The Fair Work Bill – What Does It All Mean?

On 25 November 2008, the Fair Work Bill was tabled into Parliament. The Bill forms the substantive legislation necessary to achieve the policy aims outlined in Rudd's April 2007 policy entitled 'Forward with Fairness'.

The Bill extends upon the changes to the Workplace Relations Act 1996 made in March 2008 and will, when passed and given royal assent, lead to the Workplace Relations Act 1996 being wholly repealed and replaced with a new Fair Work Act. 

A further Bill will be introduced into Parliament early next year to deal with transitional and consequential issues necessary to transition from the current workplace relations system to the new system proposed under the Fair Work Bill.

The Senate Standing Committee on Education, Employment and Workplace Relations must conduct its enquiry into the Bill and report to government by 27 February 2009.  This should enable the Bill to be passed through both houses of Parliament in March 2009 so that the government may adhere to its timeline for implementation as follows:

• 1 July 2009 – establishment of the new body Fair Work Australia and introduction of new provisions relating to unfair dismissal;
• 1 January 2010 – all other aspects of the new Act take effect.

Who Does the Fair Work Bill Cover?

The Fair Work Bill covers all national system employees.  National system employees are defined as employees of corporations, flight crew officers, maritime and waterside workers employed within Australia and all employees in the territories.

The Bill does not presently address employees of unincorporated employers in Victoria which are currently covered by the federal system by virtue of the referral of industrial powers exercised by the Kennett state government in November 1996. 

It has been anticipated that a new reference of powers may be negotiated to enable the Fair Work Bill to apply equally to all employees of both Victorian incorporated and unincorporated businesses. 

Presently no other State has agreed to refer its powers to the federal government.  As such, unincorporated businesses outside Victoria will not be subject to the Fair Work changes.

What Does the Fair Work Bill Cover?

The Fair Work Bill outlines provisions relating to:

A. Terms and conditions of employment, including:

• The National Employment Standards;
• Modern Awards;
• Enterprise Agreements;
• Workplace Determinations (arbitration); and
• Minimum Wages;

B. Rights and responsibilities of employers, employees and unions, including:

• Sham contractor arrangements;
• Protection against discrimination;
• Unfair dismissal;
• Unlawful termination;
• Industrial action;
• Right of entry; and
• Stand down;

C. Compliance, enforcement and administration, including: 

• The establishment and powers of Fair Work Australia ('FWA');
• The establishment and powers of the Fair Work division of the Federal Court and Federal Magistrates Court;
• The establishment and powers of the Fair Work Ombudsman within Fair Work Australia.

Who is Fair Work Australia?

FWA will be established to replace:

• the Australian Industrial Relations Commission;
• the Australian Fair Pay Commission;
• the Workplace Ombudsman;
• the Workplace Authority; and
• the Australian Building and Construction Commission.

Fair Work Australia will act as a 'super-agency' which has functions in relation to most aspects of minimum terms and conditions of employment and employer, employee and union rights and responsibilities.

Minimum Wage Entitlements under the Fair Work Bill

As outlined above, FWA (constituted by a Minimum Wage Panel) will succeed the Australian Fair Pay Commission in its role to set a national minimum wage.

FWA must conduct an annual wage review each financial year and in doing so:

1. may make determinations to set, vary or revoke minimum rates contained within modern awards; and
2. must make a national minimum wage order which shall apply to employees who are not covered by a modern award or enterprise agreement.

In addition to setting down provisions for establishing minimum rates of pay, the Bill outlines method and frequency of pay provisions. These provisions will act to override the provisions of the Victorian Workers' Wages Protection Act 2007 which comes into operation from 1 December 2008 and will govern deductions from employees' wages.

Both the Fair Work Bill and Victorian Workers' Wages Protection Act 2007 operate to prohibit deductions being made from an employee's pay except where the deduction is authorised in writing and is principally for the employee's benefit, or under an enterprise agreement, modern award or other legislation.

Summary

The amendments proposed under the Fair Work Bill, when passed, will operate as arguably the most significant change to industrial relations since 1904.

It is vital that employers familiarise themselves with how the Fair Work changes will impact on their employment practices.  Where necessary, changes should be considered now to ensure that full compliance with the new requirements is achieved.

This article appears courtesy of Mason Sier Turnbull