terms and conditions

164.           Proposed section 7ZR would provide that the Director of the Secretariat would hold office on the terms and conditions that are determined by the Minister in relation to matters not covered by the WR Act.

Section 7ZS - Acting Director of the Secretariat

165.           Proposed section 7ZS would provide that the Minister may appoint an acting Director of the Secretariat when necessary, including on a recurring basis.  Subsection 7ZS(2) would provide that any act done under such an appointment is not to be invalid only because of a defect or irregularity in connection with the appointment.

Subdivision D - Staff and consultants

Section 7ZT - Staff

166.           Proposed section 7ZT would provide that the staff of the AFPC Secretariat are to be engaged under the Public Service Act 1999 (subsection 7ZT(1)). 

167.           Subsection 7ZT(2) would provide that for the purposes of the Public Service Act 1999 the Director of the Secretariat and staff of the AFPC Secretariat would constitute a Statutory Agency with the Director as the Head of that Statutory Agency.

Section 7ZU - Consultants

168.           Proposed section 7ZU would provide that the Director of the Secretariat may, on behalf of the Commonwealth, engage consultants with suitable qualifications and experience for the AFPC or the AFPC Secretariat.  The terms and conditions of engagement of consultants would be determined by the Director of the Secretariat and recorded in writing.

Item 11 - New section 33

169.           This item repeals pre-reform section 33, which provides that the AIRC may exercise powers on its own motion or after an application by a specified party, subject to any limitation or restriction in the WR Act or Schedule 1B.

170.           Proposed section 33 would provide a general position that the AIRC may perform a function or exercise a power on its own initiative, but would not be able to do so if the function or power is: 

·                one that may be performed or exercised on application by a specified person or class of persons; and

·                there is not an express provision allowing the AIRC to perform the function or exercise the power on its own initiative. 

171.           This will mean that the AIRC can act on its own motion in appropriate circumstances.

Item 12 - Subsection 36(3)

172.           This item would repeal pre-reform subsection 36(3) as it relates to pre-reform section 111AAA of the WR Act, which is being repealed.

Item 13 - Section 39

173.           This item would repeal pre-reform section 39, which requires the President of the AIRC convene a conference of the AIRC at least once a year to discuss matters relating to the operation of pre-reform Part VI and Part II of the WR Act and, in particular, to discuss means for ‘ensuring speed in the settlement of industrial disputes’.

174.           The repeal of this provision would not prevent the President of the AIRC, at his or her discretion, from convening a conference of members of the AIRC to discuss the AIRC’s operations and how it performs its functions.

Item 14 - At the end of Division 2 of Part II

175.           This item would insert new sections 41A and 41B into the WR Act. 

New section 41A - Co-operation with the States by President

New Section 41B - Co-operation with the States by Registrar

176.           These sections would deal with co-operation by the President of the AIRC and the Industrial Registrar with their respective State counterparts.  They replace pre-reform sections 171 and 172, which would be repealed.

177.           Proposed sections 41A and 41B would provide the President and Industrial Registrar with the discretion to invite their State counterparts to hold discussions, rather than the mandatory requirement in pre-reform sections 171 and 172 to make such invitations. 

Item 15 - Subsection  42(3)

178.           This item would repeal and replace subsection 42(3) and insert new subsections 42(3A) -(3D).

179.           Proposed subsection 42(3) would provide that a party to a proceeding (including an employing authority ) before the AIRC may be represented by counsel, solicitor or agent, if the following two conditions are satisfied:

·                all parties to the proceedings expressly agreed that the party be represented by counsel, solicitor or agent; and

·                the AIRC grants leave for the party to be represented.

180.           Proposed subsection 42(3A) would also provide that a party to a proceeding (including an employing authority) before the AIRC may be represented by counsel, solicitor or agent if:

·                a party applies to the AIRC to be represented by counsel, solicitor or agent; and

·                the AIRC grants leave for the party to be represented.

181.           There are no limitations or restrictions on who can be an ‘agent’ for the purposes of proposed subsections 42(3) and 42(3A).  As there is no professional or regulating body for agents, unlike the legal profession, there is no independent body to discipline an agent who systematically acts unethically from representing parties.  Applicants also have no avenue for complaint if an agent acts improperly in their individual cases.

182.           This can cause problems, as stated by the AIRC in Oram v Derby Gem Pty Ltd  [Print PR946375] (Oram).  In Oram , the applicant’s application was dismissed by the AIRC as a result of her agent continually failing to comply with the directions of the AIRC.  This included failing to appear when directed and failing to file documents as required.  In making its decision, the AIRC commented on its limited power to ameliorate the effect of its decision on the applicant.

183.           Proposed subsection 42(3B) would require the AIRC to take a range of factors into consideration when deciding whether or not to grant leave to a representative, to prevent unfair results like that in Oram.  Where all the parties have consented to the representation under proposed subsection 42(3), the factors to be considered are:

·                whether being represented by counsel, solicitor or agent would assist the party concerned to bring the best case possible;

·                the capacity of the particular counsel, solicitor or agent to represent the party concerned; and

·                the capacity of the particular counsel, solicitor or agent to assist the AIRC in performing the AIRC’s functions under the Bill.

184.           Proposed subsection 42(3C) would establish additional factors for the AIRC to consider when deciding whether or not to grant leave for an application made under subsection 42(3A) where all parties to the proceeding have not agreed to have the particular representative represent the relevant party.  The additional factors are:

·                the complexity of the factual and legal issues relating to the proceeding; and

·                whether there are any special circumstances that make it desirable that the party concerned be represented by counsel, solicitor or agent.

185.           These ‘special circumstances’ might include the inability of the party to represent themselves, due to a lack of understanding of, or familiarity with the AIRC and its processes, especially where the other party to the proceeding is represented by counsel with a high level of experience or knowledge.

186.           These provisions are not intended to limit a party’s ability to be represented before the AIRC generally.  Rather the proposed subsections would ensure that, for example:

·                the AIRC has some control over who comes before it;

·                that parties to a proceeding are represented only by persons who can assist them, and the AIRC; and/or

·                the AIRC plays a role in achieving a ‘level playing field’ for parties to a proceeding.

187.           Proposed subsection 42(3D) would ensure that a decision made in relation to an application for leave under proposed subsections 42(3) or (3A) would not be appealable to a Full Bench of the AIRC.

Item 16 - At  the end of paragraphs 42(7)(a) and (b)

Item 17 - At  the end of subsection 42(7)

188.           Item 17 would amend subsection 42(7), which deals with who may represent a party before the AIRC, to include a bargaining agent (as defined in proposed Part VB, dealing with agreement making).

189.           Item 16 is a technical amendment.

Item 18 - Subsection  43(1)

Item 19 - Subsection 43(2)

190.           Item 19 repeals subsection 43(2) as there would no longer be a certification process for agreements. 

191.           Item 18 makes a technical amendment consequential to the repeal of subsection 43(2) in Item 19. 

Item 20 - After Division 3 of Part II

192.           This item would insert a new Division 3A into Part II of the WR Act. 

193.           Proposed Division 3A would set out certain powers and procedures of the AIRC and matters the AIRC must take into account in respect of proceedings before the AIRC.  These provisions would apply to the AIRC’s functions under the WR Act generally, unless specifically excluded.  Other Parts of the WR Act will contain additional powers and functions of the AIRC relevant to those particular Parts. 

194.           Proposed Division 3A would replace the powers and procedures set out in pre-reform Part VI of the WR Act.  The provisions in proposed Division 3A are based on powers and procedures set out in pre-reform Part VI.

New Division 3A - General matters relating to the powers and procedures of the Commission

Subdivision A - General matters Commission to take into account

195.           Proposed Subdivision A would set out general matters that the AIRC must to take into account in the performance of its functions under the WR Act.  Certain general matters do not apply to the AIRC’s performance of its functions under specified parts of the WR Act.  This is where the general matter is not relevant to the performance of such a function under a particular Part, or a matter is otherwise expressly provided for in a particular Part of the Bill.

New section 44A - Commission to take into account the public interest

196.           Proposed section 44A would require the AIRC to take into account the public interest when performing its functions under the WR Act or Schedule 1B to the Act. 

197.           When considering the public interest, the AIRC would be required to have regard to:

·                when dealing with a matter under the WR Act, the objects of the Act (proposed paragraph 44A(1)(a));

·                when dealing with a matter under Schedule 1B, the Parliament’s intention in enacting the Schedule (proposed paragraph 44A(2)(a)); and

·                the state of the national economy and the likely effect that an order the AIRC is considering or proposing to make will have on the national economy, particularly the likely effects on the level of employment and inflation (proposed paragraphs 44A(1)(b) and 44A(2)(b)).

198.           Proposed subsection 44A(3) would provide that this subsection does not apply to the performance of a function under Part VC (Industrial Action) or Part VI (Awards) of the Bill, as those Parts provide their own factors that the AIRC must take into account when making orders or awards under those Parts.

New section 44B - Commission to take into account discrimination issues

199.           Proposed section 44B would require the AIRC to take into account the need to:

·                apply the principle of equal pay for work of equal value without discrimination based on sex (proposed paragraph 44B(a)); and

·                prevent and eliminate discrimination on certain specified grounds (proposed paragraph, 44B(b )).

New section 44C - Commission to take account of Racial Discrimination Act, Sex Discrimination Act, Disability Discrimination Act and Age Discrimination Act

200.           Proposed section 44C would require the AIRC to have regard, in performing its functions, to the principles relating to discrimination in relation to employment in specified anti-discrimination legislation.

New section 44D - Commission to take account of Family Responsibilities Convention

201.           Proposed section 44D would require the AIRC to take into account, in performing its functions, the principles embodied in the Family Responsibilities Convention particularly, but without being limited to, those relating to:

·                preventing discrimination against workers who have family responsibilities (proposed paragraph 44D(1)(a)); and

·                helping workers to reconcile their employment and family responsibilities (proposed paragraph 44D(1)(b)).

202.           Proposed section 44D would not apply to the performance of the AIRC’s functions under Part VC (Industrial Action).

New section 44E - Safety, health and welfare of employees

203.           Proposed subsection 44E(1) would require the AIRC to take into account the provisions of any State or Territory law relating to the safety, health and welfare of employees in relation to their employment. 

Proposed subsection 44E(2) would provide that proposed section 44E would not apply to the performance of a function under proposed Division 2 of Part VIA, which deals with equal remuneration for work of equal value. 

New section 44F - Commission to act quickly

204.           Proposed section 44F would require that the AIRC must perform its functions as quickly as practicable. 

New section 44G - Commission to avoid technicalities and facilitate fair conduct of proceedings

205.           Proposed section 44G would provide that the AIRC must carry out its functions in a way which avoids unnecessary technicalities and that promotes the fair and practical conduct of any proceedings under the WR Act or Schedule 1B.  

Subdivision B - Particular powers and procedures of the Commission

206.           Proposed subdivision B would provide for particular powers and procedures of the AIRC.  The powers and procedures contained in this subdivision are based upon the existing powers and procedures of the WR Act but have been modified, in part to make changes consequential to the changed constitutional underpinnings of the WR Act. 

New section 44H Procedure of Commission

207.           Proposed subsection 44H(1) would set out the manner in which the AIRC must act in a proceeding under the WR Act or Schedule 1B.  It would provide that:

·                the procedure of the AIRC is within its discretion, subject to any contrary provisions of the WR Act, Schedule 1B and the Rules of the AIRC (proposed paragraph 44H(1)(a));

·                the AIRC is not bound by the rules of evidence or bound to act in a formal manner (proposed paragraph 44H(1)(b)); and

·                the AIRC must act according to equity, good conscience and the substantial merits of the case, without regard to technicalities and legal forms (proposed paragraph 44H(1)(c)).

208.           Proposed subsection 44H(2) would provide that the AIRC may determine the periods that would be reasonably necessary for the fair and adequate presentation of the cases of parties to proceedings and allow the AIRC to require cases to be presented in those periods. 

209.           Proposed subsection 44H(3) would provide that the AIRC may determine what evidence or argument it may require to be presented in writing and what evidence or argument it will hear orally.

New section 44I - Particular powers of Commission

210.           Proposed section 44I draws upon the powers of the AIRC set out in pre-reform section 111 of the WR Act.  Various modifications have been made to reflect the proposed changed role of the AIRC, such as the AIRC no longer having a role in certifying agreements.  In addition, modifications have been made where the existing powers relate to, or rely upon, the conciliation and arbitration power. 

211.           Proposed subsection 44I(1) would provide particular powers in respect of proceedings before the AIRC, including the power to:

·                dismiss a matter or part of a matter if it is trivial, or if further proceedings are not necessary or desirable in the public interest (proposed paragraph 44I(1)(e));

·                summon any person who the AIRC considers would assist in relation to the proceeding (proposed paragraph 44I(1)(n));

·                compel the production of documents and other things relating to the proceeding (proposed paragraph 44I(1)(o));

·                make interim decisions (proposed paragraph 44I(1)(p)); and

·                make a final decision in respect of a matter to which the proceeding relates (proposed paragraph 44I(1)(q)). 

212.           Proposed subsection 44I(2) would provide that the AIRC may, in writing, authorise a person to take evidence on its behalf.  The person so authorised has all the powers of the AIRC to secure:

·                the attendance of witnesses (proposed paragraph 44I(2)(a));

·                the production of documents and things (proposed paragraph 44I(2)(b)); and

·                the taking of evidence on oath or affirmation (proposed paragraph 44I(2)(c)).

213.           The AIRC may impose limitations on how the person takes evidence. 

214.           Proposed subsections 44I(3) - (5) would specify that particular provisions in proposed subsections 44I(1) and 44I(2) do not apply to the performance of certain functions under Parts VC and VIA of the Bill, either because similar powers are provided expressly in those Parts or because those powers are inappropriate to the performance of the functions of the AIRC under those Parts. 

215.           Proposed subsections 44I(6) and 44I(7) would provide that where the WR Act or Schedule 1B specifies a time or a period in respect of any matter or thing, the AIRC may not extend that time or period unless it is expressly permitted to do so by the WR Act or Schedule 1B.

216.           Proposed subsection 44I(8) would provide that the reference to varying or revoking an order in subsection 44I(1)(d) does not extend to awards or award-related orders.  This is because Part VI which deals with awards contains particular provisions dealing with the variation or revocation of awards or award-related orders. 

New section 44J - Reference to proceedings to Full Bench

217.           Proposed section 44J would provide the manner in which proceedings may be referred to a Full Bench. 

218.           Proposed subsection 44J(1) would provide that where proceedings are before a single member of the AIRC, or where the AIRC is not constituted by a Full Bench, a party to the proceeding or the Minister may apply for the proceeding to be dealt with by a Full Bench on the basis that the case is of such importance that it is in the public interest that a Full Bench deal with it.  Any such application must be referred to the President of the AIRC (proposed paragraph 44J(2)(a)). 

219.           If the President forms the opinion that the matter is of such importance that it should be dealt with by a Full Bench, the President must grant the application (proposed subsection 44J(3)) and a Full Bench must hear and determine the referred proceeding (proposed subsection 44J(4)), subject to proposed subsection 44J(5).

220.           In dealing with the proceeding, the Full Bench may do either or both of the following:

·                have regard to any evidence and arguments raised in the original proceeding (proposed paragraph 44J(5)(a)); 

·                refer a part of the proceeding to a single member, which might include the member from whom the proceeding was originally referred, for hearing and determination (proposed paragraph 44J(5)(b)). 

221.           The President may authorise a member of the AIRC to take evidence for the purposes of the proceeding, prior to a Full Bench being established to deal with the matter, and the Full Bench must have regard to that evidence (proposed subsection 44J(6)).

222.           The President or the Full Bench may direct a member of the AIRC to provide a report in relation to a specified matter.  This report must be provided to either the President or Full Bench (proposed subsections 44J(7) and 44J(8)).   

New section 44K - President may deal with certain proceedings

223.           Proposed subsection 44K(1) would provide that the President of the AIRC may decide to deal with a proceeding before the AIRC, even if another member of the AIRC has already begun dealing with the proceeding. 

224.           If the President decides to deal with the proceeding, he or she must hear and determine the proceeding or refer it to a Full Bench (proposed subsection 44K(2)). 

225.           Proposed subsections 44K(3)-(5) and (7)-(8) relevantly mirror those in proposed subsections 44J(4)-(9).

New section 44L - Review on application by Minister

226.           Proposed subsection 44L(1) would provide that the Minister may apply to the President of the AIRC for a Full Bench review of an award, order, or a decision relating to the making of an award or order, made by a member of the AIRC under the WR Act or Schedule 1B.  The Minister may make such an application if it appears to the Minister that the award, order or decision is contrary to the public interest. 

227.           When the Minister makes an application for a review, the President must establish a Full Bench to hear and determine the application (proposed subsection 44L(2)).

228.           The Full Bench must carry out a review if it considers that the matter is of such importance that in the public interest the award, order or decision should be reviewed (proposed subsection 44L(3)).  The AIRC must ensure that each person or organisation bound by the award, or who otherwise has an interest in the review, is made aware of the review and the Minister has a right to intervene (proposed subsection 44L(6)).

229.           The powers of the AIRC when dealing with appeals under subsections 45(4)-(8) and subsections 45A(4)-(8) relevantly apply in relation to a review under this section.

230.           Nothing in proposed section 44L would affect the right of appeal or any power of a Full Bench under sections 45 or 45A.  Any appeals under those sections may be dealt with at the same time as a review under proposed section 44L (proposed subsections 44L(8) - (9)). 

231.           Proposed subsection 44L(7) would provide that each provision of the WR Act relating to the performance of the AIRC’s functions in relation to awards, also applies to the AIRC’s performance of functions when undertaking a review. 

New section 44M - Compulsory conferences

232.           Proposed section 44M would provide that, for the performance of a function, or the exercise of a power under the WR Act or Schedule 1B, a member of the AIRC may direct a person to attend a conference presided over by a member of the AIRC or another person nominated by the President.  The direction may be made on the initiative of the member or on application made by a party to, or an intervener in, the proceeding (proposed subsection 44M(1)). 

233.           The member of the AIRC may direct anyone to attend a conference if the member considers that his or her presence would assist in the performance of a function under the WR Act or Schedule 1B (proposed subsection 44M(2)). 

234.           The conference must be held in private, unless the person presiding over the conference directs otherwise (proposed subsection 44M(3)). 

235.           Proposed subsection 44M(4) would provide that proposed section 44M would not apply to the operation of the performance of a function under Part VC (Industrial Action). 

New section 44N - Power to override certain laws affecting public sector employment

236.           Proposed subsection 44N(1) would provide that, where the AIRC is performing a function that involves public sector employment, the AIRC may make an award or order that is not, or in its opinion may not be, consistent with a relevant law of the Commonwealth or of an internal Territory.  Relevant law is defined in proposed subsection 44N(2) to mean specified laws or a prescribed Act or enactment, or prescribed provisions of an Act or enactment. 

237.           Proposed subsection 44N(3) would provide that proposed section 44N does not apply to the performance of a function under Part VIA. 

New section 44O - State authorities may be restrained from dealing with matter that is before the Commission

238.           Proposed section 44O would allow the AIRC to make an order restraining a State industrial authority from dealing with a matter that is the subject of a proceeding before the AIRC under the WR Act or Schedule 1B.  A State industrial authority would be required to cease dealing or refrain from dealing with the matter (proposed subsection 44O(2)).  An award, order, decision or determination of a State industrial authority made in contravention of an order of the Full Bench under this proposed section would be void to the extent of the contravention (proposed section 44O(3)).  This proposed section is based on section 128 of the WR Act.

New section 44P - Joint sessions of Commission

239.           Proposed section 44P would provide that the President may direct the AIRC to form a joint session for the purpose of taking evidence or hearing an argument, in circumstances where the President considers that a question is common to two or more proceedings before the AIRC.

New section 44Q - Revocation and suspension of awards and orders

240.           Proposed section 44Q would deal with the revocation and suspension of awards and orders. 

241.           An organisation, an interested person or the Minister could apply to the President for action by a Full Bench under proposed section 44Q(1).  The President would be required to refer the application to a Full Bench for hearing and determination (proposed subsection 44Q(2)).

242.           In addition, a member of the AIRC or a Registrar could refer a matter to the President for action under proposed subsection 44Q(1)).  The President could establish a Full Bench to hear and determine the matter, but would not be required to do so (proposed subsection 44Q(3)). 

243.           Under proposed subsection 44Q(4), the Full Bench could make an order revoking, or suspending for a period of time, an award or order or any terms of an award or order, if it appeared to the Full Bench that:

·                an organisation had contravened the WR Act, Schedule 1B or an award or order of the AIRC; or

·                a substantial number of members of an organisation refuse to accept employment either at all or in accordance with certain terms of an existing award or order; or

·                the award or order should be suspended or revoked in whole or in part for any other reason.

244.           The Full Bench would have certain specified powers to make other orders as it thinks appropriate in relation to the operation of the revocation or suspension of any other award or order in accordance with proposed subsection 44Q(5).  Under proposed subsection 44Q(6), the revocation or suspension of all or any terms of an award or order, may be expressed to apply only in relation to:

·                a particular person or organisation bound by the award or order;

·                a branch of an organisation;

·                a class of members of an organisation; or

·                a particular locality.

General Powers of the Commission

245.           The following proposed amendments relate to appeals to the Full Bench and references to a court.

Item 21 - Paragraph 45(1)(a)

Item 22 - Paragraph 45(1)(b)

Item 23 - Paragraph 45(1)(d)

Item 24 - Paragraph 45(1)(da)

Item 25 - Paragraphs 45(1)(e) and (eaa)

Item 26 - Paragraph 45(1)(eba)

Item 27 - Paragraphs 45(1)(ea) and (eb)

Item 28 - Paragraph 45(1)(ed)

Item 29 - Paragraphs 45(3)(ab) and (ac)

Item 30 - Paragraphs 45(3)(ad), (b) and (ba)

Item 31 - Subparagraphs 45(3)(baa)(i) and (ii)

Item 32 - Paragraph 45(3)(bab)

Item 33 - Paragraph 45(3)(bb)

Item 34 - Subsection 45(3) (note)

Item 35 - Subsection 45(3A)

Item 36 - Subsection 45(3B)

Item 37 - Paragraph 45(7)(d)

Item 38 - Subsection 45(9)

Item 39 - Paragraph 45A(1)(b)

Item 40 - Paragraph 45A(1)(d)

Item 41 - Paragraph 45A(7)(d)

Item 42 - Subsections 48(1A) and (1B)

246.           Items 21, 22, 32 and 39 would make amendments that are consequential to the changes to the constitutional underpinnings of the provisions. 

247.           Items 23, 26, 33, 37, 40, 41 and 42 would amend paragraphs 45(1)(d), 45A(1)(d) and 45(1)(eba) to update cross references to other provisions of the WR Act to take into account other amendments proposed by the Bill. 

248.           Item 25 would repeal pre-reform paragraphs 45(1)(ea) and (eb) which purport to confer jurisdiction on the Full Bench of the AIRC to hear appeals against opinions, orders or decisions of the AIRC made under sections 127A and 127B.  These paragraphs are no longer required because the jurisdiction of the Full Bench of the AIRC to hear unfair contracts matters under pre-reform sections 127A and 127B was removed by the Industrial Relations Reform Act 1993 and vested in the Federal Court of Australia. 

249.           Item 27 would repeal paragraphs 45(1)(ea) and (eb).  These paragraphs refer to the AIRC hearing matters about independent contractors.  Since 1993 independent contractor matters have been heard by the Federal Court.   

250.           Item 28 would make a consequential amendment to pre-reform paragraph 45(1)(ed) to omit ‘certified agreement’ and substitute ‘workplace agreement’ to reflect a change in terminology.  This paragraph would provide that an appeal lies to the Full Bench of the AIRC from a decision of the AIRC to vary, or not to vary, an award or workplace agreement referred to the AIRC by the Human Rights and Equal Opportunity Commission (HREOC).

251.           Item 31 would repeal subparagraphs 45(3)(baa)(i), which refers to ‘a person bound by the certified agreement’, and (ii), which refers to ‘an employee whose employment is subject to the certified agreement’, and replace it with a reference that now refers to ‘an employer, employee or organisation bound by the award’. 

252.           Items 24, 30, 34, 35 and 36 make amendments to the provisions relating to Victoria.

253.           Item 24 would repeal paragraph 45(1)(da) - which provides an appeal right in relation to aspects of common rule.  The changes proposed to Part VI of the WR Act include removing specific provision for making common rule orders.  This paragraph is therefore no longer required.

254.           Item 30 would repeal paragraph 45(3)(ad) which specifies who can bring an appeal under paragraph 45(1)(da).  This amendment is consequential upon item 24, which would repeal paragraph 45(1)(da).

255.           Item 34 would repeal the legislative note to subsection 45(3).  The legislative note refers to subsection 170MBA(2) as applied and modified by section 494 of the WR Act.  Significant changes are proposed to the agreement making provisions of the WR Act, including in relation to the manner in which such agreements come into operation.  As the AIRC will no longer have a role in relation to workplace agreements, it is not necessary to provide for appeals against AIRC decisions.

256.           Item 35 would repeal subsection 45(3A), which provides a Minister of Victoria with a right to intervene in certain AIRC proceedings.  This provision would be replaced, in part, by proposed subsection 504(2), which would require the AIRC to grant leave to intervene in an appeal against a decision of the AIRC under subsection 107G(1) in certain circumstances.  The repeal of paragraph 45(3A)(b) is also consequential upon item 240, which would repeal Part XV, including section 501.

257.           Item 36 would repeal subsection 45(3B) which provides a Minister of Victoria with a right to intervene in certain AIRC proceedings relating to common rule orders.  The changes proposed to Part VI of the WR Act include removing specific provision for making of common rule orders.  This paragraph is therefore no longer required. 

258.           Item 38 would repeal subsection 45(9), which relates to the hearing or determination of an industrial dispute to the hearing or determination of an appeal.  The existence or otherwise of an industrial dispute will no longer be relevant to the AIRC’s jurisdiction or powers.    

Item 43 - Sections 83BB and 83BC

259.           This item would repeal and replace sections 83BB and 83BC.

New section 83BB - Functions of the Employment Advocate

260.           This section would set out the functions of the person appointed by the Governor-General under section 83BI as the Employment Advocate.  A list of those functions would appear in

subsection 83BB(1).  The major functions in that list include:

·                promoting the making of workplace agreements;

·                the provision of assistance and advice to employees and employers (especially small business) in relation to workplace agreements and the Standard;

·                providing education and information to employees and employers in relation to workplace agreements;

·                promoting better work and management practices though workplace agreements; and

·                accepting lodgment of workplace agreements and notices about the transmission of instruments.

261.           The list in this subsection would not be an exhaustive list of the Employment Advocate’s functions.  Paragraph 83BB(1)(m) would allow the Employment Advocate to perform any other function conferred upon him or her by the WR Act, another Act, the regulations or Schedule 1B. 

262.           Subsections 83BB(2) and (3) would provide that the Employment Advocate must, in performing his or her functions, have regard to certain considerations. 

263.           Subsection 83BB(4) would provide that when the Employment Advocate is giving the Minister information and copies of documents (as part of his or her functions pursuant to

paragraph 83BB(1)(i)), the regulations may require those documents to be given with such deletions as are necessary to prevent the identification of the individuals to whom those documents refer.  This would allow the Employment Advocate to give non-identifying information about agreements to the Minister.

New section 83BC - Minister’s directions to Employment Advocate

264.           This proposed section would allow the Minister to give directions to the Employment Advocate specifying how the Employment Advocate must perform his or her functions.  These directions would be made by legislative instrument in accordance with the Legislative Instruments Act 2003 .  Under this proposed section, the Employment Advocate would be required to comply with any direction made by the Minister.  However, the Minister would not be permitted to give directions about any particular workplace agreement. 

Item 44 - Subsection 83BE(2)

265.           This item would amend subsection 83BE(2) to restrict the Employment Advocate’s delegation of his or her functions relating to the authorisation of multiple-business agreements (under paragraph 83BB(1)(h)) to his or her staff only.  Under proposed section 96F, the Employment Advocate may, upon the application of an employer, authorise the making of multiple-business agreements provided certain conditions listed in that section are satisfied.

Item 45 - Subsection 83BE(3)

266.           This item would repeal subsection 83BE(3) which presently allows the Employment Advocate to delegate certain of his or her functions to ‘any person’.  This capacity has never been utilised and the Employment Advocate would still be able to delegate his or her functions under subsection 83BB(1) to any person employed or appointed by the Commonwealth or a State or Territory. 

Item 46 - Division 2 of Part VIA

267.           This item would repeal Division 2 of Part VIA relating to the appointment, powers and functions of authorised officers.  Under the Bill, enforcement and compliance activities related to AWAs (currently performed by authorised officers) would be performed by workplace inspectors under Part V.

Item 47 - Section 83BS

268.           This item would repeal section 83BS and substitute a new section 83BS

New section 83BS - Identity of parties to AWAs not to be disclosed

269.           Proposed section 83BS would simplify the existing offence provision about disclosure of information identifying a person as having made an AWA.

270.           A person would commit an offence if:

·                he or she discloses information that the person acquired in the course of performing duties as workplace agreement official or who acquired it from a workplace agreement official;

·                that person had reasonable grounds to believe that information would identify a person as an AWA party; and

·                that disclosure is neither made in the course of the person’s duties as a workplace official nor required or permitted under legislation nor with the consent of the AWA party concerned.

271.           The proposed maximum penalty for this offence would be 6 months imprisonment.

272.           Subsection 83BS(2) would define workplace agreement official to mean the Employment Advocate, a delegate of the Employment Advocate or a member of the Employment Advocate’s staff. 

Illustrative Example

Bob (a workplace agreement official) and Sam are having a drink after work.  Bob recently discovered, in the course of performing his usual duties, that their mutual friend, Lisa, is engaged on an AWA.  Bob accidentally mentions this to Sam.  Under proposed section 83BS, Bob has committed an offence because the disclosure of the information was not in the course of his duties and was not authorised.  It could also be an offence for Sam to disclose the information about Lisa she has acquired from Bob to any other person.

Item 48 - Section 83BT

273.           This item would amend section 83BT which allows the Employment Advocate to publish or make available copies of, or extracts from, AWAs or ancillary documents.  This proposed amendment would replace the reference in that section to ‘AWAs or ancillary documents’ with ‘workplace agreements’, thereby broadening the application of this section to include individual agreements and collective agreements.  This is consistent with the Employment Advocate’s new broader role with respect to agreement making generally.

Item 49 - Part V (heading)

274.           This item would repeal the current heading to Part V and insert a new heading which reflects the change in title of inspectors to workplace inspectors.

Item 50 - Subsection 84(1)

275.           This item would amend the reference to inspectors in this subsection bringing it in line with the change in title to workplace inspectors.

Item 51 - Subsection 84(2)

276.           This item would repeal and replace subsection 84(2) which establishes who the Minister may appoint to be an inspector under the WR Act.

277.           Proposed subsection 84(2) would allow the Minister to appoint, by instrument, two classes of person as workplace inspector.  The first is a person who has been appointed or is employed by the Commonwealth; the second is any other person.  The term ‘instrument’ is not intended to refer to a legislative instrument for the purposes of the Legislative Instruments Act 2003 , but rather to a written document. 

Item 52 - Subsection 84(3)

278.           This item would repeal pre-reform subsection 84(3) which allows the making of arrangements with State or Territory governments for officers of the relevant State or Territory Public Service to undertake inspector functions.  Such an arrangement is not required given that the Minister is able to appoint any person under proposed paragraph 84(2)(b) which would include an officer of a State or Territory public service.

279.           Proposed subsection 84(3) would provide that a person appointed as a workplace inspector under paragraph 84(2)(a) (ie a Commonwealth officer or employee) holds that appointment for the length of time specified in the regulations.  Subsection 84(3A) would provide that a person appointed as a workplace inspector under paragraph 84(2)(b) (ie any other person) would hold that appointment for a period specified in the instrument of appointment.  However that period could not be longer than the period specified in the regulations.

Item 53 - Subsection 84(4)

Item 54 - Subsection 84(4A)

280.           These items would amend subsections 84(4) and 84(4A) which set out the powers of inspectors appointed under subsections 84(2)(a) and (b).  These amendments reflect the fact that workplace inspectors will be required to enforce the provisions of a range of industrial instruments provided for in the Bill.

Item 55 - Subsection 84(5)

281.           Subsection 84(5) presently provides that the Minister may issue directions to inspectors by notice published in the Gazette.  This item would amend subsection 84(5) to refer to such directions as legislative instruments for the purposes of the Legislative Instruments Act 2003 .

Item 56 - Subsection 84(6)

Item 57 - Subsection 85(2)

282.           These items would amend references to inspectors in these subsections bringing them in line with the change in title to workplace inspectors.  They would also make technical amendments, replacing ‘shall’ with ‘must’.  This is consistent with current drafting practice.

Item 58 - At the end of section 85

283.           This item would add a new subsection to section 85 which relates to the issuing of identity cards to workplace inspectors.  This proposed subsection would introduce a new offence provision relating to a workplace inspector who fails to return their identity card upon ceasing their appointment.  Under this provision, a person who ceases to be a workplace inspector must return their identity card to the Secretary of the Department within 14 days of the end of their appointment.  This would be a strict liability offence within the meaning of the Criminal Code. 

284.           The proposed maximum penalty for this offence would be 1 penalty unit. 

285.           It is important that identity cards be returned as soon as practicable after a workplace inspector ceases their appointment in order to prevent the improper use of such cards.

286.           This is an administrative obligation provision, with a small penalty attached where strict liability is commonly applied under Commonwealth law. 

Item 59 - Subsection 86(1)

287.           This item would repeal and replace pre-reform subsection 86(1) which deals with when an inspector can exercise his or her powers of entry and inspection.  The proposed subsection will reflect the range of industrial instruments provided for in the Bill.

288.           Proposed subsection 86(1) would establish that a workplace inspector may exercise his or her powers for the purposes of determining whether the following are being, or have been, observed:

·                workplace agreements;

·                awards;

·                the Standard;

·                minimum entitlements and orders under Part VIA; and

·                the requirements of the WR Act (other than section 541) and the regulations; or

·                for the purposes of a provision of the regulations that confers powers or functions on a workplace inspector.

289.           A legislative note would be inserted after this subsection to clarify that workplace inspectors have powers in relation to workplace determinations (made under Division 9 of Part VC) and undertakings (made under section 103M) because these instruments are enforceable as though they are collective agreements. 

Item 60 - Subparagraph 86(1A)(a)(i)

290.           This item would amend the purposes for which a workplace inspector may, without force, enter premises.  Proposed subparagraph 86(1A)(a)(i) would permit a workplace inspector to enter a premises where he or she has reasonable cause to believe that work is being performed pursuant to an industrial instrument or entitlement under subparagraphs 86(1)(a)(i) - (iv).  The amendment is necessary to reflect the range of industrial instruments provided for in the Bill.

Item 61 - Subparagraph 86(1A)(b)(iii)

291.           This item would amend pre-reform subparagraph 86(1A)(b)(iii) to provide that a workplace inspector can interview any person, rather than just any employee as provided in the current subparagraph, when on the premises or in a place referred to in paragraph 86(1A)(a).

Item 62 - At the end of paragraph 86(1A)(b)

292.           This item would add a new subparagraph at the end of paragraph 86(1A)(b) to allow a workplace inspector to require a person to tell them who has custody of a particular document.  This proposed subparagraph would allow workplace inspectors to more quickly and accurately identify documents which are relevant to their investigations.

Item 63 - Paragraph 86(1A)(c)

293.           This item is a technical amendment which removes redundant words in the pre-reform paragraph.  These words are no longer required because proposed subsection 86(1) makes clear that workplace inspectors may only exercise their powers for the purposes set out in that provision.

Item 64 - At the end of subsection 86(1A)

294.           This item would insert a note after subsection 86(1A) to make clear that a contravention of either the requirement to produce a document to an inspector made under subparagraph 86(1A)(b)(iv) or paragraph 86(1A)(c) may be an offence under section 305 (non-compliance with requirement made by an inspector).

Item 65 - Subsection 86(4B)

295.           Subsection 86(4B) presently provides that a person is not excused from producing a document under paragraph 86(1A)(c) on the ground that the production of the document may tend to incriminate the person.  This item would add the production of document pursuant to subparagraph 86(1A)(b)(iv) to this proposed subsection so that documents required to be produced to a workplace inspector under the two provisions are treated in the same way.

Item 66 - Subsection 86(4C)

296.           Subsection 86(4C) presently provides for limited use immunity for a document produced to an inspector under paragraph 86(1A)(c) so that the document and information obtained as a consequence of the production of the document are not admissible as evidence in criminal proceedings, except in proceedings for an offence against section 305 (non compliance with a requirement of an inspector).  This proposed amendment is consequential to the amendment at item 64 so that it provides protection against criminal prosecution where a person is compelled to produce a document despite the fact that it may incriminate them.

Item 67 - Subsections 86(6) and (7)

297.           This item would repeal both subsection 86(6) and (7).  Provisions relating specifically to Victoria are located in Parts XV and XVI.  The item would insert new subsections 86(6) and (7).

New subsections 86(6) and (7) - Extraterritorial extension

298.           Proposed subsection 86(6) would extend the application of subsection 86(1A) (powers of inspectors to enter premises and make inquiries) to premises in Australia’s exclusive economic zone owned or occupied by an Australian employer (as defined in subsection 4(1)).  The subsection would have effect subject to Australia’s international law obligations in relation to foreign-flagged ships and foreign-registered aircraft so that consideration would need to be given to those obligations in any case where it was intended to seek to board a foreign-flagged ship or foreign-registered aircraft.

299.           Proposed subsection 86(7) would extend the application of subsection 86(1A) (powers of inspectors to enter premises and make inquiries) to premises in, on or over a prescribed part of Australia’s continental shelf beyond the exclusive economic zone.  The extension would operate only if the premises were connected with the exploration of the continental shelf or the exploitation of its resources and the requirements prescribed in the regulations were met.  In making regulations, account would be taken of Australia’s international law obligations in relation to foreign-flagged ships and foreign-registered aircraft and its obligations in relation to matters in, on or over the continental shelf (including under agreements with other countries in relation to particular areas of the continental shelf).  The legislative note to subsection 86(7) would make clear that the regulations could prescribe different requirements for different parts of the continental shelf, including for reasons connected with Australia’s international obligations.

Item 68 - After section 86

300.           This item would insert a new section.

New section 86A - Disclosure of information by inspectors

301.           This proposed section would set out the circumstances in which a workplace inspector could disclose information to another person. 

302.           Under this proposed section, the disclosure of information by a workplace inspector would be authorised where that workplace inspector considered, on reasonable grounds that the disclosure is:

·                necessary or appropriate in the course of exercising his or her functions or duties and an inspector;

·                likely to assist an officer in the administration of the Migration Act 1958 ; or

·                likely to assist a officer of a State who has powers or functions in relation to the administration of a workplace relations or other employment related system.

303.           This proposed section would also allow the making of regulations to prescribe Commonwealth officers to whom a workplace inspector could disclose prescribed kinds of information.

304.           Proposed section 86A would provide an authorisation for disclosure of information pursuant to Information Privacy Principle 11(1)(d) of the Privacy Act 1988 .

Item 69 - Section 87

305.           This item would repeal pre-reform section 87 which allows the AIRC to request that the Secretary of the Department arrange for an inspector to investigate a matter affecting the safety of employees.  The repeal of this section is consistent with the redefined role of the AIRC as a dispute settling body at the request of the parties concerned.

Item 70 - Section 88

306.           This item would repeal pre-reform section 88 which requires the Secretary of the Department to prepare and provide to the Minister a report on the operation of Part V.  The original purpose of this section was to implement the reporting provisions in article 20 of ILO Convention (No.  81) Concerning Labour Inspection in Industry and Commerce which require the central inspection agency to produce an annual report. 

307.           In Australia, unlike some other countries, the central inspection agency is the Department.  Under section 63 of the Public Service act 1999 , the Secretary of the Department is required to produce an annual report detailing the Department's activities for tabling in Parliament.  Therefore the reporting obligations under article 20 of ILO Convention No.  81 are already addressed by the requirements of the Public Service Act 1999 Accordingly, the repeal of section 88 would not affect Australia's compliance with its international legal obligations.

Item 71 - Parts VA and VI

308.           This item would repeal Parts VA and VI and substitute the following Parts:

·                Part VA ~ The Australian Fair Pay and Conditions Standard;

·                Part VB ~ Workplace agreements;

·                Part VC ~ Industrial action;

·                Part VI ~ Awards; and

·                Part VIAA ~ Transmission of business rules

New Part VA - The Australian Fair Pay and Conditions Standard

309.           Proposed Part VA would provide for the Australian Fair Pay and Conditions Standard (the Standard).  The Standard will comprise the following key minimum entitlements for the employees to whom it applies:

·                basic rates of pay and casual loadings (proposed Division 2);

·                maximum ordinary hours of work (proposed Division 3);

·                annual leave (proposed Division 4);

·                personal leave, including sick, carer’s and compassionate leave (proposed Division 5); and

·                parental leave, including maternity, paternity and adoption leave (proposed Division 6).

310.           The Standard would be subject to the general constitutional limits of the WR Act, and the jurisdictional limits set out in proposed sections 89C and 89D. 

311.           Specific arrangements apply in respect of some employees in Victoria who are within constitutional coverage solely due to the Victorian referral legislation (proposed Part XV).

312.           The Standard would also not apply to:

·                employees in the transitional conciliation and arbitration award system (Schedule 13);

·                employees who are covered by pre-reform certified agreements and AWAs (Schedule 14);

·                employees who come into the system and who are covered by agreements made under State systems (Schedule 15).

313.           The various Divisions of Part VA also set out the types of employees to whom particular provisions of the Standard apply.

314.           The Standard would perform a number of functions. 

315.           First, it would provide guaranteed minimum entitlements to wages and conditions for award and agreement-free employees. 

316.           Second, it would underpin workplace bargaining.  New agreements made under the WR Act must always provide entitlements which are equal to or more favourable than the Standard.  The Standard would apply throughout the life of these agreements, and would prevail over inconsistent agreement terms to the extent that it is more favourable, in a particular respect (proposed section 89A).

317.           Third, it would provide the basis for the ‘more generous’ comparison with preserved award terms (proposed section 117C).

Division 1 - Preliminary

New section 89 - Purpose of Part

318.           Proposed section 89 would provide that the purpose of Part VA is to set out certain key minimum entitlements of employment, which together constitute the Standard.  The key minimum entitlements that comprise the Standard relate to:

·                basic rates of pay and casual loadings (proposed Division 2);

·                maximum ordinary hours of work (proposed Division 3);

·                annual leave (proposed Division 4);

·                personal leave (proposed Division 5); and

·                parental leave and related entitlements (proposed Division 6).

New section 89A - Operation of the Australian Fair Pay and Conditions Standard

319.           Proposed section 89A would outline the way in which the Standard operates. 

320.           Subsection 89A(1) would provide that the Standard provides key minimum entitlements of employment for the employees to whom it applies (as noted above, the Standard does not apply to all employees).

321.           A legislative note would point readers to the fact that the various Divisions of Part VA set out the employees to whom particular provisions of the Standard apply - for example, certain provisions relating to wages and casual loadings would only apply to casual employees.  A further legislative note would provide that the Standard is not relevant for some employees - for example those employees who are covered by pre-reform certified agreements and AWAs. 

322.           Subsection 89A(2) would provide that the Standard prevails over a workplace agreement or a contract of employment to the extent that it provides a more favourable outcome for the employee.

323.           This provision serves two purposes. 

·                it would provide guaranteed minimum entitlements to wages and conditions for award - and agreement-free employees; and

·                it would enable the Standard to underpin workplace bargaining. 

324.           New agreements made under the WR Act would be required to provide entitlements which are equal to or more favourable than the Standard.  The Standard would apply throughout the life of these agreements, and would prevail over inconsistent agreement terms to the extent that it is ‘more favourable, in a particular respect’.

Illustrative Examples

Natalie is a waitress.  Under the terms of the Bonny Teashoppe Collective Agreement which regulates Natalie’s employment, she works 38 ordinary hours per week, and is entitled to114 hours (the equivalent of 15 days) annual leave each year.  Natalie’s entitlement under the Standard would be 152 hours (the equivalent of 20 days) annual leave each year.  As her entitlement under the Standard provides a more favourable outcome than under the workplace agreement, Natalie will be entitled to 152 hours (or 20 days) annual leave.

James is a hairdresser in an upmarket salon in Sydney.  Under his contract of employment, he is entitled to wages of $476 each week for 38 ordinary hours.  Under the Standard, he would be entitled to the FMW of $12.75 per hour, which equates to $484.50 for a 38 hour week (as James is not covered by an award).  As his entitlement under the Standard provides a more favourable outcome than under his contract, James will be entitled to be paid $484.50 each week.

Lucy is a gym instructor.  Her AWA states that she is entitled to maternity leave of 52 weeks, the first 6 weeks of which would be paid leave.  The Standard provides for 52 weeks unpaid leave, reduced by any related authorised leave (such as paid maternity leave) she takes, and any parental leave taken by her spouse.  As Lucy’s AWA is more favourable in providing paid leave, her AWA prevails in this regard. 

 

325.           Proposed subsection 89A(3) would provide that regulations may prescribe for the purposes of subsection 89A(2):

·                what a ‘particular respect’ is, or is not; and

·                the circumstances in which the Standard provides or does not provide a more favourable outcome in a particular respect.

326.           A legislative note would provide that, for example, the regulations could prescribe the way in which particular amounts of annual leave are accrued as a particular respect under paragraph 89A(3)(a).

327.           A legislative note would set out an example of a circumstance in which the Standard does not provide a more favourable outcome.

New section 89B - Australia Fair Pay and Conditions Standard cannot be excluded

328.           Proposed section 89B would provide that a term of a workplace agreement or contract has no effect to the extent to which it purports to exclude the Standard or any part of it.

Illustrative Example

Mandy is a shop assistant.  Her contract of employment states that she is entitled to five days personal leave and that the Standard does not apply to her employment.  To the extent that a term of Mandy’s contract purports to exclude the Standard, it has no effect.  As the Standard provides for 10 days personal leave, and that entitlement is more favourable than under Mandy’s contract of employment, she would be entitled to 10 days personal leave.

 

New section 89C - This Part does not apply in relation to prescribed employees in Australia

329.           Proposed subsection 89C(1) would authorise the making of regulations to prescribe employees in Australia (by class or otherwise - see Note 1 to the subsection) to whom the provisions of the Standard do not apply.  If an employee is prescribed, the Standard would not apply to the employee’s employer in respect of that employee.  Legislative note 1 to subsection 89C(1) would explain that, for the purposes of proposed section 89C, Australia includes the Territory of Christmas Island, the Territory of Cocos (Keeling) Islands and the coastal sea.

330.           The purpose of the regulation making power in subsection 89C(1) would be to dis-apply the Standard on the basis of insufficiency of connection between the employee’s employment and Australia.  Proposed subsection 89C(2) would require that the Minister be satisfied that there was not a sufficient connection between the employee’s employment and Australia.  Although it would be open to the Commonwealth to apply the Standard to any employee in Australia, it may be impracticable or inappropriate to apply the Standard to some employees in Australia (for example, flight crew of a foreign airline who transit in and out of Australia, or an employee of a foreign employer on a short visit to, or tour of, Australia), and the regulation making power could be used to dis-apply the Standard to those employees. 

New section 89D - Extraterritorial operation

331.           Proposed subsection 89D(1) would extend the application of the Standard (and related provisions of the WR Act) to certain employees outside Australia and to their employers.  The legislative note to subsection 89D(1) would note that, for the purposes of section 89D, Australia includes the Territory of Christmas Island, the Territory of Cocos (Keeling) Islands and the coastal sea.

332.           In Australia’s exclusive economic zone, the Standard would apply to employees of Australian employers (as defined in subsection 4(1)), unless regulations were made to dis-apply the Standard to such an employee (proposed paragraph 89D(2)(a)).  Regulations could also extend the operation of provisions of the amended WR Act to other employees in the exclusive economic zone (proposed paragraph 89D(2)(b)).  In making regulations, account would be taken of Australia’s international law obligations in relation to foreign-flagged ships and foreign-registered aircraft.

333.           In relation to employees in, on or over Australia’s continental shelf beyond the exclusive economic zone, the Standard would apply only if regulations prescribed the part of the continental shelf where the employee was located and the employee met the requirements prescribed by the regulations (proposed subsection 89D(3)).  In making regulations, account would be taken of Australia’s international law obligations in relation to foreign-flagged ships and foreign-registered aircraft and its obligations in relation to matters in, on or over the continental shelf (including under agreements with other countries in relation to particular areas of the continental shelf).  The legislative note to subsection 89D(3) would make clear that the regulations could prescribe different requirements for different parts of the continental shelf, including for reasons connected with Australia’s international obligations.

334.           Outside Australia and the exclusive economic zone and continental shelf, the Standard would apply to Australian-based employees of Australian employers (as those expressions would be defined in subsection 4(1)).  In addition, proposed section 95E would have the effect of allowing workplace agreements to be made by Australian employers with non-Australian-based employees, and by non-Australian employers with Australian-based employees, wherever the work was to be performed.  In those cases, the Standard would apply in respect of that employment.  In all cases, regulations could be made to prescribe an employee outside Australia and the exclusive economic zone and continental shelf as an employee to whom the Standard does not apply (proposed subsections 89D(4) and (5)). 

335.           Subsection 89D(6) would provide a specific definition of this Act for the purposes of section 89D.  This is because the definition of this Act in proposed subsection 4(1) (which would otherwise apply) does not include the Registration and Accountability of Organisations Schedule and regulations made under it.  The specific definition would ensure that the extraterritorial extension under subsection 89D(1) would apply to that Schedule and those regulations so far as they relate to Part VA. 

New section 89E - Model dispute resolution process

336.           Proposed section 89E would provide that the model dispute resolution process set out in Part VIIA applies to disputes about the entitlements provided by Divisions 3 - 6 of the Standard.

Division 2 - Wages

Subdivision A - Preliminary

Section 90 - AFPC’s wage-setting parameters etc.

337.           Proposed section 90 would require the AFPC to act in accordance with its general wage-setting parameters under proposed section 7J when exercising its powers under this Division.  The Division also sets out additional considerations bearing on the exercise of the AFPC’s powers.

Section 90A - AFPC to have regard to recommendations of Award Review Taskforce

338.           Proposed section 90A provides that the  AFPC shall have regard to any relevant recommendations made by the Award Review Taskforce (ART).

Section 90B - Definitions

339.           Proposed section 90B would set out various terms used in this Division.  Only key definitions are explained here.

340.           APCS (or Australian Pay and Classification Scale) would mean a preserved APCS or a new APCS.  Proposed section 90X sets out what must or may be in an APCS. 

341.           APCS piece rate employee would mean an employee who is paid a basic piece rate of pay under an APCS that determines one or more basic piece rates of pay.

342.           Basic periodic rate of pay would be defined to exclude incentive-based payments and bonuses, loadings, monetary allowances, penalty rates or any other similar separately identifiable entitlements.  This reflects the division between what matters can be contained in an APCS and what can remain in awards as allowable matters.

343.           Basic piece rate of pay would mean a piece rate of pay , other than a piece rate of pay that is underpinned by a guaranteed basic periodic rate of pay.  A piece rate of pay other than a basic piece rate of pay would be characterised as an incentive-based payment or bonus, which would be allowable award matters.

Illustrative Example

Keith is employed as a fruit picker by Thunder Orchards Pty Ltd which is bound by the Horticultural Industry (AWU) Award 2000.  Under the award, Keith is entitled to be paid $28 for each bin of fruit he fills.  If Keith fills two bins per day, he is entitled to $56.  If he fills ten bins, his entitlement is $280. 

Under the award, Keith is not guaranteed a minimum periodic rate of pay (eg weekly rate). 

Following the reform commencement, Keith would be classified as an APCS piece rate employee.  His guaranteed basic piece rate of pay under the APCS derived from the Horticultural Industry (AWU) Award 2000 would be $28 per bin of fruit.

 

344.           Coverage provisions would mean provisions that determine whether a particular employee is covered by a pre-reform wage instrument as in force on the reform comparison day (the day immediately after the Bill commences) or an APCS.

345.           Proposed section 90ZD sets out those provisions from a pre-reform wage instrument that are taken to be incorporated into a preserved APCS.  At least initially, a preserved APCS would have the same coverage provisions as the pre-reform wage instrument from which it was derived.

346.           The coverage provisions for a pre-reform wage instrument are to include legislated ‘transmission of business’ rules affecting coverage (if any). 

347.           Employee with a disability would mean an employee who is or would be qualified for a disability support pensions under section 94 or 95 of the Social Security Act 1991 , but for paragraph 94(1)(e) or 95(1)(c) of that Act (which deal with the residential status of the employee).

348.           Piece rate of pay would mean a rate of pay that is expressed as a rate for a discrete or ascertainable output or task.  This rate may incorporate a piece rate loading and/or casual loading.

349.           Pre-reform federal wage instrument would include any of the following, as in force immediately before reform commencement:

·                an award (as defined in subsection 4(1) of the WR Act as in force immediately before the reform commencement), but excluding an order under section 120A of the WR Act or an award under section 170MX of the WR Act, as then in force;

·                proposed sections 552 and 555 of the WR Act as in force immediately before the reform commencement.  These sections would establish minimum wages and conditions for school-based apprentices and trainees, who would not otherwise be covered by an appropriate instrument;  or

·                any Commonwealth law or an instrument made under such a law identified in regulations made for the purposes of the definition.

350.           Pre-reform non-federal wage instrument would mean a pre-reform State wage instrument or a pre-reform Territory wage instrument.

351.           Pre-reform State wage instrument would mean any of the following, as in force immediately before reform commencement:

·                a State award (as defined in subsection 4(1) as in force immediately before the reform commencement);

·                a State law, or provision of a State law, that entitled employees or a class of employees, to a particular rate of pay;  or

·                a State law or provision of a State law, or an instrument made under such a law or provision that is specified, or is of a kind specified, in regulations made for the purposes of the definition.

352.           Pre-reform Territory wage instrument would mean any of the following, as in force immediately before reform commencement:

·                a Territory law, or provision of a Territory law, that entitled employees, or a particular class of employees to a particular rate of pay; or

·                a Territory law or provision of a Territory law, or an instrument made under such a law or provision that is specified, or is of a kind specified, in regulations made for the purposes of the definition.

353.           Pre-reform wage instrument would mean a pre-reform federal wage instrument or a pre-reform non-federal wage instrument.  Proposed section 90ZD would establish the process by which a preserved APCS is derived from a pre-reform wage instrument.

354.           Pro-rata disability pay method would mean a method for determining a rate of pay for employees with a disability by reference to their relative capacity, for example, a method that implements the supported wage system.

355.           Reform comparison day would mean the day before the day this Part commences.

356.           State or Territory training authority would mean a body authorised by a law or award of a State or Territory for the purpose of overseeing arrangements for the training of employees.

357.           Training arrangement would mean a combination of work and training that is subject to a training agreement or a training contract between the employee and employer which is registered with the relevant State or Territory training authority or under a law of a State or Territory.  This means that a training arrangement can only operate if the agreement or contract is registered in the appropriate way.

Section 90C - Meaning of casual loading provisions

358.           Proposed section 90C would define casual loading provisions as provisions that determine a loading payable to a casual employee or a casual employee of a particular classification under a pre-reform wage instrument or an APCS. 

359.           Subsection 90C(2) would set out a non-exhaustive list of ways in which a casual loading may be determined which include a direct specification of a monetary amount or percentage or a method for calculating the loading payable.

360.           Subsection 90C(3) would provide, subject to the regulations, that where a method for calculating a loading provided for a determination by a person or body, that determination would be taken to have been specified by the loading provisions. 

361.           This provision needs to be read in conjunction with:

·                subsection 90X(3) which is intended to prevent an APCS from containing ‘self executing’ casual loading provisions that would otherwise provide automatic loading increases, without anyone having to take any further action; and

·                paragraph 90X(4)(c) which is intended to prevent the AFPC from empowering the AIRC to determine a rate of pay or loading in a new APCS, or adjust a preserved or new APCS to do so.

Section 90D - Meaning of classification

362.           Classification provisions are necessary in order to determine what rate of pay a particular employee is entitled to under a pre-reform wage instrument or an APCS.

363.           Proposed section 90D would provide that a classification of employees may be described by reference to a non-exhaustive list of indicia such as the nature of the work performed and the skills or qualifications of employees.  For example, a classification could set out a skills-based career path or provide specific pay rates for junior employees (eg scale of rates). 

Section 90E - Meaning of rate provisions

364.           Proposed section 90E would define rate provisions as provisions in a pre-reform wage instrument or an APCS that determine a basic periodic rate of pay or basic piece rates of pay for an employee of a particular classification.  Subsection 90E(2) sets out a non-exhaustive list of ways in which a basic rate of pay may be determined which include a direct specification of a monetary amount, and by reference to another instrument or a method for calculating the monetary amount.  For example, a rate provision may set out a method for calculating the basic rate of pay for a junior employee as a percentage of the basic rate of pay for an adult employee (21 years or older).

365.           Subsection 90E(3) would provide, subject to the regulations, that where a method for calculating a rate provided for a determination by a person or body, that determination would be taken to have been specified by the rate provisions. 

366.           This provision needs to be read in conjunction with:

·                subsection 90X(3) which is intended to prevent an APCS from containing ‘self executing’ rate provisions that would otherwise provide automatic rate increases, without anyone having to take any further action; and

·                paragraph 90X(4)(c) which is intended to prevent the AFPC from empowering the AIRC to determine a rate of pay or a casual loading in a new APCS, or adjust a preserved or new APCS to do so.

Subdivision B - Guarantee of basic rates of pay

Section 90F - The guarantee

Section 90G - Provisions affecting what hours count as hours worked

367.           Proposed section 90F would establish a statutory guarantee of basic rates of pay.  An individual employee’s guaranteed basic periodic rate of pay would depend on whether his or her employment was covered by an APCS or an FMW.  The guaranteed basic periodic rate of pay would be:

·                for an employee whose employment is covered by an APCS (other than an APCS piece rate employee) - not less than the basic periodic rate of pay payable to the employee under the APCS (subsection 90F(1));

·                for an APCS piece rate employee - not less than the basic piece rates of pay payable to the employee under the APCS (subsection 90F(2)).  An employee could not be paid a basic piece rate of pay unless their employment was covered by an APCS and the rate provisions of the APCS determined one or more basic piece rates of pay that applied to the employment of the employee;

·                for an employee who is not covered by an APCS (other than a junior employee, an employee with a disability, or an employee to whom a training agreement applies) - not less than the standard FMW (subsection 90F(3));  or

·                for an employee who is not covered by an APCS and for whom there is a special FMW - not less than the special FMW (subsection 90F(4)).

368.           These provisions, together with subsection 90G(1), would require an employee to be paid at least his or her guaranteed basic periodic rate of pay for each hour required to be worked (or pro-rated for parts of hours required to be worked).

369.           Subsection 90G(2) would guarantee that, other than for a casual employee, an hour (or part thereof) that would have been worked by an employee had it not been a public holiday, would count as an hour (or part thereof) worked by the employee for the purposes of the guarantee under subsections 90F(1), (3) or (4).  This provision would not guarantee any additional allowance or loading for any hours actually worked on a public holiday.  Any such allowance or loading may be determined by the applicable award or workplace agreement.

370.           Subsection 90G(3) would define a public holiday to expressly exclude a union picnic day or any other day or kind of day excluded by the regulations.

371.           Subsection 90G(4) would clarify that an APCS may provide that hours attending off-the-job training by employees to whom training agreements apply may count as hours worked for the purpose of calculating the total monetary amount payable.

372.           Subsection 90G(5) is an avoidance of doubt provision which would specify that any hours worked by an employee do not count as hours worked for the purpose of calculating the total monetary amount payable if the employer is prohibited from paying strike pay under section 114.

Illustrative Example

Danielle is a piece worker who is employed by Bell Fashions Pty Ltd which is bound by the Clothing Trades Award 1999.  Under the award, Danielle received a piece rate of pay per garment produced of $12 per pair of trousers produced.  It usually takes Danielle between 30 and 45 minutes to produce one pair of trousers.  However, Danielle's award also stipulated that she must not be paid less than $13.20 per hour for each hour worked, which is the minimum hourly classification rate for her skill level in the award. 

After reform commencement, Danielle would not be an APCS piece worker because her piece rate of pay would be underpinned by a guaranteed basic periodic rate of pay.  Danielle’s piece rate of pay would be characterised as an incentive-based payment and remain in her award.  The basic periodic rate of pay guaranteed for Danielle under the APCS derived from the Clothing Trades Award 1999 would be $13.20 per hour.  Danielle would continue to receive $12 per pair of trousers produced, but could not be paid less than her guaranteed basic periodic rate of pay under the APCS for each hour worked.  For example, if Danielle worked for 38 hours per week and produced 50 pairs of trousers, she would be paid $600 (50 pairs multiplied by $12 per pair).  However, if she worked for 38 hours per week and only produced 20 pairs of trousers, she would be paid $501.60 (38 hours multiplied by $13.20 per hour).

 

Subdivision C - Guarantee of casual loadings

Section 90H - The guarantee

373.           Proposed section 90H would establish the guarantee of casual loadings for casual employees.  It makes it clear that a casual loading is only guaranteed if the employee has a guaranteed basic periodic rate of pay under proposed section 90F.  The intention behind proposed section 90H is to ensure that employees who are covered by an APCS are guaranteed the casual loading under that instrument.  It also ensures that casual employees covered by a workplace agreement or whose guaranteed rate of pay is the FMW are guaranteed the default casual loading.

374.           Subsection 90H(1) provides that the guarantee of casual loadings does not apply to a casual employee covered by an APCS if that APCS does not contain an applicable casual loading provision, and the casual employee is was not covered by a workplace agreement.

375.           Subsection 90H(2) would require a casual employee (other than a casual employee excluded under subsection 90H(1)) to be paid a casual loading that was at least equal to the amount determined by multiplying the employee’s guaranteed casual loading percentage by his or her actual basic periodic rate of pay.  For example, if the actual basic periodic rate of pay for an employee is $15.00 per hour and the APCS contains a casual loading provision that provides for a 25 per cent loading, a casual employee whose employment is covered by the APCS would be entitled to $18.75 per hour for each hour worked.

376.           An individual casual employee’s guaranteed casual loading percentage would depend on whether the employee’s basic periodic rate of pay is determined by an APCS, a workplace agreement or the FMW.  The guaranteed casual loading percentage would be:

·                for a casual employee whose basic periodic rate of pay is determined by an APCS - not less than the casual loading percentagepayable to the employee under the APCS (paragraph 90H(3)(a));

·                for a casual employee whose basic periodic rate of pay is determined by a workplace agreement - the default casual loading percentage (paragraph 90H(3)(b)); or

·                for a casual employee whose basic periodic rate of pay is the FMW - the default casual loading percentage (paragraph 90H(3)(c)).

Section 90I - Default casual loading percentage

Section 90J - Adjustment of default casual loading percentage

Section 90K - Only one default casual loading percentage

377.           Proposed section 90I would set the default casual loading percentage at 20 per cent.

378.           Proposed section 90J would allow the AFPC to adjust the default casual loading percentage, subject to various considerations that limit or affect the AFPC’s wage-setting powers.  For example, the AFPC would be required to ensure that the guaranteed casual loading percentage for a particular employee is not less than the guaranteed casual loading percentage that the employee would have received immediately after reform commencement.

379.           To avoid doubt, proposed section 90K would provide that in exercising its wage-setting powers, the AFPC must ensure that there is only one default casual loading percentage at any given time.

Illustrative Example

Mark is employed as a casual cleaner by Jacqui’s Sparkling Cleaners in Melbourne under the Building Services (Victoria) Award 2003.  Under the award, Mark is entitled to a casual loading of 25 per cent on top of his basic periodic rate of pay. 

Following reform commencement, Mark’s casual loading percentage of 25 per cent would be part of the APCS derived from the Building Services (Victoria) Award 2003. 

While Mark remained employed under the award, he would be guaranteed a casual loading percentage of 25 per cent under the APCS. 

If Mark negotiated a workplace agreement with his employer, he would be guaranteed the default casual loading percentage as part of the Standard.  If the workplace agreement was subsequently terminated, Mark would be guaranteed the casual loading percentage of 25 per cent from his APCS.

 

Subdivision D - Guarantee against reductions below pre-reform commencement rates

380.           Subdivision D would guarantee that the minimum rates of pay or casual loading for an employee cannot be less than the minimum rates of pay or casual loading that would have been payable to the employee had he or she been in their current circumstances of employment immediately after reform commencement.  This guarantee would be maintained by imposing limitations on the exercise of the AFPC’s wage-setting powers to adjust the standard FMW, to adjust an APCS, to determine a new APCS or to revoke an APCS.  This guarantee relies on the following key concepts:

·                commencement guaranteed basic periodic rate - which would mean the guaranteed basic periodic rate of pay for the employee if he or she had, at that time, been in his or her current circumstances of employment immediately after the reform commencement (paragraph 90L(1)(c));

·                resulting guaranteed basic periodic rate - which would mean the guaranteed basic periodic rate of pay for the employee immediately after the AFPC’s exercise of wage-setting powers takes effect (paragraph 90L(1)(b));

·                commencement guaranteed casual loading percentage - which would mean the guaranteed casual loading percentage for the employee if he or she had, at that time, been in his or her current circumstances of employment immediately after reform commencement (paragraph 90N(3)(b));

·                resulting guaranteed casual loading percentage - which would mean the guaranteed casual loading percentage for the employee immediately after the AFPC’s exercise of wage-setting powers takes effect (paragraph 90N(3)(a)); and

·                current circumstances of employment - in relation to an employee, includes any current circumstances of or relating to the employee’s employment (proposed section 90B).  This involves looking at a range of factual issues such as whether the employee is covered by an APCS, who the employee’s employer is, whether the employee was employed by that employer at reform commencement, whether the business commenced after the reform commencement and whether there has been a transmission of business.

Section 90L - The guarantee where only basic periodic rates of pay are involved

381.           Proposed section 90L would provide a minium wage guarantee to employees who have a guaranteed basic periodic rate of pay.  It would guarantee that the employee cannot be paid less than the basic periodic rate of pay that would have been payable to an employee in the same circumstances as that employee immediately after reform commencement.  This guarantee constrains the exercise of the AFPC’s wage-setting powers to adjust the standard FMW, to adjust an APCS, to determine a new APCS or to revoke an APCS.

382.           Subsection 90L(3) would require the AFPC to take into account the effect of any other exercise of its powers taking effect at the same time.

383.           Subsection 90L(4) would exclude the section’s operation in relation to the AFPC’s power to make an APCS pursuant to proposed sections 90ZP or 90ZQ (special APCSs in relation to employees with a disability or employees to whom training arrangements apply).

Illustrative Example

Jacob is employed as a full-time boilermaker in a small factory in Western Sydney owned by Barker Boilermakers.  The business was started up by Barker Boilermakers after the reform commencement.

Barker Boilermakers is currently covered by a preserved APCS that was derived from a federal pre-reform wage instrument, the Metal, Engineering and Associated Industries Award 1998.  Barker Boilermakers is covered by that APCS because it is a member of an employer association that is covered by the APCS.

To determine whether there is a commencement guaranteed basic periodic rate of pay for Jacob, it is necessary to work out whether there would have been a guaranteed basic periodic rate of pay for Jacob immediately after the reform commencement, had he been, at that time, in his current circumstances of employment.  Accordingly, it is necessary to consider what Jacob’s situation would have been had the business been in existence at that time.

If Jacob had been in his current circumstances of employment immediately after the reform commencement, his employment would have been covered by his current APCS.  Jacob’s commencement guaranteed rate would be worked out by looking at his classification and rate of pay in the preserved APCS as it was immediately after the reform commencement.

 

Illustrative Example

Samantha is employed as a full-time clerical worker for Waterhouse Fabrics, a manufacturer based in Sydney, NSW.  Samantha joined Waterhouse Fabrics before the reform commencement.

Before the reform commencement, Samantha’s employment was covered by the NSW Clerical and Administrative Employees (State) Award.  On reform commencement, a preserved APCS was derived from that award, and from that time covered Samantha’s employment.  The preserved APCS was revoked and replaced by a new APCS made by the AFPC, which consolidated and simplified a number of APCSs.  The coverage rules for the new APCS were not described by reference to State or Territory boundaries.

Samantha’s commencement guaranteed basic periodic rate of pay is her guaranteed basic periodic rate of pay as it was under the preserved APCS immediately after the reform commencement. 

When making the new APCS, the AFPC would have been required to ensure that Samantha’s basic periodic rate of pay did not fall below her commencement guaranteed basic periodic rate of pay, or the FMW, whichever was higher. 

 

Section 90M - The guarantee where basic piece rates of pay are involved

384.           Proposed section 90M would provide a minium wage guarantee to APCS piece rate employees.  It would guarantee that an APCS piece rate employee cannot be paid less than the basic pay per week that an APCS employee of average capacity in the same circumstances as that employee would have been paid immediately after reform commencement.  Accordingly, the AFPC must exercise its wage-setting powers in a way that it considers will not result in an employee of average capacity affected by the decision being entitled to less pay per week than would have been payable to that employee immediately after reform commencement.

385.           This provision deals with situations where the AFPC makes or adjusts an APCS basic piece rate of pay for an employee (whether or not that employee was an APCS piece rate employee prior to the AFPC’s decision taking effect) or adjusts an APCS so that an employee who was an APCS piece rate employee immediately before the decision is paid a basic periodic rate of pay immediately after the AFPC’s decision takes effect.

386.           Where an employee would be entitled to a basic piece rate after the AFPC’s decision takes effect and that employee would have had a guaranteed piece rate of pay immediately after reform commencement, the AFPC must exercise its powers in a way that it considers will not result in that employee receiving a lower basic piece rate than would have been payable to that employee had he or she been in their current circumstances of employment immediately after reform.

387.           However, if the employee was either:

·                entitled to a periodic rate of pay before the AFPC exercised its wage-setting powers, but would be entitled to a piece rate of pay after the AFPC exercised its wage-setting powers; or

·                entitled to a piece rate of pay before the AFPC exercised its wage-setting powers, but would be entitled to a periodic rate of pay after the AFPC exercised its wage-setting powers;

the AFPC must use the concept of the ‘employee of average capacity’.

388.           The inclusion of this concept would enable basic piece rates of pay to be converted into a basic periodic rate of pay or vice versa for the purposes of making comparisons under this Subdivision.  For example, if the AFPC adjusts an APCS so that an employee that was an APCS piece rate employee at reform commencement becomes entitled to a guaranteed basic periodic rate of pay after the AFPC decision takes effect, the AFPC must set that basic periodic rate of pay at a level that it considers would not be less than an APCS piece rate employee of average capacity in the same circumstances as the employee would have received as basic pay immediately after reform commencement.

389.           Subsection 90M(3) would require the AFPC to take into account the effect of any other exercise of its powers taking effect at the same time.

390.           Subsection 90M(4) would exclude the section’s operation in relation to the AFPC’s power to make an APCS pursuant to proposed section 90ZP or 90ZQ (special APCSs in relation to employees with a disability or employees to whom training arrangements apply).

Section 90N - The guarantee for casual loadings that apply to basic periodic rates of pay

391.           Proposed section 90N would provide a guarantee to a casual employee that if the AFPC proposes to exercise any of its powers listed in paragraph 90N(1)(a) such as adjusting the default casual loading percentage or an APCS, it must ensure that the casual loading percentage that applies to the basic periodic rate is not less than the casual loading percentage that would have been payable to that employee had he or she been in their current circumstances of employment immediately after reform commencement.

392.           The guarantee would require there to be both a resulting guaranteed casual loading percentage and a commencement guaranteed casual loading percentage for the employee affected by the decision.  Accordingly, the guarantee could not apply to an employee who became an APCS piece rate employee after the AFPC’s decision took effect or who was an APCS piece rate employee at reform commencement.

393.           If the resulting guaranteed casual loading percentage was the default casual loading percentage, subsection 90N(4) would deem that the commencement guaranteed casual loading percentage would be the initial legislated default casual loading percentage of 20 per cent. 

394.           Subsection 90N(5) would require the AFPC to take into account the effect of any other exercise of its powers taking effect at the same time.

Subdivision E - The guarantee against reductions below Federal Minimum Wages (FMWs)

Section 90O - The guarantee

395.           Proposed section 90O would guarantee that an employee (other than an APCS piece rate employee) covered by an APCS cannot be paid less than an applicable FMW (either the standard FMW as determined under proposed sections 90Q and 90R or a special FMW determined under proposed section 90S). 

396.           Subsection 90O(1) would require the AFPC to ensure that the basic periodic rate of pay that would be payable to an employee under an APCS immediately after the exercise of power by the AFPC is not below an FMW that covers that employee. 

397.           The legislative note would make it clear that the guarantee does not apply to basic periodic rate of pay initially included in a preserved APCS that is derived from a pre-reform wage instrument.  Proposed section 90O would only apply to any subsequent adjustment of those basic periodic rates of pay, or to any new APCS that replaced the preserved APCS.

398.           Subsection 90O(3) would provide that the guarantee that an employee cannot be paid less than an applicable special FMW does not apply unless:

·                the AFPC determined that the special FMW in question would operate as a minimum standard for one or more APCSs (proposed section 90T); and

·                the exercise of wage-setting powers by the AFPC affects one of the APCSs covered by that special FMW.

399.           Subsection 90O(4) would require the AFPC to take into account the effect of any other exercise of power by the AFPC taking effect at the same time.

Subdivision F - Federal Minimum Wages (FMWs)

400.           Proposed Subdivision F would establish a Federal Minimum Wage (FMW) and empower the AFPC to determine special FMWs. 

Section 90P - When is there an FMW for an employee

401.           Proposed section 90P would set out when there is an FMW for a particular employee.

402.           Subsection 90P(1) would establish that the standard FMW applies to every employee covered by the federal workplace relations system other than:

·                a junior employee (paragraph 90P(1)(a));

·                an employee with a disability (as defined in proposed section 90B) (paragraph 90P(1)(b));

·                an employee to whom a training agreement applies (including ‘school-based apprenticeships’) (paragraph 90P(1)(c)); or

·                an APCS piece rate employee (paragraph 90P(1)(d)).

403.           Subsections 90P(2) - (4) would set out when there is a special FMW for a junior employee, an employee with a disability, or an employee to whom a training agreement applies.  For example, there would be a special FMW for a junior employee if the AFPC set a special FMW under proposed section 90S for junior employees and the special FMW either applied to all junior employees or to a class of junior employees that included the particular junior employee.

404.           Where there is no applicable FMW, the employee would be guaranteed the basic periodic rate of pay as provided under Subdivision B.

Section 90Q - Standard FMW

Section 90R - Adjustment of standard FMW

405.           Proposed section 90Q would fix the initial standard FMW at $12.75 per hour, subject to the power of the AFPC to adjust the standard FMW. 

406.           Proposed section 90R would empower the AFPC to adjust the standard FMW, subject to various considerations or limitations on the exercise of its wage-setting powers.  For example, paragraphs 90R(2)(b) - (c) would guarantee that the standard FMW could not be adjusted below the initial legislated rate of $12.75 per hour.

Section 90S - Determination of special FMWs

Section 90T - AFPC to state whether special FMW is a minimum standard for APCSs

Section 90U - How a special FMW is to be expressed

Section 90V - Adjustment of a special FMW

407.           Proposed section 90S would empower the AFPC to determine a special FMW for any of the following groups:

·                all junior employees, or a class of junior employees (paragraph 90S(a));

·                all employees with a disability, or a class of employees with a disability (paragraph 90S(b)); or

·                all employees to whom training agreements apply, or a class of employees to whom training agreements apply (paragraph 90S(c)).

408.           Proposed section 90T would empower the AFPC to determine whether a special FMW should operate as a minimum standard.  The AFPC may determine that a special FMW should operate as a minimum standard for all APCSs, for a class of APCSs or for a single APCS.  For example, the AFPC could determine a special FMW for all junior employees that operates as a minimum standard.  This special FMW could set out a scale of rates according to the age of the junior. 

409.           Subsections 90T(2) - ( 4)  would prescribe how the instrument determining the special FMW should be expressed so as to identify which APCS the special FMW applies to.

410.           Proposed section 90U would require a special FMW to be expressed in a way that produces a monetary amount per hour.  It would make clear that this includes (but is not limited to) direct specification of a single dollar amount per hour (eg $13.75 per hour), several monetary amounts per hours (eg a scale of rates) or by specifying a method or methods for calculating a dollar amount per hour (eg as a percentage of another rate).

411.           Proposed section 90V would empower the AFPC to adjust a special FMW, subject to the provisions listed in subsection 90V(2).  To avoid doubt, subsection 90V(3) would make it clear that the AFPC may adjust a statement determining a special FMW, including which APCSs the special FMW applies to.

Subdivision G - Australian Pay and Classification Scales (APCSs):  general provisions

412.           Proposed Subdivision G would establish the legal framework for APCSs. 

Section 90W - What is an APCS?

413.           Proposed section 90W would define an APCS as a set of provisions that relate to pay and loadings for particular employees such as rate provisions (as defined in proposed section 90E), classifications (as defined in proposed section 90D), casual loading provisions (as defined in proposed section 90C) and coverage provisions (as defined in proposed section 90B).

414.           Subsection 90W(2) would clarify that an APCS includes both a preserved APCS (an APCS that is derived from a pre-reform wage instrument under proposed section 90ZD) or a new APCS that is determined by the AFPC under proposed section 90ZJ. 

Section 90X - What must or may be in an APCS

415.           Proposed section 90X would prescribe content rules for APCSs.  Subsection 90X(1) would provide that an APCS must contain:

·                rate provisions that set out basic periodic and/or piece rates of pay (paragraph 90X(1)(a));

·                classifications - where the rate provisions provide different basic periodic and/or piece rates of pay depending on the particular classification (paragraph 90X(1)(b));  and

·                coverage provisions so as to determine which employees are covered by the APCS (paragraph 90X(1)(c)).

416.           Subsection 90X(2) would provide that an APCS may also contain:

·                casual loading provisions for casual employees (other than piece rate employees - whose casual loading, if any, may be factored into their basic piece rates of pay) (paragraph 90X(2)(a));

·                classifications - where the loading provisions provide different casual loadings  depending on the particular classification (paragraph 90X(2)(b));

·                provisions relating to employees to whom training arrangements apply that stipulate whether hours attending off-the-job training (including hours attending an educational institution) count as hours worked (paragraph 90X(2)(c)).  This affects an employee’s guaranteed basic periodic rate of pay under proposed section 90F;  and

·                other incidental provisions (paragraph 90X(2)(d)) such as provisions that may prescribe when an employee actually receives wages.  For example, many wage instruments provide that wages are paid fortnightly in arrears.

417.           Subsections 90X(3) - (6) would set out a range of provisions that cannot be included in an APCS.  For example, subsection 90X(3) would prevent the AFPC from including a provision in an APCS that would otherwise automatically enable a rate or casual loading to be increased.  The legislative note would set out some common examples of the types of ‘self-executing’ provisions that would be excluded from rate and loading provisions in APCSs.  The legislative note would make it clear that the subsection does not prevent the AFPC from determining that an APCS, or an adjustment to an APCS, takes effect from a specified date.

418.           Subsection 90X(4) would prevent the AFPC from including a provision in an APCS that would determine whether an employer who acquired a business (whether by transfer or in some other way) was covered by the APCS (paragraph 90X(4)(a)).  Part VIAA sets out transmission of business rules.  Subsection 90X(4) would also prohibit provisions that allow a person or body to determine whether a particular employee was covered by an APCS (paragraph 90X(4)(b)) or which allow the AIRC to determine a rate of pay or casual loading (paragraph 90X(4)(c)).

419.           The legislative note would make it clear that subsection 90X(4) would not prevent a preserved APCS from containing provisions otherwise prohibited by subsection 90X(4) that were contained in the pre-reform wage instrument from which the APCS was derived.  The effect of such provisions, however, would be limited by proposed section 90Z (which sets out when the employment of a particular employee is covered by a particular APCS) and proposed section 90ZE (which allows for notional adjustments to be made to preserved APCSs immediately after reform commencement).

420.           Subsection 90X(5) would prevent the AFPC from including a provision in an APCS that purports to limit the duration of an APCS.  This means that, subject to the power of the AFPC to revoke an APCS, once made an APCS will operate indefinitely.

421.           Subsection 90X(6) would, subject to the regulations, prevent the AFPC from including in an APCS any provisions other than those required or allowed under this Subdivision.

Section 90Y - How pay rates and loadings are to be expressed in an APCS

422.           Proposed section 90Y would set out the rules for how rate provisions and casual loadings are expressed in an APCS.  It would require basic periodic rates of pay to be expressed as monetary amounts per hour, basic piece rates of pay to be expressed as a monetary amount and casual loading provisions to be expressed as a percentage of the basic periodic rate of pay.

423.           Proposed section 90E, which defines rate provisions, makes it clear that a rate provision may specify or refer to a rate of pay, or specify or refer to a method for calculating a rate.  Similarly, proposed section 90C, which defines casual loading provisions, makes it clear that a loading provision may specify or refer to a loading, or specify or refer to a method for calculating a loading. 

424.           Note that proposed section 90ZG provides for notional adjustments to preserved APCSs to ensure that basic periodic rates of pay are expressed as hourly rates of pay and casual loading provisions are expressed as percentages of the basic periodic rates of pay. 

425.           Subsection 90Y(4) would require the AFPC to comply with these rules when exercising its powers to make a new APCS or adjust an APCS.

Section 90Z - When is employment covered by an APCS?

426.           Proposed subsection 90Z(1) would provide that the coverage provisions in an APCS determine when a particular employee is covered by that APCS.

427.           To avoid doubt, subsection 90Z(2) would provide that provisions determining whether an employer who acquired a business (whether by transfer or in some other way) was covered by the preserved APCS only have effect in relation to acquisitions of businesses before the reform commencement.  Part VIAA sets out transmission of business rules after reform commencement which affect whether an employee is covered by a particular APCS.

428.           Similarly, to avoid doubt, subsection 90Z(3) would provide that provisions which allow a person or body to determine whether an employee is covered by a preserved APCS only have effect in relation to decisions made before the reform commencement.  After reform commencement only the AFPC can adjust coverage provisions of an APCS.

Section 90ZA - What if 2 or more APCSs would otherwise cover an employee?

429.           Proposed section 90ZA would provide for priority rules to determine when one APCS prevails over another APCS.

Section 90ZB - AFPC to remove coverage rules described by reference to State or Territory boundaries

430.           Proposed section 90ZB would require the AFPC to ensure that three years after reform commencement the coverage provisions in an APCS must not be determined by reference to State or Territory boundaries.  The AFPC would fulfil this obligation by exercising its powers to adjust, revoke or make new APCSs. 

431.           To avoid doubt, subsection 90ZB(2) would provide that in fulfilling its obligation under this section, the AFPC must comply with obligations imposed by this Division (eg ensuring that the guaranteed basic periodic rate of pay for an employee does not fall below the pre-reform basic periodic rate of pay or an applicable FMW).

Section 90ZC - Deeming APCS rates to at least equal FMW rates after first exercise of AFPC’s powers takes effect

432.           Proposed section 90ZC would provide that an employee (other than an APCS piece rate employee) cannot be paid less than an applicable FMW, irrespective of the rate provisions in an APCS that cover that employee.  This guarantee comes into operation after an exercise of the AFPC’s wage-setting powers for the first time takes effect. 

433.           Proposed section 90ZC would provide that where an employee is covered by an APCS and an FMW, the employee is guaranteed to be paid whichever basic periodic rate of pay is higher.  For example, if the employee is guaranteed $12.50 under an APCS and would be covered by the standard FMW (see proposed section 90P ) , after the AFPC’s exercise of wage setting powers takes effect for the first time, that employee would be guaranteed the standard FMW as it would be higher (ie $12.75 per hour).  This guarantee only applies if there is an FMW that applies to the particular employee.  For example, if the AFPC determines that a special FMW will operate as a minimum standard for all junior employees and the rate of pay under that special FMW is higher than the junior rate of pay under an applicable APCS, a junior employee covered by that APCS would be entitled to be paid the rate of pay set out in the special FMW.

Illustrative Example

Darrin is employed by DDS Pedigree Stud Farm as a Stablehand Grade I under the Federal Horse Training Industry Award 1998 .  Darrin's weekly rate of pay under the award is $503.70. 

In the award, ordinary hours of work are 40 hours per week.  On reform commencement and following notional adjustments under proposed section 90ZG, Darrin’s guaranteed basic periodic rate of pay will be his pre-reform weekly rate divided by the ordinary hours of work in his award. 

Under this formula, Darrin's hourly rate would be $12.59. 

If the APCS that covers Darrin’s employment was adjusted by the AFPC so that guaranteed basic periodic rate of pay under the APCS was higher than the FMW, Darrin would be guaranteed the basic periodic rate of pay under the APCS.

Assuming that at its first wage-setting decision, the AFPC does not adjust the APCS that covers Darrin’s employment, immediately after that first wage decision takes effect, Darrin will be guaranteed the FMW as it will be higher than the basic periodic rate of pay under the APCS. 

 

 

Subdivision H - Australian Pay and Classification Scales: preserved APCSs

Section 90ZD - Deriving preserved APCSs from pre-reform wage instruments

434.           Proposed section 90ZD sets out the mechanism by which a pre-reform wage instrument, (as defined in proposed section 90B) is converted into a preserved APCS on the reform commencement.  The preserved APCS would include rate provisions (as defined in proposed section 90E), classifications (as defined in proposed section 90D), casual loading provisions (as defined in proposed section 90C) and coverage provisions (as defined in proposed section 90B) derived from the pre-reform wage instrument. 

435.           Subsection 90ZD(3) would provide that, subject to regulations and after notional adjustments have been made to a preserved APCS under proposed sections 90ZE - 90ZH, any provision that does not comply with requirements for what an APCS must or may contain (proposed section 90X) or how rates of pay and casual loadings are to be expressed in an APCS (proposed section 90Y) is deemed not to be included in the APCS.

436.           Subsection 90ZD(4) would, subject to the regulations, provide for the order of notional adjustments in proposed sections 90ZE - 90ZH are to be made.

437.           Proposed section 90ZI would specify when regulations made for the purpose of subsection 90ZD(3) - (4) could be expressed to take effect.

Section 90ZE - Notional adjustment: rates and loadings determined as for reform comparison day

438.           Proposed section 90ZE would provide for notional adjustments to ensure that, subject to subsections 90ZE(2) - (4), all preserved APCSs provide for direct specification of a rate of pay or casual loading as at the reform comparison day.  For example, if an APCS specified a method for determining a junior rate of pay for each employee aged 16 to 20 by reference to a percentage of the adult rate of pay, subsection 90ZE(1) would notionally adjust the APCS to produce a specific rate of pay for each junior classification.  Accordingly, if the adult wage rate was $14 and junior rates of pay were determined as follows: 50% of the adult rate of for a 16 year old junior employee, 60 % for a 17 year old, 70% for an 18 year old, 80% for a 19 year old and 90% for a 20 year old, the notional adjustment would remove the link between adult rates of pay and junior rates of pay.  Instead, the APCS would specify a rates of pay as follows: $7 per hour for a 16 year old, $8.40 per hour for a 17 year old, $9.80 per hour for an 18 year old, $11.20 per hour for a 19 year old and $12.60 per hour for a 20 year old.  This would allow the AFPC to adjust adult and junior rates of pay under the preserved APCS independently of each other.

439.           Subsections 90ZE(2) - (4) provide that subsection 90ZE(1) does not apply in relation to:

·                a preserved APCS derived from sections 552 and 555 of the WR Act as in force immediately before the reform commencement (which provides a method for determining basic rates of pay for school-based trainees and school-based apprentices);

·                the rate provisions in an APCS that determine a rate of pay for an employee with a disability by reference to his or her assessed capacity (pro-rata disability pay method); and

·                rate provisions that determine a basic piece rate of pay by (or by referring to) a method.

440.           Subsection 90ZE(5) would allow for regulations to prescribe other situations where notional adjustments under subsection 90ZE(1) would not apply, or would only apply with specified modifications.

441.           Subsection 90ZE(6) would provide for notional adjustments to a preserved APCS immediately after the reform commencement to ensure that casual loading provisions in that APCS provide for a direct specification of the loading as at the reform comparison day.

Section 90ZF - Notional adjustment: deducing basic periodic rate of pay and casual loading from composite rate

442.           Proposed section 90ZF would operate where a preserved APCS specifies a basic periodic rate of pay for a casual employee that is higher than a basic periodic rate of pay for a non-casual employee and does not specifically determine a casual loading for the casual employee (ie the basic periodic rate of pay for a casual employee has an in-built casual loading).  In these circumstances, proposed section 90ZF would notionally adjust the APCS immediately after the reform commencement so that the composite rate was broken down into its component parts so that rate provisions for a casual employee covered by the APCS are expressed as a basic rate of pay without that built-in casual loading and a separate casual loading.

443.           The division of the composite rate in this way would ensure that the guarantees in Subdivisions B and C operated in a consistent way for casual employees for whom there would be a basic periodic rate of pay.

Section 90ZG - Notional adjustment:  how basic periodic rates and loadings are expressed

444.           Proposed section 90ZG would provide for notional adjustments to a preserved APCS to ensure that immediately after the reform commencement all basic periodic rates would be expressed as a rate of pay per hour and all casual loadings would be expressed as a percentage of the basic periodic rate.

Section 90ZH - Regulations dealing with notional adjustments

445.           Proposed section 90ZH would provide for regulations to prescribe other adjustments that could be taken to have been made to a preserved APCS.

446.           Subsection 90ZH(2) would also enable the regulations to determine the methods for working out the adjustments in proposed sections 90ZE - 90ZG, or to otherwise clarify any aspect of those sections.  Those sections would have effect accordingly.

447.           Proposed section 90ZI would specify when regulations made for the purpose of the subsection could be expressed to take effect.

Section 90ZI - Certain regulations relating to preserved APCSs may take effect before registration

448.           Proposed section 90ZI would provide for regulations made for the purpose of any of the provisions listed in subsection 90ZI(1) to take effect before their registration under the Legislative Instruments Act 2003 .

449.           Subsection 90ZI(3) would describe the interaction between regulations which would, under the section, take effect before their registration under the Legislative Instruments Act 2003 , and the operation of the listed proposed sections.

450.           While this provision allows for regulations to operate prior to their registration, it does not permit retrospective operation.  However, these regulations could affect what an employee’s commencement guaranteed basic periodic rate or commencement guaranteed casual loading percentage is taken to be in any prospective comparative assessment by the AFPC.

Subdivision I - Australian Pay and Classification Scales:  new APCSs

Section 90ZJ - AFPC may determine new APCSs

451.           Proposed section 90ZJ would empower the AFPC to determine an APCS (designated a new APCS), subject to the various considerations set out in subsection 90ZJ(2) that limit or affect the AFPC’s power to determine an APCS.

Subdivision J - Australian Pay and Classification Scales:  duration, adjustment and revocation of APCSs (preserved or new)

Section 90ZK - Duration of APCSs

452.           Proposed section 90ZK would provide that an APCS continues indefinitely, unless it is revoked or adjusted by the AFPC or its operation is affected by proposed section 90ZA which sets out when one APCS prevails over another APCS.

Section 90ZL - Adjustment of APCSs

453.           Proposed subsection 90ZL(1) would provide that the AFPC may adjust an APCS, subject to the various considerations set out in subsection 90ZL(2) that limit or affect the AFPC’s power to adjust an APCS.

Section 90ZM - Revocation of APCSs

454.           Proposed subsection 90ZM(1) would provide that the AFPC may revoke an APCS, subject to the various considerations set out in subsection 90ZM(2) that limit or affect the AFPC’s power to revoke an APCS.

Subdivision K - Adjustments to incorporate 2005 Safety Net Review etc.

Section 90ZN - Adjustments to incorporate 2005 Safety New Review

455.           Proposed section 90ZN would require the AFPC to adjust certain preserved APCSs to increase the rate provisions consistently with the AIRC’s 2005 Safety Net Review decision [Print PR002005].

456.           Subsection 90ZN(1) would provide that a preserved APCS can only be adjusted to accommodate the AIRC’s 2005 Safety Net Review decision if before the reform commencement the wage instrument from which the preserved APCS was derived:

·                was not adjusted by the AIRC in accordance with the 2005 Safety Net Review and was adjusted by the AIRC’s 2004 Safety Net Review; or

·                did not come into operation until after the AIRC’s 2004 Safety Net Review.

457.           This section ensures that an award that would have received the wage increase under the AIRC’s 2005 Safety Net Review decision, but for the establishment of the AFPC, will receive that increase at the AFPC’s first wage adjustment.

Illustrative Example

Branko is employed as a Category 2 Master and Engineer under the federal Tugboat Industry Award 1999 .  The Tugboat Industry Award 1999 received the 2004 safety net adjustment of $19 to all award rates on 27 April 2005.  In the 2005 Safety Net Review of Wages, the AIRC granted a $17 increase to all award rates of pay.  Under the AIRC's wage fixing principles, an award cannot receive the 2005 safety net adjustment until at least 12 months after it received the 2004 safety net adjustment.  The earliest this could happen would be 27 April 2006.

If the AFPC assumed responsibility for setting and adjusting minimum wages for award classifications prior to this date the AIRC would no longer be able to adjust the Tugboat Industry Award 1999 .  Branko would receive his $17 increase when the AFPC made its first wage adjustment, which would be expected to occur in Spring 2006.

 

458.           Subsection 90ZN(3) would provide that the AFPC must exercise its powers under Subdivision K when it first exercises its powers under Division 2.

459.           Subsection 90ZN(4) would provide that where the rate provisions of a preserved APCS have been adjusted to accommodate the 2005 Safety Net Review decision, the guarantee against reductions below a pre-reform basic periodic rate of pay under proposed section 90L applies to the adjusted rate provisions. 

Section 90ZO - Regulations may require adjustments to incorporate other decisions

460.           Proposed subsection 90ZO(1) would provide that regulations may be made to require the AFPC to adjust rate provisions in a class of particular APCSs, to increase those rate provisions to take account of decisions made before commencement of the reforms but not given effect in the particular APCSs.

461.           Subsection 90ZO(2) would provide that regulations made under subsection 90ZO(1) may modify the application of proposed section 90L in relation to an APCS adjusted under subsection 90ZO(1).

Subdivision L - Special provisions relating to APCSs for employees with disabilities and employees to whom training arrangements apply

462.           Subdivision L would remove major barriers to the employment of persons with a disability or apprentices or trainees.  Where an APCS inhibits the employment of a particular category of apprentice or trainee or a person with a disability because it does not make specific provision for them, proposed sections 90ZP and 90ZQ would require the AFPC to ensure that appropriate minimum wages are available.

463.           This would help ensure that all APCSs that the AFPC considers should have specific rates of pay for a class of employees with disabilities and/or a class of employees to whom training arrangements apply (eg part-time trainees or apprentices) do in fact contain such a specified rate of pay for that class.

Section 90ZP - Employees with disabilities

464.           Proposed section 90ZP would empower the AFPC to make a ‘gap filling’ APCS to cover the employment of employees with a disability.

465.           Subsection 90ZP(1) would require that where the AFPC considers that there should be an APCS that determines basic rates of pay for all, or a class of, employees with a disability, it must determine an APCS specifically for those employees.

466.           Subsection 90ZP(2) would require that where the AFPC determines an APCS under subsection 90ZP(1), it must expressly state that the APCS was determined for the purpose of proposed section 90ZP.

467.           Subsection 90ZP(3) would set out when an APCS made under subsection 90ZP(1) applies.  It would provide that a special APCS operates in relation to a particular employee with a disability only where:

·                another APCS does not cover that employee; or

·                another APSC covers the employee but it does not determine a basic periodic rate of pay that specifically applies to a class of employees with a disability covered by the special APCS to which the employee belongs. 

468.           In other words, where another APCS covers an employee with a disability and that APCS specifically determines basic rates of pay for the class of employees with a disability covered by the special APCS, that APCS will prevail over the special APCS.

469.           Subsection 90ZP(4) would provide that proposed section 90ZP, including subsection 90ZP(3), does not limit the powers of the AFPC to determine, revoke or adjust APCSs.

Illustrative Example

Anna has an intellectual disability and is qualified for a disability support pension as set out in section 94 or 95 of the Social Security Act 1991 .  King Meats operates a meat processing plant and would like to offer Anna full-time employment as a clerk, but is concerned about the employment costs associated with employing her.  The APCS that would apply to Anna’s employment was derived from an award that did not include the standard supported wage system or equivalent provisions to provide for a capacity-based pay method.  In the absence of such provisions, King Meats would be required to pay Anna the applicable full-time rate of pay.  Anna would stand a better chance of receiving a job offer from King Meats if her basic periodic rate of pay was a pro-rata wage rate based on her assessed productive capacity. 

Under proposed section 90ZP the AFPC has determined a special APCS that specifies that the standard supported wage system applies to the employment of employees with a disability.  This special APCS would provide that Anna be paid the pro-rata wage rate based on her assessed productive capacity.  This would provide Anna with a better chance of gaining full-time employment as an assistant administrative clerk at the meat processing plant.

 

Section 90ZQ - Employees to whom training arrangements apply

470.           Proposed section 90ZQ would empower the AFPC to make a ‘gap filling’ APCS to cover the employment of employees to whom training arrangements apply.

471.           Subsection 90ZQ(1) would require that, where the AFPC considers that there should be an APCS that determines basic rates of pay for all, or a class of employees to whom training arrangements apply (for example part-time trainees or apprentices), it must determine an APCS specifically for those employees. 

472.           Subsection 90ZQ(2) would provide that where the AFPC determines an APCS under subsection 90ZQ(1), it must expressly state that the APCS was determined for the purpose of proposed section 90ZQ.

473.           For example, the AFPC could determine one or more APCSs that set out specific minimum wages for apprentices and trainees employed under full-time, part-time and school-based arrangements, undertaking apprenticeships and traineeships at different qualification levels, in different occupations and in different industries, involving different combinations of work and training, and with different progression arrangements.  It would also ensure that the AFPC establishes appropriate minimum wages where State and Territory training systems develop new types of apprenticeships, traineeships or other training arrangements.

474.           Subsection 90ZQ(3) would set out when an APCS made under subsection 90ZQ(1) applies.  It would provide that a special APCS operates in relation to a particular employee to whom a training arrangement applies only where:

·                another APCS does not cover that employee; or

·                another APCS covers the employee but it does not determine a basic periodic rate of pay that specifically applies to a class of employees to whom a training arrangement applies covered by the special APCS to which the employee belongs. 

475.           In other words, where another APCS covers an employee to whom a training arrangement applies and that APCS specifically determines basic rates of pay for the class of employees to whom a training arrangement applies covered by the special APCS (for example part-time trainees or apprentices), that APCS will prevail over the special APCS.

476.           Subsection 90ZQ(4) would require the AFPC to consider whether it should determine APCSs for the purpose of this section as part of its first exercise of powers under this Division.  To avoid doubt, subsection 90ZQ(4) would provide that this requirement would not prevent the AFPC from re-considering the issue at any other time.

477.           Subsection 90ZQ(5) would provide that proposed section 90ZQ, including subsection 90ZQ(3), does not limit the powers of the AFPC to determine, revoke or adjust APCSs.

Illustrative Example

Lloyd is offered a carpentry and joinery apprenticeship by KE Jones Carpentry Pty Ltd.  At this stage KE Jones Carpentry is only in a position to employ him four days a week, including one day a week in off-the-job training at TAFE.  The APCS that would apply to Lloyd does not include wage rates for part-time apprentices. 

In the absence of such provisions, KE Jones Carpentry would have to employ Lloyd on a full-time basis which it cannot afford to do.  Under proposed section 90ZQ the AFPC has determined a special APCS that provides minimum wage rates for all part-time carpentry and joinery apprentices. 

By virtue of proposed section 90ZQ(3), the special APCS will allow KE Jones Carpentry to engage Lloyd thereby enabling him to commence his apprenticeship on a part-time basis. 

 

Subdivision M - Miscellaneous

Section 90ZR - Anti-discrimination considerations

478.           Proposed section 90ZR would set out anti-discrimination considerations that the AFPC must have regard to or apply in exercising its wage-setting powers under Division 2.  This section is intended to ensure that there are appropriate anti-discrimination safeguards to protect vulnerable employees.

479.           Subsection 90ZR(2) would provide that, for the purpose of the Commonwealth anti-discrimination legislation specified in subsection 90ZR(1), the AFPC does not discriminate against an employee or employees by determining or adjusting rate provisions in an APCS or a special FMW determined under proposed section 90S to provide for a junior rate of pay, a trainee or apprentice rate of pay or to provide for a pro-rata disability pay method (as defined in proposed section 90B).

Division 3 - Maximum ordinary hours of work

Subdivision A - Preliminary

New section 91 - Employees to whom Division applies

480.           Proposed section 91 would provide that this Division applies to all employees (as defined in proposed subsection 4AA(1)).

New section 91A - Definitions

481.           Proposed section 91A would define concepts that are used in this Division. 

482.           The definition of authorised leave includes periods of paid or unpaid leave or absence that are authorised by the employer, and leave to which an employee is otherwise entitled under either a term or condition of employment or legislation.

New section 91B - Agreement between employees and employers

483.           Proposed section 91B would allow for an employee and his or her employer to agree in writing to an applicable averaging period.

484.           Proposed section 91B would ensure that one of the ways in which an employer and employee may be taken to have agreed about such a matter is by way of an individual or collective workplace agreement (subsection 91B(1)). 

485.           Subsection 91B(2) would provide that an employer and employee are taken to agree about a particular matter if and as specified in an award that binds them.

486.           Subsection 91B(3) would clarify that employees and employers may agree about matters by other means.

Subdivision B - Guarantee of maximum ordinary hours of work

New section 91C - The guarantee

487.           Proposed section 91C would set out the guarantee of maximum hours of work.

488.           Subsection 91C(1) would set the maximum ordinary hours that an employee may be required to work.  Paragraphs 91C(1)(a)-(b) would provide that an employer must not require an employee to work more than 38 hours per week over the employee’s applicable averaging period.  Subject to subsection 91C(5), the employer may require the employee to work reasonable additional hours. 

489.           Subsections 91C(2) and (3) would define the applicable averaging period .

490.           For an employee employed by the same employer for a continuous period of less than 12 months, subsection 91C(2) would provide that the applicable averaging period will be the entire employment period, or a shorter ‘rolling’ period agreed between the employer and employee that finishes at the end of any particular employment period.

491.           For an employee employed by the same employer for a continuous period of at least 12 months, subsection 91C(3) would provide that the averaging period will be a ‘rolling’ period of any 12 months of the employment period, or a shorter period agreed between the employer and employee that finishes at the end of any particular employment period.

492.           Subsection 91C(4) would ensure that authorised leave taken by an employee is not to affect the calculation of the average number of hours that an employee has worked per week over the applicable averaging period.

493.           Subsection 91C(5) would set out a non-exhaustive list of factors that must be taken into account in determining what are reasonable additional hours for the purposes of proposed paragraph 91C(1)(b).  These factors are consistent with the AIRC Full Bench decision in the ‘Working Hours Test Case’ [Print 0792002].

Illustrative Example for calculating hours worked over an averaging period (1)

Ivanka is employed by ABC Pty Ltd (ABC).  Ivanka and ABC have agreed, in writing, that Ivanka’s applicable averaging period is 4 weeks. 

On 2 January 2006 Ivanka has been employed by ABC for a continuous period of 11 months.  To calculate whether Ivanka has been required to work more than an average of 38 hours per week over her most recent averaging period, Ivanka or ABC must:

•           work out the applicable averaging period (in this case the 4 week period starting on 5 December 2005 and ending on 1 January 2006);

•           add up how many hours Ivanka was required to work during that period, including any hours of authorised leave taken by Ivanka during that period (in this case, Ivanka was required to work 38 hours the first week, 46 hours the second week, 30 hours the third week and took 38 hours of authorised leave the fourth week, giving a total of 152 hours); and

•           divide the number of hours worked by the number of weeks in Ivanka’s averaging period (giving 38 hours).

In this example, Ivanka was not required to work more than an average of 38 hours per week over her most recent applicable averaging period.

 

Illustrative Example for calculating hours worked over an averaging period (21)

On 1 March 2006 Ivanka has been employed by ABC for a continuous period of 13 months, under the same agreement (which provides that her averaging period is 4 weeks).  To calculate whether Ivanka has been required to work more than an average of 38 hours per week over her most recent averaging period, Ivanka or ABC must:

•           work out the applicable averaging period (in this case, the 4 week period starting on 1 February 2006 and ending on 28 February 2006);

•           add up how many hours Ivanka was required to work during that period, including any hours of authorised leave taken during that period (in this case, Ivanka was required to work 42 hours the first week, 41 hours the second week, 38 hours the third week and 43 hours the fourth week, giving a total of 164 hours); and

•           divide the number of hours (164) by the number of weeks in her averaging period (4), giving 41 hours.

In this example, Ivanka was required to work more than an average of 38 hours per week over her most recent averaging period.  If those additional hours were not reasonable additional hours, determined by taking into account all relevant factors, ABC will have breached Ivanka’s guarantee of maximum ordinary hours of work.

 

New Division 4 - Annual leave

New Subdivision A - Preliminary

New section 92 - Employees to whom Division applies

494.           Proposed section 92 would provide that this Division applies to all employees (as defined in proposed subsection 4AA(1)).

New section 92A - Definitions

495.           Proposed section 92A would define a number of concepts that are used regularly in this Division.  The main definitions are explained below. 

496.           The definition of authorised leave includes periods of paid or unpaid leave or absence that is authorised by the employer, and leave to which an employee is otherwise entitled under either a contract of employment or legislation. 

497.           This definition is relevant to the definition of continuous service (explained below).  Paid authorised leave is included in the calculation of nominal hours worked which forms the basis for the annual leave entitlement guaranteed by this Division.

498.           The definition of continuous service is relevant to the calculation of an employee’s annual leave entitlement - which accrues in respect of the nominal hours worked over each four week period of continuous service with the same employer. 

499.           The definition of nominal hours worked means the sum of the number of hours that the employee was required to work, and did work (excluding any reasonable additional hours that the employee was required to work, and did work) and the number of hours of paid authorised leave taken by the employee during a particular period.  Periods of unpaid leave and authorised absences are not captured by the definition.  Nominal hours worked is relevant to how leave is accrued over a period of continuous service. 

500.           The definition of shift worker specifies a particular category of shift workers who are entitled to extra annual leave under subsection 92D(3).  A shift worker is defined as an employee who:

·                is employed in a business in which shifts are continuously rostered 24 hours a day for seven days a week;

·                is regularly rostered to work those shifts; and

·                regularly works on a Sunday or public holiday. 

501.           Continuous shift work is where a business uses continuous shifts of workers to operate 24 hours a day, seven days a week, without interruption except during breakdowns or meal breaks or due to unavoidable stoppages outside the employer’s control.  Continuous shift work is usually made up of two to three shifts per day.  An eligible shift work employee will be one who is required to work one of those shifts each day (except for rostered days off).  This results in regular work on Sundays and public holidays - this is the key reason for the additional annual leave entitlement in the Standard. 

502.           Regulations may add to the categories of employees who are considered to be shift workers.

New section 92B - Agreement between employees and employers

503.           Some aspects of this Division allow for agreement between an employee and his or her employer. 

504.           Proposed section 92B would ensure that one way in which an employer and employee may be taken to have agreed about such a matter is by way of an individual or collective workplace agreement (subsection 92B(1)). 

505.           Subsection 92B(2) would clarify that employees and employers may agree by other means about how annual leave is to be taken. 

New section 92C - Regulations may prescribe different definitions for piece rate employees

506.           Proposed section 92C would allow the making of regulations to ensure the annual leave guarantee for piece rate employees.  It is intended that regulations will only be made to the extent needed to give effect to the annual leave guarantee.  It is anticipated that this will only occur where it is apparent that the pre-reform definitions or rules contained in this Division are frustrated by the fact that piece rate employees are not remunerated by reference to hours worked.  The regulation making power is not intended to be a device to diminish the annual leave guarantee that would be provided by this Division.

New Subdivision B - Guarantee of annual leave

New section 92D - The guarantee

507.           Proposed section 92D would guarantee that employees to whom this Division applies (proposed section 92) are entitled to accrue a minimum amount of paid annual leave. 

508.           Subsection 92D(2) would guarantee all employees an entitlement to accrue an amount of paid annual leave for each completed four weeks of continuous service with an employer.  The employee is entitled to accrue 1 / 13 of the number of nominal hours worked by the employee for the employer during that four week period. 

509.           This is equivalent to four weeks annual leave for employees whose hours do not change over the course of a 12 month period - for example, an employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled to 152 hours of annual leave (which is four weeks of 38 hours each).  However, the formula also ensures that employees whose hours vary accrue appropriate amounts of annual leave.

510.           Subsection 92D(3) would provide additional leave for shift work employees (as defined in proposed section 92A).  The additional leave recognises the special circumstances of continuous shift workers and seven-day shift workers.  These types of shift workers are regularly called upon to work on Sundays and public holidays.  The additional annual leave entitlement in part compensates for the social and domestic inconvenience that continuous or seven-day shift work can cause.  The additional annual leave for shift workers is accrued on a pro-rata basis in respect of periods during which an employee is working as a shift worker. 

Illustrative Example

Denis is employed by Daytown Power Station (DPS) as a production officer under the Electricity Industry Award 2000.  D PS is a 24 hours a day, seven days a week business operation.  Production officers at DPS work on a roster cycle of 18 weeks that comprises nine weeks of continuous shift work (12 hour shifts over seven days), and nine weeks of 9am-5pm, Monday-Friday work.  Over a year this roster cycle is repeated - meaning that over a 12 month period Denis works six months on continuous shift work and six months on a Monday-Friday day shift.  Denis is therefore entitled to half a week of the additional annual leave entitlement - the additional entitlement he receives is proportionate to the time he spends working on a continuous shift during the year.

 

New section 92E - Entitlement to cash out annual leave

511.           Subsection 92E(1) would allow an employee to request to cash out a period of annual leave each year. 

512.           Subsection 92E(1) makes the entitlement to cash out annual leave conditional on:

·                a workplace agreement binding the employee and the employer including a specific provision that entitles the employee to cash out an amount of annual leave;

·                the employee making a written request to the employer to cash out an amount of annual leave that has been credited to the employee - it is not possible to cash out leave in advance of it being credited;

·                the workplace agreement binding the employee and the employer requiring payment in lieu of the amount of annual leave at a rate that is no less than the employee’s basic periodic rate of pay at the time that the cashing out occurs; and

·                the employer authorizing the employee to cash out the amount of annual leave. 

513.           It is anticipated that an employer would only refuse an employee’s request to cash out an amount of accrued annual leave on reasonable grounds.  Otherwise, the employer may be in breach of the workplace agreement that creates an employee entitlement to cash out an amount of annual leave.

514.           Subsection 92E(2) would cap the amount of annual leave that may be cashed out by an employee each year.  An employee would not be entitled to cash out an amount of annual leave that is greater than 1 / 26 of the nominal hours worked by the employee for the employer during the previous 12 months.  (This is equivalent to two weeks annual leave for employees whose hours do not change over the course of a 12 month period.)  This will ensure that employees have access to a reasonable period of annual leave for rest and recreation each year. 

515.           Subsection 92E(3) would prohibit an employer from requiring an employee to cash out an entitlement to annual leave, or exerting undue influence or undue pressure on an employee in relation to a decision about whether or not to cash out a period of annual leave. 

516.           Proposed section 101D would allow regulations to be made specifying matters that may not be included in a workplace agreement (prohibited content).  Prohibited content in a workplace agreement would be void.  It is proposed that a term in a workplace agreement that requires an employee to cash out a period of annual leave will be prescribed as prohibited content.

Illustrative Example

Antonia is employed by Steve at Belissimo Bread Bakery Pty Ltd.  The collective agreement permits the cashing out of the equivalent of two weeks of annual leave every 12 months.  Antonia would like to cash out two weeks of her leave so she can prepare for her upcoming trip to Italy which she has been diligently saving for.  Antonia knows she will have enough annual leave credits for when she takes the trip, so she would like some extra cash now to buy some new suitcases. 

Antonia provides her request to Steve in writing as required by the collective agreement.  Steve agrees.  Her next pay includes payment for the additional two weeks on top of her ordinary salary.

 

New Subdivision C - Annual leave rules

New section 92F - Annual leave - accrual, crediting and accumulation rules

517.           Proposed section 92F would provide the rules for the accrual, crediting and accumulation of annual leave.  An employee may only take paid annual leave once an entitlement to such leave has been accrued and credited in accordance with this section. 

518.           Subsection 92F(1) would provide that paid annual leave accrues on a pro-rata basis. 

519.           Subsection 92F(2) would provide for the crediting of annual leave each month.  If an employee’s working hours were variable from month to month, the amount of accrued leave credited each month would vary accordingly.

520.           Subsection 92F(3) would provide for the annual crediting of any additional leave due to shift workers.

521.           Subsection 92F(4) would provide that annual leave is cumulative.

New section 92G - Annual leave - payment rules

522.           Proposed section 92G would provide an entitlement to payment when an employee takes annual leave under this Division. 

523.           Subsection 92G(1) would provide that the employer must pay the employee an amount that is at least the employee’s basic periodic rate of pay immediately before the period of leave starts.  This provision does not affect any entitlement that the employee may have under an award or agreement to be paid an annual leave loading. 

524.           Subsection 92G(2) would provide that if the employee’s employment ends, the employee’s untaken accrued leave balance must be paid out at a rate that is at least the employee’s basic periodic rate of pay at the time that the employment ends.

New section 92H - Rules about taking annual leave

525.           Proposed section 92H would provide a number of rules regarding the taking of paid annual leave under this Division.

526.           Subsection 92H(1) would provide generally that an employee may take paid annual leave for a period provided that:

·                the employer has authorised the leave; and

·                the employee has an annual leave credit that is equal to or greater than the amount proposed to be taken as annual leave.  The Standard would not provide for an employee to take paid annual leave in advance of accruing that entitlement.

527.           Subsection 92H(2) would make clear that, subject to the requirement that sufficient leave credits be available, there are no other limits on the amount of paid annual leave that an employer may authorise an employee to take.  In particular, there is no minimum amount of annual leave that the employee must take on each occasion that leave is authorised.

528.           Subsection 92H(3) would allow an employer to refuse to authorise a proposed period of annual leave if this is necessary because of the operational requirements of the workplace or enterprise in respect of which the employee is employed.

529.           However, subsection 92H(4) would provide that an employer must not unreasonably:

·                refuse to authorise any period(s) of annual leave; or

·                revoke a previous authorisation of annual leave during a particular period.

530.           An employer who is found to have contravened this section may be penalised (see Division 2 of Part VIII - Penalties and other remedies for contravention of applicable provisions). 

531.           Subsection 92H(5) would enable an employer to direct any of its employees to take paid annual leave for a particular period when the employer shuts down the business, or any part of the business, in which the employee(s) concerned work(s).  Annual shut-downs are a common occurrence for Australian businesses - for example, many businesses shut down between Christmas and New Year’s Day, during January, or over Easter, since these periods are often characterised by slow trading.

532.           An employer may only direct an employee to take annual leave where that employee has an annual leave credit that is at least equal to the proposed shut down period. 

533.           Subsection 92H(6) would enable an employer to direct an employee to take a period of paid annual leave if the employee has an annual leave credit greater than 1 / 13 of the number of nominal hours worked over a two year period (an amount equivalent to 8 weeks for an employee working 38 hours per week over that period).  In this situation, the employer may direct the employee to take up to ¼ of his or her annual leave credit.  The intention of this provision is to ensure that:

·                employees regularly take periods of leave for rest and recreation, and

·                employers are not required to pay out excessive untaken leave accruals when an employee’s employment ends. 

Illustrative Example

Lucas has been employed by Chocolates Galore Pty Ltd for four and a half years, working 38 nominal hours each week.  In that time, he has accrued 684 hours (the equivalent of 90 days) of annual leave, of which he has taken 228 hours (the equivalent of 30 days), leaving a balance of 456 hours (or 60 days).

As Lucas enjoys his job he’s only ever taken a week or two of his annual leave each year to go surfing. 

Lucas’s current balance of annual leave is more than 304 hours (or 40 days), which is what he would normally accrue over a 24 month period. 

In this case, his employer could direct him to take up to one quarter (or 76 hours) of his accrued annual leave balance. 

 

New Subdivision D — Service: annual leave

New section 92I - Annual leave—service

534.           Proposed section 92I would guarantee that a period of annual leave does not break an employee’s continuity of service, and that annual leave counts as service for all purposes, subject to any exceptions prescribed by the regulations.

New Division 5 — Personal leave

New Subdivision A — Preliminary

New section 93 - Employees to whom this Division applies

535.           Proposed section 93 would identify the employees who are entitled to personal leave (including carer’s leave) under this Division. 

536.           Subject to subsection 93(3), subsection 93(1) would provide that this Division applies to all employees, other than casual employees, within the meaning of proposed subsection 4AA(1)).

537.           Subsection 93(2) would provide that Subdivision C of this Division, which provides a guarantee for unpaid carer’s leave, and sections 93O - 93P, which deal with notice and documentation requirements apply to all employees including casual employees.

New section 93A - Definitions

538.           Proposed section 93A would define a number of terms that are used regularly in this Division.  The main definitions are explained below.

539.           The definition of authorised leave includes periods of paid or unpaid leave or absence that is authorised by the employer, and leave to which an employee is otherwise entitled under either a contract of employment or legislation. 

·                This definition is relevant to the definition of continuous service (explained below).  Paid authorised leave is included in the calculation of nominal hours worked which forms the basis for the personal leave entitlement guaranteed by this Division. 

540.           The definition of continuous service is relevant to the calculation of an employee’s personal leave entitlement - which accrues in respect of the nominal hours worked over each four week period of continuous service with the same employer. 

541.           The definition of nominal hours worked means the sum of the number of hours that the employee worked (excluding periods of unauthorised leave and any reasonable additional hours that the employee was required to work, and did work) and the number of hours of paid authorised leave taken by the employee during a particular period.  Nominal hours worked is relevant to how leave is accrued over a period of continuous service. 

542.           The definitions of child , de facto spouse , and immediate family are relevant to the circumstances in which carer’s leave and compassionate leave may be taken under this Division.  These definitions are broad and expansive, and are intended to cover extended and blended families, including de facto marriages, step-relationships, and adoptive relationships.  Immediate family is defined as the employee’s spouse (including de facto spouse, former spouse, or former de facto spouses), child, parent, grandparent, grandchild or sibling.  In addition, immediate family includes the child, parent, grandparent, grandchild or sibling of the employee’s current or former spouse (including de facto spouses).  A de facto spouse is defined as a person of the opposite sex to the employee who lives with the employee on a genuine domestic basis as the employee’s husband or wife, without being legally married. 

New section 93B - Agreement between employees and employers

543.           Proposed section 93B would provide for types of agreement between an employee and his or her employer regarding the operation of some aspects of this Division. 

544.           Subsection 93B(1) would provide that one way in which an employer and employee may be taken to have agreed about such a matter (for example, how periods of unpaid carer’s leave (see proposed section 93K) or compassionate leave (see proposed section 93R) may be taken) is through a workplace agreement that binds the employee (subsection 93B(1)). 

545.           Subsection 93B(2) would confirm that employees and employers may agree by other means about how unpaid carer’s leave or compassionate leave is to be taken (for example, a written contract).

New section 93C - Regulations may prescribe different definitions for piece rate employees

546.           Proposed section 93C would enable regulations to be made to ensure the personal leave guarantee for piece rate employees.  It is intended that regulations will only be made to the extent needed to give effect to the personal leave guarantee.  It is anticipated that this would only occur where it is apparent that the pre-reform definitions or rules contained in this Division are frustrated by the fact that piece rate employees are not remunerated by reference to hours worked.  The regulation making power is not intended to diminish the personal leave guarantee that would be provided by this Division.

New section 93D - Meaning of personal/carer’s leave

547.           Proposed section 93D would define sick leave and carer’s leave for the purposes of personal leave under this Division. 

548.           Sick leave is paid leave taken by an employee because the employee has a personal illness or injury.

549.           Carer’s leave is paid or unpaid leave taken by an employee to provide care or support for a member of the employee’s immediate family or household.  Carer’s leave is available where a member of the employee’s immediate family or household is ill or injured, or there is an unexpected emergency affecting a family or household member.  For example, an unexpected emergency could include the employee being asked to meet with a school teacher to discuss the employee’s child’s learning requirements or to take a household member to a medical practitioner.

New Subdivision B—Guarantee of paid personal/carer’s leave

New section 93E - The guarantee

550.           Proposed section 93E would guarantee that employees to whom this Division applies (see proposed section 93) are entitled to accrue a minimum amount of paid sick leave and paid carer’s leave.

551.           Subsection 93E(1) would make the employee’s entitlement to paid sick leave and paid carer’s leave conditional upon the notice and documentation requirements contained in Subdivision D being satisfied, and provided that none of the exceptions contained in Subdivision B apply.

552.           Subsection 93E(2) would set out that an employee is not entitled to personal leave under this Division if he or she has failed to comply with the notice and documentation requirements in Subdivision D.  An employee complies with these rules if the required notice or document is presented either before or after the leave starts.

553.           A legislative note would indicate that a required document may be a medical certificate or a statutory declaration (depending on the circumstances).

New section 93F - Paid personal/carer’s leave - accrual, crediting and accumulation rules

554.           Proposed section 93F would set out the basis for the accrual, crediting and accumulation of personal leave.  Subsection 93F(1) would provide that an employee is entitled to take paid sick leave or paid carer’s leave once the entitlement to such leave has accrued and been credited in accordance with this section. 

555.           Subsection 93F(2) would guarantee all employees an entitlement to accrue an amount of paid personal leave for each completed four weeks of continuous service with an employer.  The employee is entitled to accrue 1/26 of the number of nominal hours worked by the employee for the employer during that four week period. 

556.           This is equivalent to two weeks of personal leave for employees whose hours do not change over the course of a 12 month period - for example, an employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled to 76 hours of personal leave (which is two weeks of 38 hours each).  However, the formula also ensures that employees whose hours vary accrue appropriate amounts of personal leave. 

557.           If the employee’s working hours were variable from month to month, the amount of accrued leave credited each month would vary accordingly.

558.           Subsection 93F(3) would confirm that paid personal leave accrues on a pro-rata basis.

559.           Subsection 93F4) would provide for the crediting of paid personal leave each month.  For example, the employer may credit leave on the first day of each month, or on the first Monday of every month (except for public holidays, when the leave will be credited the next business day).  If an employee’s working hours were variable from month to month, the amount of accrued leave credited each month would vary accordingly.

560.           Subsection 93F(5) would provide that paid sick leave and paid carer’s leave is cumulative. 

Illustrative Example

Roland is a butcher.  He is employed subject to The Other Cheek Pty Ltd Agreement, which was made after the commencement of the Work Choices Act 2005.  The workplace agreement provides for the accrual of 84 hours of paid personal leave per year (credited monthly), based on Roland having nominal hours worked of 38 hours per week.  The agreement also provides that paid personal leave shall accumulate for a period of no longer than four years from the end of the year in which it accrues. 

The personal leave guarantee contained in the Standard means that Roland will be allowed to accumulate paid personal leave indefinitely and it would no longer ‘expire’ after four years.

New section 93G - Paid personal/carer’s leave - payment rules

561.           Proposed section 93G would provide an entitlement for payment when an employee takes sick leave or carer’s leave under this Subdivision.  The employer must pay the employee an amount that is equivalent to what the employee would reasonably have expected to receive had the employee worked during the period of leave. 

New section 93H - Paid sick leave - no entitlement if workers’ compensation received

562.           Proposed section 93H would create an exception to taking paid sick leave in relation to workers’ compensation.  An employee is not entitled to take paid sick leave to cover an absence from work because of personal illness or injury if the employee is receiving workers’ compensation payments under a Commonwealth, State or Territory law.

New section 93I - Paid carer’s leave - annual limit

563.           Proposed section 93I would insert an annual cap on an employee’s entitlement to take paid carer’s leave where the employee has provided more than 12 months continuous service to the employer. 

564.           Subsection 93I(2) would provide that paid carer’s leave may not be taken at a particular time if, during the previous 12 months, the employee has already taken paid carer’s leave of more than 1/26 of the nominal hours worked. 

565.           In effect, an employee would be entitled to use up to 10 days of paid personal leave each year for the purposes of caring for members of the employee’s immediate family or household who are sick and require care and support, or who require care due to an unexpected emergency.  The remainder of the employee’s accrued personal leave entitlement would be reserved to be taken as paid sick leave when the need arises. 

New Subdivision C—Guarantee of unpaid carer’s leave

New section 93J - The guarantee

566.           Proposed section 93J would guarantee that all employees (including casual employees (see proposed section 93)) are entitled to two days of unpaid carer’s leave on each occasion that a member of the employee’s immediate family or household requires care and support due to being ill, injured, or affected by an unexpected emergency 

567.           Subsection 93J(2) would make the employee’s entitlement to unpaid carer’s leave conditional upon the notice and documentation requirements contained in Subdivision D being satisfied and provided that none of the exceptions contained in Subdivision C apply.

568.           Subsection 93J(3) would set out that an employee is taken not to be entitled to unpaid carer’s leave if the employee has failed to comply with the notice and documentation requirements in Subdivision D.

New section 93K - Unpaid carer’s leave - how taken

569.           Proposed section 93K would allow an employee who is entitled to unpaid carer’s leave to take that leave in one continuous period (ie two consecutive working days), or in distinctly separate periods as agreed between the employer and the employee.  For example, an employer and an employee could agree that the employee will take unpaid carer’s leave as four consecutive half-days, so that the employee could share caring duties with someone else.

Illustrative Example

New Horizons Pty Ltd employs Brendan as an architect.  Brendan and his wife, Rachel, have three children who have all caught the chicken pox.  Two months ago, Brendan had used all of his paid sick leave when he contracted glandular fever.  Caring for three sick children at once is ‘a bit of a handful’, so Brendan and his manager have agreed that he can take unpaid carer’s leave over the next four days.  The plan is for Brendan to spend the next four mornings at home caring for the children, followed by ‘some respite’ at work in the afternoons.  Rachel has agreed a similar arrangement at her workplace, so she can be the carer during the afternoons.  One parent will be at home to care for the children at all times.

 

New section 93L - Unpaid carer’s leave - paid personal leave exhausted

570.           Proposed section 93L would make the employee’s entitlement to take unpaid carer’s leave under this Subdivision conditional upon the employee not having any accumulated paid carer’s leave or any other authorised leave for caring purposes.

New Subdivision D—Notice and evidence requirements: personal/carer’s leave

New section 93M - Sick leave - notice

571.           Proposed section 93M would require an employee to give notice to their employer that he or she is or will be absent from work due to a personal injury or illness.  The notice must be given to their employer as soon as reasonably practicable.  However there is no requirement that the notice must be in writing (eg it may be given verbally over the phone).  It is intended that the employee’s notice requirement will be waived if the employee is unable to comply due to circumstances beyond the employee’s control - for example, if the employee is comatose, or is suffering severe mental or physical impairment that would make compliance with the notice provision impractical.

572.           The note would confirm that the use of personal information given to an employer under this section is subject to the Privacy Act 1988 .

New section 93N - Sick leave - medical certificate

573.           Proposed section 93N would allow (but does not require) an employer to require an employee to provide a medical certificate as soon as reasonably practicable for any period of paid sick leave that has been, or is proposed to be, taken by the employee. 

574.           Subsections 93N(2) - (3) would not allow the employee to access their paid sick leave entitlement if the employee has failed to take reasonably practicable steps to comply with the employer’s request for a medical certificate.

575.           Subsection 93N(4) would prescribe that the medical certificate must include a statement about the employee’s unfitness to work due to personal illness or injury.

576.           Subsection 93N(5) would exempt an employee from the requirement to present a medical certificate if the employee is unable to comply due to circumstances beyond the employee’s control - for example, if the employee is comatose, is suffering severe mental or physical impairment, has been transferred to another city for medical treatment, or has since died. 

577.           The note would confirm that the use of personal information given to an employer under this section is subject to the Privacy Act 1988 .

New section 93O - Carer’s leave notice

578.           Proposed section 93O would require an employee to give notice to their employer that he or she is or will be absent from work for to provide care or support to a member of the employee’s immediate family or household.  The notice must be given to their employer as soon as is reasonably practicable.  However there is no requirement that the notice must be in writing (eg it may be given verbally over the phone).  It is intended that the employee’s notice requirement will be waived if the employee is unable to comply due to circumstances beyond the employee’s control.

New section 93P - Carer’s leave - documentary evidence

579.           Proposed section 93P would allow (but does not require) an employer to obtain documentary evidence from an employee to substantiate a claim for paid carer’s leave that has been, or is proposed to be, taken by the employee.  An employee would comply with an employer’s request for the required document as soon as reasonably practicable.  The required document may be in the form of a medical certificate in relation to the member being cared for, or a statutory declaration.

580.           Subsections 93P(2) - (3) would not allow the employee to access their paid carer’s leave entitlement if the employee has failed to take reasonably practicable steps to comply with the employer’s request for documentation.

581.           Subsections 93P(4)-(5) would prescribe that the required document must include a statement that the employee needs to take leave to provide care or support to a member of their immediate family or household who is ill, injured, or affected by an unexpected emergency. 

582.           Subsection 93P(6) would exempt an employee from the requirement to present the required document if the employee is unable to comply due to circumstances beyond the employee’s control.

583.           The note would confirm that the use of personal information given to an employer under this section is subject to the Privacy Act 1988 .

New Subdivision E — Guarantee of compassionate leave

New section 93Q - The guarantee

584.           Proposed section 93Q would provide a guarantee of paid compassionate leave.  An employee (other than a casual employee) would be entitled to take two days paid leave to spend time with a critically ill, injured, or dying person who is a member of the employee’s immediate family or household.

585.           An employee may take up to two days compassionate leave upon the death of a member of their immediate family or household.

586.           An employee does not need to start taking a period of compassionate leave immediately when the illness, injury or death occurs. 

587.           The employee must present evidence of the illness, injury, or death that gives rise to the entitlement for compassionate leave where the employer makes a reasonable request for proof.

588.           The note would confirm that the use of personal information given to an employer under this section is subject to the Privacy Act 1988 .

New section 93R - Taking compassionate leave

589.           Proposed section 93R would allow an employee who is entitled take compassionate leave to take that leave in one continuous period (ie two consecutive working days), or two single periods of one day each, or in distinctly separate periods as agreed between the employer and the employee. 

590.           The employee may use their two days paid compassionate leave immediately after the death to personally grieve.  Alternatively, the employer and employee may agree that the employee take separate periods of leave spread over a number of days.

Illustrative Example

Felicity is an employee of Rashan’s HomeComfort Pty Ltd.  Felicity’s grandmother has died suddenly.  Felicity and her supervisor have agreed that she may use her two days of paid compassionate leave over three days.  Felicity will take paid compassionate leave for a half day to make funeral arrangements.  To attend the funeral, Felicity will take one day’s paid compassionate leave.  She will also take leave for half of the next working day to grieve with her family.

 

New section 93S - Compassionate leave - payment rules

591.           Proposed section 93S would provide an entitlement to payment when an employee takes compassionate leave under this Subdivision.  The employer must pay the employee an amount that is equivalent to what the employee would reasonably have expected to receive had the employee worked during that period of leave. 

Subdivision F—Personal leave: service

New section 93T Paid personal leave - service

592.           Proposed section 93T would guarantee that a period of paid personal leave under this Division does not break an employee’s continuity of service. 

593.           Subsection 93T(2) would guarantee that periods of paid leave taken in accordance with this Division will count as service for all purposes except as provided by the regulations.

New section 93U - Unpaid carer’s leave - service

594.           Proposed section 93U would guarantee that a period of unpaid carer’s leave taken in accordance with Subdivision C does not break an employee’s continuity of service.

595.           Subsection 93U(2) would make clear that a period of unpaid carer’s leave does not otherwise count as service unless provided for in a workplace agreement, award, or contract of employment, legislation, or as prescribed by the regulations.

New Division 6 - Parental leave

596.           This Division would set out entitlements for employees to parental leave and related entitlements.  The Division would cover:

·                maternity leave, including special maternity leave (proposed Subdivisions B-D));

·                paternity leave (proposed Subdivisions E - G); and

·                adoption leave (proposed Subdivisions H - J).

597.           Proposed Subdivisions A and K would deal with general matters applying to all types of parental leave.

New Subdivision A - Parental leave: preliminary

New section 94 - Employees to whom Division applies

598.           Proposed section 94 would identify the employees entitled to parental leave under this Division.  The entitlement applies to all employees (as defined in proposed subsection 4AA(1)), other than casual employees who are not eligible casual employees (defined in proposed section 94B).

·                The parental leave entitlements provided by the Standard would also be extended beyond the employment relationships to which the rest of the Standard applies (by proposed new Division 5 of Part VIA), so they apply to all equivalent employees regardless of whether they are employees within the meaning of section 4AA.  This extension gives effect to international obligations. 

New section 94A - Definitions

599.           Proposed section 94A would define a number of concepts that are used regularly in this Division. 

600.           The definition of adoption agency includes any entity that is able to perform functions relating to adoption, including authorising adoptions.  The definition would extend to adoption agencies set up under a law of a foreign country.  This would allow employees to access adoption leave under the Standard where the adoption is authorised in Australia or a foreign country. 

601.           The definition of authorised leave includes any period of paid or unpaid leave or absence authorised by the employer, and leave to which an employee is otherwise entitled under either a contract of employment or legislation. 

602.           The definition of continuous service is relevant to whether an employee is entitled to access parental leave under this Division.  An employee must have at least 12 months continuous service at the relevant time, or be an eligible casual employee - which incorporates a 12 month service requirement - to be entitled to parental leave (see proposed sections 94C, 94T and 94ZL).  Continuous service includes periods of authorised leave taken by an employee, other than where the employment for the period as a casual employee is not regular and systematic. 

603.           The definition of day of placement (which relates to adoption leave) would extend to inter-country adoptions, where the parents generally have to travel to the county from which the child is adopted to collect the child.  The definition would allow the employee to access adoption leave in order to travel overseas to collect a child.  Proposed paragraph (b) of that definition would deal with the situation where a child is placed with couple for a trial period of foster care pending authorisation of adoption. 

604.           The definitions of de facto spouse and spouse would be relevant to the circumstances in which parental leave may be taken under this Division and how other related authorised leave taken by a spouse affects the total parental leave entitlement (for example, see proposed sections 94D and 94U). 

605.           The definition of expected date of birth (which is relevant to comply with the notice and documentation requirements for maternity and paternity leave) would clarify that the relevant date is the date specified in the medical certificate required to be provided to the employer, or if this requirement is not able to be complied with for reasons beyond the employee’s control, the date of birth that could reasonably be expected if the pregnancy were to go full term.  This would cover the case where, for example, an employee was seriously ill in hospital and unable to obtain a medical certificate at the time when she was required to give notice to her employer of the expected date of birth.

New section 94B - Meaning of eligible casual employee

606.           Proposed section 94B would define an eligible casual employee for the purposes of determining the circumstances in which a casual employee would be entitled to parental leave.  An employee would be an eligible casual employee where they have been employed with a particular employer on a regular and systematic basis over a continuous period of at least 12 months, and the employee has a reasonable expectation of continuing engagement with that employer.

607.           Subsection 94B(2) would further provide that an employee is an eligible casual employee for the purpose of this Division even if his or her regular and systematic casual employment is terminated by the employer before 12 months continuous employment, in circumstances where  the employee is again engaged by the employer on a regular and systematic basis within three months.  In these circumstances the combined period of employment must be at least 12 months.  As with eligible casuals generally, the employee must have a reasonable expectation of continuing engagement with the same employer.

New Subdivision B - Guarantee of maternity leave

New section 94C- The guarantee

608.           Proposed section 94C would guarantee an employee’s entitlement to unpaid maternity leave under this Division. 

609.           Paragraph 94C(1)(a) would provide that an employee is entitled to unpaid special maternity leave if she has a pregnancy related illness or her pregnancy ends within 28 weeks before the expected date of birth otherwise than by the birth of a living child.  For example, an employee would be entitled to special maternity leave if she suffers a miscarriage within 28 weeks before the expected date of birth. 

610.           Paragraph 94C(1)(b) would provide that an employee is entitled to a single, unbroken period of unpaid ordinary maternity leave (under subsection 94C(2)) in respect of the birth or expected birth of a child. 

611.           Leave taken in a continuous, unbroken period does not preclude the employee from adding other types of authorised leave, such as annual leave or paid maternity leave, to the total leave period taken (up to a maximum of 52 weeks), but the maternity leave period cannot be broken up into separate periods of leave.

612.           Subsection 94C(2) would make the employee’s entitlement to maternity leave conditional upon 12 months continuous service with the same employer or engagement as an eligible casual employee (which incorporates a 12 month service requirement, proposed section 94B refers).  The 12 month continuous service period can contain elements of permanency, regular and systematic casual employment, and authorised leave.  At the time when the question of entitlement to parental leave arises, no matter how the continuous service period is made up, the employee must be either permanent or an eligible casual.  That is, any ‘casual period’ would have to precede the employee attaining permanent or eligible casual status.

613.           The entitlement to maternity leave is also subject to the restrictions in proposed sections 94D and 94E and proposed Subdivision D. 

614.           Subsection 94C(3) would set out the circumstances under which an employee would not be entitled to maternity leave (these relate to the failure to provide the required documentation to the employer). 

615.           An employee would be able to take special maternity leave, ordinary maternity leave or both, depending on individual circumstances (subsection 94C(4)). 

New section 94D - Period of maternity leave

616.           Proposed section 94D would set out a method for calculating the period of unpaid maternity leave that is available to an employee who has satisfied the eligibility criteria under proposed section 94C.

617.           Subsection 94D(3) would provide that the maximum total amount of unpaid maternity leave, including both special and ordinary maternity leave, is 52 weeks.  However, any amount of related authorised leave taken by the employee or her spouse would reduce the total amount of maternity leave available. 

618.           The term related authorised leave is defined in subsection 94D(1).  It would include periods of authorised leave taken by the employee because of:

·                her pregnancy;

·                the birth of the child;

·                the end of her pregnancy otherwise than by the birth of a living child;

·                the death of the child. 

619.           Related authorised leave would not include periods of authorised leave taken by the employee’s spouse, such as annual leave, taken while an employee is on maternity leave.  Therefore, it is only periods of paternity leave and any other authorised leave of the same type as paternity leave (such as paid paternity leave) taken by an employee’s spouse which would reduce the amount of ordinary maternity leave available (in addition to any authorised leave taken by the employee set out in paragraph 94D(1)(a)).

620.           The Standard will not, by itself, restrict the amount of related authorised leave the employee and her spouse may take in respect of the birth of a child.  Rather, if the related authorised leave amounts to 52 weeks, the employee’s unpaid maternity leave entitlement (under the Standard) would be reduced to zero. 

621.           The entitlement to maternity leave is expressed in absolute terms.  An employee or her spouse may be prevented from taking (or may change their minds and not wish to take) formerly intended periods of related authorised leave.  Such formerly intended leave, if not ultimately taken, would not reduce the employee’s entitlement to ordinary maternity leave. 

New section 94E - Period of special maternity leave

622.           Proposed section 94E would set out the conditions for accessing a period of special maternity leave and how this entitlement would interact with ordinary maternity leave.  A period of special maternity leave must not be longer than the period set out in a medical certificate given to the employer (see proposed section 94G).  The period of leave must end before the employee starts a continuous period of leave including ordinary maternity leave.

New section 94F - Transfer to a safe job

623.           Proposed section 94F would provide that, where an employee gives her employer a medical certificate stating that she is fit to work, but that illness or risks arising out of the pregnancy or hazards connected with the work assigned to her make it inadvisable for her to continue her present work, the employer must transfer her to a safe job.  The job must be at the same rate of pay and on the same terms and conditions of employment as her pre-transfer position.  If it is not reasonably practicable to transfer the employee to a safe job, the employee may take (or be required by her employer to take) paid leave.

624.           Subsection 94F(1) would provide that this entitlement is available to an employee if she is eligible for maternity leave and has complied with the relevant documentary requirements in proposed Subdivision C.  The employee must also provide the employer with a medical certificate stating that she is fit to work but that, in the opinion of her medical practitioner, it is inadvisable for her to continue in her present position.  The medical certificate may be provided voluntarily by the employee or requested by the employer within the six weeks before the estimated day of birth (see subsection 94F(5), and proposed section 94L - Requirement to take leave—within 6 weeks before birth).

625.           Subsection 94F(2) would provide that where the employee’s medical certificate states that she is fit to work but the employer does not think it to be reasonable practicable to transfer her to a safe job, the employee may take paid leave.  Paragraph 94F(4)(b) would end this period of leave at the earliest of:

·                the date stated in the medical certificate;

·                the end of the day before birth; or

·                if pregnancy ends other than by the birth of a living child - the end of the day before the end of pregnancy.

626.           In respect of any period of leave under this provision, subsection 94F(3) would require the employer to pay the employee at least the amount she would have reasonably expected to be paid if she had worked during that period.  For example, the rate of pay could constitute the employee’s base periodic rate of pay plus the amount of any additional amounts (such as shift penalties) if they are part of the employee’s regular pay. 

Illustrative Example

Jenny has been working full-time with her employer Louise for three years.  She has applied for ordinary maternity leave and has complied with the documentation requirements under proposed sections 94H and 94I. 

Five weeks before the expected date of birth, Louise requests that Jenny provide an additional medical certificate under proposed section 94L stating whether Jenny is fit to continue work in her present position.  Jenny provides a medical certificate stating that she is fit to continue working until the expected date of birth, but that it is inadvisable for her to continue working in her present position because of hazards connected with the position. 

Under section 94F, Louise must transfer Jenny to a safe job with the same terms and conditions of employment as her previous position, if this is reasonably practicable.  If it is not reasonably practicable for Louise to transfer Jenny to a safe job, then Jenny can take (or Louise can require Jenny to take) paid leave until the day before the expected date of birth.  The paid leave is in addition to any other leave that Jenny is entitled to and does not reduce the period of maternity leave to which she is entitled.

If Jenny had failed to provide a medical certificate within 7 days of Louise’s request, then Louise could require Jenny to start her ordinary maternity leave as soon as reasonably practicable under proposed section 94L.  Such leave would be unpaid and would reduce the total period of maternity leave available to Jenny.

 

New Subdivision C - Maternity leave: documentation 

New section 94G - Special maternity leave—documentation

627.           Proposed section 94G would set out the documentary requirements for an application for special maternity leave. 

628.           Subsection 94G(1) would require an employee to provide a written application to her employer.  Where leave is sought for a pregnancy related illness, the application must be accompanied by a medical certificate stating the period that the employee is (or was) unfit for work because of a pregnancy-related illness (subsection 94G(2)). 

629.           If the pregnancy ends otherwise than with the birth of a living child, subsection 94G(3) would provide that the application must be accompanied by a medical certificate and statutory declaration that attests to particular facts. 

630.           In both cases, the application must be given to the employer before, or as soon as reasonably practicable after, starting the special maternity leave (subsection 94G(4)).  However, the requirements of this provision would not apply where there are circumstances beyond the employee’s control which would prevent her from providing the medical certificate or statutory declaration (if required) (subsection 94G(5)).  Subsection 94G(5) is intended to ensure against the possibility that an employee in this situation would be considered to be on unauthorised leave.

631.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New section 94H - Ordinary maternity leave—medical certificate

632.           Subsections 94H(1) - (3) would require a medical certificate to be given to the employer no later than ten weeks before the expected date of birth.  The medical certificate must state that the employee is pregnant and the expected date of birth. 

633.           If there is a premature birth or other compelling reason which would mean that it would not be reasonably practicable for the employee to comply with the documentary requirements within that time frame, subsections 94H(4) - (5) would allow the medical certificate to be provided as soon as reasonably practicable (which may be before or even after maternity leave has commenced). 

634.           However, under subsection 94H(6), the requirements of this provision would not apply where circumstances beyond the employee’s control prevent compliance.

635.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New section 94I - Ordinary maternity leave—application

636.           Proposed section 94I would set out the documentary requirements for an application for ordinary maternity leave. 

637.           Subsections 94I(1) - (2) would require the written application to be given to the employer at least four weeks before the first day of leave sought.  If there is a premature birth or other compelling reason which mean that it would not be reasonably practicable for the employee to comply with the documentary requirements within that time frame, subsections 94I(3) - (4) would allow the application to be provided as soon as reasonably practicable (which may be before or even after the maternity leave has commenced). 

638.           Subsection 94I(5) would set out the requirements of the statutory declaration which would form part of the ordinary maternity leave application. 

639.           Subsection 94I(6) would provide that the requirements of this provision would not apply where circumstances beyond the employee’s control prevent compliance.

640.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New Subdivision D - Maternity leave: from start to finish 

New section 94J - Maternity leave—start of leave

641.           Proposed section 94J would provide that an employee may commence a period of leave including or constituted by ordinary maternity leave at any time within six weeks before the expected date of birth - as set out in the medical certificate required under section 94H.  The period of leave including or constituted by ordinary maternity leave must be a continuous period of leave. 

New section 94K - Requirement to take leave—for 6 weeks after birth

642.           Proposed section 94K would require a compulsory period of leave to be taken for the six weeks following the birth of the child.

New section 94L - Requirement to take leave—within 6 weeks before birth

643.           Proposed section 94L would provide the commencement of ordinary maternity leave for an employee who is entitled to such leave (proposed section 94C), and who has complied with the documentation requirements under proposed sections 94H and 94I.

644.           Where an employee continues to work during the period of six weeks before the expected date of birth, proposed subsection 94L(2) would allow the employer to request a medical certificate from the employee stating that she is fit to continue working (either in her current job or in a safe job under proposed section 94F). 

645.           The Note to subsection 94L(2) would refer readers to the fact that, if the employee gives the employer a medical certificate under proposed section 94L stating that he or she is fit to continue working within the six weeks before birth but not in her current job, the employee would be entitled to be transferred to a safe job or to take paid leave (depending on the circumstances). 

646.           Subsection 94L(3) would enable the employer to direct the employee to start a continuous period of leave including or constituted by ordinary maternity leave if the requested certificate is not provided within seven days, or if the medical certificate states she is not fit to continue work. 

New section 94M - End of pregnancy—effect on ordinary maternity leave entitlement

647.           Proposed section 94M would provide that if the pregnancy ends otherwise than by the birth of a living child (for example, by still-birth or miscarriage), the employee:

·                would not be entitled to a period of ordinary maternity leave if it had not yet commenced (subsection 94M(2)).  In this situation, an employee may be entitled to take special maternity leave; or

·                would be entitled to continue taking leave if it had already started (subsection 94M(3)).

648.           The Note under subsection 94M(3) confirms that if the period of leave has commenced, the employee may shorten the leave with the agreement of the employee under proposed section 94P.  However, to take advantage of the return to work guarantee (see proposed section 94R), the employee must give four weeks notice to her employer of the day she intends to return to work (see proposed paragraph 94R(1)(a)). 

New section 94N - Death of child—effect on ordinary maternity leave entitlement

649.           Proposed section 94N would apply if the employee gives birth to a living child who later dies and the employee has commenced a period of ordinary maternity leave. 

650.           Subsection 94N(2) would allow the employee to continue the period of leave in these circumstances.  However, subsection 94N(3) would enable the employer to cancel the remaining period of ordinary maternity leave by providing written notice that the leave ends with effect from a stated day (which, under subsection 94N(4), must be at least four weeks from the day the notice is given, but may not be within six weeks of the date of birth). 

New section 94O - End of ordinary maternity leave if employee stops being primary care-giver

651.           Proposed section 94O would require the period of ordinary maternity leave to end where the employee ceased being the primary care-giver of the child. 

652.           Under subsections 94O(1) - (2), maternity leave would be cancelled on the provision of at least four weeks notice by the employer if the employee:

·                is not the primary care-giver of the child for a substantial period; and

·                it is reasonable to expect that the employee will not resume being the child’s primary care-giver within a reasonable period.

653.           Subsection 94O(3) would provide that the period of maternity leave ends with effect from the date stated in the notice given to the employee by the employer.

New section 94P - Variation of period of ordinary maternity leave

654.           Proposed section 94P would allow an employee to extend or shorten a period of ordinary maternity leave after it has commenced.  This provision would be subject to the limitations in proposed Subdivision B and sections 94N and 94O (which would place a maximum limit of 52 weeks on the total amount of ordinary maternity leave available, and also impose other conditions on the leave in the event of the death of the child or where the employee ceases to be the primary care-giver respectively). 

655.           Subsection 94P(2) would enable the employer to grant a request for an extension of the maternity leave period provided the appropriate notice is given.  Any further extension is by agreement between the employer and employee (paragraph 94P(2)(b)).  Subject to the requirement to take leave for the six week period after birth (see proposed section 94K), the leave may be shortened by an agreement in writing between the employer and employee (subsection 94P(3)).

New section 94Q - Employee’s right to terminate employment during maternity leave

656.           Subsection 94Q(1) would confirm the employee’s right to terminate her employment at any time during a period of maternity leave.  Subsection 94Q(2) would provide that the employee’s right to terminate is subject to any relevant notice or procedural requirements in either a contract of employment or legislation.

657.           Termination of employment at the initiative of the employer is not covered by the Standard as it would be subject to other remedies under the WR Act (see Part VIA) and, in appropriate cases, under discrimination legislation. 

New section 94R - Return to work guarantee—maternity leave

658.           Proposed section 94R would set out the return to work guarantee.  The guarantee would apply in circumstances in which an employee returns to work following a period of leave including, or made up of, maternity leave.  In these circumstances, the employee is entitled to return to the position she held immediately before a period of maternity leave.

659.           Paragraph 94R(1)(a) would provide that the guarantee applies if the employee gives the employer at least four weeks written notice of the proposed date of her resuming work.  Paragraph 94R(1)(b) would provide that the return to work guarantee applies if the leave the employee has taken includes or is constituted solely by a period of special maternity leave.  Paragraph 94R(1)(c) would also extend the return to work guarantee to the situations where an employee gives birth to a living child who later dies (see proposed section 94N) and where the employee stops being the primary care-giver of the child (see proposed section 94O). 

660.           Subsection 94R(2) would ensure that the guarantee also applies where an employee has taken paid leave under proposed subsection 94R(2) (instead of being transferred to a safe job). 

661.           Subsection 94R(3) would provide that an employee is entitled to return:

·                to the position she held immediately before starting a period of leave including or constituted by maternity leave;

·                to a position she was promoted to or voluntarily transferred to during her leave; or

·                if she was transferred to a safe job (see proposed section 94F) or started part-time work because of the pregnancy (as distinct from a situation of an employee who usually works part-time) - to the position she held immediately before the transfer or part-time work.

662.           If the employee had been transferred to a safe job under paragraph 94F(2)(a)  because of the pregnancy, subsection 94R(4) would entitle the employee to return to the position she held immediately before being transferred to the safe job.

663.           Subsection 94R(5) would provide that if the employee’s former position no longer exists, and the employee is qualified for, and can perform the duties of, other positions in the employer’s employment, the employer must employ her in whichever of those positions is nearest in status and remuneration to the former position. 

New section 94S - Replacement employees—maternity leave

664.           Proposed section 94S would require the employer to tell any replacement to an employee on maternity leave that:

·                the engagement is temporary; and

·                the employee on maternity leave has a right to return to her position she held immediate before taking maternity leave under proposed section 94R.

665.           The employer would be required to provide this information to both a primary replacement (subsection 94S(1)) and secondary replacement (subsection 94S(2)).  Subsection 94S(3) would provide that for the purposes of this notification obligation, an employee includes a casual employee. 

666.           The section would not prevent the employer engaging a permanent employee and use that employee to fill the position temporarily.  So, for example, an employer could legitimately offer someone a permanent engagement, on the basis that for the first six months the new employee would fill in for the employee on maternity leave, and then afterwards the employer would assign the new employee to work elsewhere in the organisation. 

New Subdivision E — Guarantee of paternity leave

New section 94T - The guarantee

667.           Proposed section 94T would guarantee a male employee’s entitlement to unpaid paternity leave. 

668.           Paragraph 94T(1)(a) would provide that an employee is eligible for short paternity leave , which consists of one unbroken week of unpaid leave taken from the day his spouse commences childbirth. 

669.           Paragraph 94T(1)(b) would provide that an employee is entitled to a single, unbroken period of long paternity leave , which is unpaid leave taken in respect of the birth of a living child so the employee can be the primary care-giver.  Leave taken in a continuous, unbroken period does not preclude the employee from adding other types of authorised leave, such as annual leave or long service leave to the total leave period taken, but the leave period cannot be broken up into separate periods of leave.  The combined total of paternity and maternity taken must not exceed 52 weeks (see subsection 94U(3)).

670.           Subsection 94T(2) would make the employee’s entitlement to paternity leave conditional upon 12 months continuous service with the same employer or engagement as an eligible casual employee (which incorporates a 12 month service requirement - see proposed section 94B).  The 12 month continuous service period can contain elements of permanency, regular and systematic casual employment, and authorised leave.  At the time when the question of entitlement to parental leave arises, no matter how the continuous service period is made up, the employee must be either permanent or an eligible casual.  That is, any ‘casual period’ would have to precede the employee attaining permanent or eligible casual status.

671.           The entitlement to paternity leave is also subject to the restrictions in sections 94U and 94W and proposed Subdivision G. 

672.           Subsection 94T(3) would set out the circumstances under which an employee would not be entitled to paternity leave (these relate to failure to provide the required documentation to the employer).

673.           Subsection 94T(4) would provide that an employee may take either short paternity leave, long paternity leave or both.  However, because of the operation of other provisions of this Division, long paternity leave may only be taken if the employee is the primary care-giver of the child or his spouse is not taking a period of leave including or constituted by maternity leave.

New section 94U - Period of paternity leave

674.           Proposed section 94U would set out a method for calculating the period of unpaid paternity leave that is available to an employee who has satisfied the eligibility criteria under proposed section 94T.

675.           Subsection 94U(2) would provide that the maximum total amount of unpaid paternity leave, including both short and long paternity leave, is 52 weeks.  However, any amount of related authorised leave taken by the employee or his spouse would reduce the total amount of paternity leave available.

676.           The term related authorised leave is defined in subsection 94U(1).  It would include periods of authorised leave taken by the employee because of:

·                the birth of the child;

·                the death of the child. 

677.           Related authorised leave would not include periods of authorised leave taken by the employee’s spouse, such as annual leave, taken while an employee is on paternity leave.  Therefore, it is only periods of maternity leave and any other authorised leave of the same type as maternity leave (such as paid maternity leave) taken by an employee’s spouse which would reduce the amount of long paternity leave available (in addition to any authorised leave taken by the employee set out in paragraph 94U(1)(a)).

678.           The Standard will not, by itself, restrict the amount of other related authorised leave the employee and his spouse may take in respect of the birth of a child.  Rather, if the related authorised leave amounts to 52 weeks, the employee’s unpaid long paternity leave entitlement (under the Standard) would be reduced to zero.

679.           The entitlement to paternity leave is expressed in absolute terms.  An employee or his spouse may be prevented from taking (or may change their minds and not wish to take) formerly intended periods of related authorised leave.  Such formerly intended leave, if not ultimately taken, would not reduce the employee’s entitlement to paternity leave.

New section 94V - Short paternity leave-concurrent leave taken by spouse

680.           Proposed section 94V would provide that short paternity leave and any period of authorised leave taken by his spouse in relation to the birth may be taken at the same time.  Simultaneous leave of greater than one week for birth could be provided by agreement between the parties.

New section 94W - Long paternity leave-not to be concurrent with leave taken by spouse

681.           Proposed section 94W would provide that long paternity leave and any period of maternity leave or leave of the same type as maternity leave (such as paid maternity leave) taken by his spouse in relation to the birth may not be taken at the same time. 

New Subdivision F — Paternity leave: documentation

New section 94X - Paternity leave-medical certificate

682.           Subsections 94X(1) - (3) would require a medical certificate to be given to the employer.  Generally the certificate must be given to the employer at least 10 weeks before the date of expected or actual birth provided in the certificate.  However, if there is a premature birth or other compelling reason which means that it would not be reasonably practicable for the employee to comply with the requirement within that time frame, subsection 94X(4) would allow the medical certificate to be provided as soon as reasonably practicable (which may be before or even after the paternity leave has commenced). 

683.           Under subsection 94X(5), the requirements of this provision would not apply where circumstances beyond the employee’s control prevent compliance.

684.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New section 94Y - Short paternity leave-application

685.           Proposed section 94Y would require an employee to submit a written application for short paternity leave to his employer. 

686.           Subsection 94Y(1) would require that the application state the first and last days of the period in which leave is sought.  The maximum amount of short paternity leave to which an employee is entitled is one week starting from the time of birth (see proposed paragraph 94T(1)(a)).

687.           Subsection 94Y(2) would require the application to be given to the employer as soon as reasonably practicable on or after the first day of leave.

688.           Under subsection 94Y(3), the requirements of this provision would not apply where circumstances beyond the employee’s control prevent compliance.

689.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New section 94Z - Long paternity leave-documentation

690.           Proposed section 94Z would set out the documentary requirements for an application for long paternity leave. 

691.           Subsections 94Z(1) - (2) would require the written application to be given to the employer at least ten weeks before the first day of leave sought.  If there is a premature birth or other compelling reason which mean that it would not be reasonably practicable for the employee to comply with the documentary requirements within that time frame, subsection 94Z(3) would allow the application to be provided as soon as reasonably practicable (which may be before or even after the paternity leave has commenced). 

692.           Subsection 94Z(4) would set out the requirements of the statutory declaration which would form part of the long paternity leave application. 

693.           Subsection 94Z(5) would provide that the requirements of this provision would not apply where circumstances beyond the employee’s control prevent compliance.

694.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988 .   

New Subdivision G — Paternity leave: from start to finish

New section 94ZA - Short paternity leave-when taken

695.           Proposed section 94ZA would allow an employee to take short paternity leave at any time within the week starting on the day his spouse beings to give birth. 

New section 94ZB - Long paternity leave-when taken

696.           Proposed section 94ZB would provide that an employee may take long paternity leave at any time before the child’s first birthday. 

New section 94ZC - End of pregnancy-effect on paternity leave

697.           Proposed section 94ZC would preclude an employee from being entitled to a period of paternity leave if the pregnancy for which the leave was being taken ends otherwise than by the birth of a living child.  However, subsection 94ZC(3) would provide that any short paternity leave already taken is unaffected. 

New section 94ZD - Death of child - effect on paternity leave

698.           Proposed section 94ZD would apply when an employee’s spouse has given birth but the child later dies.

699.           Subsection 94ZD(2) would provide that the employee would no longer be entitled to paternity leave if the leave had not yet started at the time of the child’s death.

700.           Subsection 94ZD(3) would allow the employee to continue taking a period of leave that has already commenced in the event of the death of the child. 

·                The Note to this subsection would confirm that although the period of paternity leave which has started is unaffected, the employee may (where the period of leave is longer than 4 weeks) give the employer at least four weeks notice of his return to work if he wishes to do so under section 94ZH.

701.           Subsection 94ZD(4) would enable the employer to cancel the remaining period of paternity leave by providing at least four weeks written notice.  The employee’s entitlement to leave ends on the day specified in such a notice (subsection 94ZD(5)).

New section 94ZE - End of long paternity leave if employee stops being primary care-giver

702.           Proposed section 94ZE would require the period of long paternity leave to end where the employee ceased being the primary care-giver of the child. 

703.           Under subsections 94ZE(1) - (2), long paternity leave would be cancelled on the provision of at least 4 four weeks notice by the employer if the employee:

·                is not the primary carer giver for a substantial period while the employee is on long paternity leave; and

·                it is reasonable to expect that the employee will not resume being the primary care-giver within a reasonable period.

704.           Subsection 94ZE(3) would provide that the period of paternity leave ends with effect from the date stated in the notice by the employer.

New section 94ZF -Variation of period of long paternity leave

705.           Proposed section 94ZF would allow an employee to extend or shorten a period of long paternity leave after it has commenced.  This provision would be subject to the limitations in proposed Subdivision E and sections 94ZB, 94ZD and 94ZE (which would place a maximum limit of 52 weeks on the total amount of long paternity leave available, and also impose other conditions on the leave in the event of the death of the child or where the employee ceases to be the primary care-giver respectively). 

706.           Subsection 94ZF(2) would enable the employer to grant a request for an extension of long paternity leave provided the appropriate notice is given.  Any further extension is by agreement between the employer and employee (paragraph 94ZF(2)(b)). 

707.           Under subsection 94ZF(3), the leave may be shortened by an agreement in writing between the employer and employee. 

New section 94ZG - Employee’s right to terminate employment during paternity leave

708.           Subsection 94ZG(1) would confirm the employee’s right to terminate his employment at any time during a period of paternity leave.  Subsection 94ZG(2) would provide that the employee’s right to terminate is subject to any relevant notice or procedural requirements in either a contract of employment or legislation.

709.           Termination of employment at the initiative of the employer is not covered by the Standard as it would be subject to other remedies under the WR Act (see Part VIA) and, in appropriate cases, under discrimination legislation. 

New section 94ZH - Return to work guarantee-paternity leave

710.           Proposed section 94ZH would set out the return to work guarantee.  The guarantee would apply in circumstances in which an employee returns to work following a period of leave including or made up of paternity leave.  In these circumstances, the employee is entitled to return to the position he held immediately before a period of paternity leave.

711.           Paragraph 94ZH(1)(a) would provide that the return to work guarantee applies if the paternity-related leave period (that is, leave taken in relation to the birth, including or constituted by paternity leave) is less than four weeks.  Paragraph 94ZH(1)(b) would provide that the guarantee applies if employee gives the employer four weeks written notice of the proposed date of his resumption of work where the paternity-related leave period is greater than four weeks.  Paragraph 94ZH(1)(c) would also extend the guarantee to the situation where the employee’s spouse gives birth to a living child who later dies (see proposed section 94ZD) and where the employee ceases to be the primary care-giver of the child (see proposed section 94ZE). 

712.           Subsection 94ZH(2) would provide that an employee is entitled to return:

·                to the position he held immediately before starting a period of leave including or constituted by paternity leave;

·                to a position he was promoted to or voluntarily transferred to during his leave; or

·                if he started part-time work because of his spouse’s pregnancy (as distinct from the situation of an employee who usually works part-time) - to the position he held immediately before he commenced part-time work.

713.           However, subsection 94ZH(3) would provide that if the employee’s former position no longer exists, and the employee is qualified for, and can perform the duties of, other positions in the employer’s employment, the employer must employ him in whichever of those positions is nearest in status and remuneration to the former position.

New section 94ZI- Replacement employees-long paternity leave

714.           Proposed section 94ZI would require the employer to tell any replacement to an employee on long paternity leave that:

·                the engagement is temporary; and

·                the employee on long paternity leave has a right to return to the position he held immediate before taking long paternity leave under proposed section 94ZH.

715.           The employer would be required to provide this information to both a primary replacement (94ZI(1)) and secondary replacement (94ZI(2)).  Subsection 94ZI(3) would provide that for the purposes of this notification obligation, an employee includes a casual employee. 

716.           The section would also not prevent the employer engaging a permanent employee and using that employee to fill the position temporarily.  An employer could legitimately offer someone a permanent engagement, on the basis that for the first six months the new employee would fill in for the employee on long paternity leave, and then afterwards the employer would assign the new employee to work elsewhere in the organisation. 

New Subdivision H - Guarantee of adoption leave

New section 94ZJ Meaning of eligible child

717.           Proposed section 94ZJ would define an eligible child for the purposes of the adoption leave entitlements in this Division. 

718.           For an employee to be eligible for adoption leave, the child that the employee intends to adopt:

·                must be less than five years old (paragraph 94ZJ(a));

·                must not have not previously lived with the employee at any stage for a continuous period of over six months (paragraph 94ZJ(b)); and

·                must not be a child or step child of the employee or the employee’s spouse (paragraph 94ZJ(c)).

New section 94ZK guarantee—pre-adoption leave

719.           Proposed section 94ZK would provide an entitlement to two days of unpaid leave to attend any interview or examination required for the purpose of obtaining approval to adopt a child. 

720.           Subsection 94ZK(1) would provide that the entitlement is available to an employee seeking approval to adopt an eligible child.  There is no qualifying continuous service test for entitlement to this leave.

721.           Subsection 94ZK(2) would provide that the maximum amount of pre-adoption leave available is two days of unpaid leave.

722.           Subsection 94ZK(3) would require an employee to take other authorised leave for the same period instead of the pre-adoption leave where the employee could use other leave, and the employer directs the employee to use that other leave.

723.           Subsection 94ZK(4) would allow the leave to be taken in a single, unbroken period of up to two days or any separate periods as agreed between the employer and employee (up to a maximum of two days).  This agreement can occur through an AWA or collective workplace agreement made under the WR Act (subsection 94ZK(5)), or by other means subsection 94ZK(6)).

New section 94ZL - The guarantee—adoption leave

724.           Proposed section 94ZL would provide that the entitlement to adoption leave is to:

·                a single, unbroken period of up to three weeks unpaid leave taken within the three weeks from the day of placement - ie short adoption leave ; or

·                a single, unbroken period of unpaid leave taken after the day of placement so the employee can be the primary care-giver of the child - ie long adoption leave .

725.           Leave taken in a continuous, unbroken period does not preclude the employee from adding other types of authorised leave, such as annual leave or long service leave, to the total leave period taken, but the leave period cannot be broken up into separate periods of leave; the maximum amount of leave must not exceed 52 weeks (subsection 94ZM(3)).

726.           Paragraph 94ZL(2)(a) would require an employee to satisfy the documentation requirements set out in proposed Subdivision I.  Paragraph 94ZL(2)(b) would make the employee’s entitlement to adoption leave conditional upon 12 months continuous service with the same employer or engagement as an eligible casual employee (which incorporates a 12 month continuous service requirement - see proposed section 94B).  The 12 month continuous service period can contain elements of permanency, regular and systematic casual employment, and authorised leave.  At the time when the question of entitlement to parental leave arises, no matter how the continuous service period is made up, the employee must be either permanent or an eligible casual.  That is, any ‘casual period’ would have to precede the employee’s attaining permanent or eligible casual status.

727.           The entitlement to adoption leave is also subject to the restrictions in proposed sections 94ZM and 94ZO and proposed Subdivision J. 

New section 94ZM - Period of adoption leave

728.           Proposed section 94ZM would set out a method for calculating the period of unpaid adoption leave that is available to an employee who has satisfied the eligibility criteria under section 94ZL.

729.           Subsection 94ZM(3) would provide that the maximum total amount of unpaid adoption leave, including both short and long adoption leave, is 52 weeks.  Subsection 94ZM(2) would enable an employee to take other forms of authorised leave in conjunction with, or in addition to, adoption leave.  However, any amount of related authorised leave would reduce the total amount of adoption leave available.

730.           The term related authorised leave is defined in subsection 94ZM(1).  It would include periods of authorised leave taken by the employee because of the placement of the child with the employee.  It would also include periods of adoption leave, or leave of the same type as adoption leave (such as paid adoption leave) taken by the spouse because of the placement of the child with the employee.

731.           The Standard will not, by itself, restrict the amount of other related authorised leave the employee is entitled to take in respect of the placement of a child.  Rather, if the related authorised leave amounts to 52 weeks, the employee’s unpaid long adoption leave entitlement (under the Standard) would be reduced to zero. 

732.           The entitlement to adoption leave is expressed in absolute terms.  An employee or his or her spouse may be prevented from taking (or may change their minds and not wish to take) formerly intended periods of related authorised leave.  Such formerly intended leave, if not ultimately taken, would not reduce the employee’s entitlement to adoption leave.

New section 94ZN - Short adoption leave—concurrent leave taken by spouse

733.           Proposed section 94ZN would provide that short adoption leave and any period of authorised leave taken by his or her spouse in relation to the placement of a child may be taken at the same time.  Simultaneous leave greater than three weeks for adoption could be provided for by agreement.

New section 94ZO - Long adoption leave—not to be concurrent with leave taken by spouse

734.           Proposed section 94ZO would provide that long adoption leave and any period of authorised leave taken by his or her spouse in relation to the placement of a child may not be taken at the same time. 

New Subdivision I — Adoption leave: documentation

New section 94ZP Adoption leave—notice

735.           Proposed section 94ZP would set out the notice requirements that need to be satisfied where an employee intends to take a period of adoption leave.

736.           Subsection 94ZP(1) would oblige an employee to satisfy the notice requirements set out in the section as a prerequisite to a period of short or long adoption leave.

737.           Subsection 94ZP(2) would require an employee to provide written notice to the employer of his or her intention to apply for adoption leave as soon as reasonably practicable after the employee has received notice of approval of the placement (a placement approval notice ).

738.           Subsection 94ZP(3) would require an employee to give written notice to the employer of the actual day when the placement is to commence as soon as reasonably practicable after the employee is made aware of the expected day (a placement notice ).

739.           Subsection 94ZP(4) would require the employee to give notice of the periods of leave of both short and long adoption leave sought or any other authorised leave the employee intends to take because of the placement of the child.  This notice must be in writing and provided:

·                within eight weeks of receiving a placement approval notice if a placement notice has been received by the employee within eight weeks of receiving the placement approval notice ; or

·                as soon as practicable after receiving the placement notice if that notice is received more than eight weeks after the placement approval notice is received. 

740.           Subsection 94ZP(5) would apply where the employee decides to adopt a child who is a relative of the employee and authorisation of the placement of the child with the employee is pending.  Paragraphs 94ZP(5)(a)-(b) would provide that the notice of the decision to take the child into custody must be made as soon as practicable after the decision has been made.  The notice requirements under subsections 94ZP(2) - (4) must also be satisfied.

741.           Subsection 94ZP(6) would provide that where the employee is a new employee and he or she has already commenced the process for adoption approval, the employee must provide the relevant notices required by this section to his or her new employer as soon as reasonably practicable.  The Note to this subsection would confirm, however, that an employee is only entitled to take either short or long adoption leave if the employee will have completed 12 months continuous service with the new employer before the first day of leave sought, or the employee is eligible casual employee under proposed section 94ZL.

742.           Subsection 94ZP(7) would provide that if the employee is unable to comply with the notice requirements due to:

·                the day when the placement is expected to start; or

·                any other compelling reason,

notice must be given to the employer of those events as soon as reasonably practicable before the first day of adoption leave. 

743.           Subsection 94ZP(8) would define relative (of an employee).  For the purpose of this section, relative would mean a grandchild, nephew, niece or sibling of the employee or the employee’s spouse.

744.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

Illustrative Example

Kevin is a courier employed by Kosta’s Taxi Truck Pty Ltd.  He has a niece called Belinda who is under five years of age. 

Due to a fatal motor vehicle accident involving her parents, Belinda has been orphaned.  Her grandparents are too frail to care for her.  Her Aunt and Uncle, Kaye and Kevin, wish to become Belinda’s primary care-givers and so decide to adopt her. 

In this instance, Kevin would have to notify his employer of their decision to adopt Belinda as soon as reasonably practicable after they make their decision.  He must also satisfy the notice criteria set out in subsections 94ZP(2) - (4) while the placement of Belinda undergoes the relevant approval process prior to authorisation. 

 

New section 94ZQ - Short adoption leave—application

745.           Proposed section 94ZQ would require an employee to submit a written application for short adoption leave to the employer. 

746.           Subsection 94ZQ(1) would require that the application state the first and last days of the period in which leave is sought.  The maximum amount of short adoption leave is three weeks starting from the day of placement of the child (see paragraph 94ZL(1)(a)).

747.           Subsection 94ZQ(2) would provide that an application for short adoption leave must be given to the employer no later than 14 days before the proposed day of placement of the child.

748.           However, subsection 94ZQ(3) would provide an exception to the general rule in subsection 94ZQ(2), which applies where the employee is unable to comply due to:

·                the day when the placement is expected to start; or

·                any other compelling reason.

749.           In such cases, the employee would be required to provide the application as soon reasonably practicable before the first day of short adoption leave.

750.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New section 94ZR Long adoption leave—application

751.           Proposed section 94ZR would set out the documentary requirements for an application for long adoption leave. 

752.           Subsections 94ZR(1) - (2) would require the written application to be given to the employer at least ten weeks before the first day of leave sought. 

753.           Subsection 94ZR(3) would provide an exception to the documentary requirements, where the employee is unable to comply due to:

·                the day when the placement is expected to start; or

·                any other compelling reason.

754.           In such cases, the employee would be required to provide the application as soon reasonably practicable before the first day of long adoption leave.

755.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New section 94ZS Adoption leave—additional documents

756.           Proposed section 94ZS would require the employee to submit additional documents with an application for adoption leave.

757.           Subsection 94ZS(2) would require the documents to be given to the employer before the period of adoption leave starts or, where an employee is proposing to take both short and long adoption leave, before short adoption leave has commenced.

758.           Subsection 94ZS(3) would provide that an employer must provide his or her employer with a statement from an adoption agency stating the expected placement date and a statutory declaration.  Subsection 94ZS(4) would set out the requirements of the statutory declaration.

759.           The Note to this section would remind readers that the use of personal information provided to an employer by an employee under this section may be subject to the Privacy Act 1988

New Subdivision J - Adoption leave: from start to finish

New section 94ZT Short adoption leave—when taken

760.           Proposed section 94ZT would allow an employee to take short adoption leave at any time within the three week period starting on the day the child is placed with the employee. 

New section 94ZU Long adoption leave—when taken

761.           Proposed section 94ZU would provide that an employee may take long adoption leave at any time within 12 months from the date the child is placed with the employee.  So, for example, the employee’s spouse may take adoption leave for six months starting from the day of placement, after which he ceases to be the primary carer-giver.  The employee may then take a period of long adoption leave herself from that time, provided that the combined total of leave taken does not exceed 52 weeks.

New section 94ZV Placement does not proceed—effect on adoption leave

762.           Proposed section 94ZV would set out the effect on adoption leave where the placement of the child with the employee does not proceed or is cancelled or discontinued (including where the child dies during the period of adoption leave). 

763.           Subsection 94ZV(2) would provide that the employer would no longer be entitled to a period of adoption leave (including any authorised leave taken in conjunction with the adoption leave) if the leave had not yet started.

764.           Subsection 94ZV(3) would allow the employee to continue taking the period of leave in the event of cancellation or discontinuation of the placement after the placement has started. 

·                However, as pointed out in the Note to this subsection, the employee may shorten the period with the employer’s approval - proposed section 94ZX.  If the employee wishes to take advantage of the return to work guarantee and the period of leave is longer than four weeks, the employee must give the employer at least four weeks notice of his or her return to work under proposed section 94ZZ.

765.           Subsection 94ZV(4) would enable the employer to cancel the remaining period of long adoption leave by providing at least four weeks notice of the cancellation to the employee.  If a notice is given, the entitlement to leave ends on the day specified in the notice (subsection 94ZV(5)).

New section 94ZW End of long adoption leave if employee stops being primary care-giver

766.           Proposed section 94ZW would enable an employer to require an employee to return to work where they have ceased to be the primary care-giver of the child. 

767.           Under subsections 94ZW(1) - (2), long adoption leave would be cancelled on the provision of at least 4 four weeks notice by the employer if the employee:

·                is not the primary carer giver for a substantial period; and

·                it is reasonable to expect that the employee will not resume being the primary care-giver within a reasonable period.

768.           Subsection 94ZW(3) would provide that the period of long adoption leave ends with effect from the date stated in the notice by the employer.

New section 94ZX- Variation of period of long adoption leave

769.           Proposed section 94ZX would allow an employee to extend or shorten a period of long adoption leave after it has commenced. 

770.           The section would be subject to proposed Subdivision H and the limitations in proposed sections 94ZU, 94ZV and 94ZW (these provisions place a maximum limit of 52 weeks on the total amount of unpaid adoption leave available, and impose other conditions on the leave in the event that the placement does not proceed or where the employee ceases to be the primary care-giver). 

771.           Subsection 94ZX(2) would require the employer to grant a request for an extension of the adoption leave provided the appropriate notice is given.  Any further extension is by agreement between the employer and employee (paragraph 94ZX(2)(b)). 

772.           Under subsection 94ZX(3), the leave may be shortened by an agreement in writing between the employer and employee.  The Note would confirm that where the period of adoption leave is longer than four weeks, the employee must also give his or her employer four weeks notice of his or her intended return to work to take advantage of the return to work guarantee under section 94ZZ.

New section 94ZY Employee’s right to terminate employment during adoption leave

773.           Subsection 94ZY(1) would confirm the employee’s right to terminate his employment at any time during a period of adoption leave.  Subsection 94ZY(2) would provide that the employee’s right to terminate is subject to any relevant notice or procedural requirements in either a contract of employment or legislation.

774.           Termination of employment at the initiative of the employer is not covered by the Standard as it would be subject to other remedies under the WR Act (see Part VIA) and, in appropriate cases, under discrimination legislation. 

New section 94ZZ Return to work guarantee—adoption leave

775.           Proposed section 94ZZ would set out the return to work guarantee.  The guarantee would apply in circumstances in which an employee returns to work following a period of leave including or made up of adoption leave.  In these circumstances, the employee is entitled to return to the position held immediately before a period of adoption leave.

776.           Proposed paragraph 94ZZ(1)(a) would provide that the return to work guarantee applies if the adoption-related leave period (that is, leave taken in relation to the placement of a child, including or constituted by adoption leave) is less than four weeks.  Proposed paragraph 94ZZ(1)(b) would provide that the guarantee applies for leave that is longer than four weeks if employee gives the employer four weeks written notice of the proposed date of his or return to work.  Paragraph 94ZZ(1)(c) would also extend the guarantee to the situation where the placement of the child does not proceed (see proposed section 94ZV) and where the employee ceases to be the primary care-giver of the child (see proposed section 94ZW). 

777.           Subsection 94ZZ(2) would provide that the employee is entitled to return:

·                to the position held immediately before starting a period of leave including or constituted by adoption leave; or

·                to a position the employee was promoted to or voluntarily transferred to during the leave. 

778.           However, subsection 94ZZ(3) would provide that if the position (the former position) no longer exists, and the employee is qualified for, and can perform the duties of, other positions in the employer’s employment, the employer must employ him or her in whichever of those positions is nearest in status and remuneration to the former position.

New section 94ZZA- Replacement employees - long adoption leave

779.           Proposed section 94ZZA would require the employer to tell any replacement to an employee on adoption leave that:

·                the engagement is temporary; and

·                the employee on adoption leave has a right to return to the position he or she held immediate before taking adoption leave under section 94ZZ.

780.           The employer would be required to provide this information to both a primary replacement (subsection 94ZZA(1)) and secondary replacement (subsection 94ZZA(2)). 

781.           Subsection 94ZZA(3) would provide that for the purposes of the notification obligation, an employee includes a casual employee. 

782.           The section would also allow the employer engaging a permanent employee to replace an employee on adoption leave to fill the employee’s position temporarily.  So, for example, an employer could legitimately offer someone a permanent engagement on the basis that for the first six months the new employee would fill in for the employee on adoption leave, and then afterwards the employer would assign the new employee to work elsewhere in the organisation. 

New Subdivision K - Parental leave: Service

New section 94ZZB - Parental leave and service

783.           Proposed section 94ZZB would set out the effect of any form of parental leave on continuity of service.  The definition of continuous service is not intended to affect, or be affected by, this provision.

784.           Subsection 94ZZB(1) would provide that continuity of service is not broken by a period of parental leave. 

785.           Subsection 94ZZB(2) would provide that parental leave does not count as service except as set out in paragraphs 94ZZB(2)(a) - (c). 

786.           For example, if an employee’s entitlement to annual leave is provided for under the Standard, the employee will accrue no annual leave for the period during which they are on parental leave.  However, the employee would not lose accumulated leave credits, as the employee’s continuity of service is not broken by the parental leave.

787.           Subsection 94ZZB(3) would define parental leave for the purposes of service under this section as meaning:

·                maternity leave;

·                paid leave under subparagraph 94F(2)(b)(i) or (ii) (where the employee is fit to work in a different position but no suitable safe job is available);

·                paternity leave;

·                pre-adoption leave;

·                adoption leave. 

Illustrative Example

Benjamin works 38 hours per week as a full-time employee for Dragon Dining Rooms Pty Ltd.  He has been working there for three and a half years.  He is taking six-months of adoption leave to be the primary care-giver for the child he and his spouse Saveria have adopted.  As parental leave does not count as service, Benjamin will not accrue any annual leave during that period of adoption leave.  However, he will not lose his accrued annual leave entitlements, or any other entitlements, as his continuity of service with his employer during that period of adoption leave has not been broken. 

New Part VB - Workplace agreements

New Division 1 - Preliminary

New section 95 - Definition

788.           Proposed section 95 would define Court to mean the Federal Court of Australia or the Federal Magistrates Court.  This definition would allow parties to bring legal actions relating to Part VB in either court.

789.           Proposed section 95 would also include ‘sign post’ definitions referring the reader to particular provisions in the Bill, such as proposed section 95B which would provide a definition of new business .

New section 95A - Single business and single employer

790.           Proposed section 95A would define single business and part of a single business for the purposes of Part VB.  It is intended that collective agreements would cover a single business or part of a single business unless the exceptions in subsection 95A(2) apply or the agreement is a multiple-business agreement made under proposed section 96E.

791.           Subsection 95A(1) would define single business as a business, project or undertaking that is carried on by an employer, or activities carried on by the Commonwealth, a State or Territory, or a Commonwealth, State or Territory authority.

792.           Subsection 95A(2) would allow two or more employers to be treated as one employer in certain circumstances.  Paragraph 95A(2)(a) would provide that where two or more employers carry on a business, project or undertaking as a joint venture or common enterprise, they would be deemed to be one employer for the purposes of the definition of single business in subsection 95A(1). 

793.           Subparagraph 95A(2)(b)(i) would provide that where two or more related corporations under the Corporations Act 2001 carry on a single business, those corporations may be treated as one employer and the single businesses may be treated as one single business. 

794.           By deeming multiple businesses and employers to be single businesses and single employers in certain circumstances, subsection 95A(2) would have the effect of allowing these employers to make one collective agreement covering certain joint business activities.  This would eliminate the need for these businesses to make separate collective agreements or a multiple-business agreement, but would only apply in the limited circumstances set out in paragraphs 95A(2)(a) and (b).  These would be exceptions to the requirement that a collective agreement must apply to a single business or part of a single business.

795.           Subsection 95A(3) defines a part of a single business to include a geographically distinct part or a distinct operational or organisational unit within the single business.  The definition is inclusive and does not limit the scope for collective agreements to apply to a part of a single business that may be constituted in any relevant way (eg all of the boilermakers employed in the business).

New section 95B - New business

796.           Proposed section 95B would define new business for the purposes of sections 96C and 96D, which would provide for the making of greenfields agreements (a type of collective agreement that would not involve employee approval as it would be made prior to the employment of any employees).

797.           Proposed section 95B would provide that an agreement relates to a new business if the agreement relates to:

·                a new business, project or undertaking that the employer is proposing to establish (subparagraph 95B(1)(a)(i)); or

·                new activities proposed to be carried on by a government authority (subparagraph 95B(1)(a)(ii)); and

·                the business, project or undertaking or the activities are a single business or part of a single business (paragraph 95B(1)(b)).

798.           Proposed section 95B is intended to clarify any uncertainty arising from the jurisprudence about the definition of new business.  Greenfields agreements are only available where the employer is establishing or proposing to establish a new business (see pre-reform paragraph 170LL(1)(a), proposed paragraph 96C(1)(a) and proposed paragraph 96D(a)).  On several occasions the AIRC has decided that this requirement means that an employer cannot make a greenfields agreement to cover activities on a new project, which are of the same nature as its existing business activities.  In these decisions the AIRC found that the new activities would not constitute a new business, but instead involved the same business being undertaken on a new site (see Re Patrick Cargo Pty Limited Certified Agreement 2002 (PR920391); Re PALS Playford B Refurbishment and Maintenance Contract Agreement 2001-2004 , (PR924609); Re Pelican Point Complete Scaffold Contracting Pty Ltd Power Station Enterprise Bargaining Agreement 2003-2004 , (PR931021); Re Whyalla Steelworks, (Downer RML Pty Ltd - Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Electrical Division)) Blast Furnace Reline 2004 Outage Agreement (PR943195)).

799.           However, in Brunel Technical Services Offshore Pty Ltd Bayu-Darwin Pipeline Agreement 2004 (PR950406) ( Brunel ) the Full Bench of the AIRC took a different view.  The Full Bench found that a new project was a new business, based on the requirement for a new business in pre-reform paragraph 170LL(1)(a), which the Full Bench said was referable to the definition of new business in pre-reform section 170LB. 

800.           For these reasons, the Full Bench found an employer could make a greenfields agreement to cover activities on a new project. 

801.           The Full Bench in Brunel did not overrule the earlier AIRC decisions, instead distinguishing them and noting that each case turned on its facts.  Proposed section 95B would clarify that the definition of new business would include a new business, new project or new undertaking and is not limited to the circumstances where those activities are of a different nature to those previously carried on by the employer.

New section 95C - AWAs with Commonwealth employees

802.           Proposed section 95C would provide special arrangements for AWAs relating to Commonwealth employees.

803.           Subsection 95C(1) would provide that an agency head (as defined by the Public Service Act 1999 ) may act on behalf of the Commonwealth in relation to an AWA with persons in their agency who are engaged under the Public Service Act 1999 .

804.           Subsection 95C(2) would provide that a Secretary of a Department (as defined by the Parliamentary Service Act 1999 ) may act on behalf of the Commonwealth in relation to an AWAs with persons in their agency who are engaged under the Parliamentary Service Act 1999 .

New section 95D - Extended operation of Part in relation to proposed workplace agreements

805.           Proposed section 95D would provide a translation rule that would extend the operation of Part VB -Workplace agreements in certain circumstances, where the context permits. 

806.           Paragraph 95D(a) would provide that, so far as context permits, a reference to a workplace agreement includes a proposed workplace agreement.  For example, where proposed section 97C refers to a workplace agreement, that reference includes a proposed workplace agreement.

807.           Paragraph 95D(b) would provide that, so far as the context permits, a reference to an employer, includes a proposed employer in relation to a proposed workplace agreement.  For example, where proposed section 98C refers to an employer having a workplace agreement approved, that includes a proposed employer having a proposed workplace agreement approved.

808.           Paragraph 95D(c) would provide that, so far as the context permits, a reference to an employee, includes a proposed employee in relation to a proposed workplace agreement.  For example, where proposed section 104 refers to duress being applied to an employee in relation to an AWA, that reference includes duress being applied to a proposed employee in relation to a proposed AWA.

New section 95E - Extraterritorial extension

809.           Proposed section 95E would provide for the extraterritorial extension of Part VB.

810.           Proposed subsection 95E(1) would extend the application of the Part (and related provisions of the WR Act) to persons, acts, omissions, matters and things outside Australia that are connected with a workplace agreement relating to an Australian-based employee or an Australian employer (as those expressions would be defined in subsection 4(1)).  The note under subsection 95E(1) makes clear that, for the purposes of section 95E, Australia includes the Territory of Christmas Island and the Territory of Cocos (Keeling) Islands and the coastal sea.

811.           Subsection 95E(1) would have the effect of allowing workplace agreements to be made by Australian employers with non-Australian-based employees, and by non-Australian employers with Australian-based employees, wherever the work was to be performed.  It would also extend Part VB and related provisions of the WR Act in other ways, for example by extending the application of proposed section 104A (making false and misleading statement in relation to workplace agreements) to statements made outside Australia. 

812.           Subsection 95E(2) would provide a specific definition of this Act for the purposes of proposed section 95E.  This is because the definition of this Act in subsection 4(1) (which would otherwise apply) does not include the Registration and Accountability of Organisations Schedule and regulations made under it.  The specific definition would ensure that the extraterritorial extension under subsection 95E(1) would apply to that Schedule and those regulations so far as they relate to Part VB. 

New Division 2 - Types of workplace agreements

New section 96 - Australian workplace agreements (AWAs)

813.           Proposed section 96 would provide for the making of individual agreements between an employer and employee.  These agreements would be known as Australian workplace agreements or AWAs .

814.           Subsection 96(1) would provide that an employer may make an AWA in writing with a person whose employment will be subject to the agreement.

815.           Subsection 96(2) would provide that an AWA may be made before the commencement of the employment.  This would enable an employer to enter into an AWA with a future employee to ensure that an AWA is in place from the start of the employment relationship.

New section 96A - Employee collective agreements

816.           Proposed section 96A would provide for the making of collective agreements directly between an employer and its employees without union involvement.  These agreements would be known as employee collective agreements .

817.           Proposed section 96A would provide that an employer may make an agreement in writing with persons who are employed in a single business or part of a single business of the employer at the time of making the agreement.

New section 96B - Union collective agreements

818.           Proposed section 96B would provide for the making of collective agreements between an employer and one or more organisations of employees.  These agreements would be known as union collective agreements .

819.           Proposed section 96B would provide that an employer may make an agreement in writing where, at the time the agreement is made, each organisation of employees:

·                has at least one member employed in the single business or part of the single business whose employment will be subject to the agreement (paragraph 96B(a)); and

·                is entitled to represent the industrial interests of the member in relation to work that will be subject to the agreement (paragraph 96B(b)).

820.           These requirements are intended to ensure that an organisation of employees only enters into a union collective agreement where it has an interest in the workplace arising from having at least one member employed at the workplace who it is entitled to represent.

New section 96C - Union greenfields agreements

821.           Proposed section 96C would provide for the making of collective agreements between an employer and one or more organisations of employees in relation to a new business as defined by proposed section 95B.  These agreements would be known as union greenfields agreements .

822.           Subsection 96C(1) would provide that an employer may make an agreement in writing with one or more organisations of employees if:

·                when the agreement is made, it relates to a new business that the employer proposes to establish or is establishing (paragraph 96C(1)(a));

·                the agreement is to be made before the employment of any of the persons who will be necessary for the normal operation of the business and whose employment will be subject to the agreement (paragraph 96C(1)(b)); and

·                the one or more organisations meet the requirements of subsection 96C(2) (paragraph 96C(1)(c)).

823.           Subsection 96C(2) would provide that, in order to make a union greenfields agreement, each organisation of employees must be entitled to represent the industrial interests of one or more of the persons whose employment is likely to be subject to the agreement, in relation to the work that will be subject to the agreement.

824.           It would not be necessary to seek the approval of employees prior to the employer lodging a union greenfields agreement and it coming into operation.

New section 96D - Employer greenfields agreements

825.           Proposed section 96D would provide for employers to make collective agreements in relation to a new business as defined by proposed section 95B.  These agreements would be known as employer greenfields agreements .

826.           Proposed section 96D would provide that an employer may make an agreement in writing if:

·                the agreement relates to a new business that the employer proposes to establish or is establishing (paragraph 96D(a)); and

·                the agreement is to be made before the employment of any of the persons who will be necessary for the normal operation of the business and whose employment will be subject to the agreement (paragraph 96D(b)).

827.           It would not be necessary to seek the approval of employees prior to the employer lodging an employer greenfields agreement and it coming into operation.

New section 96E - Multiple-business agreements

828.           Proposed section 96E would provide for multiple employers to make a single agreement that applies to all of their businesses.  These agreements would be known as multiple-business agreements .  Prior to making or varying such an agreement, an employer would have to seek authorisation from the Employment Advocate under proposed section 96F.

829.           Subsection 96E(1) would provide that a multiple-business agreement is a collective agreement that relates to any of, or a combination of, different single businesses or parts of different single businesses, carried on by one or more employers. 

830.           The note under subsection 96E(1) would refer to proposed sections 99A and 102I which would make it a civil remedy provision to lodge a multiple-business agreement without authorisation.

831.           Subsection 96E(2) would provide that, so far as the context permits, Part VB has effect in relation to a multiple-business agreement of a particular type as if the agreement were a collective agreement of that type.  This means that if, for example, a multiple-business agreement is made as an employee collective agreement, the requirements for employee collective agreements found in Part VB, apart from Division 2, apply to the agreement.

832.           Subsection 96E(3) would provide that, so far as the context permits, Part VB has effect in relation to a multiple-business agreement as if a reference to the employer were a reference to any one of the employers who are party to the multiple-business agreement.  This means that, for example, one of the employers can lodge the multiple-business agreement on behalf of all of the employers.

New section 96F - Authorisation of multiple-business agreements

833.           Proposed section 96F would allow the Employment Advocate to authorise an employer to make or vary a multiple-business agreement.

834.           Subsection 96F(1) would provide that an employer acting on behalf of the other employers seeking to negotiate a multiple-business agreement may apply to the Employment Advocate for an authorisation to make the agreement.  It is intended that this would occur prior to the commencement of negotiations for the agreement.  See proposed section 99A which would make it a civil remedy provision to lodge a multiple-business agreement without authorisation.

835.           Subsection 96F(2) would provide that the regulations may set out a procedure for applying to the Employment Advocate for the authorisation.  Where such a procedure is established, the Employment Advocate would not have to consider an application for authorisation that is not made in accordance with the procedure.

836.           Subsection 96F(3) would provide the Employment Advocate must not grant an authorisation unless he or she is satisfied that it is in the public interest to do so, having regard to:

·                whether the matters dealt with in the agreement could be more appropriately dealt with by a different collective agreement (paragraph 96F(3)(a)); and

·                any other matters specified in the regulations (paragraph 96F(3)(a)).

837.           If the Employment Advocate grants an authorisation, the parties could make or vary a multiple-business agreement in accordance with the relevant provisions of Part VB.

New section 96G - When a workplace agreement is made

838.           Proposed section 96G would provide the time at which a workplace agreement is made .

839.           Paragraph 96G(a) would provide that an AWA is made when it is approved in accordance with proposed section 98C.

840.           Paragraph 96G(b) would provide that an employee collective agreement is made when it is approved in accordance with proposed section 98C.

841.           Paragraph 96G(c) would provide that a union collective agreement is made when the employer and the organisation or organisations agree to the terms of the agreement.

842.           Paragraph 96G(d) would provide that a union greenfields agreement is made when the employer and the organisation or organisations agree to the terms of the agreement.

843.           Paragraph 96G(e) would provide that an employer greenfields agreement is made when the employer lodges the agreement.

844.           The concept of when an agreement is made is included in Part VB because of the effect that making an agreement has on parties’ rights.  Once a collective agreement is made any bargaining period on foot between the parties ends, with the effect that any industrial action taken after that time would not be protected action (see paragraph 107E(a)).  Also, there is a prohibition on an employer withdrawing from a union collective agreement or union greenfields agreement after it has been made (see proposed section 98B).

New Division 3 - Bargaining agents

New section 97 - Bargaining agents - qualifications

845.           Proposed section 97 would provide for the qualifications of bargaining agents who may assist employees in making an AWA or employee collective agreement.  Bargaining agents would be able to assist employees in relation to the making, variation or termination of an AWA (see proposed section 97A).  Employees would also be able to appoint bargaining agents to meet and confer with their employer about the making or variation of an employee collective agreement or the variation of an employee greenfields agreement (see proposed section 97B).

846.           Subsection 97(1) would provide that a person can only be a bargaining agent if the person meets the qualifications in this section at the time of their appointment.

847.           Subsection 97(2) would provide that the person must meet the requirements (if any) specified in the regulations.

848.           Subsection 97(3) would provide that where an organisation of employees is to be a bargaining agent:

·                at least one person whose employment is or will be subject to the agreement must be a member of the organisation (paragraph 97(3)(a)); and

·                the organisation must be entitled to represent the person’s industrial interests in relation to work that is or will be subject to the agreement (paragraph 97(3)(a)).

849.           The requirements in 97(3) are intended to ensure that an organisation of employees only acts as a bargaining agent where it has an interest in the workplace arising from having at least one member at the workplace that it is entitled to represent.

New section 97A - Bargaining agents - AWAs

850.           Proposed section 97A would set out requirements for an employer or employee to appoint a bargaining agent in relation to the making, variation or termination of an AWA and for the other party in the negotiations to recognise that bargaining agent.

851.           Subsection 97A(1) would provide that either the employer or the employee may appoint a person to be his or her bargaining agent to negotiate the making, variation or termination of an AWA.  The appointment must be in writing. 

852.           The note under subsection 97A(1) would refer to subsection 104(3) which would provide that there is a civil remedy for coercion in relation to appointments made under proposed section 97A.

853.           Subsection 97A(2) requires the recognition of the appointment of a duly appointed bargaining agent by the other party for the purposes of subsection (1).

854.           Subsection 97A(3) would provide that a person is not in breach of subsection (2) if he or she was not given a copy of the bargaining agent’s instrument of appointment before refusing to recognise the bargaining agent.  The words ‘does not apply’ in subsection 97A(3) would mean that the burden of proving that a contravention of subsection 97A(2) did not occur, because of subsection 97A(3), would be reversed (ie it would be upon the defendant).

855.           Subsection 97A(4) would provide that subsection 97A(2) is a civil remedy provision. 

856.           The note under subsection 97A(4) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for a failure to recognise another party’s bargaining agent when negotiating an AWA (see proposed section 105D).

New section 97B - Bargaining agent - employee negotiated agreements

857.           Proposed section 97B would set out requirements for employees to appoint a bargaining agent to represent them by meeting and conferring with the employer in relation to an employee collective agreement.

858.           Subsection 97B(1) would provide that a person whose employment will be subject to an employee collective agreement may request a bargaining agent to represent them in meeting and conferring with the employer about the agreement. 

859.           The note under subsection 97B(1) would refer to subsection 104(4) which would provide a civil remedy for coercion in relation to appointments made under proposed section 97B.

860.           Subsection 97B(2) would provide that a person whose employment is or will be subject to an employer greenfields agreement may request a bargaining agent to represent them in meeting and conferring with the employer about the variation of the agreement. 

861.           The note under subsection 97B(2) would refer to subsection 104(4) which would provide that there is a civil remedy for coercion in relation to appointments made under proposed section 97B.

862.           Subsection 97B(3) would provide that an employee may request that the employer meet and confer with the employee’s bargaining agent about the agreement.  If an employee makes such a request the employer would be required to give the bargaining agent a reasonable opportunity to meet and confer with the employer about the agreement in the period beginning seven days before the agreement is approved and ending when the agreement is approved.  Subsection 97B(4) would provide that subsection 97B(2) is a civil remedy provision.

863.           The note under subsection 97A(4) would refer to Division 11of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for a failure to meet an confer with a bargaining agent about an employee negotiated agreement in the period beginning seven days before the agreement is approved and ending when the agreement is approved.

864.           Subsection 97B(5) would provide that the employer’s obligation to meet and confer with a bargaining agent ceases if the employee withdraws the request for the employer to do so.

865.           Subsection 97B(6) would provide the Employment Advocate power to issue a certificate that:

·                on application by a bargaining agent - an employee has made a request for the bargaining agent to represent the employee in meeting and conferring with the employer (paragraph 97B(6)(a)); or

·                on application by the employer - that the employer does not need to meet and confer with the bargaining agent because the employee has withdrawn the request.

866.           It is not intended that gaining a certificate under subsection 97B(6) would be a pre-requisite to a bargaining agent being able to represent an employee.

867.           It is intended that one certificate may be issued in relation to several employees appointing the same bargaining agent.

868.           Subsection 97B(7) would provide that the certificate must not identify any of the employees.  This is intended to ensure that an employee or group of employees may anonymously ask for the employer to meet and confer with their bargaining agent.

869.           In this context subsection 97B(8) would provide that the certificate is prima facie evidence for all purposes that the employee or employees made the request. 

870.           While it is intended that an organisation of employees would be able to be a bargaining agent for an employee in relation to an employee collective agreement, an employee’s choice of bargaining agents would not be limited.

871.           A number of employers have interpreted a similar requirement to subsection 97B(2) in pre-reform subsection 170LK(5) to mean that the employee must tell the employer directly of their request (see, for example, CFMEU v S.J Weir Pty Ltd (PR947609)).  However, an employee may inform their bargaining agent that they wish them to meet and confer with the employer about the agreement.  The bargaining agent may then inform the employer of the employee’s request (see subsections 97B(4), (5) and (6) for details of evidencing such a request).

New Division 4 - Pre-lodgment procedure

New section 97C - Eligible employee

872.           Proposed section 97C would provide a definition of eligible employee for the purposes of Division 4 of Part VB.  The concept of an eligible employee is a drafting tool to provide a short hand term for the employees that have rights in relation to making a workplace agreement, and reduces the need for repetition.

873.           Proposed section 97C would define an eligible employee to be:

·                in the case of an AWA - the person whose employment will be subject to the AWA (paragraph 97C(a)); or

·                in the case of a collective agreement - a person employed by the employer whose employment will be subject to the agreement (paragraph 97C(b)).

New section 98 - Providing employees with ready access and information statement

874.           Proposed section 98 would provide a period of time in which employees may consider a workplace agreement and obtain advice about that agreement prior to approving it.  Subsection 98(1) would require the employer to take reasonable steps to ensure that all eligible employees have ready access to the agreement in writing for at least seven days prior to the agreement being approved.

875.           Subsection 98(2) would require the employer to take reasonable steps to ensure that all eligible employees are given an information statement at least seven days prior to the agreement being approved.

876.           Subsection 98(3) would provide that, if a person becomes an eligible employee during the seven day period before the agreement is approved, the employer must take reasonable steps to ensure that the person is given an information statement (paragraph 98(3)(a)) and ready access to the agreement (paragraph 98(3)(b)) from no later than the time the person becomes an eligible employee.

877.           Subsection 98(4) would provide that the information statement mentioned in subsection 98(2) and paragraph 98(3)(a) must contain information about:

·                when and how the employer will seek approval of the agreement (paragraph 98(4)(a));

·                the effect of the provisions relating to bargaining agents (paragraphs 98(4)(b) and (c)); and

·                anything else that the Employment Advocate requires by notice published in the Gazette (paragraph 98(4)(d)).

878.           It is intended that the Employment Advocate would produce a standard form information statement for the employer to provide to employees, which would be published in the Gazette and available from the Employment Advocate.  Employers would then fill in any necessary details, for example, when and how the employer would seek approval of the agreement.

879.           Subsection 98(5) would provide that, if the eligible employees have waived the remainder of the seven day period, the employer no longer has to provide ready access to the agreement under subsections 98(1) and (3). 

880.           Subsection 98(6) would provide that if a workplace agreement incorporates terms from another industrial instrument by reference, the eligible employees only have ready access to the workplace agreement if they have ready access to the other industrial instrument in writing.  The requirements for incorporating industrial instruments by reference can be found in proposed section 101C. 

881.           Subsection 98(7) would provide that if the content of the workplace agreement is changed during the seven day period prior to approval, the change results in a separate workplace agreement. 

882.           The note under subsection 98(7) would provide if an agreement is amended during the seven day period, the employer must restart the period and repeat the steps in subsections 98(1), 98(2) and 98(3).

883.           Subsection 98(8) would provide that an employer contravenes subsection 98(8) if it lodges a workplace agreement without providing ready access to the agreement in accordance with subsection 98(1) and paragraph 98(3)(b). 

884.           Subsection 98(9) would provide that an employer contravenes the provision if it lodges a workplace agreement without providing eligible employees with an information statement in accordance with subsection 98(2) and paragraph 98(3)(a). 

885.           Subsection 98(10) would provide that subsections 98(8) and (9) are civil remedy provisions.

886.           The note under subsection 98(10) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for a failure to take reasonable steps to provide ready access to an agreement or an information statement in relation to an agreement.

887.           Subsection 98(11) would provide that an employer would not contravene subsections 98(8) or (9) more than once in relation to a particular workplace agreement.  This means that, for example, where an employer has ten employees and fails to give the employees ready access to the workplace agreement, that is only one contravention of subsection 98(8), rather than ten.

New section 98A - Employees may waive ready access

888.           Proposed section 98A would provide for employees to waive the remainder of the ready access period.  It is intended that this would allow an employer and its employees to approve a workplace agreement more quickly, where the employees decide that they have had sufficient time to consider the agreement and are happy to bring forward the approval.  This would address the problem that the pre-reform agreement making process required parties to wait 14 days to approve an agreement, even where the employees had made up their minds and were happy to approve the agreement instantly.

889.           Subsection 98A(1) would provide that the persons mentioned in subsection 98A(2) may make a waiver in relation to a workplace agreement.

890.           Subsection 98A(2) would provide that the persons are all the eligible employees at the time the waiver is made.

891.           Subsection 98A(3) would require the waiver to be in writing and dated.

892.           Subsection 98A(4) would provide that the waiver is made when all of the eligible employees sign the waiver.

893.           Subsection 98A(5) would provide that the waiver takes effect when it is made.

New section 98B - Prohibition on withdrawal from union collective agreement

894.           Proposed section 98B would prohibit withdrawal from a union collective agreement. 

895.           Subsection 98B(1) would require an employer to take reasonable steps to seek approval of a union collective agreement within a reasonable period after the agreement is made. 

896.           Subsection 98B(2) would provide that subsection 98B(1) is a civil remedy provision.

897.           The note under subsection 98B(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for withdrawing from a union collective agreement.

898.           This measure would ensure that when an employer and one or more organisations of employees have come to an agreement, that agreement would be put to the employees for approval. 

899.           The employer would be given a reasonable period in which to put the agreement to the employees.  This acknowledges that what is a reasonable period will vary depending on the circumstances of the employer.  For example, a reasonable period might be longer for a large business with 10 000 employees and offices located around Australia, but may be shorter for a business with 15 employees that are all located in one office.

900.           Proposed section 98B only applies to union collective agreements as there would be no need to apply the provision to other types of workplace agreement.  There are no corresponding prohibitions on an organisation of employees withdrawing from a union collective agreement as, if that occurred, the employer would still be able to lodge the agreement with the Employment Advocate and bring it into operation (see proposed subsection 100(1)). 

New section 98C - Approval of a workplace agreement

901.           Proposed section 98C would provide for the manner in which certain agreements are to be approved by employees before they are lodged.  Proposed section 98C would not apply to greenfields agreements, which do not have to be approved.

902.           Subsection 98C(1) would provide that an AWA is approved if:

·                the AWA is signed and dated by the employee and the employer (paragraph 98C(1)(a)); and

·                those signatures are witnessed (paragraph 98C(1)(b)).

903.           Paragraph 98C(1)(c) would provide additional requirements for the approval of an AWA, where the employee is under the age of 18.  These are:

·                that the AWA is signed and dated by an appropriate adult (such as the employee’s parent or guardian, but not the employer) who is aged at least 18 (subparagraphs 98C(1)(c)(i) and (ii)); and

·                that the person’s signature is witnessed (subparagraph 98C(1)(c)(iii)).

904.           This additional requirement of having an AWA signed by an appropriate adult is intended to provide further protection to employees who may be vulnerable because of their age.  The term ‘appropriate adult’ is intended to be broad enough to allow a person who is under 18 but does not have a parent or guardian available to seek the signature from another adult who has an interest in the young person’s well being (eg another member of the person’s family).

905.           Subsection 98C(2) would provide for how an employee collective agreement or union collective agreement is to be approved

906.           Paragraph 98C(2)(a) would require the employer to give all of the persons employed by the employer at the time of approving the agreement whose employment will be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement. 

907.           Paragraph 98C(2)(b) would additionally require that:

·                if the decision is made by vote - a majority of those persons who cast a valid vote decide that they want to approve the agreement; or

·                otherwise - a majority of those persons decide that they want to approve the agreement.

908.           This means that once the employer has provided employees with a reasonable opportunity to decide whether they want to approve an employee collective agreement or a union collective agreement, determining whether an agreement has been approved would involve counting the votes of the employees and not an assessment of the genuineness of employees’ consent.

New section 98D - Employer must not lodge unapproved agreement

909.           Proposed section 98D would provide remedies against an employer that lodges a workplace agreement which has not been approved in accordance with 98C. 

910.           Subsection 98D(1) would provide that an employer contravenes subsection 98D(1) if:

·                it lodges a workplace agreement (paragraph 98D(1)(a)); and

·                the agreement has not been approved in accordance with proposed section 98C (paragraph 98D(1)(b)). 

911.           Subsection 98D(2) would provide that subsection 98D(1) is a civil remedy provision.

912.           The note under subsection 98D(2) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 98D(1) (see proposed section 105D);

·                declare that all or part of the agreement is void (see proposed section 105F);

·                vary the terms of the agreement, including its nominal expiry date (see proposed section 105G);

·                order compensation (see proposed section 105J); and/or

·                grant injunctions (see proposed section 105K);

for lodging a workplace agreement (other than a greenfields agreement) that has not been approved.

New Division 5 - Lodgment

New section 99 - Employer must lodge certain workplace agreements with the Employment Advocate

913.           Proposed section 99 would require employers to lodge certain workplace agreements with the Employment Advocate. 

914.           Subsection 99(1) would require an employer to lodge an AWA, employee collective agreement or a union collective agreement within 14 days of the agreement being approved under proposed section 98C.

915.           Subsection 99(2) would require an employer to lodge a union greenfields agreement within 14 days of the agreement being made under proposed section 96G.

916.           Subsection 99(3) would provide that subsections 99(1) and (2) are civil remedy provisions.

917.           The note under subsection 99(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for a failure to lodge a workplace agreement:

·                for an AWA, employee collective agreement or union collective agreement - within fourteen days of it being approved; or

·                for a union greenfields agreement - within fourteen days of it being made.

918.           It is intended that the time frame and penalties in proposed section 99 would encourage employers to speedily lodge workplace agreements once they are made or approved (depending on the agreement). 

919.           Only employers would be able to lodge agreements with the Employment Advocate.  This would be consistent with an agreement making system where integrity of the system is ensured through a penalty regime.  It would be difficult to effectively attribute responsibility for a breach of the lodgment requirements if more than one party to the agreement were responsible for lodgment.  However, the Court would have discretion not to order a penalty against an employer who was pressured into lodging an agreement inappropriately.  Where such pressure occurred, an employer would be able to seek an injunction under proposed section 105K to restrain prohibited conduct.

920.           Proposed section 99 would not make reference to an employer lodging an employer greenfields agreement.  There is no obligation for an employer to lodge an employer greenfields agreement, as these agreements are not approved by employees and not made until they are lodged.  However, an employer greenfields agreement would not come into operation until the employer lodged it with the Employment Advocate.

New section 99A - Lodging multiple-business agreement without authorisation

921.           Proposed section 99A would prohibit an employer from lodging a multiple-business agreement that has not been authorised by the Employment Advocate under proposed section 96F. 

922.           Subsection 99A(1) would provide that an employer contravenes subsection 99A(1) if:

·                the employer lodges a multiple-business agreement; and

·                the agreement has not been authorised under 96F.

923.           Subsection 99A(2) would provide that subsection 99A(1) is a civil remedy provision.

924.           The note under subsection 99A(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 60 penalty units for lodging a multiple-business agreement without authorisation.

925.           Only one of the multiple employers would lodge an agreement.  It would be the employer who would be liable for a failure to obtain an authorisation.  However, the Court would have discretion not to order a penalty against an employer who was pressured into lodging an agreement inappropriately.  Where such pressure occurred, an employer would be able to seek an injunction under proposed section 105K to restrain prohibited conduct.

926.           Where a multiple-business agreement is lodged without authorisation, the agreement would not be able to come into operation by operation of law (subsection 100(3)).

New section 99B - Lodging of workplace agreement documents with the Employment Advocate

927.           Proposed section 99B would provide the method by which an employer would lodge a workplace agreement, thus bringing it into operation (see subsection 100(1)).

928.           Subsection 99B(1) would provide that the employer lodges a workplace agreement if:

·                the employer lodges a declaration under subsection (2) (paragraph 99B(1)(a)); and

·                a copy of the workplace agreement is annexed to the declaration (paragraph 99B(1)(b)).

929.           Subsection 99B(2) would provide that an employer lodges a declaration if the employer gives the declaration to the Employment Advocate and the declaration meets the requirements of subsection 99B(3).

930.           The note under subsection 99B(2) makes clear that providing false or misleading information or documents under subsection 99B(2) would be a criminal offence under sections 137.1 and 137.2 of the Criminal Code .

931.           Subsection 99B(3) allows the Employment Advocate to set out requirements for the form of the declaration, by notice published in the Gazette .  It is intended that the Employment Advocate would exercise his or her power under subsection 99B(3) to create a standard form declaration.  The employer would then fill in any necessary details, for example, the name of the agreement, and lodge that standard form declaration along with a copy of the workplace agreement with the Employment Advocate (subsections 99B(1) and (2)).  It is also intended that the standard form declaration would require an employer to declare that the agreement was made and/or approved in accordance with the requirements of Divisions 3 and 4 of Part VB.

932.           An employer would only need to lodge a copy of the workplace agreement as it is intended that the regulations would require an employer to retain a signed original of the workplace agreement for a specified period.  It is intended that a workplace agreement could be lodged electronically, by fax, by hand or by post.  However, it is likely that the vast majority of lodgments would be electronic.  Requiring the employer to only lodge a copy of the workplace agreement would facilitate the implementation of electronic lodgment for workplace agreements.

933.           Subsection 99B(4) would provide that a declaration is only taken to be given to the Employment Advocate if the Employment Advocate actually receives it.  This means that if an employer lodges a workplace agreement by post, the agreement would only be taken to be lodged when the Employment Advocate receives the declaration.

934.           The note under subsection 99B(4) would make clear that section 29 of the Acts Interpretation Act 1901 or section 160 of the Evidence Act 1995 do not apply to workplace agreements.  These provisions might otherwise create a presumption that the ‘postal-acceptance rule’ applies to workplace agreements. 

935.           Subsection 99B(5) would provide that the Employment Advocate is not required to consider or determine whether any of the requirements of Part VB have been met in relation to the making or content of a declaration or workplace agreement.  This is intended to make it clear that lodgment of a declaration and an agreement could occur without any scrutiny by the Employment Advocate.

New section 99C - Employment Advocate must issue receipt for lodgment of declaration for workplace agreement

936.           Proposed section 99C would provide for the Employment Advocate to issue a receipt for the lodgment of a workplace agreement.

937.           Subsection 99C(1) would require the Employment Advocate to issue a receipt if a declaration is lodged under subsection 99B(2).

938.           Subsection 99C(2) would require the Employment Advocate to give a copy of the receipt to:

·                the employer (paragraph 99C(2)(a));

·                if the agreement is an AWA - the employee (paragraph 99C(2)(b)); and

·                if the agreement is a union collective agreement or a union greenfields agreement - the organisation or organisations bound by the agreement (paragraph 99C(2)(c)).

939.           This mechanism is necessary in the context of a system where agreements come into operation on lodgment (see subsection 100(1)), as parties need to know the time when the agreement applies to them. 

940.           It is intended that where a workplace agreement is lodged electronically, the information provided in the electronic declaration would be sufficient for the Employment Advocate’s systems to instantly issue an electronic receipt without needing to scrutinise the agreement.  Where an agreement is lodged by other means, the information provided in the declaration would be sufficient for the Employment Advocate to issue a receipt after examining the declaration to the extent necessary to determine where to send the receipt.  After receiving a receipt, the employer would be required to pass on the receipt to the relevant employees (see proposed section 99D).

New section 99D - Employer must notify employees after lodging workplace agreement

941.           Proposed section 99D would require the employer to take reasonable steps to pass on copies of the lodgment receipt from the Employment Advocate to employees whose employment is subject to the agreement.

942.           Subsection 99D(1) would require an employer in relation to a collective agreement to take reasonable steps to ensure that the lodgment receipt is given to persons whose employment is, at the time the employer receives the receipt, subject to the agreement, within 21 days of the employer receiving the receipt from the Employment Advocate.  The reference to ‘persons’ is intended to ensure that an employer would not contravene subsection 99D(1) more than once in relation to a particular workplace agreement.  This means that, for example, where an employer has ten employees and fails to give the employees a copy of the lodgment receipt, that is only one contravention of subsection 99D(3), rather than ten. 

943.           Subsection 99D(1) does not apply to AWAs as the Employment Advocate would provide a lodgment receipt directly to the employee.

944.           Subsection 99D(2) would provide that subsection 99D(1) is a civil remedy provision.

945.           The note under subsection 99D(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employer for failing to pass on a lodgment receipt to employees.

946.           Subsection 99D(3) would provide that proposed section 99D does not apply in relation to a greenfields agreement.

New Division 6 - Operation of workplace agreements and persons bound

New section 100 - When a workplace agreement is in operation

947.           Proposed section 100 would set out when a workplace agreement comes into operation and ceases to be in operation.

948.           Subsection 100(1) would provide that a workplace agreement comes into operation on the day the agreement is lodged.

949.           Subsection 100(2) would provide that a workplace agreement comes into operation even if the requirements relating to Divisions 3 and 4 of Part VB have not been complied with.  This would be a necessary consequence of a lodgment only system that does not involve workplace agreements being scrutinised prior to coming into operation. 

950.           It is intended that once lodged, a workplace agreement will remain in operation even if Divisions 3 and 4 have not been complied with, unless the Court decides otherwise.  For example, an employer might lodge a collective agreement without giving employees ready access to the agreement under proposed section 98 or seeking their approval for that agreement under proposed section 98C.  In those circumstances, the agreement would come into operation.  However, the employer could have committed a criminal offence by making a false declaration when lodging the agreement (see note under subsection 99B(2)) and be liable for remedies including pecuniary penalties and compensating employees that have suffered loss or damage as a result of the employer’s actions.

951.           Subsection 100(3) would provide that a multiple-business agreement comes into operation only if it has been authorised under proposed section 96F, even though the agreement could be lodged under proposed section 99 without prior authorisation.  As with other types of agreement, the agreement would remain in operation unless the Court decides otherwise.

952.           Subsection 100(4) would provide that a workplace agreement ceases to be in operation if:

·                it is terminated in accordance with Division 9 of Part VB (paragraph 100(4)(a));

·                in the case of an AWA - it has been replaced by another AWA (paragraph 100(4)(b)); or

·                the Court declares it to be void under paragraph 105F(1)(a) (paragraph 100(4)(b)).

953.           It is intended that an AWA would be replaced under paragraph 100(4)(b) at any time the employer and employee enter into another AWA.  It would not be necessary for an AWA to have passed its nominal expiry date before the employer could make a new AWA with the employee and lodge it.

954.           Subsection 100(5) would provide that a collective agreement ceases to be in operation in relation to an employee if it has passed its nominal expiry date and has been replaced by another collective agreement in relation to that employee.  It is intended that once a collective agreement is no longer in operation in relation to any employees, it would cease to operate in its entirety.  The concept of an agreement ceasing to be in operation in relation to an employee would be included in Part VB in order to allow an employer to make agreements that operate simultaneously, while ensuring that no more than one agreement would have effect in relation to an employee at any one time (see subsection 100A(1)).

Illustrative Example

Nathan works in the manufacturing area of a shoe factory under a collective agreement which only covers the manufacturing area.  Nathan’s collective agreement has a nominal expiry date of 31 December 2007.  On 1 January 2006 Nathan’s employer lodges a collective agreement which covers the whole shoe factory.  In that situation, subsection 100(5) and subsection 100A(3) operate so that Nathan will continue to work under the manufacturing area’s collective agreement until 31 December 2007 and, after 31 December 2007, Nathan will work under the collective agreement covering the whole shoe factory.

 

955.           The note under subsection 100(5) would refer the reader to proposed Part VIAA which sets out transmission of business rules and the circumstances where an agreement binding on an employer because of transmission of business will cease to operate.

956.           Subsection 100(6) would provide additional circumstances in which a multiple-business agreement could cease to be in operation.  A multiple-business agreement would cease to operate in relation to a single business if, for example, after the multiple-business agreement comes into operation, a collective agreement covering only one of the businesses covered by the multiple-business agreement is lodged.  It is intended that this provision would allow a single business or part of a single business which is subject to a multiple-business agreement to, at any time, leave the multiple-business agreement and make a collective agreement that only covers their single business or part of a single business.

957.           The note under subsection 100(6) would give an example of the operation of the provision

958.           Subsection 100(7) provides that if a workplace agreement has ceased operating under subsection 100(4) it could never operate again.  This is intended to prevent the agreement that has ceased operating under subsection 100(4) from being ‘revived’ by coming back into operation.

959.           Subsection 100(8) provides that if a workplace agreement has ceased operating in relation to an employee because of subsection 100(5) it can never operate again in relation to an employee.  Subsection 100(8) is intended to prevent collective agreements from being ‘revived’.

960.           However, this would be different to the situation where an employee moves around a business or in and out of a business.  For example, an employee might work for an organisation under a collective agreement for a period.  The employee might then leave the organisation but return to the organisation during the life of the same collective agreement.  In those circumstances, when the employee returned to the organisation their terms and conditions would, once again, be determined by the collective agreement.  This is because the collective agreement would not have ceased operating in relation to that employee as a result of replacement.  Rather, it ceased operation in relation to that employee as a result of the employee moving businesses.

961.           Subsection 100(9) would provide that once a multiple-business agreement has ceased operation in relation to a single business or part of a single business it can never again operate in relation to that single business or part of a single business.

962.           Subsection 100(10) would provide, in effect, that if at any time when the agreement is in operation the employer ceases to fall within the constitutional coverage of the Bill, the agreement would cease operating.

New section 100A - Relationship between overlapping workplace agreements

963.           Proposed section 100A would set out what is to occur where more than one workplace agreement purports to have effect in relation to a single employee at the same time. 

964.           Subsection 100A(1) would provide that only one workplace agreement can have effect at a particular time in relation to a particular employee.  It is intended that this would encourage parties to make comprehensive workplace agreements rather than leaving some matters out of an agreement for later negotiations.  However, where parties do not include a matter, they would be able to vary their agreement under the simplified process in Division 8 of Part VB.

965.           Subsection 100A(2) would provide that a collective agreement has no effect in relation to an employee while an AWA operates in relation to the employee.  The intention of this provision is to ensure that, regardless of whether a collective agreement is in operation in a workplace, the employer and an employee may make an AWA at any time and that AWA will provide the employee’s terms and conditions instead of the collective agreement.  It would not be necessary for the collective agreement to have passed its nominal expiry date for the AWA to come into operation.

966.           Subsection 100A(3) would provide that if:

·                a collective agreement (the first agreement) binding an employee is in operation; and

·                another collective agreement (the later agreement) binding the employee is lodged before the nominal expiry date of the first agreement

the later agreement has no effect in relation to the employee until the nominal expiry date of the first agreement.

967.           The note under subsection 100A(3) explains that after the nominal expiry date of the first agreement, it ceases operating and the later agreement takes effect in relation to the employee. 

Illustrative Example

On 1 January 2006 a collective agreement is lodged covering the administration staff in a single business (the first agreement) with a nominal expiry date of 31 December 2009.  On 1 January 2007, another collective agreement is lodged covering the whole single business (the second agreement) with a nominal expiry date of 31 December 2011.  The second agreement would come into operation on 1 January 2006, but only have effect in relation to employees that are not administration staff.  However, after 31 December 2009 (the nominal expiry date of the first agreement), the first agreement would cease to be in operation (as it would be replaced by the second agreement) and the second agreement would have effect in relation to all of the employees in the single business. 

 

New section 100B - Effect of awards while workplace agreement is in operation

968.           Proposed section 100B would provide that an award has no effect in relation to an employee while a workplace agreement operates in relation to the employee.  The intention of this provision is to ensure that a workplace agreement comprehensively provides an employee’s terms and conditions of employment, instead of the employee’s terms and conditions deriving from both a workplace agreement and an award simultaneously.

969.           It is intended that this provision would only affect an employee in relation to one job at a time.  For example, if an employee had two jobs, the fact that the employee is subject to a workplace agreement in one job would not affect an award that applies in relation to the employee’s other job.

New section 100C - Workplace agreement displaces certain Commonwealth laws

970.           Proposed section 100C would provide for workplace agreements to displace certain Commonwealth laws. 

971.           Subsection 100C(1) would provide that a workplace agreement may, to the extent of any inconsistency, displace prescribed conditions of employment contained in Commonwealth laws that are prescribed in the regulations.

972.           Subsection 100C(2) would set out definitions of Commonwealth law and prescribed conditions for the purposes of this section.

973.           This means that, for example, the regulations may provide that workplace agreements made with Commonwealth public sector employees, override conditions of employment specified in the Public Service Act 1999, that are prescribed.

New section 100D - Persons bound by workplace agreements

974.           Proposed section 100D would set out who is bound by a workplace agreement that is in operation. 

975.           Proposed section 100D would provide that a workplace agreement that is in operation binds:

·                the employer in relation to the agreement (paragraph 100D(a));

·                all persons whose employment is, at any time when the agreement is in operation, subject to the agreement (paragraph 100D(b)); and

·                if the agreement is a union collective agreement or union greenfields agreement - the organisation or organisations of employees with which the employer made the agreement (paragraph 100D(c)).

976.           A workplace agreement would not be able to bind anyone unless it is in operation.  However, persons may still have obligations in relation to a workplace agreement before it comes into operation, for example, an employer’s obligation to lodge a workplace agreement within 14 days of it being approved (see proposed subsection 99(1)).

977.           Paragraph 100D(b) includes the phrase ‘at any time the agreement is in operation’ as that phrase is intended to clarify that the employment of an employee who joins a business during the life of a collective agreement would be subject to that agreement, even though the employee was not involved in making or approving the agreement.

978.           The note under paragraph 100D(b) would clarify that a person may also be bound by a workplace agreement by operation of Part VIAA - Transmission of business.

New Division 7 - Content of workplace agreements

New Subdivision A - Required content

979.           The note under the heading to proposed Subdivision A would refer to proposed Part VA - Fair Pay and Conditions Standard, which sets out the operation of the FPCS.

New section 101 - Nominal expiry date

980.           Proposed section 101 would set out when a workplace agreement is taken to have passed the nominal expiry date. 

981.           Paragraph 101(1)(a) would provide that the nominal expiry date of a greenfields agreement is a date specified in the agreement that is no later than the first anniversary of the lodgment date of the agreement.  If an agreement does not specify a nominal expiry date or specifies a nominal expiry date that is later than the first anniversary of the agreement being lodged, the nominal expiry date would be deemed to be the first anniversary of the lodgment date of the agreement. 

982.           Paragraph 101(1)(b) would provide that the nominal expiry date for other workplace agreements is a date specified in the agreement that is no later than the fifth anniversary of the lodgment date of the agreement.  If an agreement does not specify a nominal expiry date or specifies a nominal expiry date that is later than the fifth anniversary of the agreement being lodged, the nominal expiry date would be deemed to be the fifth anniversary of the lodgment date of the agreement.

983.           Under paragraph 101(2)(a) if parties vary the nominal expiry date of a greenfields agreement and the agreement as varied does not specify a nominal expiry date or specifies a nominal expiry date that is later than the first anniversary of the lodgment date of the agreement, the nominal expiry date would be deemed to be the first anniversary of the lodgment date of the agreement.

984.           Paragraph 101(2)(b) would provide for parties to vary the nominal expiry date of other workplace agreements.  If an agreement as varied does not specify a nominal expiry date or specifies a nominal expiry date that is later than the fifth anniversary of the lodgment date of the agreement, the nominal expiry date would be deemed to be the fifth anniversary of the lodgment date of the agreement. 

985.           These measures would allow greenfields agreements to have a nominal life of one year while all other workplace agreements could have a nominal life of up to five years.  After the nominal expiry date of a workplace agreement:

·                parties could take protected action in support of a new agreement (proposed section 110);

·                a collective agreement could be replaced by another collective agreement (proposed section 100);

·                another collective agreement could come into operation in relation to an employee (proposed section 100A).

986.           It is not intended that proposed section 101 would prevent the Court using its powers under proposed section 105G to vary a workplace agreement.

New section 101A - Workplace agreement to include dispute settlement procedures

987.           Proposed section 101A would provide for workplace agreements to include dispute settlement procedures. 

988.           Subsection 101A(1) would require a workplace agreement to include procedures for settling disputes about matters arising under the agreement between:

·                the employer (paragraph 101A(1)(a)); and

·                the employees whose employment will be subject to the agreement (paragraph 101A(1)(b)).

989.           Subsection 101A(2) would provide that if a workplace agreement does not include dispute settlement procedures it will be deemed to include the model dispute settlement procedures in Division 2 of Part VIIA of the Bill.  This means that parties to workplace agreements would have the option of developing their own dispute settlement procedures or relying on the dispute settlement procedure provided in the Bill.  Where an agreement is silent in relation to dispute settlement procedures, the dispute settlement procedure in the Bill would be ‘read into’ the agreement by operation of law.

New section 101B - Protected award conditions

990.           Proposed section 101B would provide a mechanism to deem certain award conditions to be included in a workplace agreement. 

991.           Subsection 101B(1) would provide that this section applies if:

·                a person’s employment is subject to a workplace agreement (paragraph 101B(1)(a)); and

·                but for the agreement, the protected award conditions would have effect in relation to the person’s employment (paragraph 101B(1)(b)).

992.           Subsection 101B(2) would provide that the protected award conditions:

·                are taken to be included in the workplace agreement (paragraph 101B(2)(a));

·                have effect in relation to the person’s employment (paragraph 101B(2)(b)); and

·                have that effect subject to any terms of the workplace agreement that expressly exclude or modify all or part of them (paragraph 101B(2)(c)).

993.           Subsection 101B(3) would define terms relating to protected award conditions for the purposes of section 101B.

994.           Subsection 101B(3) would define outworker to mean an employee who performs work at private residential premises or premises that are not the employer’s business or commercial premises.

995.           Subsection 101B(3) would define outworker conditions to mean conditions for outworkers, other than pay, but only to the extent necessary to ensure that their overall conditions of employment are fair and reasonable in comparison with the conditions of employment specified in a relevant awards or awards for employees who perform the same kind of work at an employer’s business or commercial premises.

996.           Subsection 101B(3) would define protected allowable award matters to mean:

·                rest breaks (paragraph 101B(3)(a));

·                incentive-based payments and bonuses (paragraph 101B(3)(b));

·                annual leave loadings (paragraph 101B(3)(c));

·                public holidays declared by or under State or Territory law and related entitlements for working on those days (paragraph 101B(3)(d));

·                certain allowances relating to employees’ out of pocket expenses, skills not taken into account in pay rates and disabilities associated with the performance of work in particular conditions or locations (paragraph 101B(3)(e));

·                loadings for overtime or shift work (paragraph 101B(3)(f));

·                penalty rates (paragraph 101B(3)(g)); and

·                any other matter prescribed in the regulations.

997.           Subsection 101B(3) would define protected award conditions to mean the terms of an award, as in force from time to time to the extent that those terms:

·                deal with protected allowable award matters (paragraph 101B(3)(a)); and

·                do not deal with matters which are not allowable award matters (see proposed section 116B) or matters specified in the regulations (paragraph 101B(3)(b)).

998.           The note under subsection 101B(3) would refer to certain allowable award matters which are referred to in proposed section 116.

999.           It is intended that proposed section 101B would have the effect of protected award conditions being ‘read into’ a workplace agreement unless the agreement expressly modifies or excludes them.

Illustrative Example

Matt is employed by Frances Furnishings Pty Ltd as a curtain cutter.  Frances Furnishings Pty Ltd operates in NSW.  It is a respondent to the federal Home Furnishings and Interior Decorators Award (the award).  The award provides for, among other things, entitlements to public holidays in accordance with NSW legislation and penalty rates for work undertaken on public holidays.  On 1 July 2006, Frances Furnishings makes a collective agreement with its employees.  When the agreement comes into operation, Matt and other employees to whom the award would apply will receive entitlements to public holidays and penalty rates in accordance with the award unless the agreement expressly removes those entitlements or changes them and the majority of employees approve the agreement.

Five years later, Frances Furnishings Pty Ltd makes a second collective agreement with its employees.  It turns out that the first collective agreement expressly excluded the award.  Even so, public holidays and penalty rates in accordance with the award would be included in the agreement unless the second agreement expressly removes or changes those entitlements and the majority of employees approve the agreement.

New section 101C - Calling up content of other documents

1000.       Proposed section 101C would set out the circumstances in which a workplace agreement could ‘call up’ the terms of an award or workplace agreement.

1001.       Subsections 101C(1) and (2) would provide that a workplace agreement may incorporate by reference terms from an award or workplace agreement if all the requirements in subsection 101C(3) are satisfied.

1002.       The note under subsection 101C(2) would refer the reader to clause 9 of Schedule 14, which would set out the means by which a pre-reform certified agreement may be ‘called up’ into a workplace agreement.

1003.       Subsection 101C(3) would allow an award to be ‘called up’ where the award is binding on the employer just before the agreement is made, the award regulates any term or condition of employment of persons engaged in a particular kind of work and that work will be subject to the agreement when the agreement comes into operation.

1004.       If the industrial instrument is a workplace agreement, it would have to regulate the employment of at least one person whose employment will be subject to the agreement just before the agreement is made (paragraph 101C(3)(b)).

1005.       Subsection 101C(4) would provide that where an award or agreement is incorporated by reference, it must be clear in the agreement about whether the industrial instrument is to apply as it was at the time it was incorporated or as varied from time to time.  This measure is intended to facilitate the enforcement of agreements by making clear to the parties what terms and conditions apply to employees.

1006.       Subsection 101C(5) would provide that a term of a workplace agreement is void to the extent that it incorporates by reference terms from an industrial instrument mentioned in subsection 101C(2) if the requirements of subsection 101C(3) are not satisfied.  This means that such terms would not be enforceable.

1007.       Subsection 101C(6) would provide that a term of a workplace agreement is void to the extent that it incorporates by reference terms from:

·                an award or agreement regulating terms and conditions that is in force under a law of a State (other than a common law contract of employment) (paragraph 101C(6)(a));

·                an agreement, arrangement, deed or memorandum of understanding that regulates terms or conditions of employment and was created by a process of collective negotiation eg a so called ‘unregistered agreement’ such as the Victorian Building Industry Agreement (paragraph 101C(6)(a)); or

·                an industrial instrument specified in the regulations.

1008.       Subsection 101C(7) would provide that a term of a workplace agreement is void to the extent that it applies or adopts terms from an instrument mentioned in subsection 101C(2) or (6), without incorporating those terms by reference in accordance with proposed section 101C.  It is intended that workplace agreements will be able to incorporate terms by reference and not ‘call up’ terms by other means.

1009.       It is intended that proposed section 101C would encourage parties to make comprehensive agreements.  Specifically, it is intended that parties would only be able to ‘call up’ industrial instruments by incorporating them into the agreement by reference as opposed to, for example, providing that the agreement is to be ‘read in conjunction’ with another industrial instrument.  It is intended that parties would only be able to incorporate terms by reference from a federal award or workplace agreement that applied to the employer and employees immediately before the agreement is made.  It is not intended that parties be able to ‘call up’ awards or agreements that were in operation at a much earlier date, eg a 2006 agreement attempting to ‘call up’ an award made in 1988.  It is intended that all other forms of ‘calling up’ industrial instruments would be void.  However, proposed section 101C is not intended to limit the ability of parties to ‘call up’ workplace policies such as an annual leave policy.

New Subdivision B - Prohibited content

New section 101D - Prohibited content

1010.       Proposed section 101D would provide that the regulations may specify matters that are prohibited content for the purposes of the WR Act.

1011.       It is intended that the regulations would provide a non-exhaustive list of matters which are prohibited from being included in a workplace agreement.  The list would include matters such as:

·                matters that do not pertain to the employment relationship; and

·                terms which are objectionable because they allow or require a breach of the proposed freedom of association provisions.

New section 101E - Employer must not lodge agreement containing prohibited content

1012.       Proposed section 101E would provide that an employer contravenes a civil penalty provisions if they lodge a workplace agreement containing prohibited content.

1013.       Subsection 101E(1) would provide that an employer contravenes subsection 101E(1) if:

·                it lodges a workplace agreement or a variation to a workplace agreement (paragraph 101E(1)(a));

·                the agreement or agreement as varied contains prohibited content (paragraph 101E(1)(b)); and

·                the employer was reckless as to whether the agreement or agreement as varied contains prohibited content (paragraph 101E(1)(c)). 

1014.       Subsection 101E(2) would provide that subsection 101E(1) would not apply if:

·                before the agreement or variation was lodged, the Employment Advocate advised the employer that the agreement (or variation) did not include prohibited content (paragraph 101E(2)(a)); and

·                the advice was in the form specified by the regulations (paragraph 101E(2)(b)).

1015.       Subsection 101E(3) would provide that subsection 101E(1) is a civil remedy provision under Division 11 of Part VB.  This means that the Court may order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 101E(1) (see proposed section 105D).

1016.       This section is intended to act as a deterrent against employers including prohibited content in workplace agreements.  However, to assist employers to determine what is or is not prohibited content, the Employment Advocate will be able to provide advice as to the character of a particular term or terms.  If the Employment Advocate advises that a term is not prohibited content, this would form a defence to an action for a contravention of the civil remedy provision.

New section 101F - Prohibited content in workplace agreement is void

1017.       Proposed section 101F would provide that a term of a workplace agreement is void to the extent that it contains prohibited content. 

1018.       The notes under 101F would refer to:

·                                        proposed section 101K (which deals with the Employment Advocate’s power to remove prohibited content); and

·                proposed section 101E, 101M and 101N (which are civil remedy provisions relating to prohibited content.

1019.       This means that if a workplace agreement contains prohibited content, the agreement would continue to operate although, by operation of law, a term containing prohibited content would be unenforceable. 

New section 101G - Initiating consideration of removal of prohibited content

1020.       Proposed section 101G would provide the first steps in the process of the Employment Advocate removing prohibited content from a workplace agreement.

1021.       Subsection 101G(1) would provide that the Employment Advocate may exercise his or her power to remove prohibited content from a workplace agreement either on his or her own initiative (paragraph 101G(1)(a)) or on application by any person (paragraph 101G(1)(b)).

1022.       Subsection 101G(2) would provide that the requirements in proposed sections 101H, 101I and 101K are an exhaustive statement of the requirements of the natural justice hearing rule in relation to the Employment Advocate’s decision in relation to deciding whether an agreement contains prohibited content.

1023.       It is intended that, similar to section 422B of the Migration Act 1958 , subsection 101G(2) would exclude any rights to procedural fairness that parties might otherwise have, except any prohibition against bias by the Employment Advocate in making a decision under proposed sections 101H, 101I and 101K.

New section 101H - Employment Advocate must give notice that he or she is considering variation

1024.       Proposed section 101H would provide notice requirements in relation to the removal of prohibited content.

1025.       Subsection 101H(1) would require the Employment Advocate to give to the persons mention in subsection 101H(2) a notice meeting the requirements of subsection 101I(1) stating that he or she is considering varying an agreement to remove prohibited content. 

1026.       Subsection 101H(2) would list the persons as:

·                the employer in relation to the workplace agreement (paragraph 101H(2)(a));

·                if the agreement is an AWA - the employee (paragraph 101H(2)(b)); and

·                if the agreement is a union collective agreement or a union greenfields agreement - the organisation or organisations bound by the agreement (paragraph 101H(2)(c)).

1027.       This would be the initial step in allowing parties to the agreement to participate in the process of considering whether the content is prohibited.

New section 101I - Matters to be contained in notice

1028.       Proposed section 101I would provide for the content of the notice that the Employment Advocate must provide.

1029.       Subsection 101I(1) would require that the notice:

·                is dated (paragraph 101I(1)(a));

·                states that the Employment Advocate is considering making the variation (paragraph 101I(1)(b));

·                state the reasons why the Employment Advocate is considering making the variation (paragraph 101I(1)(c));

·                set out the terms of the variation (paragraph 101I(1)(d));

·                invite the persons mentioned in subsection 101I(2) to make a written submission about whether the Employment Advocate should make the variation (paragraph 101I(1)(e)); and

·                states that any submission must be made within the objection period (ie 28 days after the date of the notice (paragraph 101I(1)(f))).

1030.       Subsection 101I(2) would list the persons as:

·                the employer in relation to the workplace agreement (paragraph 101I(2)(a));

·                if the agreement is an AWA - the employee (paragraph 101I(2)(b)); and

·                if the agreement is a union collective agreement or a union greenfields agreement - the organisation or organisations bound by the agreement (paragraph 101I(2)(c)).

New section 101J - Employer must ensure employees have ready access to notice

1031.       Proposed section 101J would require the employer to pass on the notice relating to a possible variation to remove prohibited content to employees.

1032.       Subsection 101J(1) would require an employer in relation to a collective agreement to take reasonable steps to ensure that the notice is given to persons whose employment is subject to the agreement, at a time during the objection period. 

1033.       Subsection 101J(2) would provide that subsection 101J(1) is a civil remedy provision. 

1034.       The note under subsection 101J(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employer for failing to take reasonable steps to give employees ready access to a notice.

1035.       The reference to ‘persons’ in subsection 101J(1) is intended to ensure that an employer would not contravene subsection 101J(2) more than once in relation to a particular workplace agreement.  This means that, for example, where an employer has ten employees and fails to give the employees ready access to the notice, that is only one contravention of subsection 101J(2), rather than ten. 

1036.       Subsection 101J(1) would not apply to AWAs as the Employment Advocate would provide the notice directly to the employee.

New section 101K - Employment Advocate must remove prohibited content from agreement

1037.       Proposed section 101K would require the Employment Advocate to remove content from a workplace agreement where he or she finds that content to be prohibited content.

1038.       Subsection 101K(1) would provide that if the Employment Advocate is satisfied that a term of the workplace agreement contains prohibited content, the Employment Advocate must vary the agreement to remove the content.

1039.       Subsection 101K(2) would require the Employment Advocate to consider any submission from any of the persons mentioned in subsection 101I(2) in determining whether to vary the agreement.

1040.       Subsection 101K(3) would prohibit the Employment Advocate from removing the prohibited content until the end of the objection period.

1041.       Subsection 101K(4) would require that, if the Employment Advocate decides to vary an agreement to remove prohibited content, he or she must:

·                give notice to the persons mentioned in 101H(2) (paragraph 101K(4)(a)); and

·                if the agreement is a collective agreement - publish a notice in the Gazette stating that the variation has been made and setting out the particulars of the variation (paragraph 101K(4)(b)).

1042.       Although it is discretionary for the Employment Advocate to act on its own motion to investigate whether a workplace agreement contains prohibited content, once the Employment Advocate has formed the view that an agreement does so, he or she must remove that content.

New section 101L - Employer must give employees notice of removal of prohibited content

1043.       Proposed section 101L would require the employer to pass on the notice of removal of prohibited content from the Employment Advocate to employees.

1044.       Subsection 101L(1) would require an employer in relation to a collective agreement to take reasonable steps to ensure that, within 21 days of receiving the notice from the Employment Advocate, the notice is given to persons whose employment is subject to the agreement at the time the employer receives the receipt. 

1045.       Subsection 101L(2) would provide that subsection 101L(1) is a civil remedy provision

1046.       The note under subsection 101L(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for failing to take reasonable steps to give employees a notice relating to removal of prohibited content.

1047.       The reference to ‘persons’ is intended to ensure that an employer would not contravene subsections 101L(2) more than once in relation to a particular workplace agreement.  This means that, for example, where an employer has ten employees and fails to give the employees ready access to the notice, that is only one contravention of subsection 101L(2), rather than ten. 

1048.       Subsection 101L(2) does not apply to AWAs as the Employment Advocate would provide a notice directly to the employee under paragraph 101K(4)(a) and subsection 101H(2).

New section 101M - Seeking to include prohibited content in an agreement

1049.       Subsection 101M(1) would provide that a person contravenes subsection 101M(1) if:

·                in the course of negotiations, the person seeks to include a term in a workplace agreement or variation to a workplace agreement (paragraph 101M(1)(a));

·                that term includes prohibited content (paragraph 101M(1)(b)); and

·                the person is reckless as to whether the term includes prohibited content (paragraph 101M(1)(c)).

1050.       Subsection 101M(2) would provide that subsection 101M(1) is a civil remedy provision

1051.       The note under subsection 101M(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 60 penalty units for seeking to include prohibited content in a workplace agreement or variation to a workplace agreement.

New Section 101N - Misrepresentations about prohibited content

1052.       Proposed section 101N would provide penalties for misrepresentations in relation to prohibited content.

1053.       Subsection 101N(1) would provide that a person contravenes subsection 101N(1) if:

·                the person makes a representation in relation to a workplace agreement or variation that a particular term does not contain prohibited content (paragraph 101N(1)(a)); and

·                the person is reckless as to whether the term includes prohibited content (paragraph 101N(1)(b)).

1054.       Subsection 101N(2) would provide that subsection 101N(1) is a civil remedy provision.

1055.       The note under subsection 101N(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 60 penalty units for making misrepresentations about prohibited content.

New Division 8 - Varying a workplace agreement

New Subdivision A - General

New section 102 - Varying a workplace agreement

1056.       Proposed section 102 would provide for who may vary a workplace agreement.

1057.       Subsection 102(1) would provide that the following persons may make a variation, in writing, to a workplace agreement that is in operation:

·                in the case of an AWA - the employer and employee (paragraph 102(1)(a));

·                in the case of an employee collective agreement or employer greenfields agreement - the employer and the persons employed at the time whose employment will be subject to the agreement as varied (paragraph 102(1)(b)); and

·                in the case of a union collective agreement or a union greenfields agreement - the employer and the one or more organisations of employees that are bound by the agreement (paragraph 102(1)(c)).

1058.       The example would provide that an agreement may be varied to provide additional pay.

1059.       Subsection 102(2) would provide that a workplace agreement cannot be varied except in accordance with:

·                Division 8 of Part VB (paragraph 102(2)(a));

·                proposed section 101K (which deals with prohibited content) (paragraph 102(2)(b));

·                proposed subsection 352A (which deals with discriminatory agreements) (paragraph 102(2)(c)); or

·                an order of the Court under proposed section 105G (paragraph 102(2)(d)).

1060.       The note under subsection 102(2) would provide that the subsection would not apply to an agreement where the obligations under the agreement can change because of the agreement itself.  For example, where an agreement refers to terms and conditions being governed by a workplace policy as varied from time to time, subsection 102(2) would not stop the policy from being varied nor would it require that the agreement be varied in accordance with Division 8 of Part VB each time the policy is varied.

New section 102A - When a variation to a workplace agreement is made

1061.       Proposed section 102A would provide the time at which a variation to workplace agreement is made .

1062.       Paragraph 102A(a) would provide that a variation to an AWA is made when it is approved in accordance with proposed section 102F.

1063.       Paragraph 102A(b) would provide that a variation to an employee collective agreement is made when it is approved in accordance with proposed section 102F.

1064.       Paragraph 102A(c) would provide that a variation to a union collective agreement is made when the employer and the organisation or organisations agree to the terms of the variation.

1065.       Paragraph 102A(d) would provide that a variation to a union greenfields agreement is made when the employer and the organisation or organisations agree to the terms of the variation.

1066.       Paragraph 102A(e) would provide that a variation to an employer greenfields agreement is made when it is approved in accordance with proposed section 102F.

New Subdivision B - Pre lodgment procedure for variations

New section 102B - Eligible employee in relation to variation of workplace agreement

1067.       Proposed section 102B would provide a definition of eligible employee for the purposes of this Subdivision.  The concept of an eligible employee is a drafting tool to provide a short hand term for the employees that have rights in relation to making a variation to a workplace agreement, and reduces the need for repetition.

1068.       Proposed section 102B would define an eligible employee to be:

·                in the case of an AWA - the employee (paragraph 102B(a)); or

·                in the case of a collective agreement - a person employed by the employer whose employment is subject to the agreement or will be (paragraph 102B(b)).

1069.       It is intended that agreements may be varied to change which employees the agreement covers.  For example, an agreement applying to a part of a single business may be varied to cover the whole business and vice versa.  However, it is intended that paragraph 102B(b) would operate so that such a variation could only occur with the approval of both:

·                the persons whose employment is currently subject to the agreement; and

·                the persons currently employed by the employer whose employment will be subject to the agreement as varied.

New section 102C - Providing employees with ready access and information statement

1070.       Proposed section 102C would provide a period of time in which employees may consider a variation to a workplace agreement and obtain advice about that variation prior to approving it. 

1071.       Subsection 102C(1) would require the employer to take reasonable steps to ensure that all eligible employees have ready access to the variation in writing for at least seven days prior to the variation being approved.

1072.       Subsection 102C(2) would require the employer to take reasonable steps to ensure that all eligible employees are given an information statement at least seven days prior to the variation being approved.

1073.       Subsection 102C(3) would provide that if a person becomes an eligible employee during the seven day period before the variation is approved, the employer must take reasonable steps to ensure that the person is given an information statement (paragraph 102C(3)(a)) and ready access to the variation (paragraph 102C(3)(b)) from no later than the time the person becomes an eligible employee.

1074.       Subsection 102C(4) would provide that the information statement mentioned in subsection 102C(2) and paragraph 102C(3)(a) must contain information about:

·                when and how the employer will seek approval of the variation (paragraph 102C(4)(a));

·                the effect of the provisions relating to bargaining agents (paragraphs 102C(4)(b) and (c)); and

·                anything else that the Employment Advocate requires by notice published in the Gazette (paragraph 102C(4)(d)).

1075.       It is intended that the Employment Advocate would produce a standard form information statement for the employer to provide to employees, which would be published in the Gazette and available from the Employment Advocate.  The employer would then fill in any necessary details, for example, when and how the employer would seek approval for the variation.

1076.       Subsection 102C(5) would provide that if the eligible employees have waived the remainder of the seven day period, the employer no longer has to provide ready access to the variation. 

1077.       Subsection 102C(6) would provide that if a because of the variation a workplace agreement as varied would incorporate by reference terms from an industrial instrument mentioned in subsection 101C(2), the eligible employees only have ready access to the variation if they have ready access to the other industrial instrument in writing.  The requirements for incorporating industrial instruments by reference can be found in proposed section 101C. 

1078.       Subsection 102C(7) would provide that if the content of the variation is changed during the seven day period prior to approval, the change results in a separate variation. 

1079.       The note under subsection 102C(7) makes clear that if the content of a variation is amended during the seven day period, the employer must restart the period and repeat the steps in subsections 102C(1), 102C(2) and 102C(3).

1080.       Subsection 102C(8) would provide that an employer contravenes subsection 102C(8) if it lodges a variation to a workplace agreement without having provided ready access to the variation in accordance with subsection 102C(1) and paragraph 102C(3)(b). 

1081.       Subsection 102C(9) would provide that an employer contravenes subsection 102C(9) if it lodges a variation to a workplace agreement without providing eligible employees with an information statement in accordance with subsection 102C(2) and paragraph 102C(3)(a). 

1082.       Subsection 102C(10) would provide that subsections 102C(8) and (9) are civil remedy provisions.

1083.       The note under subsection 102C(10) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for a failure to take reasonable steps to provide ready access to a variation to an agreement or an information statement in relation to a variation.

1084.       Subsection 102C(11) would provide that an employer would not contravene subsections 102C(8) or (9) more than once in relation to a particular variation.  This means that, for example, where an employer has ten employees and fails to give the employees ready access to the variation, that is only one contravention of subsection 102C(8), rather than ten.

New section 102D - Employees may waive ready access

1085.       Proposed section 102D would provide for employees to waive the remainder of the ready access period.  It is intended that this would allow an employer and its employees to approve a variation to a workplace agreement more quickly, where the employees decide that they have had sufficient time to consider the variation and are happy to bring forward the approval.  This would address the problem that the pre-reform agreement making process required parties to wait 14 days to approve a variation, even where the employees had made up their minds and were happy to approve the variation instantly.

1086.       Subsection 102D(1) would provide that the persons mentioned in subsection 102D(2) may make a waiver in relation to a variation to a workplace agreement.

1087.       Subsection 102D(2) would provide that the persons are all the eligible employees at the time the waiver is made.

1088.       Subsection 102D(3) would require the waiver to be in writing and dated.

1089.       Subsection 102D(4) would provide that the waiver is made when all of the eligible employees sign the waiver.

1090.       Subsection 102D(5) would provide that the waiver takes effect when it is made.

New section 102E - Prohibition on withdrawal from variation to union collective agreement

1091.       Proposed section 102E would prohibit an employer from withdrawing from a variation to a union collective agreement. 

1092.       Subsection 102E(1) would require an employer to take reasonable steps to seek approval of a variation to a union collective agreement or union greenfields agreement within a reasonable period after the variation is made. 

1093.       Subsection 102E(2) would provide that subsection 102E(1) is a civil remedy provision.

1094.       The note under subsection 102E(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for withdrawing from a variation to a union collective agreement or union greenfields agreement.

1095.       This measure would ensure that when an employer and one or more organisations of employees have come to an agreement about a variation, that variation would put to the employees for approval. 

1096.       The employer would be given a reasonable period in which to put the variation to the employees.  This acknowledges that what is a reasonable period will vary depending on the circumstances of the employer.  For example, a reasonable period might be longer for a large business with 10 000 employees and offices located around Australia, but may be shorter for a business with 15 employees that are all located in one office.

1097.       Proposed section 102E only applies to union collective agreements as there would be no need to apply the provision to other types of workplace agreement.  There are no corresponding prohibitions on an organisation of employees withdrawing from a variation to a union collective agreement or union greenfields agreement as, if that occurred, the employer would still be able to lodge the variation with the Employment Advocate and bring it into operation (see proposed section 102M). 

New section 102F - Approval of a variation to a workplace agreement

1098.       Proposed section 102F would set out the manner in which variations to workplace agreements are to be approved by employees before they are lodged. 

1099.       Subsection 102F(1) would provide that a variation to an AWA is approved if:

·                the variation is signed and dated by the employee and the employer (paragraph 102F(1)(a)); and

·                those signatures are witnessed (paragraph 102F(1)(b)).

1100.       Paragraph 102F(1)(c) would provide additional requirements for the approval of a variation to an AWA, where the employee is under the age of 18.  These are:

·                that the variation is signed and dated by an appropriate adult (such as the employee’s parent or guardian, but not the employer) who is aged at least 18 (subparagraphs 102F(1)(c)(i) and (ii)); and

·                that the person’s signature is witnessed (subparagraph 102F(1)(c)(iii)).

1101.       This additional requirement of having a variation to an AWA signed by an appropriate adult is intended to provide further protection to employees who may be vulnerable because of their age.  The term ‘appropriate adult’ is intended to be broad enough to allow a person who is under 18 but does not have a parent or guardian available to seek the signature from another adult who has an interest in the young person’s well being, for example, another member of the person’s family.

1102.       Subsection 102F(2) would provide for how a variation to a collective agreement is to be approved .  Paragraph 102F(2)(a) would require the employer to give all of the persons employed at the time of approving the variation whose employment is or will be subject to the agreement a reasonable opportunity to decide whether they want to approve the variation. 

1103.       Paragraph 102F(2)(b) would additionally require that:

·                if the decision is made by vote - a majority of those persons who cast a valid vote decide that they want to approve the variation; or

·                otherwise - a majority of those persons decide that they want to approve the variation.

1104.       This means that once the employer has provided employees with a reasonable opportunity to decide whether they want to approve a variation to a collective agreement, determining whether a variation to an agreement has been approved would involve counting the votes of the employees and not an assessment of the genuineness of employees’ consent.

New section 102G - Employer must not lodge unapproved variation

1105.       Proposed section 102G would provide remedies against an employer that lodges a variation to a workplace agreement which has not been approved in accordance with proposed section 102F. 

1106.       Subsection 102G(1) would provide that an employer contravenes the subsection if:

·                it lodges a variation to a workplace agreement (paragraph 102G(1)(a)); and

·                the variation has not been approved in accordance with proposed section 102F (paragraph 102G(1)(b)). 

1107.       Subsection 102G(2) would provide that subsection 102G(1) is a civil remedy provision.

1108.       The note under subsection 102G(2) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 98D(1) (see proposed section 105D);

·                declare that all or part of the agreement is void (see proposed section 105F);

·                vary the terms of the agreement, including its nominal expiry date (see proposed section 105G);

·                order compensation (see proposed section 105J); and/or

·                grant injunctions (see proposed section 105K)

for lodging a variation to a workplace agreement that has not been approved.

New Subdivision C - Lodgment of variations

New section 102H - Employer must lodge variations with the Employment Advocate

1109.       Proposed section 102H would require employers to lodge variations to workplace agreements with the Employment Advocate. 

1110.       Subsection 102H(1) would require an employer to lodge a variation within 14 days of the variation being approved under proposed section 102F.

1111.       Subsection 102H(2) would provide that subsection 102H(1) is a civil remedy provision.

1112.       The note under subsection 102H(2) would refer to Division 11 of Part VB.

1113.       This means that the Court may order a pecuniary penalty of up to 30 penalty units for a failure to lodge a variation to a workplace agreement within fourteen days of it being approved

1114.       It is intended that the time frame and penalties in proposed section 102H would encourage employers to lodge variations to workplace agreements once they are approved, in a timely manner. 

1115.       Only employers would be able to lodge variations to agreements with the Employment Advocate.  This would be consistent with an agreement making system where integrity of the system is ensured through a penalty regime.  It would be difficult to effectively attribute responsibility for a breach of the lodgment requirements if more than one party to the agreement were responsible for lodgment.  However, the Court would have discretion not to order a penalty against an employer who was pressured into lodging an agreement inappropriately.  Where such pressure occurred, an employer would be able to seek an injunction under proposed section 105KV for prohibited conduct.

New section 102I - Lodging variation to multiple-business agreement without authorisation

1116.       Proposed section 102I would prohibit an employer from lodging a variation to multiple-business agreement that has not been authorised by the Employment Advocate under proposed section 96F. 

1117.       Subsection 102I(1) would provide that an employer contravenes subsection 102I(1) if:

·                the employer lodges a variation to a multiple-business agreement; and

·                the variation has not been authorised under 96F.

1118.       Subsection 102I(2) would provide that subsection 102I(1) is a civil remedy provision.

1119.       The note under subsection 102I(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 60 penalty units against an employer for lodging a variation to a multiple-business agreement without authorisation.

1120.       Only one of the multiple employers bound by the agreement would be required to lodge a variation to the agreement.  It would be that employer who would be liable for a failure to obtain an authorisation.  However, the Court would have discretion not to order a penalty against an employer who was pressured into lodging a variation to an agreement inappropriately.  Where such pressure occurred, an employer would be able to seek an injunction under proposed section 105K to restrain prohibited conduct.

1121.       Where a variation to a multiple-business agreement is lodged without authorisation, subsection 102M(3) would operate and the variation would not be able to come into operation.

New section 102J - Lodging of variation documents with the Employment Advocate

1122.       Proposed section 102J would provide the method by which an employer would lodge a variation to a workplace agreement, thus bringing it into operation (see subsection 102M(1)).

1123.       Subsection 102J(1) would provide that the employer lodges a variation to a workplace agreement if:

·                the employer lodges a declaration under subsection 102J(2) (paragraph 102J(1)(a)); and

·                a copy of the variation is annexed to the declaration (paragraph 102J(1)(b)).

1124.       Subsection 102J(2) would provide that an employer lodges a declaration if the employer gives the declaration to the Employment Advocate and the declaration meets the requirements of subsection 102J(3).

1125.       The note under subsection 102J(2) makes clear that providing false or misleading information or documents under subsection 102J(2) would be a criminal offence under sections 137.1 and 137.2 of the Criminal Code .

1126.       Subsection 102J(3) allows the Employment Advocate to set out requirements for the form of the declaration, by notice published in the Gazette .  It is intended that the Employment Advocate would exercise its power under subsection 102J(3) to create a standard form declaration.  An employer would then fill in any necessary details, for example, the name of the agreement, and lodge that standard form declaration along with a copy of the variation with the Employment Advocate (subsections 102J(1) and (2)).  It is also intended that the standard form declaration would require an employer to declare that the agreement was made and/or approved in accordance with the requirements of Divisions 3 and 4 of Part VB.

1127.       An employer would only need to lodge a copy of the variation as it is intended that the regulations would require the employer to retain a signed original of the variation for a specified period.  It is intended that a variation could be lodged electronically, by fax, by hand or by post.  However, it is likely that the vast majority of lodgments would be electronic.  Requiring the employer to only lodge a copy of the variation would facilitate the implementation of electronic lodgment for variations.

1128.       Subsection 102J(4) would provide that a declaration is only taken to be given to the Employment Advocate if the Employment Advocate actually receives it.  This means that if an employer lodges a variation by post, the variation would only be taken to be lodged when the Employment Advocate receives the declaration.

1129.       The note under subsection 102J(4) would make clear that section 29 of the Acts Interpretation Act 1901 or section 160 of the Evidence Act 1995 do not apply to variations.  These provisions might otherwise create a presumption that the ‘postal-acceptance rule’ applies to variations. 

1130.       Subsection 102J(5) would provide that the Employment Advocate is not required to consider or determine whether any of the requirements of Part VB - Workplace agreements have been met in relation to the making or content of a declaration or variation.  This is intended to make it clear that lodgment of a declaration and a variation would occur without any scrutiny by the Employment Advocate.

New section 102K - Employment Advocate must issue receipt for lodgment of declaration for variation

1131.       Proposed section 102K would provide for the Employment Advocate to issue a receipt for the lodgment of a variation to a workplace agreement.

1132.       Subsection 102K(1) would require the Employment Advocate to issue a receipt if a declaration is lodged under subsection 102J(2).

1133.       Subsection 102K(2) would require the Employment Advocate to give a copy of the receipt to:

·                the employer (paragraph 102K(2)(a));

·                if the agreement is an AWA - the employee (paragraph 102K(2)(b)); and

·                if the agreement is a union collective agreement or a union greenfields agreement - the organisation or organisations bound by the agreement (paragraph 102K(2)(c)).

1134.       This mechanism is necessary in the context of a system where variations come into operation on lodgment (see subsection 102M(1)), as the parties need to know when they start being subject to the variation. 

1135.       It is intended that where a variation is lodged electronically, the information provided in the electronic declaration would be sufficient for the Employment Advocate’s systems to instantly issue an electronic receipt without needing to scrutinise the agreement.  Where a variation is lodged by other means, the information provided in the declaration would be sufficient for the Employment Advocate to issue a receipt after examining the declaration to the extent necessary to determine where to send the receipt.  After receiving a receipt, the employer would be required to pass on the receipt to the employees (see proposed section 102L).

New section 102L - Employer must notify employees after lodging variation

1136.       Proposed section 102L would require the employer to take reasonable steps to pass on copies of the lodgment receipt from the Employment Advocate to employees.

1137.       Subsection 102L(1) would require an employer in relation to a collective agreement to take reasonable steps to ensure that the lodgment receipt is given to persons whose employment is, at the time the employer receives the receipt, subject to the agreement, within 21 days of the employer receiving the receipt from the Employment Advocate.  The reference to ‘persons’ is intended to ensure that an employer would not contravene subsection 102L(1) more than once in relation to a particular variation.  This means that, for example, where an employer has ten employees and fails to give all employees a copy of the lodgment receipt, that is only one contravention of subsection 102L(1), rather than ten. 

1138.       Subsection 102L(1) does not apply to AWAs as the Employment Advocate would provide a lodgment receipt directly to the employee.

1139.       Subsection 102L(2) would provide that subsection 102L(1) is a civil remedy provision.

1140.       The note under subsection 102L(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employer for failing to pass on a lodgment receipt to employees.

New Subdivision E - When a variation comes into operation

New section 102M - When a variation comes into operation

1141.       Proposed section 102M would provide for when a variation to a workplace agreement comes into operation.

1142.       Subsection 102M(1) would provide that a variation to a workplace agreement comes into operation when the variation is lodged with the Employment Advocate in accordance with section 102J.

1143.       Subsection 102M(2) would provide that the variation comes into operation even if the requirements in Division 3 of Part VB and Subdivision B of Division 8 of Part VB have not been met.

New Division 9 - Terminating a workplace agreement

New Subdivision A - General

New section 103 - Types of termination

1144.       Proposed section 103 would set out the ways in which a workplace agreement may be terminated.

1145.       Subsection 103(1) would provide that a workplace agreement may be terminated:

·                by approval (paragraph 103(1)(a)); or

·                unilaterally (paragraph 103(1)(b)).

1146.       Subsection 103(2) would provide that a workplace agreement is terminated when:

·                a termination is lodged with the Employment Advocate in accordance with proposed section 103H (paragraph 103(2)(a));

·                a declaration to terminate the agreement in accordance with subsection 103K(2) is lodged with the Employment Advocate in accordance with proposed section 103N (paragraph 103(2)(b)); or

·                a declaration to terminate the agreement in accordance with subsection 103L(2) is lodged with the Employment Advocate in accordance with proposed section 103N (paragraph 103(2)(c)).

New Subdivision B - Termination by approval (pre-lodgment procedure)

New section 103A - Terminating a workplace agreement by approval

1147.       Proposed section 103A would provide that the following persons may agree to terminate a workplace agreement:

·                in the case of an AWA - the employer and employee (paragraph 103A(a));

·                in the case of an employee collective agreement or employer greenfields agreement - the employer and employees whose employment is be subject to the agreement (paragraph 103A(b));

·                in the case of a union collective agreement or a union greenfields agreement - the employer and the one or more organisations of employees that are bound by the agreement (paragraph 103A(c)).

New section 103B - Eligible employee in relation to termination of workplace agreement

1148.       Proposed section 103B would provide a definition of eligible employee for the purposes of this Subdivision.  The concept of an eligible employee is a drafting tool to provide a short hand term for the employees that have rights in relation to terminating a workplace agreement, and reduces the need for repetition.

1149.       Proposed section 103B would define an eligible employee to be:

·                in the case of an AWA - the employee (paragraph 103B(a)); or

·                in the case of a collective agreement - a person employed at the time of the termination whose employment is subject to the agreement (paragraph 103B(b)).

New section 103C - Providing employees with information statement

1150.       Proposed section 103C would provide a period of time in which employees may consider a proposal to terminate a workplace agreement and obtain advice about that termination prior to approving it. 

1151.       Subsection 103C(1) would require the employer to take reasonable steps to ensure that all eligible employees are given an information statement at least seven days prior to the agreement being terminated.

1152.       Subsection 103C(2) would provide that, if a person becomes an eligible employee during the seven day period before the agreement is terminated, the employer must take reasonable steps to ensure that the person is given an information statement from no later than the time the person becomes an eligible employee.

1153.       Subsection 103C(3) would provide that the information statement mentioned in subsections 103C(1) and (2) must contain information about:

·                when and how the employer will seek approval of the termination (paragraph 103C(3)(a));

·                if the agreement is an AWA - the effect of the provisions relating to bargaining agents (paragraph 103C(3)(b)); and

·                anything else that the Employment Advocate requires by notice published in the Gazette (paragraph 103C(3)(c)).

1154.       It is intended that the Employment Advocate would produce a standard form information statement for the employer to provide to employees, which would be published in the Gazette and available from the Employment Advocate.  An employer would then fill in any necessary details, for example, when and how the employer would seek approval of the termination.

1155.       Subsection 103C(4) would provide that an employer contravenes subsection 103C(4) if it lodges a declaration to terminate a workplace agreement without providing eligible employees with an information statement in accordance with subsections 103C(1) and (2). 

1156.       Subsection 103C(5) would provide that subsection 103C(4) is a civil remedy provision.

1157.       The note under subsection 103C(5) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employer for a failure to take reasonable steps to provide an information statement in relation to terminating an agreement.

Subsection 103C(6) would provide that an employer would not contravene subsection 103C(4) more than once in relation to a particular termination.  This means that, for example, where an employer has ten employees and fails to give the employees an information statement, that is only one contravention of subsection 103C(4), rather than ten.

New section 103D - Prohibition on withdrawal from variation to union collective agreement

1158.       Proposed section 103D would prohibit withdrawal from a termination to a union collective agreement or union greenfields agreement. 

1159.       Subsection 103D(1) would require an employer that has agreed to terminate a union collective agreement or union greenfields agreement to take reasonable steps to seek approval for the termination of the union collective agreement or union greenfields agreement within a reasonable period after agreeing to terminate the agreement. 

1160.       Subsection 103D(2) would provide that subsection 103D(1) is a civil remedy provision.

1161.       The note under subsection 103D(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employer for withdrawing from a termination of a union collective agreement or union greenfields agreement.

1162.       This measure would ensure that when an employer and one or more organisations of employees have come to an agreement about a termination, that termination would put to the employees for approval. 

1163.       The employer would be given a reasonable period in which to put the termination to the employees.  This acknowledges that what is a reasonable period will vary depending on the circumstances of the employer.  For example, a reasonable period might be longer for a large business with 10 000 employees and offices located around Australia, but may be shorter for a business with 15 employees that are all located in one office.

1164.       Proposed section 103D only applies to union collective agreements and union greenfields agreements as there would be no need to apply the provision to other types of workplace agreement.  There are no corresponding prohibitions on an organisation of employees withdrawing from a variation to a union collective agreement or union greenfields agreement as, if that occurred, the employer would still be able to lodge the termination with the Employment Advocate and bring it into operation (see proposed section 103Q). 

New section 103E - Approval of a termination

1165.       Proposed section 103E would provide for the manner in which terminations are to be approved by employees before they are lodged. 

1166.       Subsection 103E(1) would provide that a termination of an AWA is approved if:

·                the employer and employee make a written termination agreement to terminate the AWA (paragraph (103E(1)(a));

·                the termination agreement is signed and dated by the employee and the employer (paragraph 103E(1)(b)); and

·                those signatures are witnessed (paragraph 103E(1)(c)).

1167.       Paragraph 103E(1)(d) would provide additional requirements for the approval of a termination agreement, where the employee is under the age of 18.  These are:

·                that the termination agreement is signed and dated by an appropriate adult (such as the employee’s parent or guardian, but not the employer) who is aged at least 18 (subparagraphs 103E(1)(d)(i) and (ii)); and

·                that the person’s signature is witnessed (subparagraph 103E(1)(d)(iii)).

1168.       This additional requirement of having a termination agreement signed by an appropriate adult is intended to provide further protection to employees who may be vulnerable because of their age.  The term ‘appropriate adult’ is intended to be broad enough to allow a person who is under 18 but does not have a parent or guardian available to seek the signature from another adult who has an interest in the young person’s well being, for example, another member of the person’s family.

1169.       Subsection 103E(2) would set out how a termination of a collective agreement is to be approved

1170.       Paragraph 103E(2)(a) would require the employer to give all of the persons whose employment is be subject to the agreement a reasonable opportunity to decide whether they want to approve the termination. 

1171.       Paragraph 103E(2)(b) would additionally require that:

·                if the decision is made by vote - a majority of those persons who cast a valid vote decide that they want to approve the termination; or

·                otherwise - a majority of those persons decide that they want to approve the termination.

1172.       This means that once the employer has provided employees with a reasonable opportunity to decide whether they want to approve a termination of a collective agreement, determining whether an agreement has been approved would involve counting the votes of the employees and not an assessment of the genuineness of employees’ consent.

New section 103F - Employer must not lodge unapproved termination

1173.       Proposed section 103F would provide remedies against an employer that lodges a termination of a workplace agreement which has not been approved in accordance with proposed 103E. 

1174.       Subsection 103F(1) would provide that an employer contravenes the subsection if:

·                it lodges a termination of a workplace agreement (paragraph 103F(1)(a)); and

·                the variation has not been approved in accordance with proposed section 103E (paragraph 103F(1)(b)). 

1175.       Subsection 103F(2) would provide that subsection 103F(1) is a civil remedy provision.

1176.       The note under subsection 103F(2) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 98D(1) (see proposed section 105D);

·                order that the agreement continues to operate despite the termination (see proposed section 105H);

·                order compensation (see proposed section 105J); and/or

·                grant injunctions (see proposed section 105K)

for lodging a termination of a workplace agreement that has not been approved.

New Subdivision C - Termination by approval (lodgment)

New section 103G - Employer must lodge termination with the Employment Advocate

1177.       Proposed section 103G would require employers to lodge terminations of workplace agreements with the Employment Advocate. 

1178.       Subsection 103G(1) would require an employer to lodge a termination within 14 days of the termination being approved under proposed section 103E.

1179.       Subsection 103G(2) would provide that subsection 103G(1) is a civil remedy provision.

1180.       The note under subsection 103G(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employee for a failure to lodge a termination of a workplace agreement within fourteen days of it being approved

1181.       It is intended that the time frame and penalties in proposed section 103G would encourage employers to lodge terminations of workplace agreements once they are approved, in a timely manner. 

1182.       Only employers would be able to lodge terminations of agreements with the Employment Advocate.  This would be consistent with an agreement making system where integrity of the system is ensured through a penalty regime.  It would be difficult to effectively attribute responsibility for a breach of the lodgment requirements if more than one party to the agreement were responsible for lodgment.  However, the Court would have discretion not to order a penalty against an employer who was pressured into lodging an agreement inappropriately.  Where such pressure occurred, an employer would be able to seek an injunction under proposed section 105K for prohibited conduct.

New section 103H - Lodging termination documents with the Employment Advocate

1183.       Proposed section 103H would provide the method by which an employer would lodge a termination of a workplace agreement, thus terminating the agreement (see paragraph 100(4)(a)).

1184.       Subsection 103H(1) would provide that the employer lodges a termination of a workplace agreement if:

·                the employer lodges a declaration under subsection (2) (paragraph 103H(1)(a)); and

·                if the agreement is an AWA - a copy of the termination agreement is annexed to the declaration (paragraph 103H(1)(b)).

1185.       Subsection 103H(2) would provide that an employer lodges a declaration if the employer gives the declaration to the Employment Advocate and the declaration meets the requirements of subsection 103H(3).

1186.       The note under subsection 103H(2) explains that providing false or misleading information or documents under subsection 103H(2) would be a criminal offence under sections 137.1 and 137.2 of the Criminal Code .

1187.       Subsection 103H(3) allows the Employment Advocate to set out requirements for the form of the declaration, by notice published in the Gazette .  It is intended that the Employment Advocate would exercise its power under subsection 103H(3) to create a standard form declaration.  An employer would then fill in any necessary details, for example, the name of the agreement, and lodge that standard form declaration with the Employment Advocate (subsections 103H(1) and (2)).  It is also intended that the standard form declaration would require an employer to declare that the agreement was terminated in accordance with the requirements of Division 3 of Part VB and Subdivision B of Division 9 of Part VB.

1188.       Subsection 103H(4) would provide that a declaration is only taken to be given to the Employment Advocate if the Employment Advocate actually receives it.  This means that if an employer lodges a termination of a workplace agreement by post, the agreement would only be taken to be lodged when the Employment Advocate receives the declaration.

1189.       The note under subsection 103H(4) makes clear that this means that section 29 of the Acts Interpretation Act 1901 or section 160 of the Evidence Act 1995 do not apply to terminations of workplace agreements.  These provisions might otherwise create a presumption that the ‘postal-acceptance rule’ applies to terminations of workplace agreements. 

1190.       Subsection 103H(5) would provide that the Employment Advocate is not required to consider or determine whether any of the requirements of Part VB have been met in relation to the making or content of a declaration or termination of a workplace agreement.  This is intended to make it clear that lodgment of a declaration and a termination would occur without any scrutiny by the Employment Advocate.

New section 103I - Employment Advocate must issue receipt for lodgment of declaration for termination

1191.       Proposed section 103I would provide for the Employment Advocate to issue a receipt for the lodgment of a termination of a workplace agreement.

1192.       Subsection 103I(1) would require the Employment Advocate to issue a receipt if a declaration is lodged under subsection 103H(2).

1193.       Subsection 103I(2) would require the Employment Advocate to give a copy of the receipt to:

·                the employer (paragraph 103I(2)(a));

·                if the agreement is an AWA - the employee (paragraph 103I(2)(b)); and

·                if the agreement is a union collective agreement or a union greenfields agreement - the organisation or organisations bound by the agreement (paragraph 103I(2)(c)).

1194.       This mechanism is necessary in the context of a system where termination takes effect on lodgment (see subsection 103(2)), as parties need to know when the termination takes effect. 

1195.       It is intended that where a termination is lodged electronically, the information provided in the electronic declaration would be sufficient for the Employment Advocate’s systems to instantly issue an electronic receipt.  Where a termination is lodged by other means, the information provided in the declaration would be sufficient for the Employment Advocate to issue a receipt after examining the declaration to the extent necessary to determine where to send the receipt.  After receiving a receipt, the employer would be required to pass on the receipt to the employees (see proposed section 103J).

New section 103J - Employer must notify employees after lodging termination

1196.       Proposed section 103J would require the employer to take reasonable steps to pass on copies of the lodgment receipt from the Employment Advocate to employees.

1197.       Subsection 103J(1) would require an employer in relation to a collective agreement to take reasonable steps to ensure that the lodgment receipt is given to persons whose employment was, just before the agreement was terminated, subject to the agreement, within 21 days of the employer receiving the receipt from the Employment Advocate.  The reference to ‘persons’ is intended to ensure that an employer would not contravene subsection 103J(2) more than once in relation to a particular termination.  This means that, for example, where an employer has ten employees and fails to give all employees a copy of the lodgment receipt, that is only one contravention of subsection 103J(3), rather than ten. 

1198.       Subsection 103J(1) does not apply to AWAs as the Employment Advocate would provide a lodgment receipt directly to the employee.

1199.       Subsection 103J(2) would provide that subsection 103J(1) is a civil remedy provision.

1200.       The note under subsection 103J(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units for failing to pass on a lodgment receipt to employees.

New Subdivision D - Unilateral termination after nominal expiry date

New section 103K - Unilateral termination in a manner provided for in workplace agreement

1201.       Proposed section 103K would provide for a workplace agreement to be terminated after its nominal expiry date in the manner provided for in the agreement.  When an agreement is terminated under proposed section 103K, employees’ terms and conditions of employment would be derived from the FPCS (see proposed section 103R).

1202.       Subsection 103K(1) would provide when the section applies (ie where a workplace agreement provides for a manner of terminating the agreement after its nominal expiry date).

1203.       Subsection 103K(2) would provide that any of the following persons could unilaterally terminate the agreement by lodging a declaration under proposed section 103N:

·                the employer (paragraph 103K(2)(a));

·                a majority of employees whose employment is subject to the agreement when the notice mentioned in subsection 103K(3) is given (paragraph 103K(2)(b));

·                in the case of an AWA - a bargaining agent at the request of the employer or employee (paragraph 103K(2)(c)); or

·                an organisation of employees that is bound by the agreement (paragraph 103K(2)(d)).

1204.       Subsection 103K(3) would only allow a workplace agreement to be unilaterally terminated under proposed section 103K where:

·                the agreement has passed its nominal expiry date (paragraph 103K(3)(a)); and

·                all the requirements in the agreement for terminating the agreement are met (paragraph 103K(3)(b)).

1205.       The note under subsection 103K(3) notes that providing false or misleading information or documents under proposed section 103K would be a criminal offence under sections 137.1 and 137.2 of the Criminal Code .

1206.       Subsection 103K(4) would require the person terminating the agreement to, at least 14 days before lodging the declaration, take reasonable steps to ensure that the following persons are given written notice of the termination:

·                the employer (paragraph 103K(5)(a));

·                each employee whose employment is subject to the agreement when the notice is given (paragraph 103K(5)(b)); and

·                an organisation of employees that is bound by the agreement (paragraph 103K(5)(c)).

1207.       Subsection 103K(5) would provide that the notice mentioned in subsection 103K(4) must:

·                state that the workplace agreement is to be terminated in the manner provided for by the agreement (paragraph 103K(5)(a));

·                be in the form (if any) that the Employment Advocate requires by notice published in the Gazette (paragraph 103K(5)(b)); and

·                contain any information that the Employment Advocate requires by notice published in the Gazette (paragraph 103K(5)(c)).

1208.       It is intended that the Employment Advocate would produce a standard form notice.  A person terminating the agreement would then fill in any necessary details, for example, the clause of the agreement being relied upon to terminate it, and provide that standard form notice to the persons mentioned in subsection 103K(4).

1209.       Subsection 103K(6) would provide that a person contravenes the subsection if:

·                the persons lodges a declaration to terminate a workplace agreement (paragraph 103K(6)(a)); and

·                the person did not comply with subsections 103K(4) and (5) (paragraph 103K(6)(b)). 

1210.       Subsection 103K(7) would provide that subsection 103K(6) is a civil remedy provision.

1211.       The note under subsection 103K(7) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 98D(1) (see proposed section 105D);

·                order that the workplace agreement continues to operate despite the termination (see proposed section 105H);

·                order compensation (see proposed section 105J); and

·                order injunctions (see proposed section 105K).

1212.       Subsection 103K(8) would provide that proposed section 103K does not apply to multiple-business agreements.  It is intended that multiple-business agreements could only be terminated by approval. 

New section 103L - Unilateral termination with 90 days written notice

1213.       Proposed section 103L would provide for a workplace agreement to be terminated after its nominal expiry date on 90 days written notice.  When an agreement is terminated under proposed section 103L, employees’ terms and conditions of employment would be derived from the FPCS (see proposed section 103R).

1214.       Subsection 103L(1) would provide that a workplace agreement may be terminated on after its nominal expiry date on 90 days written notice regardless of whether the agreement provides for a manner in which it may be terminated.

1215.       Subsection 103L(2) would list the persons who may unilaterally terminate a workplace agreement on 90 days notice as:

·                the employer (paragraph 103L(2)(a));

·                a majority of employees whose employment is subject to the agreement when the notice mentioned in subsection 103L(3) is given (paragraph 103L(2)(b));

·                in the case of an AWA - a bargaining agent at the request of the employer or employee (paragraph 103L(2)(c)); or

·                an organisation of employees that is bound by the agreement (paragraph 103L(2)(d)).

1216.       Subsection 103L(3) would only allow a workplace agreement to be unilaterally terminated under proposed section 103L if the agreement has passed its nominal expiry date

1217.       The note under proposed subsection 103L(3) makes clear that providing false or misleading information or documents under the section would be a criminal offence under sections 137.1 and 137.2 of the Criminal Code .

1218.       Subsection 103L(4) would require the person or persons terminating the agreement to, at least 90 days before lodging the declaration, take reasonable steps to ensure that:

·                persons bound by the agreement are given written notice of the termination (paragraph 103L(4)(a)); and

·                if the person giving the notice is the employer - a written copy of the undertakings (if any) made by the employer under proposed section 103M.

1219.       Subsection 103L(5) would provide that the notice mentioned in subsection 103L(4) must:

·                state that the workplace agreement is to be terminated (paragraph 103L(5)(a));

·                specify the day on which the person or persons propose to lodge the notice (paragraph 103L(5)(b));

·                be in the form (if any) that the Employment Advocate requires by notice published in the Gazette (paragraph 103K(5)(c)); and

·                contain any information that the Employment Advocate requires by notice published in the Gazette (paragraph 103L(5)(d)).

1220.       It is intended that the Employment Advocate would produce a standard form notice.  A person terminating the agreement would then fill in any necessary details, for example, the name of the agreement, and provide that standard form notice to the persons mentioned in subsection 103L(4).

1221.       Subsection 103L(6) would provide that an employer contravenes the subsection if:

·                it lodges a declaration to terminate a workplace agreement (paragraph 103L(6)(a)); and

·                the person did not comply with subsections 103L(4) and (5) (paragraph 103L(6)(b)). 

1222.       Subsection 103L(7) would provide that subsection 103L(6) is a civil remedy provision.

1223.       The note under subsection 103L(7) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 98D(1) (see proposed section 105D);

·                order that the agreement continue to operate despite the termination (see proposed section 105H); and

·                order compensation (see proposed section 105J).

1224.       Subsection 103L(8) would provide that the section does not apply to multiple-business agreements.  It is intended that multiple-business agreements could only be terminated by approval. 

New section 103M - Undertakings about post-termination conditions

1225.       Proposed section 103M would provide for an employer that terminates an agreement under proposed section 103L to make undertakings about the employees’ terms and conditions after the agreement is terminated.

1226.       Subsection 103M(1) would provide that an employer intending to terminate a workplace agreement under subsection 103L(2) may make undertakings as to the terms and conditions of employees who were covered by the workplace agreement just before it was terminated.

1227.       Subsection 103M(2) would provide for the undertakings to come into operation on the day the agreement is terminated.

1228.       Subsection 103M(3) would provide for the undertakings to cease to operate in relation to an employee when the employee’s employment becomes subject to a later workplace agreement.  For example, if, after the agreement is terminated, the employer makes an AWA with an employee who is covered by the undertakings, the undertakings cease to apply to that employee.

1229.       Subsection 103M(4) would provide for undertakings to operate as if they were a workplace agreement for the purposes of their enforcement, inspectors’ powers and any other provision of the Bill specified in the regulations.

1230.       Subsection 103M(5) would provide that an employer contravenes subsection 103M(5) if:

·                it lodges a declaration to terminate a workplace agreement (paragraph 103M(5)(a));

·                it has made undertakings in relation to that termination (paragraph 103M(5)(b)); and

·                it did not annex a copy of the undertakings to the declaration (paragraph 103M(5)(b)). 

1231.       Subsection 103M(6) would provide that subsection 103M(5) is a civil remedy provision.

1232.       The note under subsection 103M(6) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 103M(5) (see proposed section 105D).

New section 103N - Lodging unilateral termination documents with the Employment Advocate

1233.       Proposed section 103N would provide the method by which an employer would lodge a termination of a workplace agreement, thus terminating the agreement (see paragraph 100(4)(a)).

1234.       Subsection 103N(1) would provide that a person lodges a declaration to terminate a workplace agreement if:

·                the employer gives it to the Employment Advocate (paragraph 103N(1)(a)); and

·                it meets the form requirements mentioned in subsection 103N(3) (paragraph 103N(1)(b)).

1235.       The note under subsection 103N(1) makes clear that providing false or misleading information or documents under subsection 103N(1) would be a criminal offence under sections 137.1 and 137.2 of the Criminal Code .

1236.       Subsection 103N(2) would provide that if the person lodging the declaration is the employer, the employer lodges undertakings if:

·                he or she lodges a declaration under subsection 103N(1); and

·                a copy of the undertakings is annexed to the declaration.

1237.       Subsection 103N(3) allows the Employment Advocate to set out requirements for the form of the declaration, by notice published in the Gazette .  It is intended that the Employment Advocate would exercise its power under subsection 103N(3) to create a standard form declaration.  An employer would then fill in any necessary details, for example, the name of the agreement, and lodge that standard form declaration with the Employment Advocate (subsections 103N(1) and (2)).  It is also intended that the standard form declaration would require an employer to declare that the agreement was terminated in accordance with the requirements of Division 3 of Part VB and Subdivision D of Division 9 of Part VB.

1238.       Subsection 103N(4) would provide that a declaration is only taken to be given to the Employment Advocate if the Employment Advocate actually receives it.  This means that if an employer lodges a termination of a workplace agreement by post, the agreement would only be taken to be lodged when the Employment Advocate receives the declaration.

1239.       The note under subsection 103N(4) makes clear that this means that section 29 of the Acts Interpretation Act 1901 or section 160 of the Evidence Act 1995 do not apply to terminations of workplace agreements.  These provisions might otherwise create a presumption that the ‘postal-acceptance rule’ applies to terminations of workplace agreements. 

1240.       Subsection 103N(5) would provide that the Employment Advocate is not required to consider or determine whether any of the requirements of Part VB have been met in relation to the making or content of a declaration or termination of a workplace agreement.  This is intended to make it clear that lodgment of a declaration and a termination would occur without any scrutiny by the Employment Advocate.

New section 103O - Employment Advocate must issue receipt for lodgment of declaration for notice of termination

1241.       Proposed section 103O would provide for the Employment Advocate to issue a receipt for the lodgment of a declaration for a notice of termination of a workplace agreement.

1242.       Subsection 103O(1) would require the Employment Advocate to issue a receipt if a declaration is lodged under subsection 103N(1).

1243.       Subsection 103O(2) would require the Employment Advocate to give a copy of the receipt to:

·                the person that lodges the declaration (paragraph 103O(2)(a));

·                the employer (paragraph 103O(2)(b));

·                if the agreement is an AWA - the employee (paragraph 103O(2)(c)); and

·                if the agreement is a union collective agreement or a union greenfields agreement - the organisation or organisations bound by the agreement (paragraph 103O(2)(d)).

1244.       This mechanism is necessary in the context of a system where termination takes effect on lodgment (see proposed section 103Q). 

1245.       It is intended that where a declaration is lodged electronically, the information provided in the electronic declaration would be sufficient for the Employment Advocate’s systems to instantly issue an electronic receipt without needing to scrutinise the agreement.  Where a declaration is lodged by other means, the information provided in the declaration would be sufficient for the Employment Advocate to issue a receipt after examining the declaration to the extent necessary to determine where to send the receipt.  After receiving a receipt, the employer would be required to pass on the receipt to the employees (see proposed section 103P).

New section 103P - Employer must notify employees after lodging termination

1246.       Proposed section 103P would require the employer to take reasonable steps to pass on copies of the lodgment receipt from the Employment Advocate to employees.

1247.       Subsection 103P(1) would require an employer in relation to a collective agreement to take reasonable steps to ensure that the lodgment receipt is given to persons whose employment was, just before the agreement was terminated, subject to the agreement, within 21 days of the employer receiving the receipt from the Employment Advocate.  The reference to ‘persons’ is intended to ensure that an employer would not contravene subsection 103P(2) more than once in relation to a particular termination.  This means that, for example, where an employer has ten employees and fails to give all employees a copy of the lodgment receipt, that is only one contravention of subsection 103P(2), rather than ten. 

1248.       Subsection 103P(1) does not apply to AWAs as the Employment Advocate would provide a lodgment receipt directly to the employee.

1249.       Subsection 103P(2) would provide that subsection 103P(1) is a civil remedy provision.

1250.       The note under subsection 103P(2) would refer to Division 11 of Part VB.  Under these provisions the Court may order a pecuniary penalty of up to 30 penalty units against an employer for failing to pass on a lodgment receipt to employees.

New Subdivision E - Effect of termination

New section 103Q - When a termination takes effect

1251.       Proposed section 103Q would provide that a termination of a workplace agreement takes effect even if the following requirements are not met:

·                requirements relating to bargaining agents (paragraph 103Q(a));

·                if the termination is by approval - the requirements of Subdivision B of Division 9 of Part VB - Termination by approval (paragraph 103Q(b)); or

·                if the termination is unilateral - the requirements for notice of termination under subsections 103K(4) and (5) and subsections 103L(4) and (5).

1252.       It is intended that once lodged, a termination of a workplace agreement will take effect, despite non-compliance, unless the Court orders otherwise.  It is intended that the increased number of penalties, broader range of remedies and improved Court powers under Part VB will ensure the integrity of the requirements relating to terminating workplace agreements.  This would be a necessary consequence of a lodgment only system that does not involve terminations of workplace agreements being scrutinised prior to taking effect. 

New section 103R - Consequence of termination of agreement—application of other industrial instruments

1253.       Proposed section 103R would provide for employees’ terms and conditions to be protected under the FPCS after an agreement is terminated.

1254.       Subsection 103R(1) would provide that an industrial instrument mentioned in subsection 103R(3) ie an award or workplace agreement has no effect in relation to an employee if a workplace agreement that operated in relation to that employee was terminated.  This means that an employee would not ‘fall back’ onto another industrial instrument, but would be entitled to the FPCS and any voluntary undertakings.

1255.       The notes under subsection 103R(1) refer readers to provisions relating to the operation of the FPCS and voluntary undertakings.

1256.       Subsection 103R(2) would provide that, once an agreement is terminated, an industrial instrument would have no effect in relation to the employee until another workplace agreement (the later agreement) comes into operation in relation to the employee.  The industrial instrument would have effect again from that time.  Where the industrial instrument is an award this would enable it to provide protected award conditions for the purposes of the later agreement (see proposed section 101B for an explanation of protected award conditions).

1257.       Subsection 103R(3) identifies the industrial instruments referred to in subsection 103R(1) as an award or workplace agreement.

New Division 10 - Prohibited conduct

New section 104 - Coercion and duress

1258.       Proposed section 104 would provide remedies against certain prohibited conduct in relation to workplace agreements and bargaining agents for certain workplace agreements.

1259.       Subsection 104(1) would relate to collective agreements.  Subsection 104(1) would prohibit a person from:

·                engaging in, organising, or threatening to engage in or organise any industrial action (paragraph 104(1)(a));

·                taking or threatening to take other action (paragraph 104(1)(b)); or

·                refraining or threatening to refrain from taking any action (paragraph 104(1)(c))

with intent to coerce another person to agree or not agree to make, approve, lodge, vary or terminate a collective agreement. 

1260.       Subsection 104(2) would provide that the prohibitions in subsection 104(1) would not apply to protected action.  This would mean that if industrial action is found to be protected action it would not amount to coercive conduct.

1261.       Subsection 104(3) would prohibit persons from coercing or attempting to coerce an employer of employee in relation to the appointment or termination of a bargaining agent.

1262.       Subsection 104(4) would prohibit persons from coercing or attempting to coerce an employee in relation to a request or withdrawal of a request for the employer to meet and confer with the employee’s bargaining agent. 

1263.       Subsection 104(5) would prohibit persons from applying duress to an employer or employee in connection with an AWA. 

1264.       Subsection 104(6) would clarify that an employer does not apply duress to an employee for the purposes of subsection 104(5) merely because the employer requires the employee to make an AWA with the employer as a condition of employment.  This means that an employer may make an AWA a condition of the person becoming an employee.

1265.       Subsection 104(7) would provide that subsections 104(1), (3), (4) and (5) are civil remedy provisions.

1266.       The note under subsection 104(7) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsections 104(1), (3), (4) or (5) (see proposed section 105D);

·                declare that all or part of the agreement is void (see proposed section 105F);

·                vary the terms of the agreement, including its nominal expiry date (see proposed section 105G);

·                order that a workplace agreement continues to operate despite its termination (see proposed section 105H);

·                order compensation (see proposed section 105J); and

·                grant injunctions (see proposed section 105K)

New section 104A - False or misleading statements

1267.       Proposed section 104A would provide remedies against persons who make false or misleading statements relating to workplace agreements.

1268.       Subsection 104A(1) would provide that a person contravenes the section if:

·                the person makes a false or misleading statement to another person (paragraph 104A(1)(a));

·                the person is reckless as to whether the statement is false or misleading (paragraph 104A(1)(b)); and

·                the making of the statement causes the other person to or not to make, approve, lodge, vary or terminate a workplace agreement (paragraph 104A(1)(c)).

1269.       Subsection 104A(2) would provide that subsection 104A(1) is a civil remedy provision.

1270.       The note under subsection 104A(2) would refer to Division 11 of Part VB.  Under these provisions the Court may:

·                order a pecuniary penalty of up to 60 penalty units for a contravention of subsection 104A(1) (see proposed section 105D);

·                declare that all or part of the agreement is void (see proposed se