Home » WORKCHOICES - AWARDS AND AGREEMENT MAKING

In this article, we examine the impact of WorkChoices on awards and agreement making.

Coverage

WorkChoices will cover 70 - 80% of Australian workers - this includes employees of constitutional corporations, all employees in the Territories and in Victoria, all Commonwealth employees and waterside, maritime and flight crew employees.

WorkChoices will not apply to employees of unincorporated businesses and state government bodies not currently in the federal system. Unincorporated businesses already in the federal system (other than in Victoria and the Territories) will remain in the federal system for a period of five years. If they do not incorporate during this five year period, they will fall into the state system.

Current system in Victoria (the current federal system)

In Victoria, employees are covered by:

Schedule 1A to the Workplace Relations Act 1996 (which contains minimum standards relating to annual leave, personal leave, notice on termination, parental leave) and any applicable minimum wage order; or

Awards (either because the employer is a party to an award or because the award has been declared common rule for a particular industry). If an award is applicable, there may also be a certified agreement concerning certain employment matters at a particular employer.

In some instances, Australian Workplace Agreements have been concluded between the employer and an individual employee.

Currently, all certified agreements and AWAs must pass the no-disadvantage test which requires that the agreement must not reduce the overall terms and conditions of employment of the employees when compared with the relevant award.

WorkChoices

Minimum and award wages will be set by the Australian Fair Pay Commission.

A set of minimum conditions (annual leave, personal/carer’s leave including sick leave, parental leave and a maximum of 38 ordinary hours of work) will be provided in law.

These minimum conditions together with the minimum wage set by the Commission will constitute the Australian Fair Pay and Conditions Standard.

All employees covered by WorkChoices are entitled to the benefits of the Standard and all workplace agreements (details set out below) must meet the Standard for the life of the agreement.

Awards under WorkChoices

No new federal awards will be made and existing awards will be simplified and rationalised.

Certain provisions (Preserved Award Entitlements) may not be rationalised out of awards, they include:

Annual leave

Notice of termination

Personal/carer’s leave

Jury service

Parental leave

Superannuation

Long service leave

Awards will be limited to 13 Allowable Award Matters, i.e.:

Ordinary time hours of work

Monetary allowances

Dispute settling provisions

Incentive based payments and bonuses

Loadings for overtime and shift work

Types of employment (full-time, part time, casual, shift work)

Annual leave loading

Penalty rates

Conditions for outworkers

Ceremonial leave

Redundancy pay (only for 15 or more employees)

Public holidays

Stand down provisions

When WorkChoices comes into operation, any provision (other than a Preserved Award Entitlement) which falls outside the list of Allowable Award Matters listed above will have no effect.

Workplace agreements under WorkChoices

There will be six types of workplace agreements under WorkChoices:

AWAs;

Employee Collective agreements – between an employer and its employees without union involvement;

Union Collective agreements – between an employer and a union representing employees at the workplace;

Union Greenfields agreements – between employer and a union in circumstances where the employer is starting a new business;

Employer Greenfields agreement – by an employer in relation to a new business before employees are hired;

Multiple Business Agreements – single agreement made by a group of employers./li>

Workplace agreements - procedural issues

The no disadvantage has been scrapped but all agreements are required to comply with the Standard for the life of the agreement.

The agreements come into operation on the day that they are lodged with the Employment Advocate save for multiple business agreements which require prior authorisation by the Employment Advocate.

All agreements must include a dispute settlement clause, failing which model dispute settlement provisions will apply.

Workplace agreements can apply for up to 5 years.

Workplace agreements can be terminated at any stage by agreement between the parties and can be unilaterally terminated by either party on 90 days notice if the nominal expiry date in the agreement has passed.

Workplace agreements - substantive issues

Employees, who are covered by an award, and who make a workplace agreement, will be taken to have included the following award conditions (Protected Allowable Award Matters) in their agreement unless expressly excluded:

Rest breaks

Monetary allowances eg remote location allowance

Incentive based payments and bonuses/li>

Loadings for overtime and shift work

Annual leave

Penalty rates

Public holidays

Workplace agreements may not contain certain matters (Prohibited Content) as set out in the regulations (which are not yet available).

Impact on existing awards and agreements

Existing awards (Pre-Reform Awards) will continue to apply save for:

Common Rule awards which will only continue to apply for a transitional period of 5 years; and

Unincorporated employers (except in Victoria and the Territories), in respect of whom federal awards will only continue to apply for a transitional period of 5 years.

Existing certified agreements ,b>(Pre-Reform Agreements) will continue to apply unless terminated under the Workplace Relations Act or replaced by one of the WorkChoices workplace agreements.

Existing AWAs (Pre-Reform AWAs) will continue to apply unless terminated under the Workplace Relations Act or replaced by one of the WorkChoices workplace agreements

Implications for employers

WorkChoices is complex legislation. Although the impact of WorkChoices is likely to be greatest on states other than Victoria, it is essential for all employers to have an understanding of the legislation and its effect on their business.


Frances Anderson is a senior lawyer with Moores Legal fanderson@mooreslegal.com.au