The key IR cards Labor has laid on the table

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The first steps in the Government’s makeover of industrial relations have been taken, reports PETER VITALE. Early signs show that business will be dealt more of a reformation than a revolution.

By Peter Vitale

Industrial relations laws in 2008

The Rudd Government started to lay its IR cards on the table when Workplace Relations Minister, Julia Gillard, introduced the Workplace Relations Amendment (Transition to Forward with Fairness) Bill to Parliament last week.

At the same time Gillard revealed a detailed discussion paper on the proposed 10 minimum legislative standards for employees, which will replace the five standards currently fixed by the WorkChoices legislation. 

What is clear from these new proposals is that the Government can’t really be described as “tearing up” WorkChoices, despite the planned abolition of Australian Workplace Agreements.

The new Government appears to have accepted that large sections of WorkChoices are popular among important sections of the economy, including small and medium enterprises.

When will this legislation be in force? The Coalition appears to have dropped its objections to the laws and it is looks likely AWAs will be abolished once a Senate inquiry into the laws finishes in mid-April. In a press conference held after lunchtime in Canberra today, Opposition workplace relations spokeswoman Julie Bishop said the Coalition now accepts that Labor’s IR laws “strike a fair balance between the interests of employers and employees”.

AWAs out – ITEAs in

Perhaps the most significant change in the transition bill is the abolition of AWAs, and in the longer term all statutory individual agreements.

Until the legislation comes into effect employers have a window for implementing new AWAs. But anecdotal evidence suggests that many employers see AWAs as on the nose with employees and interest levels have sunk since Christmas.

In place of AWAs employers will have the chance, up to the end of 2009, to implement Individual Transitional Employment Agreements (ITEAs).

But to take advantage of ITEAs, employers must already have employees employed under AWAs.

The ITEA must also pass a new “no disadvantage test”, which replaces the Howard government’s “fairness test”.

In the case of ITEAs, the no disadvantage test is to be measured against existing collective agreements if any, in preference to relevant awards. In other words the bar will already be set higher for many employers than it was for AWAs.

Collective agreements and the no disadvantage test

Under Labor’s new laws, employers will still be able to make collective agreements, with or without unions. Agreements must pass the “no disadvantage test” (NDT). The new NDT reflects more closely the pre-WorkChoices position than does the fairness test, but despite Labor’s campaign positioning there isn’t any real indication that there will be any difference of substance. Collective agreements must be assessed against the relevant award.

The transition bill might also resuscitate a number of pre-WorkChoices Certified Agreements, as it introduces provisions that would enable those agreements to be varied and extended.

In other words, if there is a Certified Agreement in place, unions can demand that wage rates and other conditions be varied, thereby avoiding the need to negotiate a WorkChoices collective agreement.

‘Modern awards’

The Government’s desire to avoid offending business early in its term becomes a little more transparent when you reach the part of the transition bill that deals with the modernisation of awards.

The first stated requirement is that modern awards “must be simple to understand and easy to apply, and must reduce the regulatory burden on business”.

The award-making function will be returned to the Australian Industrial Relations Commission, which has the almost Sisyphean task of completely overhauling the current awards of the commission by the end of 2009.

In what will probably prove to be a massive understatement, the president of the AIRC has already described this timetable as “tight”. The hoped-for result is a set of awards that are fewer in number, much slimmer, industry based instruments which will cover only 10 basic conditions.

When combined with the 10 conditions proposed to be introduced from 2010 as legislated “national employment standards” (NESs), federally regulated workplace terms and conditions will look pretty similar to the then controversial list of “allowable award matters” first introduced by the Howard government in 1996.

One really has to wonder whether the “award modernisation” process will make any real inroads into simplifying the terms and conditions of awards that businesses so often find impenetrable.

Unlike the WorkChoices scheme, minimum wages will be determined by the AIRC as part of an award.

A welcome development will be the ability for employers to implement annualised salary arrangements that comply with the specific terms of the award. This is an issue that has led to much uncertainty over many years, and smaller businesses can be quietly hopeful that compliance with award obligations might become easier.

National employment standards

The second stage of the Government’s legislative program is to include the NES as part of the Workplace Relations Act from 2010. So a lot of the terms and conditions traditionally contained in awards will not form part of the legislation itself.

In addition to the existing WorkChoices minimums relating to hours of work, parental leave, annual leave and personal leave, public holidays and notice of termination of employment, the Rudd legislation will add requests for flexible working arrangements, community service leave, long service leave, and redundancy pay entitlements.

Some of these changes will have a significant impact on business. State long service leave entitlements would be eventually abolished in favour of a single national standard, with current employees retaining pre-existing rights under state law, awards or state or federal agreements.

Redundancy pay obligations will extend for the first time to a number of businesses not presently covered, although most state systems have some form of redundancy entitlement applicable to award covered businesses.

The most uncertainty probably surrounds the “right to request” flexible working arrangements. A number of pre-WorkChoices awards contained similar provisions.

Employers also need to be conscious of obligations not to breach federal and state anti discrimination laws when facing a request to accommodate an employee with family responsibilities. It will nevertheless be the first time in Australia that such an obligation will be positively imposed on such a broad range of employers.


The lessons for employers:

  • Much of what the Rudd Government proposes to do will return workplace regulation to an essentially pre-WorkChoices status.
  • Award modernisation offers businesses hope of a simpler system, but don’t bet on it.
  • AWAs will be gone, but the red tape that goes with them probably won’t be missed.
  • The Government is taking a cautious approach to its “winding back” of WorkChoices – unlike some of the changes introduced by the Howard government in its last days, it’s unlikely that employers will be required to comply with rules that no-one has seen before.


Peter Vitale is the principal of CCI Victoria Legal



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