Government Moves to Change Fair Work Act


Government Moves to Change Fair Work Act

The Federal Government has introduced a suite of industrial relations changes into Federal Parliament.  The proposals affect important areas, including annual leave, individual flexibility arrangements, greenfields agreements, protected industrial action and union rights of entry.

These changes follow the Government’s move to re-establish the Australian Building and Construction Commission and change the registered organisations regime, both initiated in late 2013. Many of the changes are also in line with the Coalition’s pre-election policy on industrial relations.

What are the Federal Coalition’s major changes?

The following are the key changes to the Fair Work Act 2009 (Cth) (FW Act) proposed in the Government’s Fair Work Amendment Bill 2014 (Cth):

Annual leave

  • It will be made clear that annual leave loading is not payable to an employee on the termination of their employment unless there is an express obligation to do so under an enterprise agreement or modern award.
  • It will also be made clear that annual leave cannot be accrued or taken during a period when an employee is on workers compensation.

Individual Flexibility Arrangements (IFAs)

  • The existing IFA framework in the FW Act will be retained, which allows an employee and their employer to enter into an arrangement which varies the effect of a modern award or an enterprise agreement for that employee, in order to meet the genuine needs of the parties.
  • Any agreed IFA must result in the employee being better off overall than if no IFA were agreed to.  It is proposed that the FW Act be amended to make it clear that non-monetary benefits can be considered as part of that “better off overall” test.  An employee agreeing to an IFA will be required to give a written statement about why they believe that the IFA meets their genuine needs and why they will be better off overall under the terms of the IFA.
  • The notice period for terminating IFAs will be extended from 28 days to 13 weeks.
  • Enterprise agreements will not be able to restrict the use of IFAs to one or two conditions.  Instead, IFAs may cover arrangements about when work is performed, overtime and penalty rates, allowances and leave loading, if these are dealt with in the enterprise agreement.

Greenfields agreements

  • Negotiations over enterprise agreements for new projects (greenfields agreements) with a union or unions who will represent the majority of future employees must be conducted in good faith and, if appropriate notice is provided by an employer, completed within three months of negotiations starting.  Those good faith bargaining obligations will not extend beyond any such three month negotiation period.
  • If agreement cannot be reached within three months, the Fair Work Commission (FWC) will have the power to make and approve an agreement if it is satisfied that it passes the better off overall test, is consistent with prevailing pay and conditions within the relevant industry for equivalent work, and that the union/s to be covered by the agreement are able to represent the majority of future employees.  The FWC may also have regard to the prevailing pay and conditions in the geographical area where the project is to be completed.

Protected industrial action – no more ‘strike first, talk later’

  • Protected action ballot order applications will only be able to be made once bargaining has commenced, either voluntarily or where a majority support determination has been made.

Union rights of entry

  • Union rights of entry will be pared-back to laws modelled on the pre-Fair Work regime.  This will involve allowing unions to enter a workplace only if they:
    • are covered by an enterprise agreement which applies to the workplace, or
    • are invited by a member or employee they are entitled to represent. Employees that wish to remain anonymous when inviting a union will be able to apply to the FWC for an ‘invitation certificate’ to be issued to a union.
  • The FWC will have expanded powers to resolve right of entry disputes, including by suspending, revoking or imposing conditions on an entry permit.
  • Employers will no longer be required to provide union officials with travel and accommodation to remote sites, and unions will no longer be able to insist on addressing workers in their lunch room.

Other changes

An employer will be required to give an employee a reasonable opportunity to discuss with them a request for extended unpaid parental leave (beyond the initial 12 month period) before refusing any such request.

The FWC will have clearer powers to dismiss unfair dismissal proceedings ‘on the papers’ in certain circumstances, including where there has been a non-attendance of a party to a conference or hearing, non-compliance with an order or direction of the FWC, or failure to discontinue an application after a settlement agreement has been concluded.

Transfer of business rules in relation to the voluntary transfer of employees between associated entities will be simpler.  A “voluntary transfer” will occur where the employee has sought to become employed by the new employer at the employee’s initiative.

Workers who are underpaid will receive interest on the unpaid back pay held for them by the Fair Work Ombudsman (FWO), which is currently kept by the Federal Government.

What has the government left out?

Interestingly, this suite of changes leaves out several amendments that were proposed by the Coalition when it was in opposition, including that:

  • the FWC’s new anti-bullying jurisdiction be extended to expressly cover the conduct of union officials towards workers and employers, and to restrict access to that jurisdiction to those workers who have first sought help, advice or assistance from a work health and safety regulator
  • small businesses would be given immunity from FWO penalties for any mistaken underpayments, provided FWO advice was previously sought
  • the FWC, before approving an enterprise agreement, would need to be satisfied that the negotiating parties had considered and discussed ways to improve productivity, and
  • protected industrial action could only occur if the FWC was satisfied that there had been genuine and meaningful talks between workers and businesses at the workplace, that the claims made by both parties were ‘sensible and realistic’, and that the claims made would not affect productivity.

The Government’s controversial proposed paid parental leave scheme, which is coming under renewed scrutiny, still appears set to be introduced from July 2015.