Authored by Chris McArdle, Principal at McArdle Legal, Employment Lawyers Sydney
“The Government’s election commitment is that there will be no place in the new workplace relations system for AWAs or any other form of statutory individual employment agreement.”
On 13 February 2008, a bill which became the Rudd Government’s new Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 was introduced in Parliament. It commenced on 27 March 2008, and along with its companions the Workplace Relations Amendment Regulations 2008 (No. 1) and Workplace Relations Amendment Regulations 2008 (No. 2) which together form a suite of transitional legislation, its purpose is to dismantle, at least to some extent, the changes wrought by Howard’s Work Choices legislation.
This transitional legislation seeks to make several major alterations to the federal industrial relations landscape:
• A modified version of the ‘no-disadvantage test’ is to be re-introduced, in place of the previous government’s ‘fairness test’ – there is no practical difference between the two, but we must accept that it is necessary for the new to appear different to the old;
• It will no longer be possible to unilaterally terminate collective agreements after they have run out – the party wishing to terminate the agreement would now need to apply to the Australian Industrial Relations Commission, who would only terminate the collective agreement if the public interest would not be harmed by doing so. Since that test means: “does not affect anyone else”, we can assume that termination by the AIRC will be virtually automatic unless it is opposed on “flow on” grounds;
• A special ‘award modernisation process’ is to be put in train, to be conducted by the AIRC and to be completed by 1 January 2010. This will have no effect on most people – it will mean that, after much debate things like “gender non-specific terms” will be introduced;
• All awards are to contain a mandatory ‘flexibility clause’ to enable employment arrangements to more closely suit the genuine needs of employers and employees.
• There will be a new statutory ‘safety net’ to consist of ten National Employment Standards, which have not yet been released; and
• One of the most high-profile changes is to forcibly retire the Australian Workplace Agreement and replace all AWAs with Interim Transitional Employment Agreements, (ITEAs), during the transitional period.
AWAs and ITEAs AWAs at their height covered about 5% of the workforce. They have been subject to the “fairness test” since May 2007, which is identical to the “no-disadvantage test” in all discernable respects.
They have thus not been the ogre documents of popular fiction that they are still painted since then. It is odd, therefore, for their removal to be held out to be so significant.
The Coalition’s Industrial Relations
reform.
That is especially so in the light of the policy of the new government to abolish all but the most minimum safety net for any of those rich people earning more than $100,000 per year. Thus, all the unskilled mine workers in WA who were earning $150,000 on AWAs will now have less protection than they previously did – mainly in the area of wrongful dismissal, in the event of which they can now approach the AIRC being “award covered”, but from now on will not be able to, being rich.
ITEAs are re-named AWAs, – so named to appear different. They are “end game” documents, and will all cease to be on the last day of 2009. None could be made after 27 March this year. During parliamentary debate over the Forward with Fairness Bill, Julia Gillard stated: “From the date of proclamation…
the ability of any employer in the country to make an Australian workplace agreement… to rip away an award condition without compensation, will be over – done and dusted.” Puzzling rhetoric, in view of the Fairness Test that Howard introduced in his panic in May 2007. The ALP could not acknowledge that, since they could hardly admit that their key criticism was no more, and the Coalition could not point it out, since they could not admit that their policy was anti social before May 2007. The press could not say anything, because there is no story in emptiness.
Academics could hardly write papers to the effect that it was all about nothing. So, we had and continue to have the Seinfeld debate about Industrial Relations.
Individual common law contracts The solution to the problems of IR seen by the new Government is to remove great chunks of the community from under the umbrella. The AIRC will be replaced by a public service agency that will take up to a year to do anything, and the functions of which will be discharged by the unmotivated led by the unimaginative. Most of the community will be spared this, as most will be excluded, either because they are rich and earning more than $100,000 a year, or cannot wait for the wheels of bureaucratic justice to grind slowly.
The exception is the public sector, the members of which will not be put off at all by the slowness or the passive aggressive unresponsiveness of the “Fair Work Australia” crack team of operatives. That finalises the process that has been evolving for some time – trade unionism is confined to the public service, and is an institution that serves the lowly paid (and preserves their lowly paid status).
Most people will be on their own. The exception is the ’10 National Minimum Standards’ (see following article). The Government has settled on a figure of $100,000 a year as the magic number. The 2008 legislation provides that if an employee, whose ‘guaranteed ordinary earnings’ are less than $100,000 a year, enters into a common law contract with their employer, then that contract must adhere to the 10 national minimum standards and must also allow for, at a minimum, the standards set out in any applicable award. So far so good, for these are long-established legal requirements for common law emp0loyment contracts; you cannot ‘contract out’ of any applicable award provisions, and your contract has to meet minimum award standards whether you like it or not.
However, if a common law contract is going to govern the employment of an employee who earns $100,000 or more per annum, then the only compulsory minimum standard which the contract must meet is that which will be set out in the 10 national minimum standards. To put it simply, those earning, or paying, six-figure salaries can contract out of an award – any relevant award is simply considered not to apply to the employment of that employee.
So, the whole system is now to be only for the bottom rungs. “Middle Australia” (“working families” – the people who elected them) will be largely cut out. It is stated in the amending act’s explanatory memorandum that “the proposed National Employment Standards…will be legislated as part of the Government’s substantive workplace relations reforms”, but we have not yet beenadvised of the final version of these standards. To make an educated estimation of what those 10 minimum standards
will be, it is useful to examine the details of the industrial relations policy which the Labor Party took to the
2007 election. Using the ‘Forward with Fairness” document as a guide, the present indications are that the ten standards would set out required minimum entitlements for:
• Hours of Work
• Parental Leave
• Flexible Work for Parents
• Annual Leave
• Personal, Carers and Compassionate Leave
• Community Service Leave
• Public Holidays
• Information in the Workplace
• Notice of Termination and Redundancy; and
• Long Service Leave.
The only real change in this list is “the right to request flexible working hours”. How “requesting” requires a “right” has not been explained. How it could not have been requested up to now has also not been extensively analysed.