WorkChoices Executive Summary

Newcastle Herald 16 February 2006

By Kellie Tranter

The bulk of the Federal Government’s Workplace Relations Amendment (WorkChoices) Act 2005 (Cth) provisions are expected to commence in March 2006.  If we review unbiased statistics about our levels of understanding of the GST after it was introduced in 1996, now is probably a good time to book your ticket on the shuttle from heaven to hell; there is no doubt that the time and expense of understanding, analysing, determining the consequences and implementing the provisions of the “simpler, fairer, national workplace relations system” will be yet another burden on employers and employees.  

After that has sent you cross-eyed, turn back to the fact that Canberra wants the States to hand over their industrial relations powers, but the States continue to resist a proposed ‘unified system’.   So the Federal Government has implemented a ‘piecemeal’ system whereby some employers will be subject to the Federal System but others, like trusts, sole traders and partnerships, will be left in what remains of the State system.   As well as that, complex transitional provisions set out how existing agreements will be affected when businesses move into, and out of, the new national system.

The governments of New South Wales, South Australia, Queensland and Western Australia and the Australian Workers Union are challenging the constitutional validity of the legislation in the High Court, not only to protect workers, as the Labor Governments protest, but also to maintain their own power. It’s impossible at this stage to predict the outcome of this High Court challenge, so for the time being there is considerable uncertainty about whether WorkChoices will operate as the Government intends.   Even if the High Court upholds the Government’s scheme, employers should not be too hasty to adopt all of the scheme’s current provisions.

Because of the speed with which the Act was drafted and the insufficient time allowed for proper review, if WorkChoices survives the constitutional challenges in May the Government inevitably will introduce a spate of amendments to “iron out” any vagueness, ambiguities, omissions and mistakes discovered by employers, employees and the legal profession. 

Perhaps, as the Government says, economic and regulatory reforms like these are needed to boost Australia's international competitiveness and maintain our living standards, but even after repeated requests the Government has produced no proper historical or statistical analysis in support of these reforms, no logical and rational explanation of why positions have been taken or how the changes will really work, and no evidence to demonstrate how WorkChoices will achieve what the Government says it will.  If the need for WorkChoices is so clear why haven't we been given real information instead of political hyperbole and empty rhetoric?  In the end the Australian public will have to implement and live under WorkChoices and only time will tell whether or not the new system is in the best interests of Australians as a whole.

Executive Summary

Agreement-making process:

• agreements operational upon lodgement with the Office of Employment Advocate (OEA), provided there is a declaration signed by the employer and the form of that declaration meets certain requirements set by the OEA.  The OEA is not required to consider or determine whether the requirements of the legislation concerning the making or content of agreements have been met
• minimum conditions of employment to be included in agreements
• no-disadvantage test abolished
• some matters will be specifically excluded from inclusion in workplace agreements – “prohibited content”.  The Federal Government’s WorkChoices booklet indicated it would include matters such as restrictions on labour hire, remedies for unfair dismissals, prohibitions on AWAs, mandatory union involvement in dispute resolution, allowing for industrial action during the term of the agreement, trade union training leave, bargaining fees or paid union members
• agreements must contain dispute settlement provisions
• unilateral termination of workplace agreements possible after nominal expiry date with 90 days’ notice
• WorkChoices states a “person must not apply duress to an employer or employee in connection with an AWA”.  However, requiring the making of an AWA as a condition of engagement does not constitute duress, so employers can require or insist that prospective employees enter into a AWA as a condition of taking them on. 

New minimum employment conditions standard:

• annual leave four weeks, pro rata and cumulative, additional week for shift workers – possible to cash out two weeks at employee’s request
• personal/carer’s leave (including sick leave) 10 days pro rata and cumulative, plus additional two days of unpaid carer’s leave, and two days of paid compassionate leave parental leave one year unpaid
• maximum ordinary working week of 38 hours (there is potential to work an average of 38 hours a week if an averaging period, not exceeding 12 months, is agreed in writing)
• minimum wage rates as determined by the Australian Fair Pay Commission.

• will still exist but conditions may be negotiated away
• no new awards, unless the result of award “rationalisation” or “simplification”
• number of awards will be drastically reduced
• matters covered by the Australian Fair Pay and Conditions Standard,  long service leave, superannuation, redundancy pay by small business employers, notice of termination and jury service no longer allowable award matters
• agreements may modify award entitlements including public holidays, rest breaks (including meal breaks), incentive based payments and bonuses, annual leave loadings, allowances, penalty rates and shift/overtime loadings.

Parties left to resolve their own disputes: 

• all agreements must contain dispute settling procedures
• private dispute resolution services encouraged
• the Australian Industrial Relations Commission can’t settle disputes unless parties agree, or extreme circumstances apply (ie. to ensure health and safety of workers, prevent loss of life, or prevent serious damage to the economy)
• secret ballots required before any protected industrial action  

Unfair dismissal access limited: 

• exemption of businesses with fewer than 100 employees
• no unfair dismissal claims within the first six months of service
• no unfair dismissal for those made redundant
• unlawful dismissal provisions remain available to all under the current system, at the federal level, unlawful termination claims usually involve bringing an action in the Federal Court, a far more costly exercise than bringing an unfair dismissal claim that is heard before the Australian Industrial Relations Commission.  The federal government has “pledged” up to $4,000.00 in legal assistance to be offered to employees in financial need who are bringing unlawful termination claims.

Restricted right of entry for unions: 

• union officials must pass a “fit and proper” test to gain right of entry
• entry for discussion limited to discussion with employees covered by an award or collective agreement
• unions must specify reason for entry
• employers may dictate location of workplace meetings
• revocation or suspension of right of entry for those who breach Federal, State or Territory right of entry laws

The Office of Workplace Services (OWS) is the new “workplace watchdog”.  A workplace inspector will be able to enter a workplace to determine whether any of the following are being, or have been observed: 

• workplace agreements
• awards
• the Australian Fair Pay and Conditions Standard
• minimum entitlements and orders under Pt VIA
• the requirements of the Workplace Relations Act 1996 (WR Act) and its regulations 

Further powers:

• exercise power in relation to workplace determinations and employer undertakings, which are treated as if they were collective agreements
• authority to enter, without force, and make inquiries on premises where he or she believes that work to which an industrial instrument or entitlement applies is being or has been performed
• right to interview any person in the workplace premises they are inspecting, rather than just any employee as per the current provisions able to require a person to tell them who has custody of a particular document relevant to their investigation.

Transitional provisions for those entering and leaving national system:

• businesses moving into the national system from state system will have a three year transition period
• businesses moving out of the national system to a state system will have a  transition period of up to five years

The deferred starting date of most of the changes gives employers time to conduct an audit of their workplace relations to establish what action is required. They should take advantage of that opportunity, with expert assistance if necessary.

Kellie Tranter retains copyright 2006