Business likely to get AWA reprieve until April

Businesses are likely to continue to be able to enter into AWAs for at least another six weeks after the Coalition voted to create a Senate inquiry into Labor’s new Iegislation.

Labor yesterday introduced laws into Parliament to begin the transition from WorkChoices to its new industrial relations system. Key matters dealt with by the legislation include:

  • The abolition of AWAs.
  • Introduction of “individual transitional employment agreements”, AWA-like instruments that will operate until 2009.
  • Creation of a no-disadvantage test to apply to the ITEAs.
  • Requirement that the Workplace Authority receive written evidence of an employee’s agreement to go on an ITEA before they commence.
  • Commencement of the award rationalisation process.

The workability of Labor’s new IR laws for business could depend as much on the resources and guidelines given to the bureaucrats who will implement them as the content of the laws themselves, a leading adviser in the area says.

IR practitioner and Australian Business Lawyer managing partner Tim Capelin says the legislation does not appear to contain many surprises and largely reflects Labor’s pre-election commitments.

He says while it is unlikely that there will be a sudden rush of businesses to use the new ITEA once the laws are passed, their workability will depend largely on whether they are administered in a practical and flexible way.

“On its face the new test will be marginally harder to satisfy than the old fairness test, but the biggest problem with the old test was the sense that it was being administered in an overly rigid way. If this test can be administered in a more practical way than the fairness test it may end up being easier to satisfy,” Capelin says.

Australian Chamber of Commerce and Industry chief executive Peter Anderson agrees that it is imperative the Government improves the lodgement process from the previous system by ensuring that bureaucrats aren’t required to vet every single agreement against the test.

The new requirement that the Workplace Authority see evidence that a worker agrees to an ITEA could also add to red tape, Anderson says.

On the whole, however, business groups have been relaxed about the introduction of the bill, with Anderson describing it as a “measured transition” and Australian Industry Group chief executive Heather Ridout saying it is “balanced and workable”.

As for the response of business owners and managers who have to deal with the bill, however, we may still be waiting for some time – the Coalition, which controls the Senate until 30 June, has already voted for an inquiry that is unlikely to report until 18 April.

Because the legislation has been drafted so that AWAs are not abolished until 14 days after it is passed by Parliament, AWAs are now likely to be available to employers for at least another two months.

Labor also plans to introduce a draft of its 10 new national employment standards into Parliament today.


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