The Government has also introduced two bills to replace the current general employee entitlements and redundancy scheme (GEERS) with an equivalent legislative scheme and to extend transfer of business protections to state public servants.
Proposed changes to the FW Act in response to the panel's review
The proposed changes to the FW Act represent the Government's initial response to the three-member panel's review of the FW Act in August this year. If accepted, the proposed changes accept the panel's less controversial recommendations and will implement roughly a third of the 53 recommendations.
The most significant of the proposed changes include to:
- change the name of Fair Work Australia (FWA), most likely to the "Fair Work Commission";
- align the time limit for lodging unfair dismissal applications and general protections (adverse action) claims involving a dismissal to 21 days. This means that the existing time limits for lodging applications will be increased from 14 to 21 days for unfair dismissal claims, and decreased from 60 to 21 days for general protections claims involving a dismissal;
- allow unfair dismissal applications to be struck out if the parties have reached a settlement, or if an applicant fails to attend a proceeding or fails to comply with directions/orders;
- enable costs orders to be made against a party that unreasonably fails to discontinue proceedings or causes the other party to incur costs;
- prohibit enterprise agreement clauses permitting individual employees to opt-out of coverage of the agreement altogether and move to more individually rewarding contract arrangements;
- ban the making of an enterprise agreement with only one employee;
- enable the striking out of frivolous or vexatious modern award variation applications;
- allow a broader range of parties to make modern award variation applications to remove ambiguities or uncertainties;
- require applicants for "scope orders" to take all reasonable steps to notify other relevant bargaining representatives of the application. These types of orders allow FWA to determine the scope of coverage of a proposed enterprise agreement, if a party requests it, where the parties themselves are unable to agree;
- restrict the content of employee bargaining representative notices to the matters prescribed in the FW Act; and
- prevent an individual union official being a bargaining representative for employees in an enterprise agreement negotiation, for whom the official's union does not have coverage.
Some more controversial recommendations made by the panel remain the subject of consultation with employer and employee groups, and include recommendations to make arbitration available in deadlocked greenfield agreement negotiations, and to extend the right of employees to seek flexible working arrangements in a wider range of circumstances.
The Government has said that a second tranche of changes to the FW Act may be introduced early next year if agreement can be reached on the panel's other recommendations.
Separate changes to the FW Act to cover state public servants
The Fair Work Amendment (Transfer of Business) Bill 2012 seeks to amend the FW Act to provide for the protection of employees' terms and conditions of employment when they are "transferred" from a state public sector employer to a national system employer.
For those protections to apply there must be a connection between the old and new employers, which will include a transfer of assets or an outsourcing arrangement.
The protection will be achieved through the creation of a new federal instrument that effectively "copies" the existing terms and conditions in the relevant state award or agreement. This will mean that private sector employers who employ former state government employees to perform similar work may, in certain circumstances, be covered by the new instrument.
Equivalent laws already cover public sector employees in Victoria, the Australian Capital Territory and the Northern Territory.
Legislative protection for employee entitlements owed when employers become insolvent
The Fair Entitlement Guarantee Bill 2012 will replace the GEERS system, which currently supports employees who are owed entitlements after their employment has ended due to the liquidation or bankruptcy of their employer.
The new scheme will provide a monetary "advance" to employees where the end of their employment is linked to the insolvency or bankruptcy of their former employer or where their employment is affected by a deed of company arrangement.
The amount of the "advance" will be based on the employee's unpaid entitlements to accrued but untaken annual leave and long service leave, payment in lieu of notice (capped at 5 weeks' pay), redundancy/severance payment (capped at 4 weeks' pay for each year of service) and wages (capped at 13 weeks' pay).
In addition to having the right to seek an internal Department of Education, Employment and Workplace Relations review if entitlements under the scheme are disputed, employees will now also be able to challenge those internal review decisions in the Administrative Appeals Tribunal.
Please contact your local Hunt & Hunt team if you have any questions about how these important legislative changes may impact you.
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Shawn Skyring (North Ryde)
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