Employment Law - The New Fair Work Act - What Is It and What Does It Do (1)

Welcome to our 5 Part series on The New Fair Work Act. We hope you find the series interesting and informative. You can find the rest of the series at the links below

• New National Employment Standards
• Contracting with Employees
• Collective Agreements
• Consequences & The Agreement Making Process

On Friday, 20 March 2009, the Fair Work Bill was finally passed by the Australian Senate after Family First’s Senator Fielding voted with the Government after doing a deal in relation to the unfair dismissal provisions. It received Royal Assent on 7 April 2009.

The legislation brings a comprehensive set of legislative changes which takes effect in two main time-frames. On 1 July 2009, that part of the Act dealing with new employment standards and workplace agreements came into effect. On 1 January 2010, that part of the Act dealing with modern awards and unfair dismissal will come into effect.

Overall, the Fair Work Act makes fundamental changes to employment relations as follows:

• It repeals the Workplace Relations Act 1996;
• Provides for a new set of ten national employment standards;
• Ensures the survival of modern awards;
• Determines that minimum wage rates will be provided by Fair Work Australia;
• Restores unfair dismissal rights. The unfair dismissal code will apply initially to all employers with more than 15 full-time employees changing to 15 employees whether full-time, part-time or casual;
• Outlines new rules for collective bargaining such as good faith bargaining provisions and introduces a new “better off overall test” for agreements;
• Phases out individual statutory agreements over time;
• Ensures that parties can bargain over a broader range of matters relating to the employment relationship;
• Implements new changes to the taking of industrial action by unions; and
• Establishes a new independent industrial tribunal called Fair Work Australia to be complemented by new fair work divisions of the Federal Court and of the Federal Magistrates’ Court.

The Fair Work legislation has already abolished Australian Work Agreements. Independent Transitional Employment Agreements (ITEAs) have been introduced in their place. ITEAs provide the new “no disadvantage test” whereby a work agreement must not, on balance, reduce employees’ overall terms and conditions of employment when compared with what is known as a reference instrument which is a previous award or collective agreement that an employee was covered by prior to entering into the new agreement under the new legislation.

ITEAs cannot be introduced after 31 December 2009. Employees who were using individual statutory arrangements prior to 1 December 2007 or who do not terminate individual statutory agreements or who are covered by agreements where the normal expiry date extends beyond 2010, will still be covered by those agreements extending beyond 2010. For example, an AWA made in 2007 with a five year nominal expiry date will go its expressed distance. However, no AWAs or ITEAs will be possible after 2015.