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Fair Work Amendment (Transfer of Business) Bill 2012

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2010-2011-2012

 

 

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

 

 

 

SENATE

 

 

 

 

 

 

 

FAIR WORK AMENDMENT (TRANSFER OF BUSINESS) BILL 2012

 

 

 

 

 

SUPPLEMENTARY EXPLANATORY MEMORANDUM

 

 

Amendments to be Moved on Behalf of the Government

 

 

 

 

 

 

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

 





AMENDMENTS TO THE FAIR WORK AMENDMENT (TRANSFER OF BUSINESS) BILL 2012

OUTLINE

The Government will move amendments to the Fair Work Amendment (Transfer of Business) Bill 2012 (the Bill) to ensure that the provisions better align with the existing transfer of business provisions in Part 2-8 of the Fair Work Act 2009 (FW Act) and operate as intended.

Fair Work Australia orders

The Government proposes amendments to ensure that Fair Work Australia (FWA) can hear applications and make orders in anticipation of there being a transfer of business, including before a transferring employee’s employment is terminated by the first employer.  These amendments will more closely align with similar provisions relating to FWA orders in Part 2-8 of the FW Act.  Similar to orders in Part 2-8 of the FW Act, orders in relation to transferring employees take effect no earlier than the time that the employee is re-employed by the new employer and no earlier than the time that the employee starts to perform the transferring work for the new employer in relation to non-transferring employees.

Amendments are also proposed to clarify that FWA can make orders relating to multiple employees, rather than being required to make one order per employee.  This approach is consistent with Part 2-8 of the FW Act.

Application and coverage of the Bill

The Government proposes amendments to clarify that local government employers are not included in the coverage of the Bill.  These amendments reflect the intended coverage and application of the Bill.

Consistency with Part 2-8 treatment

An amendment is also proposed to ensure that the same rules apply to transfers of business under proposed Part 6-3A as apply to transfers of business under Part 2-8 of the FW Act in relation to the General Protections.

Financial Impact Statement

Nil



 



Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Amendments to the Fair Work Amendment (Transfer of Business) Bill 2012

These amendments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

Overview

The Bill will amend the FW Act to protect employee entitlements in circumstances where there is a transfer of business from an old State employer to a national system employer.

Amendments to the Bill will ensure that the provisions operate as intended, and better align with the existing treatment of transfer of business in the FW Act (principally contained in Part 2-8 of the FW Act) by:

·          making it clearer that FWA can make orders in anticipation of there being a transfer of business;

·          ensuring that consolidation orders and orders about employee coverage made by FWA cannot have retrospective operation;

·          clarifying that FWA can make orders relating to multiple employees, rather than being required to make one order per employee;

·          ensuring that the same rules apply to transfers of business under proposed Part 6-3A as apply to transfers of business under Part 2-8 of the FW Act in relation to the General Protections; and

·          clarifying that local government employers are not included in the coverage of the Bill, reflecting the intended coverage and application of the Bill.

Human rights implications

The amendments contained in the Bill that are of a technical nature do not engage any of the rights or freedoms outlined in the Human Rights (Parliamentary Scrutiny) Act 2011 .

Some amendments engage with the right to work and rights in work including the right to just and favourable conditions of work in articles 6(1) and 7 of the International Covenant on Economic, Social and Cultural Rights (ICESCR).

The Right to Work and Rights in Work

Article 6(1) of the ICESCR recognises the right to work and obliges State Parties to take appropriate steps to safeguard this right.  The United Nations Committee on Economic, Social and Cultural Rights (the UN Committee) has stated that the right to work in article 6(1) of ICESCR encompasses the need to provide the worker with just and favourable conditions of work.  Article 7 of the ICESCR sets out the right to just and favourable



conditions of work, including remuneration which provides all workers, as a minimum, with fair wages and equal remuneration for work of equal value without distinction of any kind.

The Bill engages with and promotes the right to work and rights in work including the right to just and favourable conditions of work in articles 6(1) and 7 of the ICESCR.  The FW Act promotes the right to just and favourable working conditions by preserving employee entitlements where there is a transfer of business between two national system employers.

The Bill extends the FW Act’s protection of employee entitlements in a transfer of business situation to also cover transfers that occur from certain non-national workplace relations system employers to national workplace relations system employers.  Although the application and coverage of the Bill would not further extend to transfers of business from a  local government employer, former local government employees who move into the national workplace relations system otherwise have the benefit of the protections, rights and entitlements of the FW Act.

The effect of one amendment would be to ensure that the same rules apply to transfers of business under proposed Part 6-3A as apply to transfers of business under Part 2-8 of the FW Act in relation to the provisions regarding the General Protections, including the exemptions contained in those provisions.  Importantly, when a national workplace relations system employer employs a transferring employee and a transfer of business occurs, the transferring employee is entitled to the benefit of his or her previous industrial instruments and accrued entitlements.

Conclusion

To the extent that the amendments engage human rights, they do so in a manner that is consistent with existing provisions in the FW Act.

Minister for Employment and Workplace Relations,

the Honourable William Shorten MP



 



NOTES ON AMENDMENTS

In these notes on amendments, the following abbreviations are used:

FW Act

Fair Work Act 2009

FWA

Fair Work Australia

the Bill

Fair Work Amendment (Transfer of Business) Bill 2012

Transitional Act

Fair Work (Transitional Provisions and Consequential Amendments) Act 2009



 



Amendment 1 - Schedule 1, item 1, page 4 (lines 2 and 3)

1.                   The amendment to new section 768AB of the Bill made by this item provides that the terms employee and employer in new Part 6-3A have their ordinary meaning.  The amendment will operate with other amendments to enable FWA to make orders where there is likely to be a transfer of business.

Amendment 2 - Schedule 1, item 1, page 5 (line 22)

2.                   This technical amendment to new subsection 768AE(1) changes a cross-reference to new paragraph 768AD(1)(a) to make it clearer that an employee becomes a transferring employee in relation to a transfer of business at the time that his or her employment with the old State employer is terminated. 

Amendment 3 - Schedule 1, item 1, page 7 (lines 7 to 20)

Amendment 4 - Schedule 1, item 1, page 8 (line 21) to page 9 (line 3)

3.                   These amendments to new subsections 768AI(1) and 768AK(1) make clear that copied State instrument(s) come into operation in relation to a transferring employee immediately after the termination time of the transferring employee. 

Amendment 5 - Schedule 1, item 1, page 20 (before line 8)

Amendment 6 - Schedule 1, item 1, page 20 (line 31) to page 21 (line 34)

Amendment 7 - Schedule 1, item 1, page 22 (lines 15 to 20)

Amendment 8 - Schedule 1, item 1, page 23 (after line 13)

Amendment 9 - Schedule 1, item 1, page 23 (line 27) to page 24 (line 30)

4.                   This group of amendments relate to the provisions of the Bill that enable FWA to:

·          vary copied State instruments (new Division 5 of new Part 6-3A of the Bill); and

·          make orders about the coverage of copied State instruments and other instruments (new Division 6 of new Part 6-3A of the Bill).

5.                   Broadly, the amendments are intended to enable FWA to hear applications and make orders where there is likely to be a transfer of business, reflecting similar provisions in Part 2-8 of the FW Act. 

6.                   Amendment 5 inserts new subsection 768AX(1A) to make clear that new section 768AX, which deals with the variation of copied State instruments, applies if there is or is likely to be a transfer of business.

7.                   Amendment 6 omits and substitutes new subsections 768AX(2) and 768AX(3) which deal with who may apply to FWA for a variation of a copied State instrument and the matters that FWA must take into account in deciding whether to vary a copied State instrument. 



8.                   The effect of this amendment is to enable applications to be made, heard, and decided, and for appropriate matters to be considered where there is or is likely to be a transfer of business.

9.                   Amendment 7 omits subsection 768AX(6) and substitutes new subsections 768AX(6) and 768AX(7).

·          New subsection 768AX(6) ensures that a variation can be made where there is or is likely to be a transfer of business, which more closely aligns with provisions in Part 2-8 of the FW Act.

·          New subsection 768AX(7) changes the way that FWA’s decision to vary an instrument is described to better align with the terminology in Part 2-8 of the FW Act.  It also removes an unnecessary reference to orders not taking effect in relation to a transferring employee before the employee’s re-employment time, when the instrument starts to operate in relation to the employee.  This was unnecessary because a variation to an instrument cannot take effect in relation to a particular employee until such time as the instrument covers that employee.  For example, a copied State instrument can only cover a transferring employee from the time that the employee is re-employed by the new employer (see new section 768AN).

10.               Amendment 8 inserts new section 768AZA in Division 6 of new Part 6-3A.  The amendment is intended to make clear that FWA can make orders where there is or is likely to be a transfer of business, reflecting similar provisions in Part 2-8 of the FW Act.

11.               Amendment 9 omits and substitutes new subsections 768BA(2), 768BA(3) and 768BA(4).  This amendment is intended to more closely align the new provisions with similar provisions in Part 2-8 of the FW Act and ensures that applications can be made, heard, and decided, and for appropriate matters to be considered where there is or is likely to be a transfer of business. 

12.               New subsection 768BA(4) would align the commencement of an order made under new subsection 768BA(1) with similar provisions in Part 2-8 of the FW Act.  An order must not come into operation in relation to a particular transferring employee before the later of:

·          the transferring employee’s re-employment time; or

·          the day on which the order is made.

Amendment 10 - Schedule 1, item 1, page 25 (line 17) to page 30 (line 15)

13.               This amendment makes changes to Division 7 of the Bill.  This Division enables FWA to effectively consolidate various workplace instruments that may apply at a workplace.

14.               New subsection 768BCA and amendments to new subsections 768BD(2) and 768BD(3) and new subsections 768BG(3) and 768BG(4) make it clear that FWA can make consolidation orders where there is or is likely to be a transfer of business.  The effect of these changes is to enable applications to be made, heard, and decided, and for appropriate matters to be considered where there is or is likely to be a transfer of business. 



15.               These changes are intended to more closely align the provisions in this Division with similar provisions in Part 2-8 of the FW Act.

16.               This amendment also clarifies that FWA can make one order relating to multiple employees (new subsection 768BD(1) in respect of transferring employees and new subsection 768BG(1) in respect of non-transferring employees).  This is also highlighted in changes to the Guide to the Division and consequential changes are made to new sections 768BE, 768BF, 768BH and 768BI.

17.               The amendment also modifies new subsection 768BE(1) which deals with the application and coverage of consolidation orders to transferring employees.  The subsection requires a consolidation order to specify, among other things, when a copied State instrument for an employee applies to and covers other transferring employees.

18.               It is intended that FWA be able to make consolidation orders in relation to both copied State awards and copied State agreements.  For example, if FWA were to order that both the copied State award and copied State agreement for an employee were to operate in relation to other transferring employees then subsection 768BE(2) will have the effect that, once those consolidation orders come into operation, both copied State awards and copied State agreements for the other transferring employees cease to operate.

19.               Changes to new subsections 768BD(4) and 768BG(5) align the commencement of orders made under this Division in relation to transferring and non-transferring employees with similar provisions in Part 2-8 of the FW Act.  This means that orders in relation to transferring employees under new section 768BD cannot come into operation before the day on which the order is made, or the time that the transferring employee is re-employed by the new employer, whichever is the later.  Similarly, orders in relation to non-transferring employees under new section 768BG cannot come into operation before the day that the order is made, or the time that the employee starts to perform the transferring work for the new employer, whichever is the later.

Amendment 11 - Schedule 1, item 1, page 43 (table item 3, column 1)

20.               This technical amendment amends table item 3 in new subsection 768BY(2) that incorrectly translated the notes in item 13 of Schedule 3A of the Transitional Act in relation to copied State instruments.  These notes refer to other items in Schedule 3A of the Transitional Act that have not been translated in new subsection 768BY(2) and are not intended to have any application in relation to copied State instruments.

Amendment 12 - Schedule 1, item 3, page 47 (lines 10 to 12)

21.               This technical amendment changes references in section 9A of the FW Act from Schedule 1 to (the) Schedules.  This change is consequential on amendment 21, which creates a new Schedule 2 rather than a new Part to Schedule 1. 

Amendment 13 - Schedule 1, items 14 and 15, page 48 (line 22) to page 49 (line 2)

22.               This amendment omits two signpost definitions that would have been inserted into section 12 of the FW Act.  This amendment is consequential on amendment 10.

 



Amendment 15 - Schedule 1, item 24, page 50 (line 12)

Amendment 16 - Schedule 1, item 25, page 50 (line 16)

23.               Amendments 15 and 16 change cross-references in signpost definitions of original State agreement and original State award that would be inserted into section 12 of the FW Act by the Bill.  These amendments are consequential on amendments 3 and 4.

Amendment 14 - Schedule 1, page 49 (after line 14)

Amendment 17 - Schedule 1, item 34, page 51 (after line 24)

Amendment 18 - Schedule 1, item 35, page 52 (lines 14 and 15)

24.               Amendment 14 inserts definitions of local government employee and local government employer into section 12 of the FW Act to make clear that, for the purposes of new Part 6-3A, they have the same meaning as they have in subsection 30K(1) of the FW Act.

25.               Amendments 17 and 18 would amend items 34 and 35 of Schedule 1 of the Bill which insert signpost definitions of State public sector employee and State public sector employer into section 12 of the FW Act.  The amendments clarify that local government employers are not included in the coverage of the Bill.

Amendment 19 - Schedule 1, page 54 (after line 31)

26.               This amendment amends subsection 341(5) of the FW Act to make clear that the same rules apply to transfers of business under proposed Part 6-3A as apply to transfers of business under Part 2-8 of the FW Act in relation to the General Protections.

Amendment 20 - Schedule 1, page 56 (after line 8)

Amendment 21 - Schedule 1, item 67, page 56 (line 22) to page 57 (line 16)

27.               Amendment 20 is a technical amendment which repeals and substitutes section 795A of the FW Act, consequential on amendment 21.

28.               Amendment 21 is a technical amendment which provides that instead of being contained in Part 2 to Schedule 1 of the FW Act, the provisions regarding the application of the Bill will be included in a new Schedule 2.  This will ensure that there is only one Part 2 to Schedule 1 to the FW Act.