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Preparing for the New Safety Net

Preparing for the New Safety Net. Professor Andrew Stewart University of Adelaide & Piper Alderman 8th Annual Workforce Conference Melbourne, 22 September 2009. The Fair Work safety net.

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Preparing for the New Safety Net

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  1. Preparing for the New Safety Net Professor Andrew Stewart University of Adelaide & Piper Alderman 8th Annual Workforce Conference Melbourne, 22 September 2009

  2. The Fair Work safety net • A two part ‘safety net’ of minimum conditions under the Fair Work Act 2009, to commence on 1 January 2010 • National Employment Standards (NES) for all national system employees (Pt 2-2) • standardised and simplified ‘modern awards’ for most such employees (Pt 2-3) • currently being created by AIRC under WR Act 1996 Pt 10A, continued in effect by TPCA Act (Fair Work (Transitional Provisions and Consequential Amendments) Act 2009) Sch 5

  3. The Fair Work safety net • Plus national minimum wage orders for award-free workers • to be set by FWA Minimum Wage Panel under FW Act Pt 2-6 • first annual wage review in 2010, to take effect on 1 July • by 1 July 2011, there must be a minimum wage for juniors and trainees • TPCA Act Sch 9 cl 4

  4. Transitional arrangements • Australian Fair Pay Conditions Standard in Part 7 of Workplace Relations Act 1996 continues until end of 2009 • TPCA Act Sch 4 cl 2 • Minimum wages set under Part 7 Div 2 continue into 2010 and beyond, until displaced by modern awards or NMWOs • TPCA Act Sch 9 cl 5

  5. Transitional arrangements • Until modern awards take effect, ‘award-based transitional instruments’ can continue (TPCA Act Sch 3) • ie, pre-reform federal awards, NAPSAs • Query arrangements for State reference employers outside Victoria • presumably to be revealed in forthcoming amendments to FW Act

  6. Preparing for the NES • Affected employers need to review existing employment arrangements and ensure NES compliance by 1 January 2010 • applies to all employees, including executives • unlike AFPCS, no exemption where old agreements deal with matters covered by NES

  7. Preparing for the NES • Key new entitlements/obligations • right to request flexible working arrangements • parents eligible if they have children below school age or with a disability • refusal by employer can be disputed, but only if employer has agreed • extended (unpaid) parental leave • if refused, agreed dispute resolution only

  8. Preparing for the NES • Key new entitlements/obligations (cont’d) • cashing out annual leave • directing when annual leave is taken • unpaid compassionate leave for casuals • community service leave • voluntary emergency management activities • jury service

  9. Preparing for the NES Key new entitlements/obligations (cont’d) redundancy pay based on 2004 federal award standards usual exceptions for casuals, fixed term contracts, etc Fair Work Information Statement new employees only

  10. Accrued entitlements • ‘Service’ defined in FW Act s 22 • General rules for pre-NES service (TPCA Act Sch 4 cl 5) • service with an employer before 1 January 2010 generally counts towards NES entitlements • but where employee has already had the benefit of an entitlement, they cannot ‘double count’

  11. Accrued entitlements • Special rules • employee carries over whatever annual leave or paid personal/carer’s leave entitlements they have accrued before NES (TPCA Act Sch 4 cl 6) • but if leave taken after 1 January 2010, NES rules apply (eg as to cashing out, notification, etc) • for redundancy pay, pre-NES service counted only if employee had some entitlement as of 31 December 2009 (TPCA Act Sch 4 cl 5) • including under an award, agreement or employment contract

  12. Award modernisation • The challenge for the AIRC • review around 1700 awards/NAPSAs that apply to more than one business • standardise and simplify, to reduce number of awards and eliminate State/Territory-based differences in wages and conditions • avoid disadvantaging employees or increasing costs for business • complete process by end of 2009

  13. Award modernisation • Progress to date • 93 awards either ‘finalised’ or issued in exposure draft, for Stages 1 to 3 • 30 more industries/occupations still to be dealt with in Stage 4, plus ‘miscellaneous’ award • note challenge of framing coverage of miscellaneous award • on track for 2010 start, but ongoing adjustments can be expected • plus review after first 2 years (TPCA Act Sch 5 cl 6)

  14. Transitional arrangements • Model/default transitional provisions announced in [2009] AIRCFB 800 (2 September 2009) • Some awards will have different arrangements, or move to modern award conditions immediately

  15. Transitional arrangements • Under default arrangements • most modern award provisions commence on 1 January 2010 • but for minimum wage rates, loadings and penalty rates • six month ‘grace period’ • phasing up or down of each rate or loading in 5 instalments from 1 July 2010, where significant discrepancy with transitional instrument

  16. Transitional arrangements • Two big queries about default provisions • no reductions in take-home pay • supplements protection offered by TPCA Act Sch 5 Pt 3 • but is the protection automatic, or only on application to FWA? • how they apply to new businesses • commencing after 1 January 2010 • commencing between 27 March 2009 and 1 January 2010

  17. Enterprise awards • Excluded from current modernisation process • No new enterprise awards from now on (except in Victorian public sector) • Parties can ask FWA to modernise existing enterprise awards (TPCA Act *) • unmodernised awards to expire at end of 2013 • FWA’s discretion • to modernise or not to modernise?

  18. Award modernisation • An assessment of the process • The inevitable problems (and complaints) when standardising and simplifying • Government intervention – help or hindrance? • An encouragement to make enterprise agreements? • Is it worth the pain?

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