Prepared by Wal Beattie Ask HR Pty Ltd July 2010 0412 158 893

1. Fair Work Briefing Prepared by Wal Beattie Ask HR Pty Ltd July 2010 0412 158 893

2. What Has Changed? • Human Rights and Equal Opportunity Commission Act (Cwlth) 1986 • Equal Opportunity Act (Vic) 1995 • Equal Opportunity Amendment (Family Responsibilities) Act 2008 • Affirmative Action (Equal Employment Opportunity for Women Act 1986) • Sex Discrimination Act (Cwlth) 1984 • Racial Discrimination Act (Cwlth) 1975 • Racial Hatred Act 1995 • Disability Discrimination Act 1992 • Immigration Act, Employee Sanctions • State based Occupational Health and Safety Acts • Privacy Amendment Act 2000 (10 National Privacy Principles) • Fair Work Act 2009 • Anti-Discrimination Act 1977 (NSW) • Anti-Discrimination Act 1991 (Qld) • Equal Opportunity Act 1984 (SA) • Equal Opportunity Act 1988 (WA) • Discrimination Act 1991 (ACT) • Anti-Discrimination Act 1992 (NT)

3. The Fair Work Timetable Stage 1: 1st July 2009Fair Work Legislation, Became Law: Stage 2: 1st January 2010 Fair Work Legislation, Became law: Stage 3: July 2010 & Beyond. Further Fair Work Changes Planned: • Fair Work Australia is Established • New bargaining rules • Unfair dismissal • New Redundancy rules • Union right of entry • New record keeping rules • National Employment Standards become law • Modernised award system begins • Phasing In Wage Rates, Loadings & Penalties • National OH&S Legislation 2012 • National LSL Legislation? • Paid Maternity Leave 1/1/11

4. Functions of FWA will include: • Approval of enterprise agreements • Preview and variation of awards • Good faith bargaining orders • Unfair dismissal • Mediation and dispute resolution FWA will include a “Minimum Wages Panel” that will set and adjust wages in an wage review.

5. The Fair Work Ombudsman (FWO) • Functions of the FWO will include: • Promoting and monitoring compliance with the new legislation and industrial instruments; • Investigating and enforcing common law entitlements relating to minimum employee entitlements; • Issuing court proceedings to enforce rights and obligations. FWO will appoint Fair Work Inspectors to assist with compliance and investigation functions

6. What Is New?

7. Stage 1 With Effect From 1st July 2009 • The mega bureaucracy Work Fair Australia replaced the Australian Industrial Relations Commission, Workplace Ombudsman and Workplace Authority. • New Unfair dismissal • New redundancy rules • Right of Union Entry • Record keeping • New bargaining rules 7

8. Dismissal • From 1st July 2009 unfair dismissal laws under FWA applies to all businesses in the federal jurisdiction • The FWA requires that an employee serves a “Minimum Employment period” before the employee can bring an unfair dismissal claim. For: • An employer with an FTE of 15 employees or less this period is 12 months. A “Small Business Fair Dismissal Code” will be applied. • An employer of more than 15 employees this period is 6 months • Employees who earn more than $113,800 PA are exempt from coverage.

9. High Income Threshold • The high income threshold of $113,800 is the amount which must at least be met with a guarantee of annual earnings (a written guarantee given to an employee who is covered by a modern award where the employer wants to employ the person without the award applying) the amount below which an employee who: • is award/agreement-free; and • has completed the minimum employment period; and • is dismissed by the employer • can make an unfair dismissal application. • The high income threshold also sets the maximum amount that can be awarded in an unfair dismissal matter — i.e. six months pay so, from 1 July 2010, $56,900. • ‘ 9

10. What is Unfair Dismissal? • A person has been unfairly dismissed if Fair Work Australia finds that: • The employee was dismissed; and • The dismissal was harsh, unjust or unreasonable; and • The dismissal was not a case of genuine redundancy; and • The dismissal was not consistent with the Small Business Fair Dismissal Code, where the employee was employed by a small business. • Other Significant Changes include: • Renewed emphasis on reinstatement as the primary remedy • Applications must be made within 14 days of dismissal; and • FWA has more discretion about the way in which it hears applications

11. Unlawful Termination • FWA makes it illegal to dismiss an employee on a range of grounds. These include: • A person’s race, colour, sex, sexual preference, age, physical or mental disability, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction or social origin; • Temporary absence from work because of illness or injury; • Trade union membership or participation in trade union activities outside working hours, or with the employer’s consent, during working hours; • Non-membership of a trade union; • Seeking office as, or acting as, a representative of employees; • Being absent from work during maternity leave or other parental leave; • Temporary absence from work to participate in a voluntary emergency management activity; • Filing a complaint, or participating in proceedings, against an employer.

12. Notice Of Termination Minimum notice periods for termination have been enshrined in federal workplace law for many years. The NES continues with these minimum notice periods, but introduces the requirement that the employer must give notice in writing to the employee. • Exclusions: • Employees employed for a specific period of time, specific task, or the duration of a specific season; • An employee who's employment is terminated because of serious misconduct; • A casual employee; • An employee (Other than an Apprentice) to whom a training arrangement applies. Period of continuous serviceNotice period Not more than 1 year1 week More than 1 year, but not more than 3 years2 weeks More than 3 years, but not more than 5 years3 weeks More than 5 years 4 weeks Employees over 45years old get a further 1 weeks pay if they have completed at least 2 years of service with the employer.

13. Redundancy Pay • The NES sets a scale of minimum severance payments for redundant employees. Awards may include industry specific redundancy entitlements, but award based entitlements are intended to provide conditions more comprehensive than the NES. • The scale does not apply to any business which employs fewer than15 employees at the time of the termination due to redundancy • In the case of transfer of business, an employee is not entitled to redundancy pay on the termination of employment with the first employer if the employee rejects an offer of employment made the second employer, if the second employer is willing to provide: • Substantially similar terms and conditions of employment • Recognises the employees service with the first employer  At leastBut less than Redundancy Pay 1 year 2 years 4 weeks 2 years 3 years 6 weeks 3 years 4 years 7 weeks 4 years 5 years 8 weeks 5 years 6 years 10 weeks 6 years 7 years 11 weeks 7 years 8 years 13 weeks 8 years 9 years 14 weeks 9 years 10 years 16 weeks 10 yearsplus 12 weeks

14. What Is Union Right Of Entry? • A union official (which may include an employee) has the right to enter premises if they hold a valid and current right of entry permit issued by Fair Work Australia (FWA). The permit allows the official to: • Investigate suspected breaches of the Fair Work Act 2009 and other instruments; • Meet with employees; • Exercise rights under occupational health and safety laws. • Certain rights and obligations exist in relation to the exercise of a right of entry • Written notice (an entry notice) may be required to be given before entering a workplace and should be provided no less than 24 hours and no more than 14 days before the proposed visit; • A visit to a workplace must take place during working hours; • Penalties may apply for refusing, delaying or obstructing entry as well as for other breaches of the legislation.

15. What Should A Union Right Of Entry Notice Include? • An entry notice should include details of: • the premises to be entered; • the day of entry • the organisation the permit holder belongs to • the section of the Fair Work Act 2009 that authorises the entry • details of the suspected breach • a declaration by the permit holder that they represent an employee who works on the premises. And: • To whom the suspected breach relates, or • Who is affected by the suspected breach • The provision of the organisations rules that details the organisations right to represent the employee.

16. Parental Leave New mothers - maternity leave Up to 52 weeks continuous unpaid leave if they are the primary caregiver. (This is called 'ordinary maternity leave'.) This can be extended by a further 52 weeks. A minimum of 6 weeks leave must be taken immediately after the birth of their child if new mothers take ordinary maternity leave. New fathers - paternity leave Up to 52 weeks continuous unpaid leave if they are the primary caregiver. (Called 'long paternity leave‘). Up to 1 week unpaid leave for fathers who aren't the primary caregiver. (Called 'short paternity leave'.) This starts on the day their spouse begins to give birth. Parents of the newborn can only apply for concurrent short parental leave for a period of no more than 3 weeks. A 12 month qualifying period applies.

17. Annual Leave • Under the Australian Fair Pay and Conditions Standard (the Standard), all employees (except casual employees) can get paid annual leave based on the nominal hours they've worked. An employee can get: • Four weeks annual leave for each 12 months completed • Five weeks annual leave for some shift workers for each 12 months. • Refusing To Authorise Annual Leave • An employer must not unreasonably: • Refuse to authorise annual leave being taken; or • Take back an authorisation. • Directing an Employee to Take Annual Leave • There are 2 circumstances where an employer can direct an employee to take leave. These are: • During a period of shut down • If the employee has a large accumulated annual leave balance. (Eight weeks or more over a two year period.)

18. Personal/Carers Leave • Personal/carer’s leave can now be taken during a period of annual leave, meaning the employee is to be re-credited annual leave for each day the employee is eligible for paid personal/carer’s leave. • There is no restriction on the amount of paid carer’s leave that can be taken by an employee in any period. The Standard places no cap on the amount of accrued paid personal leave that may be taken by an employee in any year • A new minimum condition of unpaid compassionate leave is two days per permissible occasion. It is now also available to casual employees. • An employee does not accrue any paid personal/carer’s leave while absent from work because of an illness or injury for which the employee is receiving workers compensation • Where a public holiday occurs during a period of personal/carer’s leave or compassionate leave, that day does not count as a period of personal/carer’s leave.

19. Government Funded Paid Parental Leave (GPPL) (From 1/1/11) (1) • The scheme provides 18 weeks of government-funded PPL to eligible working parents paid at the federal minimum wage, currently $569.90/week. • A person (employee, contractor or self-employed) is eligible for GPPL if (s)he is the primary care giver to a new born child or adopted child under 16. (S)he must satisfy: • the work test: (s)he must have worked continuously for at least 10 of the previous 13 months and for at least 330 hours (approximately 1 day/week) during that period • the income test: her/his income must be less than $150,000 pa. • Arranging GPPL is the responsibility of the eligible working parent. Someone wanting GPPL must apply to the Family Assistance Office (FAO) in the period between 3 months before the expected date of birth or adoption and 12 months after that date. GPPL will not be paid for leave taken 12 months or more after the birth or placement.

20. Government Funded Paid Parental Leave (GPPL) (From 1/1/11) (2) When the eligible working parent is an employee When an eligible working parent has 12 months of continuous service, or if a casual, is ‘long term’ (has worked a series of engagements during at least 12 months on a regular and systematic basis), the employer becomes the paymaster for the GPPL. This part of the GPPL scheme does not start until 1 July 2011, although an employer may opt to become paymaster for their employees taking GPPL before that date should they wish to. Service required to qualify The 12 months requirement is the same service requirement for an employee to be eligible for unpaid parental leave under the National Employment Standards. Unpaid parental leave and GPPL can be taken concurrently. The amount of GPPL taken is deducted from the employee’s unpaid parental leave entitlement. Employer-paymaster Where an employer is to be paymaster for an employee’s GPPL, the FAO will contact and advise the employer of this.

21. Flexibility Arrangements An employee who is a parent, or has a responsibility for the care, of a child under school age will be entitled to request a change in working arrangements to assist the employee in caring for the child. This right is also available to a parent caring for a child under 18 with a disability. An employer may only refuse the request on “Reasonable” business grounds. (The FWA does not explain the facts and circumstances pertaining to “Reasonable”) Within 21 days of receiving the request the employer must give a written reply to the employees. The reply must state wether the request has been granted or refused and the detailed reasons for a refusal.

22. Community Service Leave Community Service Leave Employees who engage in an eligible community service activity will be entitled to unpaid leave of absence for the period in which the employee engages in the activity. The entitlement extends to reasonable travelling time and rest time associated with the activity. To claim leave for emergency management activities, the employee must be a member of, or associated with, a recognised emergency management body. Jury Service Leave Jury service pay is now covered by the community service leave entitlement under the NES. An employer’s obligation to pay an employee (Other than a casual employee) for jury service is capped at ten (10) days in total. This means all full-time employees who work Monday to Friday would be entitled to be paid for the first two weeks of absence. This entitlement is to be paid at their base rate of pay for ordinary hours of work for the relevant period.

23. Maximum Weekly Hours • An employee’s ordinary hours of work must not exceed 38 hours in any week. • Additionally an employer may require an employee to work reasonable additional hours. • An employee may refuse to work additional hours if the additional hours are unreasonable. Factors that must be taken into account include: • Any risk to the employees health • The employees personal circumstances • Wether the employee is entitled to overtime payments

24. RecordKeeping Employers must keep a number of written records of their employees for 7 years, such as records about time and wages. The records must be easy to access and be written in plain and simple English. Pay slips Employers must issue pay slips to each employee within 1 working day of their pay day. It's best practice for these to be written in plain and simple English. The pay slip must be issued in electronic form or hard copy. Employers must ensure that a pay slip is issued to an employee, even when they are on leave. Termination of employment  If an employee’s employment is terminated section: s535(10) of the Act requires an employee record that the employer must make and keep is a record that sets out: Name of the person who terminated the employment; How the termination took place - by consent, by notice, summarily or in some other way (need to include details).

25. Work Practices To Avoid (1) • Unpaid work trials are generally against the law. You should not ask people to work for free. • You should pay employees for all the hours they work, including meetings or training and the time they spend opening and closing the business. • Not giving someone a pay slip. Employees should get a pay slip within 1 day of being paid. • Sham contracting when an employer tries to disguise an employment relationship as an independent contracting relationship is illegal under the Fair Work Act 2009.

26. Work Practices To Avoid (2) • Undue Influence Or Pressure And Coercion • It’s unlawful to unduly influence or pressure an employee to: • make / not make an agreement or arrangement under the Australian Fair Pay & Conditions Standard (the Standard); • make / not make an agreement or arrangement under an award or enterprise agreement; • agree to, or terminate an individual flexibility arrangement; • agree / not agree to have money deducted from their pay. • It’s also unlawful to: • coerce another person or 3rd party to exercise / not exercise a workplace right; • coerce another person or 3rd party to get involved in industrial activity.

27. January 2010 What Changed?

28. With Effect From 1st January 2010 • National Employment Standards-10 minimum conditions protected by legislation including maximum weekly working hours, leave public holidays, termination notice, redundancy pay and right to request flexible working arrangements. • Modernised award system begins, with some changes to be phased in over five years. Extra minimum standards are included in awards. • Fair Work Australia becomes fully operational. • Minimum wages reviewed annually by Fair Work Australia

29. The FWA Safety Net

30. National Employment Standards (1) Employers and employees in the national workplace system will be covered by the Ten (10) National Employment Standards (NES) on and after 1 January 2010. Under the new standards, all employees will be protected by minimum pay and conditions. This is a safety net that cannot be stripped away.. These are guaranteed in legislation and cannot be excluded or modified, even if earning $113,800 or more.

31. The National Employment Standards (2) • Maximum weekly hours of work-38 Hours PW plus reasonable additional hours. • The right to request flexible working arrangements. (IFA’s) • Parental leave and related entitlements. Up to two (2) years. • Second parent up to one (1) year. • Annual leave. Four (4) weeks plus an additional week for shift workers. • Personal / carer's leave and compassionate leave. • Community service leave. Some to be paid. • Long service leave. To be standardised. • Public holidays. All employees are entitled to prescribed public holidays. • Notice of termination and redundancy pay. Up to 16 weeks pay. • A 'fair work information statement' for all employees.

32. Modern Awards (1) • 1st January 2010 • Industry or Occupation based • Streamline current award system and reduce current number of awards to about 120 • Cover all who have been previously covered by awards • Do not apply to employees earning more than $113,800 (Indexed annually) • Transitional arrangements. Some pay related provisions will be deferred until 1st July 2010. (e.g. casual and part time loadings; Saturday, Sunday and public holiday penalties; shift allowances) 32

33. Modern Awards (2) 10 Further employment standards • Minimum wages. • Facilitation of flexible work hours, family responsibilities and job sharing. • Hours of work, rostering, rest and meal break allowances. • Overtime rates. • Penalty rates • Provision for annualised wage or salary arrangements. • Allowances • Leave and leave loading • Superannuation • Consultation, representation and dispute setting procedures. 33

34. Transitional Issues • The Fair Work (Transitional Provisions and Consequential Amendments) Bill addresses issues such as: • What will happen to existing AWA’s ,ITEAs and collective agreements on1 July 2009? These will continue in force unless terminated or replaced. • What will happen to existing awards such as preserved State Awards and federal awards? On 1st January 2010 the Modern Awards will commence, those on preserved awards (NAPSA) will continue to apply up to 1st January 2014. • What happens to enterprise awards? From 1st January 2010 until 31st December, FWA will have the power to make a modern enterprise award to replace a current enterprise award.

35. Individual Flexibility Arrangements (IFA’s) • An IFA can be used to vary certain terms of a modern award or enterprise agreement as it applies to that particular employee covered by the IFA. • An employee or employer can initiate a request for an IFA. • An IFA must be in writing and signed by the employer and employee. If the employee is under 18 years of age, it must also be signed by the employee’s parent or guardian. • Once an IFA has been made, it is the employer’s responsibility to ensure that a copy of the IFA is given to the employee. The employer should also retain a copy. • Flexibility terms within modern awards will only allow IFAs to vary: • arrangements for when work is performed such as working hours • overtime rates • penalty rates • allowances, and • leave loading.

36. Enterprise Agreements • From 1st July 2009, collective agreements will be known as “Enterprise Agreements”; • There will be no distinction between union and non-union agreements; • A union is automatically a “bargaining representative” for an agreement if it has a member in the workplace and the member does not appoint another person; • A union may not be involved in bargaining in order to be covered by the agreement; • Effectively, therefore true non-union agreements are only possible: • In workplaces where there are no union members, or • Where the union chooses not to be covered by the agreement. • Arrangements for union Greenfields agreements effectively continue • Employers are able to make a Greenfields agreement with a union or unions of their choice, provided those unions are entitled to represent a majority of the employees covered by the agreement

37. Best Practice Guides • Eleven Best Practice Guides have been issued by the Fair Work Ombudsman, significant aspects of these are: • Family Friendly workplace strategies • Employees rights to family friendly workplace strategies • Employees rights to family friendly entitlements • Need for work life balance • Flexible workplace strategies • Consultation in the workplace • Individual flexibility arrangements • Regular performance reviews 37

38. 2010 What Is Anticipated?

39. During 2010 & Beyond • Building inspectorate takes over from Australian Building and Construction Commission in policing industrial activity in the construction sector. • National OH&S legislation to be introduced to replace existing state • based legislation. • National Long Service Leave legislation to be introduced. • 18 Weeks Paid Maternity Leave to be introduced in June 2011. • 1st July 2010 Phasing-in of wage rates, loadings and penalties.

40. Harmonisation of OH&S Laws

41. How Do You Phase in New Wage Rates? Step 1  It’s really important for employers to audit all their employees — whether they are currently under an award or an agreement. Look at the classifications in each modern award and determine which ones apply to your employees. This is something that only the employer can do — you need to look at the work the employees do and compare it to the description in the modern award. Step 2 Next, as soon as you have classified each employee, you need to list their current award wage rate, as it applied at 31 December 2009. Step3 The next step is to actually understand what you need to do once the new modern award wage rates start on 1 July. IMPORTANT: you will have to do this individually for each employee. Use what you’ve learned about phasing-in and compare the current wage rate to the modern award rate for that employee classification. 41

42. Phasing In Wage Rates Etc For Employees Who Are Covered By Agreements • Again, compare the work that those employees do to the classifications in the modern award. You will need to do this for two reasons: • The transitional wage rate in the modern award overrides the wage rate in any agreement because it forms part of the basic minimum standards that apply to all employees. • If the wage rate in the agreement is lower than in the modern award, you will need to give your employees a pay rise on 1 July 2010. • 2. Some employees may have been award-free prior to the introduction of the Fair Work Act, but are now covered by a modern award (for example, merchandisers in Queensland and Western Australia). You need to know whether an award now applies to such employees.

43. How Do You Comply with the FWA? (1) • Compliance:Be prepared for possible increased union interest in the workplace and right of entry. Identify which unions might approach your business and decide in advance how to handle any approaches that may arise. Make sure appropriate People Management policies and procedures are up to date and in place. • Communications: Review and improve your communication strategies in general: This step refers to communications with line managers, all employees, and external organisations such as FWA. If these strategies work properly, employees will be less interested in seeking help from third parties. 43

44. How Do You Comply with the FWA? (2) • Training and coaching for managers: to improve their communication, consultation, counselling and decision-making skills: If employees are happy with how their concerns and complaints are handled in-house, they tend not to look elsewhere. This is why the performance management programmes are now even more important. • Employers should take steps to be well prepared for bargaining: When ‘good faith bargaining” previously existed in federal legislation (between 1993 and 1996), unions were not well set up to handle collective bargaining, as it was then a relatively new phenomenon. This time, they have 15 years of experience of it and are much better organised. 44