News & Events

Government commences Fair Work Act reform

Submitted By Firm: Corrs Chambers Westgarth

Contact(s): John Tuck

Author(s):

John Tuck (Partner), Jacqueline Parker (Special Counsel) & Joshua Levy (Graduate Lawyer)

Date Published: 2/27/2014

Article Type:

Share This:

On 27 February 2014, the Government introduced the Fair Work Amendment Bill 2014 (Amendment Bill) into federal parliament.

This In Brief summarises the main changes to the FW Act that will occur if the Bill is passed in its present form.

Greenfields agreements

The Amendment Bill proposes a number of changes to the greenfields agreement process intended to prevent employers from being compelled to agree to inflated wages and conditions and employment preference in order to avoid delays to a project. These changes will improve the certainty around major developments and in particular major infrastructure projects that are critical to improved productivity and job creation. The changes are:

  • the extension of the good faith bargaining requirements to single-enterprise greenfields agreements;
  • provision for an employer to apply to the Fair Work Commission (FWC) for an “agreement” to be approved where the parties are unable to reach agreement in a reasonable period following a three month negotiation period notified by the employer; and
  • an approval requirement that the FWC be satisfied that an “agreement” approved by the FWC in the circumstances above provides “for pay and conditions that are consistent with the prevailing pay and conditions with the relevant industry for equivalent work”.

Right of entry

The Amendment Bill proposes to wind back recent changes and further amend the right of entry provisions in the FW Act by:

  • abolishing the obligations on an employer or occupier to organise transport and accommodation arrangements to support the exercise of entry rights by permit holders at work sites in remote areas;
  • restoring former rules relating to the default location of interviews and discussions, meaning that permit holders must once again comply with reasonable requests by employers to conduct interviews or hold discussions in particular rooms or areas of a work site and to take particular routes to reach those areas;
  • broadening the power of the FWC to deal with disputes including those concerning the frequency of visits by permit holders to work sites for discussion purposes (the FWC would no longer be limited to making an order where satisfied that the frequency of entry would require “an unreasonable diversion of the occupier’s critical resources”); and
  • limiting the permit-holder’s entry rights to hold discussions to premises where:
    • the permit-holder’s organisation is covered by an enterprise agreement applying to work performed on the premises; or
    • the permit holder is invited by a person who works on the premises and is a member or prospective member of the permit holder’s organisation (the FWC will have power to issue an “invitation certificate”).

Transfer of business

In order to avoid applications having to be made to the FWC to avoid the transfer of industrial instruments between associated entities where an employee seeks out an opportunity in an associated entity, the Amendment Bill proposes that there will not be a transfer of business where:

  • an employee becomes employed by an associated entity of their old employer; and
  • the employee sought out that opportunity on their own initiative prior to the termination of their employment with the old employer.

Individual flexibility arrangements

Amendments have also been proposed to improve the utility of individual flexibility arrangements by:

  • requiring enterprise flexibility terms to permit individual flexibility about all five minimum matters listed in the model flexibility term; namely arrangements about when work is performed, overtime rates, penalty rates, allowances and leave loading;
  • allowing for unilateral termination only upon 13 weeks’ notice (rather than the current 28 days’ notice);
  • including a legislative note to the effect that, in considering whether an employee is better off overall under the individual flexibility arrangement, benefits other than a payment of money may be taken into account; and
  • excusing an employer from contravening a flexibility term if the employer reasonably believed that the requirements of the term had been complied with.

However, the additional certainty and flexibility for businesses comes with an additional administrative burden. Employees entering into an individual flexibility arrangement will now be required to give a written statement that indicates why they believe an individual flexibility arrangement under a modern award or enterprise agreement meets their needs and leaves them better off.

The amendments will prevent the practice of making enterprise agreements with minimal capacity for individual flexibility arrangements because new enterprise agreements made after the commencement of the relevant provisions would be required to include a flexibility term that allows for variation of all five minimum matters..

Protected action ballot orders

The Amendment Bill proposes that an application for a protected action ballot order will not be able to made until the employer is obliged to give employees notice of representational rights in bargaining (reversing the effect of the decision of the Full Federal Court in JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297).

Annual leave and unpaid parental leave

The National Employment Standards (NES) currently require annual leave paid out on termination of employment to be paid at the rate that would have been payable if the employee had taken the period of leave. This caused confusion in relation to annual leave loading, which some modern awards required to be paid during a period of leave but excluded from being paid on termination of employment (apparently in breach of the NES provision).

The Amendment Bill proposes that the NES will require annual leave on termination of employment to be paid out at the base rate of pay.

Amendments will also make clear that annual leave entitlements will not accrue during a period in which an employee is absent from work and in receipt of workers’ compensation entitlements, even if this is permitted under the relevant State statute. This will place all national system employees on workers’ compensation in the same position in respect of leave accrual.

It is proposed that employers will be prohibited from refusing requests for extended unpaid parental leave until they have given the employee a reasonable opportunity to discuss the request. The Explanatory Memorandum anticipates that such discussions will be held in person or over the phone but not by email or text message.

Dismissal of unfair dismissal applications by FWC

The Amendment Bill proposes a more streamlined process in relation to the dismissal of unfair dismissal applications by the FWC. The FWC will no longer be required to hold a hearing or conduct a conference when considering whether to dismiss an unfair dismissal application under section 399A (non-compliance with directions etc) or section 587 (no reasonable prospects of success etc).

However the FWC must first invite relevant parties to provide further information that relates to whether the FWC should exercise its power to dismiss and consider that information before exercising the power.

Where to next?

The Explanatory Memorandum anticipates that there will be a Senate inquiry into the Amendment Bill and that the proposed changes will be reviewed as part of the “Productivity Commission review of the workplace relations framework” that is scheduled to commence this year.

The Bill is unlikely to be passed until after 30 June 2014, when the composition of the Senate changes and the Government has better prospects of securing passage of the legislation.

Find a Member

View or print a complete ELA member list »

Client Successes

Altra Industrial Motion Inc.

Altra Industrial Motion Inc. has multiple locations in the U.S., as well as Central America, Europe, and Asia. The Employment Law Alliance has proved to be a great asset in assisting us in dealing with employment issues and matters in such diverse venues as Mexico, Australia, and Spain. We have obtained excellent results using the ELA network for matters ranging from a multi-state review of employment policies to assisting with individual employment issues in a variety of foreign jurisdictions.

In one instance, we were faced with an employment dispute with a former associate in Mexico that had the potential for substantial economic exposure. The matter had been pending for over a year, and we were not confident in the employment advice we had been receiving. I obtained a referral to the ELA counsel in Mexico, who was able to obtain a favorable resolution of the dispute in only a few days. Based on our experiences with the ELA, we would not hesitate to use its many resources for future employment law needs.

American University in Bulgaria

In my career I have been a practicing attorney, counsel to the Governor of Maine, and CEO of a major public utility. I have worked with many lawyers in many settings. When the American University in Bulgaria needed help with employment litigation in federal court in Syracuse, New York, we turned to Pierce Atwood, the ELA member we knew and trusted in Maine, for a referral. We were extremely pleased with the responsiveness and high quality of service we received from Bond Schoeneck & King, the ELA's firm in upstate New York. I would not hesitate to recommend the ELA to any employer.

David T. Flanagan
Member of Board of Trustees 

Arcata Associates

I really enjoyed the Conducting an Effective Internal Investigation in the United States webinar.  We are in the midst of a rather delicate employee relations issue in California right now and the discussion helped me tremendously.  It also reinforced things that you tend to forget if you don't do these investigations frequently.  So, many, many thanks to the Employment Law Alliance for putting that webinar together.  It was extremely beneficial.

Lynn Clayton
Vice President, Human Resources

Barrett Business Services, Inc.

I recently participated in the ELA-sponsored webinar on the Employee Free Choice Act.  I was most impressed with that presentation.  It was extremely helpful and very worthwhile.  I have also been utilizing the ELA's online Global Employer Handbook.  This compliance tool is absolutely terrific. 

I am familiar with several other products that purport to provide up-to- date employment law information and I believe that this resource is superior to other similar compliance manuals.  I am delighted that the ELA provides this free to its members' clients.

Boyd Coffee Company

Employment Law Alliance (ELA) has provided Boyd Coffee Company with a highly valued connection to resources, important information and learning. With complex operations and employees working in approximately 20 states, we are continually striving to keep abreast of specific state laws, many of which vary from state to state. We have participated in the ELA web seminars and have found the content very useful. We appreciate the ease, cost effectiveness and quality of the content and presenters offered by these web seminars.  The Global Employer Handbook has provided our company with a very helpful overview of legal issues in the various states in which we operate, and the network of attorneys has helped us manage issues that have arisen in states other than where our Roastery and corporate headquarters are located in Portland, Oregon.

Capgemini Outsourcing Services GmbH

As an international operating outsourcing and consulting supplier Capgemini has used firms of the Employment Law Alliance in Central Europe. We were always highly satisfied with the quality of employment law advice and the responsiveness. I can really recommend the ELA lawyers.

Hirschfeld Kraemer

Stephen HirschfeldAs an employment lawyer based in San Francisco, I work closely with high tech clients with operations around the globe. Last year, one of my clients needed to implement a workforce reduction in a dozen countries simultaneously. And they gave me 48 hours to accomplish this. I don't know how I could have pulled this off without the resources of the ELA. I don't know of any single law firm that could have made this happen. My client received all of the help they needed in a timely fashion and on a cost effective basis.

Stephen J. Hirschfeld
Partner 

Hollywood Entertainment Corporation

As the Vice President for Litigation & Associate General Counsel for my company, I need to ensure that we have a team of top-notch employment lawyers in place in every jurisdiction where we do business. And I want to be confident that those lawyers know our business so they don't have to reinvent the wheel when a new legal matter arises. With more than 3400 stores and 35,000 employees operating in all 50 U.S. states and across Canada, we rely on the ELA to partner with us to help accomplish our objectives. I have been delighted with the consistent high quality of the work performed by ELA lawyers. I encourage other in-house counsel to use their services, as well.

Ingram Micro

Ingram Micro is the world's largest technology distributor, providing sales, marketing, and logistics services for the IT industry around the globe. With over 13,000 employees working throughout the U.S. and in 35 international countries, we need employment lawyers who we can count on to ensure global legal compliance. Our experience with many multi-state and multi-national law firms is that their employment law services are not always a high priority for them, and many do not have experts in many of their offices. The ELA has assembled an excellent team of highly skilled employment lawyers, wherever and whenever I need them, and they have proven to be an invaluable resource to our company.

Konami Gaming

Our company, Konami Gaming, Inc., is growing rapidly in a very diverse and highly regulated industry. We are aggressively entering new markets outside the domestic U.S., including Canada and South America. I have had the recent opportunity to utilize the services provided by the ELA. The legal advice was both responsive and professional. Most of all, the entire process was seamless since our Nevada attorney coordinated the services and legal advice requested. I look forward to working with the ELA in the future, as it serves as a great resource to the legal community.

Jennifer Martinez
Vice President, Human Resources

Nikkiso Cryo, Inc.

Until recently, I was unaware of the ELA's existence. We have subsidiaries and affiliates throughout the United States, as well as in Asia, the Middle East and Europe. When a recent legal issue arose in Texas, our long-time Nevada counsel, who is a member of the ELA, suggested that this matter be handled by his ELA colleague in Dallas. We are very pleased with the quality and timeliness of services provided by that firm, and we are excited to now have the ELA as an important asset to help us address employment law issues worldwide.

Palm, Inc.

The ELA network has been immensely important to our company in helping us address an array of human resources challenges around the world. I strongly encourage H.R. executives who have employees located in many different jurisdictions to utilize the ELA's unparalleled expertise and geographic coverage.

Stacy Murphy
Former Senior Director of Human Resources

Rich Products

As the General Counsel for a company with 6,500 employees operating across the U.S. and in eight countries, it is critical that I have top quality lawyers on the ground where we do business. The ELA is an indispensable resource. It has taken the guesswork out of finding the best employment counsel wherever we have a problem.

Jill K. Bond
Senior Vice President/General Counsel, Shared Services and Benefits

Ricoh Americas Corporation

We have direct sales and service offices all over the U.S., but have not necessarily had the need in the past for assistance with legal work in every state where we have a business presence. From time to time, we suddenly find ourselves facing a legal issue in a state where we have no outside counsel relationship. It has been a real benefit to know that the ELA has assembled such an impressive team of experts throughout the U.S. and overseas.

A few years ago, we faced a very tough discrimination lawsuit in Mississippi. We had never had to retain a lawyer there before. I was absolutely delighted with the Mississippi ELA firm. We received an excellent result. They will no doubt handle all of our employment law matters in Mississippi in the future. I have also obtained the assistance of several other ELA firms around the U.S. and have received the same outstanding service. The ELA is a tremendous resource for our company.

Roberts-Gordon LLC

Our affiliated companies have used the Employment Law Alliance in connection with numerous acquisitions, and have always been extremely pleased with our ability to obtain the highest quality legal advice on due diligence issues from jurisdiction to jurisdiction. We have found the Employment Law Alliance firms to be not only first rate with respect to their legal advice but also responsive and timely in assisting us with federal and state law issues critical to our due diligence efforts. We consider the Employment Law Alliance to be an important part of our team.

Rockwell Collins, Inc.

We have partnered with many ELA firms on the development and execution of case management strategies with very positive results. We have been very pleased with the legal advice and counsel provided by the law firms we have utilized who are affiliated with the Employment Law Alliance. The ELA firms we have worked with are customer focused, responsive, and thorough in their approach to handling labor and employment law matters.

Elizabeth Daly
Assistant General Counsel

Sanmina-SCI

Sanmina-SCI has facilities strategically located in key regions throughout the world. Our customers expect that we will provide them with the highest quality and most sophisticated services in the marketplace. We have that same expectation for the lawyers with whom we do business. With operations in 17 countries, we need to be certain that we have a team of lawyers working together to address our employment law needs worldwide. The ELA has delivered exactly what it promised-- seamless and consistent high quality services delivered in each locale around the globe. It has quickly become a key asset for our human resources department.

Starwood

We own, manage, and franchise hotels throughout the U.S. and in more than 90 countries. With more than 145,000 employees worldwide, ensuring that we comply with the complex web of local labor and employment laws in every one of these jurisdictions is a daunting task. The Employment Law Alliance has served as an important resource for us and we have benefited greatly from its expertise and long reach. When a legal dispute or issue has arisen in some far-flung place, Employment Law Alliance lawyers have always provided responsive, practical, and cost-effective assistance.

Wilmington Trust Corporation

Wilmington Trust has used the ELA to locate firms in California, Washington State, Georgia, and Europe. Our experience with the ELA lawyers with whom we have worked has always been one of complete satisfaction and prompt, practical advice.

Michael A. DiGregorio
General Counsel