As by now you would be aware, 1 July 2009 heralded a new era in Industrial Relations (IR) legislation, with the Fair Work Act commencing as a national IR system. This new system covers most employees nationally, including those working for a constitutional corporation or a Federal Government department. As of 1 January 2010, two new changes have come into effect – National Employment Standard and Modern Awards. So what exactly are the changes and what do they mean for your business?
The key changes already implemented on 1 July 2009 included Fair Work Australia opening its doors, replacing seven workplace relations agencies; the introduction of new Unfair Dismissal laws, along with a new Fair Dismissal Code and new Adverse Action laws providing a new avenue for employees to make claims against their current or potential employer. The definition of what constitutes a small business changed to 15 full-time equivalent staff, and the nature of Workplace Agreement making changed, shifting back towards a collective bargaining focus.
To date, we have seen the effects of these changes with a sharp increase in claims made against employers, especially through the new Adverse Action provisions and the changes to the Unfair Dismissal laws.
Just as significantly, as at 1 January 2010 two further developments commence as part of the Fair Work Act – the introduction of National Employment Standard (NES) and a new system of national employment awards, Modern Awards. Employers need to make sure they are ready for these changes now. Fair Work Australia has made it clear there will be no excuses for employers who fail to comply with their obligations under these changes.
National Employment Standards
National Employment Standards (NES) detail 10 minimum conditions of employment, replacing the old Minimum Pay and Conditions under Work Choices, and will apply to all employees. They are:
1. Hours of work:
Employees can be required to work a maximum of 38 hours per week, plus “reasonable additional hours”.
2. Request for flexible work arrangements:
An employee who has responsibility for a child under school age or someone under 18 with a disability has a right to request a change in working arrangements.
3. Parental Leave and related entitlements:
Up to 24 months unpaid leave per employed couple (12 months per parent), with the right for one parent to ask for an extension by up to an extra 12 months if they are the only caregiver. This extension can only be refused on reasonable business grounds.
4. Annual Leave:
Four weeks paid leave per year for full-time employees, pro rata for part-time employees.
5. Personal, Carers and Compassionate Leave:
Employees are entitled to 10 days paid personal/sick leave per year of service, plus two days paid compassionate leave per permissible occasion.
6. Community Service Leave:
Employees are entitled to unpaid leave to engage in community service e.g. jury service, rural fire service etc. Employees will be entitled to ‘make up pay’ for up to 10 days to provide jury service.
7. Long Service Leave:
Preserved as is until new national system developed.
8. Public Holidays:
Paid public holidays will also apply to casual employees who are rostered on for that day of work.
9. Notice of Termination and Redundancy:
Employers may need to provide notice of up to five weeks upon termination or redundancy, depending on length of service. Redundancy obligations are as follows (not applicable to small businesses):
Period of continuous service Redundancy Payment Due:
1 to 2 years 4 weeks
2 to 3 years 6 weeks
3 to 4 years 7 weeks
4 to 5 years 8 weeks
5 to 6 years 10 weeks
6 to 7 years 11 weeks
7 to 8 years 13 weeks
8 to 9 years 14 weeks
9 to 10 years 16 weeks
More than 10 years 12 weeks
10. Fair Work Information Statement:
Employees must be provided with a ‘Fair Work Information Sheet’ informing them of their rights and entitlements upon commencement of employment.
See next page for explanation of new Modern Awards system…
The new system of Modern Awards takes effect on 1 January 2010 and provides 122 awards, covering various industries and occupations. Employers should be aware that many industries and occupations which were previously award free, are now covered by a Modern Award. Modern Awards will apply to most employers unless they are party to a registered workplace agreement.
Most conditions within the Modern Award take effect from 1 January 2010, however pay rate changes do not take effect until 1 July 2010 and employers have a five-year transition period (in most but not all cases) to meet the new pay requirements.
Award Flexibility Agreements (designed to replace AWAs) will apply where the Employer and Employee “genuinely” agree to vary arrangements for work, overtime and penalty rates, allowances and leave loading. This cannot happen until after the employee has commenced employment, so cannot be a condition of employment.
There is a general ruling under the Fair Work Act and the Modern Awards which stipulates that an employee cannot be “worse off” under the new system. So if an employee feels that they are worse off under the new system due to a reduction in pay, entitlements or conditions, they can make a claim to Fair Work Australia who will make appropriate arrangements with the employer to ensure the employee is no worse off.
For more information about the Fair Work Act visit: