Commonwealth of Australia Explanatory Memoranda

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FAIR WORK BILL 2009


2008






               THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA







                          HOUSE OF REPRESENTATIVES















                             FAIR WORK BILL 2008





                           EXPLANATORY MEMORANDUM





















    (Circulated by authority of the Minister for Employment and Workplace
                                 Relations,

                      the Honourable Julia Gillard MP)




                             FAIR WORK BILL 2008


OUTLINE


The Fair Work Bill 2008 (the Bill) creates a national workplace relations
system that is fair to working people, flexible for business and promotes
productivity and economic growth.


The Bill implements the following major reforms:


     . it establishes a simple and stable safety net comprising:


          - the NES, which will apply to all employees and guarantee:


               o maximum weekly hours of work;


               o a right to request flexible working arrangements;


               o parental leave and related entitlements;


               o annual leave;


               o personal/carer's leave and compassionate leave;


               o community service leave;


               o long service leave;


               o public holidays;


               o notice of termination and redundancy pay; and


               o provision of a Fair Work Information Statement.


          - modern awards, which provide flexibility and stability for
            employers and their employees and which may include:


               o additional minimum terms and conditions of employment (such
                 as minimum wages, overtime and penalty rates, allowances,
                 representation and dispute settlement) tailored to the
                 needs of the particular industry or occupation to which the
                 award relates; and


               o terms which supplement the NES.


          - national minimum wage orders that apply to award/agreement free
            employees


     . It establishes a new institutional framework for the administration
       of the new workplace relations system comprising:


          - FWA, an independent, statutory body with a range of functions
            and powers, including:


               o facilitating collective bargaining;


               o approving enterprise agreements;


               o adjusting minimum wages and award conditions;


               o dealing with unfair dismissal claims;


               o dealing with industrial action; and


               o settling workplace disputes


          - the Fair Work Ombudsman, whose key function is to promote
            harmonious and cooperative workplace relations and compliance
            with the Bill through education, assistance and advice and,
            where necessary, undertake enforcement activities, such as
            investigation, issuing compliance notices and initiating court
            proceedings.


     . It promotes productivity and fairness through enterprise agreements
       that are tailored to suit the needs of businesses and the needs of
       employees, including by:


          - providing employees and employers with the right to appoint
            persons of their choice to represent them in negotiations for a
            proposed agreement;


          - enabling FWA to facilitate good faith bargaining and the making
            of agreements, including through making bargaining orders and
            dealing with bargaining disputes where the parties request
            assistance; and


          - ensuring that employees covered by an agreement are better off
            overall against the new safety net.


     . It provides a framework for dealing with terms and conditions of
       employment where there is a transfer of business that balances the
       protection of employees' terms and conditions of employment and the
       interests of employers in running their enterprises efficiently.


     . It promotes fairness and representation at the workplace through
       streamlined and simple general protections dealing with workplace
       and industrial rights, including the rights to freedom of
       association and protection against discrimination, unlawful
       termination and sham arrangements (which disguise employment
       arrangements as independent contractor arrangements).


     . It provides genuine unfair dismissal protections for employees with
       a quick, flexible and informal process, an emphasis on re-
       instatement and a Fair Dismissal Code for small businesses.


     . It retains clear, tough rules against industrial action, with the
       right to take protected industrial action during bargaining in
       support of claims in relation to a new enterprise agreement
       following a fair and democratic secret ballot.  This includes
       empowering FWA to make orders to stop industrial action and sets out
       restrictions on payment to employees during periods of industrial
       action.


     . It retains a fair and balanced framework for right of entry for
       officials of organisations and empowers FWA to deal with abuses of
       rights by officials, unreasonable requests by employers and
       disputes.


     . It provides a default right for employers to stand down employees in
       defined circumstances.


     . It enhances compliance with the new workplace relations system by
       providing a single, accessible compliance system, including:


          - the ability of the Fair Work Divisions of the Federal Court or
            the Federal Magistrates Court to make any order considered
            appropriate to remedy a contravention;


          - the right to enforce entitlements under a contract of employment
            that relate to the same subject-matters as the NES or a modern
            award in the Federal Court and the Federal Magistrates Court and
            by inspectors in eligible State and Territory courts; and


          - a new small claims procedure in the Federal Magistrates Court.


FINANCIAL IMPACT STATEMENT


The financial impact is yet to be determined in consultation with the
Department of Finance and Deregulation and once agreed will be included in
the relevant appropriation bills.



REGULATORY ANALYSIS


   1. This document analyses the regulatory implications of the key
      legislative proposals contained in the Fair Work Bill 2008 (the Bill).
      The analysis has been prepared by the Department of Education,
      Employment and Workplace Relations (the Department). The Prime
      Minister and the Minister for Finance and Deregulation have agreed to
      the inclusion of this analysis in the Explanatory Memorandum to the
      Bill and note that the Office of Best Practice Regulation (OBPR)
      agrees that this analysis has effectively documented the regulatory
      implications of the legislative proposals, compared with arrangements
      which existed under the legislative framework of the previous
      Government.


   2. The Prime Minister granted an exceptional circumstances exemption for
      these proposals at the decision making stage. Consistent with best
      practice regulation requirements, the Australian Government (the
      Government) commits to undertaking a post-implementation review within
      two years of the full implementation of these proposals on 1 January
      2010.


INTRODUCTION


   3. The current legislative provisions contained in the Workplace
      Relations Act 1996 (WR Act) are complex and amount to some 1,500 pages
      in length. This compares with the simpler provisions of this Bill
      which amount to fewer than 600 pages.


   4. As the means for fulfilling the election commitments made by the
      Government in Forward with Fairness, released April 2007, and Forward
      with Fairness - Policy Implementation Plan, released August 2007, this
      Bill provides a much needed opportunity to reconceptualise the
      legislation from first principles and ensure that Australia's
      workplace relations legislation:


     . provides a clear and stable framework of rights and obligations;


     . is simple and straightforward to understand in terms of structure,
       organisation and expression; and


     . reduces the compliance burden on business (for example, by avoiding
       'micro-regulation' and overly prescriptive provisions and by
       conferring broad functions and appropriate discretion on Fair Work
       Australia).


Key Elements of the New System


   5. The new workplace relations system will be built on:


     . a strong safety net of 10 legislated National Employment Standards
       for all employees;


     . a modern, simple award system that complements the National
       Employment Standards, providing certainty, flexibility and stability
       for employers and their employees;


     . an enterprise-level collective bargaining system focused on
       promoting productivity;


     . unfair dismissal laws which balance the rights of employees to be
       protected from unfair dismissal with the need for employers,
       particularly small business, to fairly and efficiently manage their
       workforce; and


     . a 'one-stop-shop', Fair Work Australia (incorporating the Fair Work
       Ombudsman), for advice and support on all workplace relations issues
       and enforcement of legal entitlements.


Regulatory Implications


   6. The proposed legislation will have a regulatory impact. The new
      arrangements pose significant implications for employees, employers
      and the broader community. The new provisions centre on six key policy
      areas:


     i) Legislated Minimum Employment Standards;


    ii) Modern Awards;


   iii) Bargaining Framework;


    iv) Unfair Dismissal;


     v) Industrial Action; and


    vi) Institutional Framework.


Summary


   7. Pending the development of a national workplace relations system, the
      Department estimates that up to approximately 85 per cent of
      Australian employees will be covered by the federal workplace
      relations system. The remaining employees will be covered by a state
      industrial relations system in New South Wales, Queensland, Western
      Australia, South Australia or Tasmania.


   8. The Government's policy is to enter into new arrangements with state
      governments to ensure a uniform workplace relations system for private
      sector employers and employees.


   9. The Bill sets out provisions that provide minimum employment standards
      and provide an industrial framework for employers and employees in the
      federal workplace relations system. These provisions are designed to
      strike a balance between the needs of employers and employees and to
      promote fair and productive workplaces.


  10. Each of the sections of this analysis discusses this in detail.


  11. The new legislated minimum employment standards, known as the National
      Employment Standards (NES), contain provisions that provide increased
      access to leave (particularly unpaid leave), provide flexible working
      arrangements and simplify the rules by which the entitlements of
      employees are accrued. Where additional entitlements (including unpaid
      entitlements) are provided under the NES, this will benefit employees
      but may, depending on circumstances, impose a cost on an employer. The
      increased access to flexible working arrangements is designed to
      assist employees to balance their work and personal lives. However,
      businesses are able to refuse access to these provisions on reasonable
      business grounds, which will minimise the disruption of these
      provisions to business. The simplified rules for accruing leave are
      designed to benefit both employers and employees.


  12. The bargaining framework contained in the Bill entails significant
      regulatory change. These include the introduction of good faith
      bargaining, changes to the content of agreements, the creation of a
      single stream of agreement-making, a streamlined process for the
      approval of agreements and the introduction of Fair Work Australia-
      facilitated bargaining for the low paid. These regulations are focused
      on facilitating bargaining where employers and employees are not
      successfully able to bargain together. As a number of the elements of
      the bargaining framework are new to the federal workplace relations
      system and do not have parallels elsewhere, the impact of a number of
      elements of the bargaining framework is difficult to quantify at this
      stage.


  13. The new legislation will expand access to unfair dismissal provisions.
      Approximately 100 000 additional previously exempt businesses, with
      around 3 million employees, will become part of the unfair dismissal
      system. Businesses have 6 or 12 months to assess their employees
      before the employees would be able to contemplate an unfair dismissal
      claim, claims must be lodged within 7 days of dismissal and small
      businesses can avoid defending claims altogether by following the new
      Fair Dismissal Code. While there is likely to be more unfair dismissal
      claims, they should be easier and cheaper to resolve. The unfair
      dismissal system will provide definite benefits for employees in terms
      of job security and mitigate adverse impacts on employers.


  14. Industrial action can have a negative impact, particularly in terms of
      productivity. Regulations that encourage industrial action can have a
      negative impact on the ability of employers to operate their business
      and on the take home pay of employees. Bargaining participants should
      have the right to take protected industrial action and an employer
      should have a right to provide a proportionate response. The
      provisions in the Bill largely retain previous rules on industrial
      action, with some provisions streamlined and simplified.


  15. The institutional framework of the new workplace relations system will
      be a 'one-stop-shop' - Fair Work Australia (FWA). FWA will replace
      seven separate agencies that currently span the institutional
      framework in the federal workplace relations system. The Department is
      not able to directly quantify the impact of the changes to the
      institutional framework in the creation of FWA. However, the
      Department anticipates that employers and employees will benefit from
      this regulatory change by having a central point of contact for
      workplace relations issues, as opposed to spending time and resources
      ascertaining the appropriate institution to contact in relation to
      their issue.


  16. The impact of modern awards is difficult to quantify at this stage.
      The Australian Industrial Relations Commission (AIRC) is currently
      undertaking an award modernisation process to create modern awards to
      come into effect on 1 January 2010. The impact of award modernisation
      rests on the final content of these awards. However, the intention of
      award modernisation is to create modern awards that reduce regulation,
      are relevant to the needs of employers and employees, provide (along
      with the NES) the definition of minimum wages and conditions of
      employment and are fewer in number.


  17. The Department does not anticipate that the impact of these
      regulations will be differential across industries, occupations and
      regions. The Bill creates a federal workplace relations system that
      provides consistent minimum conditions and industrial frameworks for
      all employers and employees within the system.


  18. As mentioned above, the Government is committed to monitoring the
      impact of the provisions contained in the Bill through a post-
      implementation review. This review will provide a comprehensive
      analysis of how the Government's new workplace relations system is
      operating and its impact on employers, employees, the community and
      governments. The review will assess if the provisions in the Bill have
      led to any differential impacts across regions, industries and
      occupations.


Consultation


  19. In Forward with Fairness the Government committed to taking a measured
      and consultative approach to developing its substantive workplace
      relations legislation. As detailed in Table A1 of Attachment A, the
      Government consulted extensively with a wide range of stakeholders,
      including peak union and employer bodies and state and territory
      workplace relations ministers. To summarise, the key stakeholder
      groups that have provided valuable input to the development of the
      Bill are:



     . Workplace Relations Ministers' Council (WRMC), a council of federal,
       state and territory ministers responsible for workplace relations
       matters in their respective jurisdictions. The New Zealand Minister
       is invited to attend WRMC as an observer.


     . High Level Officials Group (HLOG) consists of officials from the
       federal government and each state and territory. It was established
       at the WRMC meeting on 1 February 2008 to facilitate collaboration
       on the development of the new national workplace relations system
       for the private sector.


     . National Workplace Relations Consultative Council (NWRCC) is a
       tripartite body comprised of seven representatives from the
       Australian Council of Trade Unions (ACTU) and seven employer
       representatives. It is chaired by the Deputy Prime Minister and
       under the NWRCC Act is required to meet at least once every six
       months on a confidential basis to consider workplace relations
       matters on a national level.


     . Committee on Industrial Legislation (COIL) is a sub-committee of
       NWRCC that considers workplace relations and related legislative
       matters.


     . Business Advisory Group (BAG) was established on 20 February 2008
       and is chaired by Mr John Denton, Managing Partner, Corrs Chambers
       Westgarth. It involves representatives from the construction,
       mining, transport, hospitality, retail, banking, labour hire and the
       media industries meeting on a confidential basis to discuss key
       issues relating to the Bill.


     . Workers Advisory Group (WAG) was established on 20 February 2008 and
       is chaired by the Deputy Prime Minister. It consists of high-level
       union representatives meeting on a confidential basis to discuss key
       issues relating to the Bill.


     . Small Business Working Group (SBWG) was established on 20 February
       2008 and is chaired by the Hon Dr Craig Emerson MP, Minister for
       Small Business, Independent Contractors and the Service Economy. It
       involves representatives of small businesses, including peak small
       business organisations, meeting on a confidential basis to provide
       advice to the Government on the development of the Fair Dismissal
       Code.


     . Union Working Group on the Fair Dismissal Code (UWG) was established
       on 20 February 2008 and is chaired by the Hon Dr Craig Emerson MP,
       Minister for Small Business, Independent Contractors and the Service
       Economy.


Consultation on National Employment Standards


  20. The Government has also undertaken extensive consultation on the
      proposed NES. The Government released the NES and invited submissions
      on the NES exposure draft and discussion paper on 14 February 2008. A
      total of 129 submissions were subsequently received from a wide range
      of stakeholders, including employer and employee representatives,
      community groups, businesses, state governments and interested
      individuals. After consideration of the submissions received, the
      Government released the proposed NES on 16 June 2008.


Outline


  21. This document is structured to provide an analysis of the regulatory
      implications of the Bill in accordance with the six key policy areas
      noted above. Each section begins with an outline of the arrangements
      in place under the system that applied at the time the Government
      assumed office. This includes the 'Work Choices' amendments to the WR
      Act. Each section then includes details on how the Government's new
      policies will operate, followed by an impact analysis of these new
      arrangements. The analysis concludes with details on how the
      Government will review and monitor the new provisions.


1. LEGISLATED MINIMUM EMPLOYMENT STANDARDS

Current Arrangements


  22. The current safety net of legislated minimum employment standards
      under the WR Act came into effect with Work Choices and the
      implementation of the Australian Fair Pay and Conditions Standard (the
      Standard). The Standard contains five basic entitlements, detailed as
      follows:


     . Basic rates of pay and casual loadings: prescribed in Australian Pay
       and Classification Scales (Pay Scales), the Federal Minimum Wage or
       special Federal Minimum Wages for junior employees, employees to
       whom training arrangements apply and employees with a disability.


     . Maximum ordinary hours of work: employees cannot be required or
       requested to work more than 38 hours per week plus reasonable
       additional hours; or, an average of 38 hours per week over a period
       of up to 12 months (if the employee and the employer agree in
       writing) and reasonable additional hours.


     . Annual leave: all employees, other than casual employees, have a
       minimum paid entitlement to annual leave based on their calculated
       'nominal hours' worked. For an employee who works 38 hours or more
       per week for 12 months, the entitlement to annual leave is four
       weeks. For shift workers the entitlement is five weeks of leave per
       year if they worked 38 hours per week.


     . Personal leave (includes sick leave, carer's leave and compassionate
       leave): an employee is entitled to ten days of paid personal leave
       per annum after 12 months of service for an employee who works 38
       hours per week. This entitlement is pro-rated for employees who have
       not completed 12 months service. A further entitlement of two days
       of unpaid carer's leave per occasion in the event of an unexpected
       emergency for employees who have exhausted their personal leave
       entitlement or are casual.


     . Parental leave and related entitlements: separate provision is made
       for maternity, paternity, adoption and related kinds of leave. The
       primary entitlement is to 12 months' unpaid leave, to be shared
       between both parents. Leave must be taken separately in a single
       continuous period, except for a one-week period around the birth of
       the child (three weeks in the case of adoption) which may be taken
       concurrently.


  23. These five standard entitlements apply to all employers and employees
      subject to the WR Act. While the specific nature of the application
      varies depending on the relevant industrial instrument, the five
      entitlements generally prevail unless a more favourable outcome is
      provided in a preserved award (for annual leave, personal/carer's
      leave and parental leave), workplace agreement or common law contract
      of employment.


  24. The current provisions include both the entitlement and machinery
      provisions about how the entitlement is determined or calculated.


Government's Policy on Legislated Minimum Employment Standards


  25. The Government's key objective is to address public concern about the
      adequacy of the safety net under the current workplace relations
      system by providing a safety net which is fair for employers and
      employees and supports productive workplaces. The NES is structured in
      a way that ensures the provisions are easy to understand and apply for
      employers and employees at the workplace.


Proposed Changes


  26. The NES provisions, as proposed in the Bill, will apply to all
      employees covered by the federal system and will come into effect from
      1 January 2010. Minimum wages are not included in the NES as they will
      be provided in modern awards. The ten NES are:


     . Maximum weekly hours of work: the NES will provide for the same
       quantum of maximum ordinary hours of work (38 hours for full time
       employees) as provided under the Standard while making additional
       provisions of maximum ordinary hours for part-time employees.


       The Standard allows for averaging of hours, provided there is
       agreement in writing and the averaging period is no longer than 12
       months. Under the Standard, hours worked in excess of 38 hours in a
       week are not considered additional (or subject to the reasonableness
       factor) if these hours are worked in accordance with an averaging
       agreement.


       Under the proposed NES, a modern award or enterprise agreement may
       provide for averaging of hours of work. An employee not covered by
       an award or an agreement may agree in writing to average hours over
       6 months or less. A key change is that where additional hours worked
       are based on an averaging arrangement, they will be subject to
       reasonableness factors. The averaging provision/arrangement will be
       taken into account in considering whether additional hours are
       reasonable.


     . Requests for flexible working arrangements: the Standard does not
       provide an entitlement to request flexible working arrangements. The
       NES will provide a new legislated entitlement for parents of, or
       having responsibility for the care of, a child under school age to
       request a change in working arrangements to assist with the care of
       the child. An employer will only be able to refuse this request on
       reasonable grounds. The employer's decision will not be subject to
       review.


     . Parental leave and related entitlements: both the Standard and the
       NES provide for maternity, paternity and adoption leave. The NES
       will provide both parents with the right to separate periods of up
       to 12 months unpaid parental leave. Alternatively, one parent will
       have the right to request an additional 12 months of leave, which
       employers will only be able to refuse on reasonable business
       grounds. This builds on the previous entitlement under the Standard
       of 12 months unpaid leave, shared between parents.


     . Annual leave: both the Standard and the NES provide the same
       coverage and quantum of annual leave entitlement. A key change under
       the NES is a simpler manner of accrual and the concept of 'service'
       for calculating the entitlement. Paid annual leave will accrue and
       then be taken on the basis of an employee's ordinary hours of work.
       The NES will enable modern awards to supplement the NES if the
       effect of those terms is not detrimental. This could include
       provisions that, for example, allow an employee to take twice the
       annual leave required by the NES but at half the rate of pay. The
       cashing out of annual leave may be provided in modern awards and by
       enterprise agreements, subject to a remaining entitlement balance of
       4 weeks leave. Award and agreement free employees may also cash out
       their annual leave, as long as 4 weeks leave remains.


     . Personal/carer's leave and compassionate leave: the NES will not
       change the quantum of the entitlement to personal/carer's leave and
       compassionate leave but will extend unpaid compassionate leave to
       casual employees. In addition, the number of paid carer's leave days
       which can be used is no longer capped at 10 days per year. The NES
       will also replace complex rules about the accrual and crediting of
       paid personal/carer's leave with a single, simple rule that
       consolidates notice and evidence rules for taking leave. The NES
       will enable modern awards to make provision for the cashing out of
       personal/carer's leave as long as 15 days' leave balance remains.
       Employees not covered by an award or agreement will not be able to
       agree to cash out personal/carer's leave.


     . Community service leave: there is no current entitlement to any kind
       of community services leave under the WR Act, although it is
       unlawful to terminate an employee's employment if they are
       temporarily absent due to a voluntary emergency management activity.
       Employees currently rely on an employer's discretion and provisions
       in awards and agreements. The NES will enable employees to take
       unpaid leave to undertake an eligible community service activity
       such as jury service or voluntary emergency management. The NES
       contains provisions for employers to provide make up payments for
       full and part time employees undertaking jury duty for a period of
       up to ten days (at the base rate of pay for ordinary hours of work).
       This is different from the current situation, where employees rely
       on provisions in state and territory legislation, awards and
       agreements for jury make up pay.


     . Long service leave: an entitlement to long service leave is
       currently provided by state and territory legislation, awards and
       agreements. Initially, the NES will draw on current state and
       territory arrangements for long service leave in providing this
       entitlement. Meanwhile, the Government is working with state and
       territory governments to develop nationally consistent long service
       leave entitlements.


     . Public holidays: the NES and the Standard both provide an
       entitlement for an employee to be absent on prescribed public
       holidays. The NES provides for payment at their base rate of pay for
       ordinary hours if absent on a public holiday. Under the NES, the
       Queen's birthday holiday is prescribed. The current provisions of
       the WR Act do not prescribe this as a holiday. Under the NES, an
       employer may make a reasonable request for an employee to work on a
       public holiday. However, an employee may refuse to work if they have
       reasonable grounds.


     . Notice of termination and redundancy pay: the NES will provide for
       written notice of termination and redundancy pay. The current
       provision for notice of termination is provided under the WR Act but
       through provisions separate to the Standard. The substantive change
       under the proposed reforms is for the employer's notice to be in
       writing. The NES provides a new entitlement to redundancy pay,
       depending on the level of continuous service by an employee. This
       NES does not apply to employees of a small business. Modern awards
       may include industry specific redundancy entitlements. These
       entitlements will provide more comprehensive protection for
       employees.


     . Fair Work Information Statement: from 1 January 2010 an employer
       will be required to give the Fair Work Australia Information
       Statement to all new employees. However, unlike the Workplace
       Relations Fact Sheet, there will no longer be a statutory
       requirement to give the statement to existing employees.


  27. The Bill does not identify what may, or may not, comprise 'reasonable
      business grounds' for the refusal of a request under the NES. Rather,
      the reasonableness of the grounds is to be assessed in the
      circumstances that apply when the request is made. Reasonable business
      grounds may include, for example:


     . the effect on the workplace and the employer's business of approving
       the request, including the financial impact of doing so and the
       impact on efficiency, productivity and customer service;


     . the inability to organise work among existing staff; or


     . the inability to recruit a replacement employee or the practicality
       or otherwise of the arrangements that may need to be put in place to
       accommodate the employee's request.


It is envisaged that FWA will provide guidance on this issue.


Impact Analysis


  28. Changes to minimum employment standards will impact on those employers
      and employees that have their employment arrangements based on these
      minimum employment conditions. The changes will directly affect those
      parties that rely on minimum standards currently available through
      legislation, awards or collective agreements which include minimum
      employment conditions as part of the agreement. In establishing the
      impact of these changes to minimum employment standards the first step
      is to identify how many employers and employees are affected.


How many employers and employees are affected?


  29. In terms of awards, ABS data from May 2006 (most recent data
      available) show that 19.0 per cent of employees were paid their exact
      award rate of pay. However, a larger number of employees rely on
      awards to form the basis of their minimum entitlements. There are no
      data available on the proportion of employees who rely on minimum
      conditions in awards.


  30. It is difficult to identify the number of employees covered by
      collective agreements that utilise minimum employment conditions as
      many agreements include conditions over and above the minimum
      requirements. Nevertheless, the following analysis includes data on
      the incidence of employment conditions in federally registered
      collective agreements where available and appropriate.


Impact on employees and employers


  31. Changes to minimum employment standards can afford a benefit to
      employees if they are increased, in which case they would impose a
      cost on business that has to pay for the increased standard. Or if a
      standard is reduced then this affords a benefit to business that has a
      lowered cost, but imposes a cost on employees who have a reduction in
      their standards. Therefore, it can be seen that changes to employment
      standards result in a transfer or redistribution between employers and
      workers.


  32. What matters when assessing the impact of the change to employment
      standards is:


     . the equity effect of any transfer or redistribution between
       employers and employees; and


     . the behavioural responses of employers and employees to a change in
       employment standards.


Equity effect


  33. It is not possible to measure scientifically the equity effect of
      transfers between different parties in an economy. However, it is
      important to acknowledge that these equity considerations will play a
      part in the impact of changes to minimum employment standards.


  34. It is important to also consider the role of government in taxing the
      payments that are made to workers. This could mean that where an
      employment standard may, for example, result in employers paying a
      higher salary to workers, the workers will not receive the full
      benefit because part of it will go to the government through taxation.




Behavioural responses


  35. Changes to employment standards may result in employers or employees
      changing their behaviour. The main behavioural response from employers
      is their propensity to hire workers in response to changes in costs of
      employing staff caused by changes in employment standards. For
      example, if new employment standards are increased to a degree that
      substantially increases the marginal cost of employing staff to above
      the marginal benefit, then in this case it is likely that business
      will have a reduced incentive to employ staff. Conversely, individuals
      may be more willing to work if they receive more compensation for that
      work. This could improve participation rates.


  36. The behavioural responses of employers to changes in employment
      standards may also affect the type of staff that they employ. For
      example, some employers may recruit employees that are unlikely to
      take unpaid leave over other potential employees who are more likely
      to take unpaid leave. However, equal opportunity legislation is
      designed to prevent this from occurring.


  37. The following sections will analyse in more detail the impact of
      changes to specific employment standards. In assessing the impact of
      the changes in legislated minimum entitlements, the Department used
      Australian Bureau of Statistics (ABS) data where available.


  38. The Department also compared the NES provisions with conditions
      provided in a sample of 50 awards and a census of federally registered
      collective agreements to determine if they provided a lesser, equal or
      higher entitlement.


  39. The sample of awards is not a random sample. The sample was drawn
      mainly from the list of industries and occupations prioritised by the
      AIRC for award modernisation but also included non-priority
      industries, such as road transport. These are important awards with
      significant employee coverage.


  40. The census of federally registered collective agreements was conducted
      using the Department's Workplace Agreement Database (WAD). The WAD
      provides details on a range of employment conditions for various types
      of agreements including union collective, employer collective, union
      greenfields and employer greenfields agreements.


Maximum weekly hours


ABS data


  41. Data from the ABS Labour Force survey show that over the year to
      August 2008, an average of 43.6 per cent of all employees worked 40 or
      more hours a week (actual hours).[1]


Award and agreement data


  42. The average maximum weekly hours of current federal collective
      agreements is 37.5 hours or just below the 38 hour maximum
      requirement.


  43. In current federal collective agreements, averaging of hours over more
      than a one month period is relatively common. The accommodation, cafés
      and restaurants industry has the highest level of averaging in current
      collective agreements at 39.3 per cent of all agreements in the
      sector. Other sectors in which more than 20 per cent of all current
      agreements average hours over more than one month include personal and
      other services (27.5 per cent), agriculture, forestry and fishing
      (26.5 per cent), property and business services (25.2 per cent),
      communication services (24.0 per cent) and retail trade (22.2 per
      cent).


Impact


  44. Therefore, the Department expects a negligible impact of this
      provision.


Requests for flexible working arrangements


ABS data


  45. The Department estimates that there are potentially 96,000 eligible
      mothers who could take advantage of this provision at any one time.
      This is calculated by taking the number of mothers with a youngest
      child aged 0-4 who were employed in full-time work whose partner, if
      they were in a couple family, was also employed full-time
      (142,700)[2], adjusting it by both the number of full-time employed
      females in child bearing age (95.4 per cent)[3] and the share of those
      employees who have not been with their employer for under twelve
      months (70.5 per cent).[4]


Administrative burden


  46. The consideration of a request for flexible working hours may involve
      some minor administrative cost, primarily the time spent by management
      and/or human resources staff to consider a request and prepare a
      written response to the employee. However, the department does not
      expect this requirement to be onerous for the vast majority of
      businesses and therefore these costs are likely to be minimal.


  47. Furthermore, any costs incurred by businesses in considering requests
      for flexible working arrangements where industrial instruments did not
      offer such flexibility may be offset by the benefits to employers such
      as increased staff retention and loyalty. Indeed, businesses that are
      able to offer flexible working arrangements may benefit by being
      viewed favourably as an 'employer of choice'.


Agreement data


  48. WAD data show that 43.0 per cent of all current federal collective
      agreements provide for flexible working arrangements through changes
      related to hours of work. Flexible working arrangements are most
      common for employees in the retail trade industry (88 per cent of
      employees covered by federal agreements). The lowest proportion of
      employees covered by a collective agreement providing flexible working
      arrangements by industry, is in the wholesale trade industry (24 per
      cent of employees covered).


Impact


  49. Therefore, as this provision in the NES will be a new entitlement for
      a number of employees, the Department expects that there will be a
      moderate increase in compliance costs associated with the processes
      involved in requesting flexible working arrangements. However, this
      NES contains provisions that ensure that the right to request flexible
      working arrangements will not impede the competitiveness and viability
      of businesses.


Parental leave


ABS data


  50. The analysis of this NES does not include any estimate of the costs of
      training an employee to replace an employee who is on parental leave.


  51. The Department estimates that a maximum of 26,238 women who had taken
      leave of 12 months or more in the absence of extended parental leave,
      would potentially take the full entitlement of 104 weeks. This is
      calculated by taking the number of live births and adoptions
      (285,200)[5], adjusting it both by the share of eligible female
      employees aged 15-44 years who had been with their current employer
      for 12 months or more (40 per cent)[6] and the share of female
      employees who took unpaid parental leave for a period of one year or
      more (23 per cent)[7].


Simultaneous unpaid parental leave


  52. The NES increases the amount of leave that can be taken concurrently
      by both parents (in relation to both birth-related and adoption leave)
      from 1 week to 3 weeks.


  53. The ABS Career Experience survey asks employed males about their leave
      experience when their youngest child was born. Only 6 per cent of
      employed males with children aged under six years take unpaid parental
      leave when their youngest child is born.[8] Men are most likely to
      take recreational /holiday/annual leave (68 per cent) on the birth of
      their youngest child.[9] On the other hand, all men who used unpaid
      parental leave did so for a period less than six weeks.[10]


  54. International studies show that male use of parental leave is
      generally low.[11] Where men do use this leave, they only use a small
      proportion of the total number of days of leave available to them.[12]
      Figure 1 shows that, at November 2002 (most recent data), a total of
      22,000 men with children under 6 years took unpaid parental leave when
      their youngest child was born. Of these, all took leave for a period
      of less than 6 weeks.


Same-sex couples


  55. The proposed parental leave NES extends parental leave entitlements to
      same-sex couples for the first time. Data from the ABS Labour Force
      survey show that there were 31,100 same-sex couple families in June
      2007. Of these, 915 (3.7 per cent) were same-sex couple families with
      dependants where the youngest child was aged up to 4 years in June
      2007. In total, there were approximately 2,300 (9.3 per cent) same sex
      couples with dependant children in June 2007.[13]


Agreement data


  56. Of current federal collective agreements, 25 per cent provide parental
      leave provisions consistent with the current Standard. Simultaneous
      leave is provided in 10.2 per cent of agreements. Only 6.2 per cent of
      agreements provide for extended unpaid parental leave. The ability to
      extend unpaid parental leave from 12 to 24 months is a more generous
      provision than currently provided in 93.8 per cent of current federal
      collective agreements. However, it is important to note that a
      business has the right to refuse the extra 12 months leave on
      reasonable business grounds.

Figure 1: Employed males with children under 6 years who took parental
leave when youngest child born, November 2002
[pic]
Source: ABS, Career Experience Survey (Cat No 6254.0), November 2002,
unpublished data.

Annual leave

  57. The NES will not change the coverage or quantum of the annual leave
      entitlement. However, the NES will replace complex formulae in the
      current Standard about the accrual and crediting of paid annual leave
      with a simplified system - paid annual leave simply accrues and is
      taken on the basis of an employee's 'ordinary hours of work'. The NES
      enables modern awards to make provision for additional leave for shift
      workers and for cashing out of annual leave with appropriate
      safeguards.


  58. As noted above, the major regulation change under this NES is to
      simplify complex rules around annual leave accrual. The Department is
      unable to quantify the regulation impact of the simplification of
      these rules and formulae.

Personal/carer's leave

ABS Data


  59. The proposed NES extends unpaid compassionate leave entitlements to
      casual employees. However, only limited data are currently available,
      making it difficult to calculate the expected take up of this
      provision.


  60. The ABS offers three different measures of the incidence of casual
      employment - the Employee Earnings, Benefits and Trade Union
      Membership (EEBTUM)[14], Forms of Employment (FoES)[15] and Labour
      Market Statistics[16] publications.


  61. ABS EEBTUM data show that casual employee incidence was 24.7 per cent
      (2,061,000 employees) in August 2007.[17] The Department believes that
      this is the most accurate estimate of casual employment.


  62. Quantifying the potential take-up of this provision by casuals is
      problematic. Because casuals are classified as employees without leave
      entitlements for statistical purposes, data on the leave taken by
      casuals is very limited. Other potential methodologies, for example,
      estimating leave based on the propensity of non-casual employees to
      take compassionate leave, are also frustrated by a lack of suitable
      data.


Award and agreement data


  63. All awards sampled provided personal/carer's leave for full-time and
      part-time employees in varying amounts (from 5 to 15 days). Methods of
      accrual varied across the instruments, with some instruments requiring
      a minimum length of service prior to accrual of this entitlement.


  64. In all awards sampled, compassionate leave was available on
      bereavement only. There was only one example of bereavement leave for
      casuals (Metalliferous Mining and Processing Award [AN170065 - Tas].
      There was one example of casuals entitled to unpaid carer's leave
      (Clerks' (South Australia) Award [AN150039 - SA]). The lack of pre-
      reform award/Notional Agreement Preserving State Award (NAPSA)
      provisions in the sample providing casuals with compassionate leave
      suggests some limited regulatory impact of this provision.


  65. Personal/carer's leave is also a common entitlement in federal
      collective agreements - 92.9 per cent of current agreements provide
      for paid personal leave.


Community Service Leave


Jury service


  66. As noted above, the NES contains provisions for employers to provide
      make up payments for all permanent full and part time employees
      undertaking jury duty for a period of up to ten days (at the base rate
      of pay for ordinary hours of work). At present, relevant legislation
      for each state and territory prescribes how much each state and
      territory government will pay employees for each day of jury service.
      Of all the states and territories, only Victoria and Queensland
      currently require employers to pay a make-up payment to employees for
      jury service.


  67. Jury service is a community benefit. It is the Government's view that
      employees who provide jury service should not suffer a financial
      burden due to their participation in jury service. Employees currently
      not entitled to make-up pay for jury service are likely to be more
      inclined to try and avoid service, potentially making juries less
      representative overall than they would otherwise be.


  68. The following analysis provides estimates of the total net additional
      annual impost on employers under this NES.


Data


  69. National estimates of the proportions of employees undertaking jury
      service are derived using data from the AIRC's 2004 decision to vary
      the Grocery Products Manufacture - Manufacturing Grocers Award 2003 in
      respect of jury leave entitlements for Victoria in financial year 2003-
      04.[18] ABS Labour Force and Average Weekly Total Earnings data are
      also used. The key annual derived estimates are:


     . 0.190 per cent of permanent adult employees will be empanelled
       (serve as jurors), serving an average of seven days; and


     . 0.433 per cent of permanent adult employees will be required to
       attend a jury room, for an average of 2 days.


     . Based on these estimates, Australia-wide 12,896 permanent adult
       employees would have been empanelled in financial year 2007-08, and
       29,414 would have attended the jury room but not been empanelled.


  70. The additional costs to employers for each state and territory are
      then estimated by calculating the total wages cost of the days of
      attendance at jury rooms and jury service [19] and subtracting the
      payments already required to be made according to the legislation
      applicable in each state and territory. The estimated net additional
      cost to employers Australia-wide is $7,793,524.


  71. It should be noted that this is likely to be an over-estimate of the
      total cost for several reasons. Firstly, the average length of time
      for all jurors is seven days, which presumable includes many cases
      which extend past ten days, after which time the NES does not require
      make-up pay. Thus, the average estimated duration for empanelled
      jurors is probably too high. Secondly, the estimated number of days
      non-empanelled jurors spend in the jury room was rounded up to two
      days, inflating the estimated costs. Lastly, WAD data show that 44.9
      per cent of current federal agreements (covering 59 per cent of
      employees) already provide for jury service make-up pay, leading to an
      over estimate of the additional costs to employers.


  72. Nevertheless, while the additional Australia-wide cost is therefore
      minimal on an economy-wide basis, it could have a modest impact on
      some firms, particularly small businesses.


 Emergency services leave


ABS data


  73. According to the ABS Voluntary Work survey 2006, 34.1 per cent (5.2
      million persons) of the Australian population aged 18 years and over
      participated in voluntary work in 2006. Column 2 of Table 1 shows the
      estimated number of employee volunteers as at May 2008, by the type of
      organisation.[20] In terms of the relevant group of interest who may
      take advantage of the NES entitlement, an estimated 104,000 employees
      volunteered in emergency services as at May 2008.

Table 1: Estimated number and percentage of employees volunteering as at
May 2008, by type of organisation[21]

|Type of organisation                  |Volunteer|Employees|
|                                      |Rate (%) |(000s)   |
|Arts/heritage                         |1.4      |132.2    |
|Community/welfare                     |7.3      |689.2    |
|Education/training                    |9.1      |859.1    |
|Emergency services                    |1.1      |103.9    |
|Environment/animal welfare            |1.1      |103.9    |
|Health                                |3.1      |292.7    |
|Parenting/children/youth              |2.0      |188.8    |
|Religious                             |6.7      |632.5    |
|Sport/physical recreation             |11.2     |1057.4   |
|Other recreation/interest             |1.6      |151.1    |
|Other[22]                             |1.8      |169.9    |
|Total                                 |34.1     |3219.4   |


Source: ABS Voluntary Work, Australia (Cat No 4441.0), 2006, Table 20. The
employee figures (column 2) were derived by multiplying the relevant
volunteer rate (column 1) by 9,440,915, the number of employees as at May
2008 (ABS Labour Force, Australia, Detailed, Quarterly (Cat No
6291.0.55.003), May 2008.

Award and agreement data

  74. WAD data show that 34 per cent of all employees covered by current
      collective agreements are provided with emergency services leave.


Impact


  75. Given that emergency services leave is unpaid and there is not a large
      group of employees engaged in this activity, the Department expects a
      minimal impact from this provision.

Long Service Leave

  76. An entitlement to long service leave is currently provided by state
      and territory legislation, awards and agreements. The NES will
      preserve current arrangements for long service leave. Meanwhile, the
      Government is working with the states and territories to develop
      nationally consistent long service leave entitlements.


  77. Given that the overwhelming majority of employees currently have
      access to long service leave, the Department expects a minimal impact
      from this NES.


ABS data


  78. The department is not aware of any data on the usage of long service
      leave. As noted above, there are divergent entitlements to long
      service leave in awards, agreements and state and territory
      legislation. However, an indication of the entitlement to long service
      leave is the number of employees with 10 years service or over. Table
      2 displays ABS data that show an estimated 21.3 per cent of employees
      (2.2 million) were employed by their current employer/business for 10
      years or more.



Table 2: Employees by duration with employer/business by industry, as at
August 2008

|Industry           |Under 12 months                                      |
|                   |                                                     |
|Employee           |Most unions support the provisions contained in the  |
|Stakeholders       |NES, believing that they will benefit workers in work|
|                   |that do not have access to awards or agreements.     |
|                   |However, unions generally support a wider number of  |
|                   |entitlements.  Unions particularly want stronger     |
|                   |entitlements in place for the proposed standards,    |
|                   |such as flexible working arrangements that carry     |
|                   |obligations on employers when refusing a request.    |
|                   |                                                     |
|                   |Unions are concerned that a number of provisions,    |
|                   |such as the right for parents to request flexible    |
|                   |working arrangements, need strong enforcement by Fair|
|                   |Work Australia.                                      |
2. MODERN AWARDS

Current Arrangements


  79. As a result of the Work Choices changes to the WR Act, award
      arrangements are best examined by looking at minimum wages and award
      conditions separately.


Minimum wages


  80. Under Work Choices, minimum wages were taken out of awards and set up
      under separate notional instruments known as Australian Pay and
      Classification Scales (Pay Scales). The establishment of this separate
      system of minimum wages has given rise to a number of concerns.


  81. One of the key issues is that it has resulted in two different points
      of reference for employee safety net entitlements. This has caused
      confusion among many Australians used to minimum wages being contained
      in awards. The separation of minimum wages from awards also resulted
      in uncertainty over exactly what wage-related provisions are now
      contained in Pay Scales and what have remained in awards. While wage-
      related allowances provide a straight forward example of this, having
      remained in awards, the complex and detailed nature of awards as they
      currently stand, means that it has not always been clear which
      provisions have actually moved into Pay Scales and which have remained
      in awards.


  82. The main problems, however, with the establishment of Pay Scales is
      that they have not been published as legally enforceable instruments.
      While the Workplace Authority has produced around 425 Pay Scale
      summaries, these have applied only to the most common Pay Scales. In
      addition, Pay Scales were created under the WR Act as notional
      instruments implying, in effect, that the summaries are not legally
      enforceable. Given that there is a total of around 4,000 Pay Scales,
      employers and employees have therefore been left with no legal
      certainty as to the correct rates of pay and, in many instances, where
      Pay Scale summaries have not been available, they have had no
      information at all to reference for minimum wage information.


Award conditions


  83. Under Work Choices, awards were only permitted to deal with certain
      allowable matters (such as ordinary hours of work, public holidays,
      monetary allowances, overtime and shift work loadings, penalty rates
      and redundancy pay), various other matters (annual leave,
      personal/carer's leave, parental leave, long service leave, jury
      service, notice of termination and superannuation) were 'preserved' in
      awards.


  84. Also under Work Choices, some allowable award provisions (including
      rest breaks, public holidays, allowances, penalty rates, overtime and
      shift work loadings) were designated as 'protected' in the course of
      agreement making even though agreements could specifically modify or
      remove them. Although Work Choices provided for awards to be
      rationalised and simplified, this process was not undertaken.


Government's Policy on Modern Awards


  85. The AIRC is currently preparing modern awards in line with the
      Minister for Employment and Workplace Relation's award modernisation
      request pursuant to s. 576C(1) of the WR Act. Along with the National
      Employment Standards, modern awards will form a safety net for
      employees in the federal workplace relations system from 1 January
      2010.


  86. Modern awards will provide a fair and relevant safety net for
      employees. They will be simple and promote a certain and sustainable
      modern award system.


  87. The aim of the award modernisation process is to create a
      comprehensive set of awards. As set out in section 576A of the WR Act,
      modern awards:


a) must be simple to understand and easy to apply, and must reduce the
   regulatory burden on business; and


b) together with any legislated employment standards, must provide a fair
   minimum safety net of enforceable terms and conditions of employment for
   employees; and


c) must be economically sustainable, and promote flexible modern work
   practices and the efficient and productive performance of work; and


d) must be in a form that is appropriate for a fair and productive
   workplace relations system that promotes collective enterprise bargaining
   but does not provide for statutory individual employment agreements; and


e) must result in a certain, stable and sustainable modern award system for
   Australia.


  88. The AIRC will ensure awards are simple to understand so that employees
      and employers have certainty regarding their rights and obligations.
      The AIRC will also ensure awards promote the efficient performance of
      work having regard to the nature of the work and the characteristics
      of the workforce covered by the award. Finally, awards will encourage
      employers and employees to maintain work-family balance.


Proposed Changes


  89. The Workplace Relations Amendment (Transition to Forward with
      Fairness) Act 2008 (the Transition Act) paved the way for
      modernisation of awards. As a result of the process, new modern awards
      will come into effect with the new system.


  90. Currently, s. 576J of the WR Act provides 10 matters that may be dealt
      with by modern awards. These are:


     . minimum wages and classifications;


     . types of employment;


     . arrangements for when work is performed;


     . overtime rates;


     . penalty rates;


     . annualised wage or salary arrangements;


     . allowances;


     . leave related matters;


     . superannuation; and


     . procedures for consultation, representation and dispute settlement.


  91. The award modernisation request provides detailed direction to the
      AIRC on how to undertake the award modernisation process. Among other
      things, the request requires that the AIRC include the following
      matters in modern awards:


     . an award flexibility term;


     . a dispute resolution term;


     . terms providing ordinary hours of work;


     . terms about rates of pay for pieceworkers (where necessary);


     . terms identifying shift workers eligible for five week's of annual
       leave under the NES; and


     . terms facilitating the automatic variation of allowances.


  92. The WR Act also provides that a modern award must not include terms:


     . that breach freedom of association provisions;


     . about right of entry, terms that are discriminatory; and


     . that contain state based differences.


  93. All of these parameters, and the Minister's award modernisation
      request, are guiding the AIRC in the process of modernisation. The
      objectives of award modernisation include ensuring that awards are
      simple to understand, easy to apply and reduce the regulatory burden
      on business.


  94. Modern awards will contain a flexibility clause enabling employers and
      employees to agree on flexible arrangements varying how modern awards
      work. This will ensure that the needs of employers and employees are
      met. It will assist employees in balancing their work and family
      responsibilities and improve retention and participation of employees
      in the workforce. The simplification and increased flexibility
      associated with modernised awards, together with the reduced
      regulatory burden on business, are all consistent with the
      Government's agenda of increasing productivity.


  95. Modern awards will not cover employees earning over $100,000 a year
      (indexed) who will be free to agree to their own pay and conditions
      without reference to awards. This will provide flexibility for
      employers and employees. The Government believes that these workers
      can negotiate their own arrangements and do not require the same level
      of safety net protection as lower paid employees.


  96. Fair Work Australia (FWA) will undertake four yearly reviews of each
      modern award to maintain a relevant and fair minimum safety net. This
      will be the main vehicle for varying modern awards (except minimum
      wages). The first review will take place in 2014, four years after
      modern awards commence on 1 January 2010.


  97. FWA will be guided by criteria which take into account public, social
      interest and economic aspects when considering whether and how to vary
      the content of modern awards. Outside of the four yearly review, FWA
      will have limited power to vary awards. FWA will be able to vary an
      award to remove ambiguity, uncertainty and discriminatory terms. To
      ensure awards provide a fair minimum safety net for employees, anyone
      covered by an award will be able to apply to have the award varied in
      exceptional circumstances. FWA will be able to adjust awards for 'work
      value' reasons.


Impact Analysis


  98. The making of modern awards is a significant change for employees,
      employers and their representatives. This will require them to adjust
      and become familiar with the form, arrangement, content and new
      processes associated with modern awards.


  99. Stakeholder consultation by the AIRC - including through the exposure
      draft process - provides employers, employees and their
      representatives with the opportunity to start this familiarisation
      process. This process will continue until modern awards commence on 1
      January 2010. The simplicity of modern awards will assist the parties
      in this phase and also in their future involvement in award related
      processes.


 100. As award modernisation is currently in progress, estimating the future
      content and impact of modern awards, which are either currently in the
      exposure draft phase or are yet to be drafted, cannot be undertaken
      with sufficient accuracy to provide a basis for meaningful analysis of
      the proposed changes. Therefore, this section does not include an
      impact analysis of award modernisation. However, as noted later in
      this analysis, the Government has committed to reviewing the new
      workplace relations system.


 101. The inclusion of minimum wages in modern awards will provide employees
      and employers with a single point of reference for verifying their
      rights and obligations with regard to minimum wages and conditions of
      employment. These new streamlined arrangements will reduce confusion
      and apprehension among users about where to go for information on
      safety net entitlements, improving the accessibility to and ease of
      use of this information by key stakeholders. The new streamlined
      arrangements will also reduce the regulatory burden imposed on
      government, both in terms of the direct costs associated with
      administering two separate systems as well as the indirect costs
      arising from having to resolve discrepancies across the two
      arrangements.


 102. The clear legal enforceability of minimum wages in the new system will
      also reduce the regulatory burden imposed on key stakeholders,
      providing them with legal certainty on minimum wage protections. The
      legal certainty will not only reduce the vulnerability and hardship
      experienced by some employees while reducing the compliance costs of
      the majority of employers committed to observing minimum wage
      protections for their employees. By reducing the potential for
      breaches of minimum wage protections in this way, the new arrangements
      will also reduce the regulatory impact on government leading to
      significant savings in terms of the monitoring and enforcement of
      minimum wage protections.


 103. The proposed changes in the minimum wage-setting arrangements are
      designed to improve the regulatory framework. The streamlining of
      responsibility for reviewing and adjusting minimum wages will reduce
      confusion and uncertainty among employers and employees about which
      body is responsible for the determination of minimum wages relevant to
      their particular circumstances.


 104. Annual minimum wage reviews, particularly in requiring that any
      adjustments take effect on the same date of 1 July each year, will
      provide greater certainty for employers and employees, especially in
      terms of accounting for these adjustments in their business plans and
      household budgets. This increased certainty will be further reinforced
      by the requirement that any updated wage rates be published by the 1
      July date of effect. Moreover, the improved transparency of the
      process will help ensure that the decisions of the Fair Work Australia
      Minimum Wages Panel are fair and independent of bias, thereby
      facilitating greater acceptance of and compliance with its minimum
      wage rulings.


Table 5: Employer and employee views on new award provisions

|                   |                                                     |
|Employer           |Employer groups broadly support modern awards, but   |
|Stakeholders       |are wary that the timetable for developing and       |
|                   |implementing them would be difficult to achieve. Some|
|                   |are concerned that the award modernisation process   |
|                   |may become a 'levelling-up' exercise that increases  |
|                   |costs for employers.                                 |
|                   |                                                     |
|                   |Most employer groups support having individual       |
|                   |flexibility clauses within awards. The various       |
|                   |employer groups also support a monetary threshold on |
|                   |the application of awards.                           |
|                   |                                                     |
|Employee           |As with employer groups, unions also believe that the|
|Stakeholders       |timetable for the award modernisation process is     |
|                   |ambitious. Although unions support the creation of   |
|                   |modern awards, they are concerned that the award     |
|                   |modernisation process may undercut the pay and       |
|                   |conditions for award-dependent workers, particularly |
|                   |non-union workers.                                   |
|                   |                                                     |
|                   |Unions believe that no upper monetary threshold      |
|                   |should exist for the application of awards.          |
3. BARGAINING FRAMEWORK

 105. Under the Bill, the Government proposes important changes to the
      collective bargaining framework. These changes include: the
      introduction of good faith bargaining; less regulation regarding the
      content of agreements; the creation of a single stream of agreement
      making; a streamlined process for the approval of agreements; and the
      introduction of Fair Work Australia facilitated bargaining for the low
      paid.


 106. The proposed bargaining arrangements will be simpler than the current
      system. The Bill is drafted to reduce the regulation of the bargaining
      framework in acknowledgement that most employers and employees in
      Australia voluntarily and successfully bargain collectively. Where
      there is new regulation it is focused on facilitating the bargaining
      processes in situations where an employer and their employees are
      unable to successfully bargain together.


 107. This section will assess the regulatory impact of these changes in
      contrast to the current system under the WR Act.


 108. In some instances changes to the 'current system' were made by the
      2008 amendments to the WR Act under the Transition Act. When
      discussing these amendments to the WR Act the Transition Act will be
      specifically mentioned.


Current Arrangements


Agreement types


 109. The current system allows for multiple streams of agreement making,
      including Individual Transitional Employment Agreements (ITEAS),
      introduced in the Transition Act to replace the use of Australian
      Workplace Agreements (AWAs) during the transition to the proposed
      framework), union collective agreements, employee collective
      agreements, union greenfields agreements, employee collective
      greenfields agreements and multi-employer agreements. The existence of
      multiple streams of agreement making has the capacity to create
      disputes over which industrial instrument to use.


 110. The occurrence of such disputes is quite common. For example, the
      Cochlear company has been involved in a protracted industrial dispute
      due to the company's desire to create a non-union collective
      agreement. Similarly, Boeing was involved in a dispute for over 9
      months, including over 70 days of strike action, because the company
      refused to negotiate a union collective agreement against the
      preference of its aircraft maintenance engineers.


 111. In addition, prior to the Transition Act, the workplace relations
      system allowed for 'take it or leave it' AWAs which could undercut the
      safety net and collective bargaining processes.


 112. In many industries characterised by low skilled, low paid employment,
      such as cleaning and retail trade, the shift towards individual
      agreements on a 'take it or leave it' basis expanded managerial
      prerogative.[23] As such, it allowed some businesses to put downwards
      pressure on wages and conditions, reflected in studies showing that 89
      per cent of pre-Fairness Test AWAs removed at least one protected
      award condition.[24]


Content of agreements


 113. The current workplace relations system extensively regulates what can
      be included in enterprise agreements. The extent of current regulation
      adds significant obstacles to genuine agreement making.


 114. An agreement must include a nominal expiry date (NED) and dispute
      settlement procedure. If no dispute settlement procedure is specified
      the model dispute settlement procedure contained in legislation
      applies. If no NED is specified, the agreement will have a NED of one
      year from commencement for employer Greenfields agreements, 31
      December 2009 for an ITEA and five years from the date of issue for
      other agreements.


 115. The WR Act introduced a concept of prohibited content which lists some
      30 matters which are not to be included in workplace agreements. This
      includes matters that do not pertain to the employment relationship
      between the employer and the employees covered by the agreement.
      'Objectionable provisions' that breach freedom of association
      provisions, that provide remedies for unfair dismissal or restrict the
      use of independent contractors or labour hire workers are also
      prohibited.


 116. Other prohibited content relates specifically to union-related
      clauses. This includes deductions from wages for union membership or
      dues, employees receiving trade union training leave, employees
      receiving paid leave to attend union meetings, the renegotiation of a
      workplace agreement, and the foregoing of annual, compassionate or
      personal leave for pay or another entitlement.


 117. Prohibited content in an agreement is unenforceable but does not
      render the agreement invalid. The Workplace Authority Director is able
      to remove such clauses from agreements with significant penalties of
      up to $33,000 applying for recklessly including prohibited content in
      an agreement, and for making misrepresentations about prohibited
      content.


 118. The extensive regulation of what can and cannot be included in
      agreements complicates the bargaining process, with many parties
      unsure of what clauses were allowable content. It has also exposed
      employers to penalties for contravening the WR Act. Employers have
      sought to avoid this by seeking a statement from the Workplace
      Authority that there is no prohibited content included in the
      agreement prior to lodging the agreement. This has further lengthened
      the agreement making process.


 119. There is anecdotal evidence that another result of this regulation is
      the frequent use of 'side deals' between an employer and employees and
      the relevant union. Such side deals have unclear legal status and
      unnecessarily complicate the bargaining process.



Approval of agreements


 120. Prior to the Transition Act, the Workplace Authority was required to
      apply a Fairness Test to agreements. The Fairness Test added a
      substantial regulatory burden on businesses and was plagued with
      inefficiencies.[25] The implementation of the Fairness Test resulted
      in a considerable backlog of agreements needing to be approved.[26]


 121. Currently (since the introduction of the Transition Act), the
      Workplace Authority applies a no-disadvantage test to agreements. The
      Workplace Authority Director has described the no-disadvantage test as
      a more measured approach to agreement testing that has resulted in
      better results and faster approvals.[27]


 122. However, both the Fairness Test and the no-disadvantage test are
      reliant on the current award system or, in the case of ITEAs, an
      existing collective agreement that would otherwise cover the employee.




 123. The complex nature of the existing award system has made the approval
      process detailed and heavily bureaucratic, requiring assessors to
      apply a series of formulas to determine the overall value of an
      agreement to an employee. This requires prescribing a monetary value
      to non-monetary entitlements, which was criticised as inherently
      inaccurate.[28]


 124. Furthermore, under the Fairness Test, a series of secondary
      considerations could potentially form part of the test, drawing out
      the assessment process. These considerations require written
      submissions from employers and employees as to the benefits of
      modified conditions and working arrangements.


 125. Where an agreement did not pass the Fairness Test, the Workplace
      Authority could request an undertaking and provide examples of changes
      that could be made in order to allow the agreement to pass the test.
      This process took considerable time and resources to develop and
      required the Workplace Authority to reassess an agreement when an
      undertaking was received from the employer.


 126. As such, the Fairness Test employed complex approval processes with
      criticism of its application and processing times.


Bargaining, including in good faith


 127. The WR Act provides no avenues of assistance for employers or
      employees in the circumstances where collective bargaining breaks down
      other than where both parties agree to use the AIRC or a private
      dispute resolution provider to help them settle a dispute. As such,
      the existing bargaining framework does not actively encourage
      employers and employees to bargain and reach agreement.


 128. Without the capacity to determine whether majority support exists for
      collective bargaining, employers can simply refuse to negotiate with
      employees, often resulting in protracted disputes.  Examples of these
      disputes include those at Boeing and Cochlear.


 129. Currently, the only test to ensure the parties are genuinely
      bargaining occurs if an application is made for a secret ballot for
      industrial action. This means that it is possible for parties to act
      capriciously or unfairly in bargaining without repercussions.


 130. An employer's ability to object to secret ballot orders on grounds
      that the union has not genuinely sought to reach agreement has created
      a mechanism for employers to ask the AIRC, albeit indirectly, to
      impose good faith bargaining requirements on employee
      representatives.[29] However, there is no reciprocal right for
      employees to impose good faith bargaining requirements on employers,
      creating an imbalance.


 131. As a result 'employees [that are] unhappy with employer intransigence
      in bargaining must resort to industrial action'.[30] The current
      system may, therefore, exacerbate industrial disputes.


Bargaining for the low paid


 132. The WR Act does not contain provisions to assist the low paid beyond
      the five minimum entitlements of the Standard.


Proposed Changes


Agreement types


 133. Under the Bill there will be no distinction between union and non-
      union agreements. The Bill will provide for the creation of a single
      stream of collective, enterprise agreements that are to be made
      between an employer or employers and employees. A union that is
      entitled to represent the industrial interests of an employee and was
      a bargaining representative for a proposed agreement may notify FWA in
      writing that it wants to be covered by the agreement. When an employee
      organisation is covered by an agreement, it will have certain
      entitlements that it would not otherwise have. For example, an
      employee organisation that is covered by an agreement would be able to
      enforce the agreement to ensure that the employer is meeting its
      obligations. A single stream will remove the capacity for disputes
      over which type of agreement to enter into.


 134. The Bill will maintain the capacity for employers to make greenfields
      agreements to establish terms and conditions of employment for a
      genuine new enterprise. However, the Bill will require that
      greenfields agreements must be made with one or more unions that would
      be eligible to represent the employees who will be employed in the
      enterprise.


 135. The proposed system ensures that employers can tailor agreements to
      the requirements of their business by focusing on agreement making at
      the enterprise level. However it will maintain a strong safety net for
      employees that cannot be undercut and builds the inherent protections
      of collective bargaining into all enterprise agreements.


Content of Agreements


 136. The proposed workplace relations framework expands what matters an
      enterprise agreement can be made about to one or more of the
      following:


    a) matters pertaining to the relationship between the employer or
       employers that will be covered by the agreement and the employees
       who will be covered by the agreement;


    b) matters pertaining to the relationship between the employer or
       employers, and the employee organisation or employee organisations,
       that will be covered by the agreement;


    c) deductions from salary for any purpose authorised by an employee who
       will be covered by the agreement;


           d) how the agreement will operate.


 137. This content rule retains the 'matters pertaining' formulation
      established in case law and ensures that matters that clearly fall
      within 'managerial prerogative', that are outside the employer's
      control or are unrelated to employment arrangements are not subject to
      bargaining and industrial action. The continuation of the familiar
      'matters pertaining' formulation provides certainty to employers as to
      what matters can be included in enterprise agreements.


 138. The content rule will cut regulation so that matters that historically
      have been included in agreements which encompass the relationship
      between an employer and a union but were prohibited under Work Choices
      can be included where agreed to, for example, union consultation
      clauses or leave to attend union training. The formulation also makes
      it clear that provisions for payroll deductions such as salary
      sacrifice and union fees can be included in agreements.


 139. The capacity to include more issues in agreements where the parties
      agree will make side agreements between employers and unions
      unnecessary.


 140. Provisions that would be inconsistent with, or seek to override
      provisions in, the new legislation on matters such as freedom of
      association, unfair dismissal and industrial action would be classed
      as unlawful content. For example, the payment of union bargaining
      fees, provisions that purport to 'contract out' of unfair dismissal
      protections and provisions that purport to allow industrial action
      during the life of an agreement would be unlawful. FWA will not
      approve agreements that contain unlawful content.


 141. Provisions that breach occupational health and safety laws will also
      be unlawful subject to interaction rules between state and territory
      laws. Provisions which are discriminatory will also be classed as
      unlawful content.


 142. Other matters currently classed as prohibited content may be included
      in agreements where they meet the content rule. There will be no
      concept of 'prohibited content' in the Bill.


 143. In order to facilitate more flexible employment relationships,
      enterprise agreements will also be required to include an individual
      flexibility arrangement and a consultation clause where major change
      is considered. Where no such provisions are included, the respective
      model term prescribed by the regulations is taken to be a term of the
      agreement.  It is intended that the model term to be prescribed will
      be based upon the model flexibility term developed by the AIRC for
      inclusion in modern awards.   These provisions will allow employers to
      enter into individual flexibility arrangements with employees where
      this is to the benefit of the employer and the employee.


 144. In addition, before approving an agreement, FWA must be satisfied that
      the agreement includes a term that provides a procedure that requires
      or allows FWA or another person who is independent of the employers,
      employees or employee organisations covered by the agreement, to
      settle disputes about any matters arising under the agreement; and in
      relation to the NES.  Such term must allow for the representation of
      employees covered by the agreement for the purposes of the dispute
      settlement procedure.


 145. Agreements will have a NED of no later than four years after the date
      of operation.


 146. The removal of complex regulation surrounding the content of
      agreements will simplify the agreement making process, offer employers
      and employees genuine flexibility and remove harsh financial penalties
      for including content in agreements that is outside the content rule.


Approval of agreements


 147. Under the Bill, all enterprise agreements must be lodged with FWA for
      approval before they commence operation. The approval process is a
      simple, point in time assessment of the enterprise agreement and the
      circumstances under which it was made.


 148. Once an agreement has received employee approval, FWA will ensure
      that:


     . there is genuine agreement;


     . the group of employees covered by the agreement was fairly chosen;


     . the agreement passes the 'Better Off Overall Test' (BOOT);


     . the agreement contains a nominal expiry date and dispute settlement
       clause;


     . the agreement does not contain terms that contravene the NES; and


     . the agreement does not contain unlawful content.


 149. The approval process under the Bill will simplify many of the
      procedures previously applied as part of the Fairness Test.


 150. At the time of agreement lodgement bargaining representatives will be
      required to submit a statutory declaration setting out details of the
      agreement. The agreement will need to be signed by the employer and a
      representative of the employees.


 151. FWA will apply the BOOT to ensure that each employee covered by the
      agreement is better off overall in comparison to the relevant modern
      award. The use of modern awards as reference instruments will further
      simplify the approval process in comparison to the current, complex
      minimum standards arrangements.


 152. The BOOT will be an 'on the papers' assessment of the pay and
      entitlements of an agreement and will avoid the complicated assessment
      procedures adopted for the Fairness Test, such as accepting written
      submissions from employees on the personal value of intangible
      benefits. Undertakings will not be a feature of the approval process
      except where FWA is satisfied that the effect of accepting the
      undertaking is not likely to cause financial detriment to any employee
      covered by the agreement or result in substantial changes to the
      agreement. Before accepting an undertaking FWA must seek the views of
      bargaining representatives for the agreement.


 153. Minimum wage provisions in awards or the National Minimum Wage will
      override less generous minimum wage provisions in an enterprise
      agreement. This will mean that where minimum award rates increase
      during the life of an agreement to above the agreement rates,
      employers will have to make up any difference, thereby protecting the
      integrity of the safety net.


 154. An agreement will come into operation seven days after it is approved
      by FWA or on a later date if one is specified in the agreement.


Good faith bargaining


 155. The proposed good faith bargaining system recognises that most
      employers and employees voluntarily and successfully bargain
      collectively in good faith and that most employers respect their
      employees' right to bargain collectively.


 156. If no issues arise in bargaining, the Bill will only regulate the
      bargaining process by requiring employers to advise employees of their
      right to be represented at the commencement of bargaining. Bargaining
      representatives will be able to bargain and create an agreement and
      will not be required to interact with FWA until the agreement is
      submitted for approval.


 157. The proposed system will include a number of processes designed to
      facilitate agreement making and assist bargaining representatives to
      bargain effectively when it is required.


 158. There are times where a majority of employees at a workplace want to
      collectively bargain and this choice is not respected by their
      employer. If an employer refuses to bargain with their employees, FWA
      will have the power to test the support amongst the employees to which
      the agreement will apply in a manner it considers suitable, for
      example, using evidence of union membership, petitions or a ballot of
      employees. If a majority of the employees wish to collectively
      bargain, their employer will be required to bargain with them.


 159. Under this Bill, if bargaining representatives are not effectively
      bargaining together, FWA will have the power to issue bargaining
      orders requiring representatives to bargain in good faith.


 160. The good faith bargaining requirements over which FWA can make
      bargaining orders relate to procedural matters only and not the
      content of the agreement. These requirements will be defined through
      an exhaustive list which will require attending and participating in
      meetings at reasonable times; disclosing relevant information (other
      than confidential or commercially sensitive information) in a timely
      manner; responding to proposals made by other bargaining
      representatives in a timely manner; giving genuine consideration to
      the proposals of other bargaining representatives and providing
      reasons for responses to those proposals; and refraining from
      capricious or unfair conduct that undermines freedom of association or
      collective bargaining.


 161. Good faith bargaining requirements aim to ensure that all bargaining
      representatives act in an appropriate and productive manner when
      working towards a collective agreement. The requirements also
      facilitate improved communication between bargaining representatives,
      which is expected to reduce the likelihood of industrial action.


 162. During agreement making, where representatives are failing to bargain
      in good faith, the good faith bargaining requirements will act to
      avoid protracted disputes by allowing FWA to make orders. This
      facilitation of agreement making is in the interests of both
      bargaining representatives and the general public.


 163. Where one bargaining representative believes another representative is
      not negotiating in good faith, they must notify the offending
      representative of their concerns and give them a reasonable time to
      respond. This will stop capricious claims that representatives are not
      bargaining in good faith as FWA will only be able to make bargaining
      orders if it is satisfied that this notification was made.


 164. To uphold the integrity of existing agreements, FWA will not be able
      to make good faith bargaining orders until 90 days before the nominal
      expiry date of an existing collective agreement if the employer has
      not offered employees a new agreement.


 165. Bargaining orders will not require bargaining representatives to make
      concessions or sign up to an agreement where they do not agree to the
      terms of the agreement. If FWA believes that there have been serious
      and sustained breaches of bargaining orders by a bargaining
      representative and those breaches have significantly undermined
      bargaining for the agreement, it will have the power to make a
      workplace determination.  In this context FWA must be satisfied that
      all other reasonable alternatives to reach agreement have been
      exhausted and that agreement will not be reached in the foreseeable
      future.


 166. Where bargaining representatives cannot agree regarding agreement
      content, they will be able to jointly walk away (in which case the
      workplace arrangements already in place would remain in force), take
      protected industrial action or jointly seek FWA's assistance in
      determining a settlement.  A bargaining representative can also seek
      FWA's assistance through mediation or conciliation.


 167. Good faith bargaining requirements protect employers from unfair
      bargaining processes. Analysis of secret ballot applications by unions
      to the AIRC indicates that, in many cases, employers raise objections
      about whether a union is engaging in genuine bargaining or not. During
      the period March 2006 to May 2007 there were at least 28 objections to
      secret ballot applications on the grounds of unions failing to
      genuinely trying to reach agreement.


 168. Many businesses will be familiar with the concept of good faith
      bargaining, reducing the uncertainty that could arise upon its
      introduction. Under the federal workplace relations system the concept
      of bargaining in good faith was set out in the Industrial Relations
      Act 1988 as amended by the Industrial Relations Reform Act 1993.


Facilitated bargaining for the low-paid


 169. Under the Bill, FWA will be able to facilitate multiple employer
      bargaining for employees who are low-paid and those who have not
      historically had access to the benefits of collective bargaining.


 170. Currently there are no provisions to assist the low paid beyond the
      five minimum entitlements of the Standard and an annual minimum wage
      review. Enterprise level bargaining has been a central feature of
      workplace relations since the early 1990s. However, over that time not
      all employers and employees have participated in enterprise
      bargaining. This may have occurred because employees in low-paid
      sectors lack the skills and bargaining power to negotiate for improved
      wages and conditions at the single enterprise level. Similarly, some
      individual employers in low-paid sectors may lack the time, skills and
      resources to bargain collectively with their employees. Some of these
      employees are unable to negotiate above minimum award rates and
      conditions because a third party (such as a head contractor)
      effectively sets their pay and conditions, not their direct employer.


     . Parties will have the benefit of access to FWA to help them
       negotiate the making of a multi-employer agreement. Examples of
       assistance by FWA include the ability to call compulsory conferences
       to bring the parties together and to take a more hands-on role in
       facilitating the negotiations. FWA will also be able to require a
       third party to attend a conference in certain circumstances, if this
       is necessary to advance negotiations. This might include a head
       contractor who actually determines the terms and conditions that
       apply.


 171. The Bill will provide access to a separate multi-employer bargaining
      stream for the low-paid. Bargaining representatives may apply on
      behalf of employers or employees for a low paid authorisation which
      will allow for FWA to facilitate bargaining for a specified list of
      employers.


 172. FWA will consider a range of factors to determine if the proposed
      bargaining is in the public interest. These factors include the
      history of bargaining in the industry where the employees work and
      whether the granting of the authorisation would assist in identifying
      improvements to productivity and service delivery at the enterprises
      to which the agreement relates. Further, FWA must take into account
      the views of employers and employees who will be covered by the
      agreement and the extent to which the applicant is prepared to respond
      reasonably to the needs of individual employees.


 173. FWA will be able to facilitate bargaining in this stream by the use of
      compulsory conferences and good faith bargaining orders which would
      not otherwise be available in multi employer bargaining. Protected
      industrial action will not be available.


 174. If the bargaining representatives for an agreement in the low paid
      bargaining stream are unable to reach agreement on the terms that
      should be included in the agreement, employee representatives and one
      or more of the employers could seek a workplace determination by
      consent. There will also be capacity for FWA to make a workplace
      determination on the application of only one party. Under this
      category, FWA would apply a set of threshold criteria to decide
      whether the arbitration should proceed including that the parties had
      genuinely tried to reach agreement, and that making the determination
      will promote productivity and efficiency in the enterprises concerned.


Impact Analysis


 175. The introduction of a new bargaining system may involve some
      transitional costs as the parties adjust to a new set of legislative
      provisions. Some features of the new system may also impose new or
      additional obligations and regulations on employers and employees.
      This is an inevitable result of a major overhaul of current workplace
      relations laws.


 176. However, the Government believes that the new bargaining system will
      deliver benefits that offset these costs. The new system is designed
      to provide a fair and simple framework for employees and employers to
      determine their working arrangements in a way that encourages
      productivity at the enterprise level. While some features of the new
      system may have some regulatory impact, they will also help to make
      the bargaining process run more efficiently and smoothly.


 177. A fair and balanced bargaining framework that properly recognises the
      interests of both employees, employers, and their representatives is
      also more likely to achieve broad support from all parties. This will
      help ensure a more stable and enduring system that allows employers to
      get on with the job of running their business, and employees to
      perform their work productively.


 178. This Bill will place collective bargaining at the enterprise level at
      the heart of the workplace relations system.


 179. Enterprise agreements can ensure that increases in pay and
      entitlements are linked to productivity increases at the enterprise.
      This is due to negotiations at the level of the enterprise better
      reflecting the financial situation of the enterprise. Furthermore,
      collective bargaining will shift the focus of negotiations towards
      boosting productivity.


 180. Collective bargaining under the Bill will be less bound by regulation
      and red tape and is designed to have a positive impact on labour
      productivity.


 181. The post-implementation review of the new system will be an important
      means of assessing the effectiveness of the new bargaining system.


Individual agreements


 182. The Transition Act removed the capacity for employers and employees to
      enter into AWAs. It introduced ITEAs, which were solely designed to be
      transitional instruments with a nominal expiry date no later than
      31 December 2009. As these agreements are not the subject of
      provisions in this Bill, there is no impact analysis of statutory
      individual agreements.


Approval of agreements


 183. The Australian Human Resources Institute (AHRI) published 1 001
      responses to an online survey about the take-up of the WR Act and
      whether it was achieving benefits.[31] The majority of responses
      regarding the Fairness Test indicated frustration with its complexity
      which tended to complicate agreement making and increased
      administrative costs.


 184. The BOOT will simplify agreement processing. Enterprise agreements
      will be assessed 'on the papers' against modern awards, providing for
      a simpler comparison compared to the current assessment against the
      old award system. The BOOT will also be a point in time assessment.


 185. The removal of the capacity to make individual statutory agreements
      under the proposed framework will substantially improve the approval
      process. As at September 2009, 80 per cent of all agreements being
      processed were individual statutory agreements, [32] so the removal of
      these forms of agreements will dramatically reduce the volume of
      agreements lodged for approval.


Evidence on the effects of collective bargaining on productivity


 186. Collective bargaining at the level of the enterprise is a productive
      form of agreement making that allows employer and employees to examine
      the way they work, discover new ways to improve productivity and
      efficiency and communicate to make workplaces more flexible. Research
      by the Melbourne Institute and Productivity Commission links
      productivity gains to collective bargaining.


 187. In 1999, the Productivity Commission conducted case studies into the
      factors affecting productivity growth. The case studies included
      industries such as the whitegoods, automotive, textile clothing and
      footwear, NSW rail freight and wholesale and retail trade
      industries.[33] The main findings from these studies were that
      flexibility in work arrangements increased through collective
      agreements.


 188. More specifically, the Productivity Commission found that workplace
      bargaining provided a framework in assisting the redesign of working
      arrangements and ensuring workers were employed more productively.
      Productivity improvement was therefore found to be an explicit feature
      of many of these agreements.


 189. Furthermore, Tseng and Wooden found that firms with employees on
      collective agreements experienced a 9 per cent increase in
      productivity levels, when compared to firms with employees on
      awards.[34] The authors point out, however, that their results do not
      prove that collective bargaining causes higher productivity (though
      they imply that it may) but that rather, collective bargaining and
      higher productivity are correlated.


 190. Fry, Jarvis and Loundes, also found that organisations entering into
      collective agreements with their workers, reported substantially
      higher levels of self-assessed labour productivity relative to their
      competitors.[35]

Good faith bargaining

 191. Good faith bargaining provisions currently operate in the Queensland
      and Western Australian workplace relations systems. Consultations with
      state government representatives indicate that these state systems do
      not impose onerous additional obligations on employers. The Department
      is not aware of any concerns with these good faith bargaining systems
      among state-based employer representatives.


 192. For example, in the entire Queensland bargaining system in 2006-07
      there was only one application to arbitrate a bargaining dispute to
      determine whether negotiations were conducted in good faith. In
      Western Australian bargaining system, there were only 4 requests for
      good faith bargaining orders between 2002 and 2006. This period was
      prior to the commencement of the Work Choices amendments to the WR Act
      when the jurisdiction of the state industrial relations systems was
      considerably larger.


 193. It is advanced that good faith bargaining requirements will serve to
      facilitate more effective agreement making without unnecessarily
      imposing regulation and outcomes on bargaining representatives.


Facilitating bargaining for the low paid


 194. The provisions for multi-employer bargaining for low paid sectors in
      this Bill are designed to assist those that typically find it
      difficult to bargain to enter into enterprise agreement making. This
      will facilitate employees working in areas such as child care, aged
      care, community services, security and cleaning, who are often paid
      the relevant minimum wage rate entering into the bargaining stream,
      with associated productivity benefits.


 195. Table 6 below displays the rates of pay for occupations closely linked
      with those discussed above. In all occupations, employees on
      collective agreements earn more than those who are paid the award rate
      of pay.



Table 6: Average hourly ordinary time cash earnings (AHOTE) for adult non-
managerial employees by select occupation codes and pay-setting method,
Australia

|Occupation (ANZSCO 3-digit code)  |Award-only   |Collective   |Difference |
|                                  |             |agreement    |           |
|                                  |($)          |($)          |($)        |
|Health and Welfare Support Workers|22.10        |25.30        |3.20       |
|(411)                             |             |             |           |
|Child Carers (421)                |16.80        |18.00        |1.20       |
|Personal Carers and Assistants    |19.80        |20.80        |1.00       |
|(423)                             |             |             |           |
|Prison and Security Officers (442)|20.00        |24.20        |4.20       |
|Cleaners and Laundry Workers (811)|17.00        |18.60        |1.60       |
|Food Process Workers (831)        |16.30        |20.50        |4.20       |
|Packers and Product Assemblers    |16.30        |18.20        |1.90       |
|(832)                             |             |             |           |


Notes: Differences in earning are statistically significant.
Source: ABS Employee Earnings and Hours (Cat No 6306.0), May 2006,
unpublished data

 196. The capacity for one party to apply for a workplace determination
      where there has been a failure to reach agreement in this stream could
      potentially lead to arbitrated wage outcomes that are not linked to
      factors at the workplace. Importantly, however, the provisions
      contained in this Bill ensure that this will only occur where genuine
      productivity and efficiency gains have been identified to offset any
      increases.


Table 7: Employer and employee views on the new bargaining framework
provisions

|Employer           |Employer groups support a voluntary bargaining       |
|Stakeholders       |framework where workers may seek a collective        |
|                   |agreement, but employers are not compelled to bargain|
|                   |collectively with their workforce.                   |
|                   |                                                     |
|                   |Employer groups are generally accepting of the       |
|                   |proposed good faith bargaining framework, in         |
|                   |particular the specific provision that Fair Work     |
|                   |Australia will not have the power to force bargaining|
|                   |representatives to make concessions during the       |
|                   |bargaining process.                                  |
|                   |                                                     |
|                   |Employer groups want restrictions on the content that|
|                   |can be bargained for and contained in agreements.    |
|                   |Most are satisfied with the retention of the 'matters|
|                   |pertaining formulation.' However, some are concerned |
|                   |that the expansion of the content rule to relate to  |
|                   |employee associations as well as the removal of      |
|                   |'prohibited content'.                                |
|                   |                                                     |
|                   |Employer groups are generally satisfied that         |
|                   |industrial action is not available for multi-employer|
|                   |agreements and that arbitration is only for low paid |
|                   |workers.                                             |
|                   |                                                     |
|                   |Some groups are concerned with the expanded formula  |
|                   |for matters pertaining to the employment relationship|
|                   |and their implications for delegates' rights.        |
|                   |                                                     |
|Employee           |Unions support the collective bargaining framework.  |
|Stakeholders       |They also want a strong industrial umpire to enforce |
|                   |the framework through the capacity to arbitrate      |
|                   |outcomes. They want this framework to come into      |
|                   |effect immediately.                                  |
|                   |                                                     |
|                   |Unions are particularly concerned that there are     |
|                   |restrictions on the content that can be bargained.   |
|                   |Some unions believe that there will be disputes over |
|                   |whether the content being bargained is a matter      |
|                   |pertaining to the employment relationship.           |
|                   |                                                     |
|                   |Unions support the bargaining stream for low paid    |
|                   |workers. Unions believe that workers in this stream  |
|                   |must have the right to access arbitration by an      |
|                   |umpire, as well as have access to industrial action  |
|                   |in pursuit of claims.                                |
4. UNFAIR DISMISSAL

Current Arrangements


 197. The current unfair dismissal laws, under the WR Act, apply only to
      employees working in businesses with more than 100 staff and who have
      met a six month qualifying period of employment. Within this group,
      certain categories of employees are also exempt, including:


     . employees dismissed for 'genuine operational reasons';


     . short term casual employees (with less than 12 months regular and
       systematic employment), fixed term and fixed task employees,
       trainees, probationers and seasonal workers; and


     . employees not employed under award-derived conditions whose
       remuneration exceeds a rate specified in regulations.[36]


 198. Applications for unfair dismissal relief are made to the AIRC and must
      be on the grounds that the dismissal was harsh, unjust or
      unreasonable. Applications must also be lodged within 21 days of the
      dismissal, although the AIRC has the discretion to accept late
      applications.


 199. Once lodged, the AIRC will first attempt to conciliate the claim. If
      this is unsuccessful, the case will then move to arbitration and a
      binding order will be made. The AIRC's order may be for reinstatement
      or compensation. Compensation is capped and the amount cannot include
      any component for shock, distress, humiliation or other similar hurt
      caused by the termination.


 200. Parties in unfair dismissal claims may, with leave from the AIRC, be
      represented by a legal practitioner or other, non-legal representative
      or adviser. Appeals may also be granted by the AIRC except for certain
      matters. These include orders relating to the eligibility of an
      applicant to make a claim as well as those relating to whether a claim
      is frivolous, vexatious or lacking in substance. Decisions made by the
      AIRC to allow an extension of time on applications lodged after 21
      days, are also exempt from appeal.


Unfair dismissal under Work Choices


 201. Criticisms of the current unfair dismissal system revolve around two
      issues. The first is the reduction in unfair dismissal protections
      imposed by Work Choices (i.e. the 100 employee and genuine operational
      reasons exclusions). The second is the burden on business,
      particularly small business, of defending an unfair dismissal claim.


 202. The Work Choices legislation introduced exclusions from complying with
      unfair dismissal laws for businesses with 100 employees or less,
      removing unfair dismissal protection from approximately 4.6 million
      (or 56 per cent) of employees. Work Choices also stipulated that an
      unfair dismissal claim could not be made if the employee was dismissed
      for genuine operational reasons, or for reasons that include genuine
      operational reasons. These changes were introduced to reduce the
      administrative burden of defending an unfair dismissal claim for
      businesses that needed to make operational changes to the business
      structure but had the effect of significantly reducing the protections
      available to employees in businesses of 100 or more employees.


 203. Employer organisations asserted that for many businesses, the cost of
      defending a claim would often exceed the cost of paying out an
      employee that threatened to make a claim, leading to the practice of
      paying "go away" money.[37]


Proposed Changes


 204. The new system will remove the 100 employee exemption introduced under
      Work Choices and instead introduce new qualifying periods that have to
      be met before an unfair dismissal claim can be made - 12 months for
      employees of businesses with fewer than 15 employees and six months
      for employees in businesses with 15 or more employees. Casual
      employees will no longer be excluded but will have to meet the same
      qualifying periods as permanent employees, provided that they have
      been employed on a regular and systematic basis for the requisite
      period and they had a reasonable expectation of continuing employment
      by the employer.


 205. Employees not covered by a modern award or employed under collective
      agreements whose remuneration exceeds the high income threshold[38]
      and employees dismissed due to genuine redundancy will be excluded
      from making an unfair dismissal claim. Employees who are under a
      contract of employment for a specified period of time, for a specified
      task or for a specified season are also excluded from making a claim
      when their employment ends on the completion of the specified period,
      task or season. Similarly, an employee to whom a training agreement
      applies and whose employment is limited to the duration of that
      agreement is excluded from making a claim where their employment ends
      on completion of that training agreement.


 206. Applications for relief on the grounds that the termination was harsh,
      unjust or unreasonable must be lodged with Fair Work Australia (FWA)
      within 7 days. FWA will have discretion to accept late applications in
      exceptional circumstances.


 207. FWA will be able to consider matters such as whether the employee has
      completed the minimum qualifying period or whether the employer has
      complied with the Small Business Fair Dismissal Code in an informal
      and 'inquisitorial' manner. For example, FWA may gather information
      via telephone discussions with the parties, FWA may ask the parties
      for written information, or FWA may convene a face-to-face conference,
      either at the employer's premises or at FWA. Where there are contested
      facts between the parties, FWA will be required to either hold a
      conference or conduct a hearing.


 208. Any face-to-face conference will be informal with formal written
      submissions or cross examination not necessarily required. Only
      matters that are considered appropriate by FWA will be referred to a
      full public hearing. In considering what is appropriate FWA must have
      regard to the views of the parties and whether a hearing would be the
      most effective and efficient way to resolve the matter.


 209. In any matter being considered by FWA, the parties will be able to be
      supported by a non-legal representative or agent. Legal representation
      will only be allowed where FWA deems it appropriate.


 210. Reinstatement will be the preferred remedy. However, if it is not in
      the interests of the employee or the employer's business, compensation
      in lieu of reinstatement may be ordered. Compensation will be capped
      at half of the high income threshold (i.e. 6 months pay) immediately
      before the dismissal or worked out from the total remuneration
      received by the person or to which they were entitled during the 26
      weeks immediately before the dismissal. The factors for determining
      compensation within the maximum amount will be specified.


 211. There will also be a Small Business Fair Dismissal Code (the Code) for
      businesses with fewer than 15 employees (small business employers).
      The Code will set out the steps a small business employer needs to
      take in order for the dismissal to be fair. If an employee of a small
      business employer makes an unfair dismissal claim, FWA will first
      determine if the employer has complied with the Code. If so the
      dismissal will be considered fair. If the employer has not complied
      with the Code, the claim will treated in the same way as any other
      unfair dismissal claim, and FWA will go on to determine whether the
      dismissal was harsh, unjust or unreasonable.


How does it overcome the disadvantages of the old system?


 212. Abolishing the 100 employee exemption and replacing it with qualifying
      periods of 6 and 12 months (depending on the size of the employer)
      will allow many more employees to access unfair dismissal laws -
      estimated to be 6.7 million (or 80 per cent of employees) compared
      with 3.7 million (or 44 per cent of employees) under Work Choices.


 213. There are several aspects of the new system that should make
      compliance easier for businesses.


 214. For example, under the new system, the time limit to lodge an unfair
      dismissal claim will be reduced from 21 days to 7 days. The aim of the
      new time limit is to promote quick resolution of claims and increase
      the feasibility of reinstatement as an option. FWA will have
      discretion to accept late applications in exceptional circumstances.


 215. Similarly, employers will still be able to dismiss an employee in
      cases of genuine redundancy.


 216. There will also be special assistance for small business employers
      through the Small Business Fair Dismissal Code and a 12 month
      qualifying period for small business employees. Therefore, small
      businesses will have 12 months in which to assess the performance of
      an employee and terminate their employment if necessary. This will be
      adequate time for a small business to assess the performance of an
      employee.


 217. Small businesses tend not to have the resources to employ dedicated
      human resources professionals to help them manage dismissals. By
      providing a clear process and guidance to follow when dismissing an
      employee, the Code may help to mitigate any increase in unfair
      dismissal claims from small business employees, and provide certainty
      to small business when they need to dismiss an employee.


 218. The new system administered by FWA will be simpler and easier for all
      parties to use. Under the current system, an unfair dismissal claim
      must go through an initial conciliation stage, which goes on to
      arbitration if not able to be conciliated. In the new system, FWA will
      be able to respond to claims in a flexible and informal manner. This
      includes through initial inquisitorial inquiries, and where there are
      contested facts, an informal conference or hearing. FWA will be able
      to make binding decisions following a conference, without the need for
      a formal, public hearing. Where conferences are held, they will be
      able to be conducted at alternative venues, such as the employer's
      place of business, which will minimise the cost in time and lost
      earnings an employer may face in defending a claim.


 219. Overall the new system has more of a focus on early intervention and
      informal processes over the previous system. It will increase access
      to unfair dismissal remedies for employees while still imposing
      certain conditions on access that will benefit business, particularly
      small business.


Impact Analysis


 220. The unfair dismissal provisions in the Bill will increase the number
      of businesses and employees covered by unfair dismissal laws with the
      removal of the current exemption for firms employing less than 100
      employees. In addition, there will be changes to the process of
      resolving claims. The net regulatory effect will depend largely on the
      impact on employees who will be covered by unfair dismissal laws and
      the impact on employers employing less than 100 employees.


Impact on employees


 221. The major impact for workers will be that a larger number will be
      covered by unfair dismissal laws. It is estimated that with the
      removal of the exemption for firms employing less than 100 employees
      there will be an increase of 3 million workers covered by unfair
      dismissal laws in the federal workplace relations system, subject to
      them meeting certain qualifying periods.


 222. For these workers, the major benefit is that it provides reinstatement
      (or compensation) for those who are unfairly dismissed. This
      compensation will be capped at six months of salary. In addition:


     . The sense of justice could be an important benefit for those workers
       who are dismissed unfairly, although this benefit is difficult to
       estimate accurately.


     . There would also be a benefit to employees in having an option to
       have their case heard. Again, this benefit is difficult to estimate.




     . It could reduce the number of unfair dismissals - the presence of
       the law will provide an incentive for employers not to unfairly
       dismiss workers because of the legal consequences of doing so.


     . However, for employees who bring an unfair dismissal claim there is
       the cost of preparing and presenting their case, which in unusual
       cases, could include the hiring of a legal representative.


Impact on employers


 223. For employers the major impact is the cost of dealing with an unfair
      dismissal case and this is not just limited to the cost of paying
      compensation.


     . There is the cost of defending unfair dismissal cases, which
       involves time and possibly the cost of hiring legal representatives.
       However, under these provisions, legal representatives will only be
       allowed where FWA deems it appropriate.


     . As is currently the case, where an employer has been found to have
       unfairly dismissed an employee they will be required to reinstate or
       pay compensation to the dismissed employee.


     . It is also possible that employers will continue to employ an
       inefficient employee because of the possibility of that employee
       bringing an unfair dismissal claim, although the Bill provides
       additional time for an employer to assess the performance of an
       employee which mitigates against this.


 224. If employers perceive that there is a risk of an unfair dismissal
      claim being made, then this could increase the cost of employing
      workers and may reduce the incentive of businesses to employ workers.


 225. Another possible response from some employers may be to avoid
      compliance with the regulations, for example, it may increase the
      incentive for some employers to sack staff just before the qualifying
      periods or employing more staff on a contract basis. This type of
      behaviour is unlikely to be widespread given the costs of excessive
      staff turnover. Moreover, the time-based approach allows employers to
      ensure that the employee is right for the job before the probation
      period is over.


 226. Such a response is difficult to predict in advance but can be subject
      to monitoring and review. However, the Fair Dismissal Code is designed
      to provide small business employers and employees with clear
      guidelines to minimise the extent of unfair dismissal action.


Community-wide effect


 227. For the community, there is the cost of running the unfair dismissal
      process through FWA. The change in this cost will largely depend on
      how many unfair dismissal claims are made. This issue is discussed
      later in this section.


 228. Overall, the unfair dismissal laws will have a positive impact if the
      equity effect of reinstating or compensating those employees who are
      dismissed unfairly outweighs the cost borne by employers and employees
      in preparing and participating in the unfair dismissal process and the
      government to run it and any possible negative employment effect.


 229. The following sections provide empirical evidence on the size of these
      effects, starting with the possible impact on employment levels.


OECD Analysis of Employment Protection Legislation


 230. The OECD ranked Australia sixth in 2006 in terms of how strict its
      employment protection legislation (EPL) is compared with other OECD
      countries.[39] A relatively high ranking such as this implies a
      country's EPL is not too strict and that an employee can be dismissed
      without too much difficulty. The US and the UK, with the least strict
      EPL, had rankings of 1 and 2 respectively in 2006.[40]


 231. The precise relationship between EPL and employment is still unclear.
      The OECD stated in its 1999 Employment Outlook that:


      Simple, cross-country comparisons suggest that EPL has little or no
      effect on overall unemployment, but may affect its demographic
      composition. In countries where EPL is stricter, unemployment tends to
      be lower for prime-age men but higher for other groups, especially
      younger workers. However, this latter finding must be regarded as
      tentative, since it is not supported by the evidence from the
      multivariate regressions, except in the case of stricter EPL having a
      negative impact on the unemployment of prime-age men. [41]


 232. More recently, the OECD stated in its 2007 Going for Growth
      publication that:


      While some studies have found negative effects of stringent EPL on
      aggregate employment,[42] other evidence, including OECD research,
      finds no significant impact[43]. [44]


 233. In looking at the link between employment protection legislation and
      productivity, the OECD stated that the available literature is
      inconclusive about the direction of the overall effect.[45] In
      examining the specific issue of employment protection legislation and
      worker effort, the OECD noted that "layoff protection might reduce
      worker effort (thus productivity) because there is a lower threat of
      layoff in response to poor work performance or absenteeism" but
      "alternatively, layoff regulations could provide additional job
      security for workers, increasing job tenure and work commitment and
      making firms and workers more likely to invest in firm or job-specific
      human capital".[46]


Australian academic studies


 234. There are two Australian studies that attempted to estimate the
      employment impact of the unfair dismissal laws operating early this
      decade (Harding[47] and Freyens and Oslington[48]). The Harding study
      reports on a survey commissioned by the (then) Department of
      Employment and Workplace Relations under the previous Government.
      Although both studies found a negative employment effect, the extent
      of the impact differed significantly between the two studies and,
      subsequently, the authors of these studies have both contested the
      validity of each others' methodology.


 235. These studies are not considered relevant in assessing the current
      changes because the employment impact is based on the previous unfair
      dismissal laws that are different in their design and operation. For
      example, previous laws did not include a fair dismissal code for small
      business or the same qualifying periods that are afforded to employers
      to assess staff performance.


Number of businesses impacted


 236. The proposal to remove the current 100-employee exemption from unfair
      dismissal laws will impact primarily on businesses with 15-100
      employees. As noted above, businesses with fewer than 15 employees
      will have access to the Fair Dismissal Code and will have a 12 month
      qualifying period before an unfair dismissal claim can be made. As
      noted earlier, small business has been consulted extensively in the
      development of the Fair Dismissal Code.


 237. The ABS Counts of Australian Businesses, including Entries and Exits
      publication provides information on the count of businesses by number
      of employees. The latest data are for June 2007. Unpublished data from
      this publication show that there were 101,188 businesses with 15-99
      employees in June 2007.


 238. Data on the proportion of businesses who reported that they have had
      an employee or former employee take action or threaten to take action
      relating to unfair dismissal are available from the Sensis Business
      Index survey for August 2005. The Sensis Business Index is one of the
      most extensive and regular surveys of small businesses in
      Australia.[49]


 239. Unpublished data from the August 2005 Sensis Business Index show that
      around 35 per cent of businesses with 15-100 employees reported having
      an employee or former employee take action relating to unfair
      dismissal, 10 per cent reported that they have been threatened with
      action and 57 per cent reported they had neither had action taken or
      been threatened with action.[50]


 240. Importantly, these proportions relate to all threats or actions
      relating to unfair dismissals that have been made or taken by
      employees ever, rather than those that occurred during a specific
      period. The proportion of businesses who face threats or action
      relating to unfair dismissals each year would therefore be far lower
      than those reported in the Sensis Business Index. However, some
      businesses may have faced multiple unfair dismissal threats or action.


AIRC data


 241. Data from the AIRC 2004-05 Annual Report (the last full year before
      the commencement of Work Choices) show that 19.7 per cent of unfair
      dismissal claims are withdrawn, settled or otherwise discontinued
      prior to conciliation.[51] The data also show that 77 per cent of
      claims went to conciliation and were settled in 2004-05, while around
      5.4 per cent of cases proceeded to arbitration.[52]


 242. The AIRC 2004-05 Annual Report data also show that there were only
      6,707 lodgements of matters concerning termination in 2004-05.[53] As
      this figure includes both unfair dismissal and unlawful termination
      applications (these data were not disaggregated until 2006), this
      figure is an overestimate of the number of unfair dismissal cases in
      that year.


 243. While the 6,707 figure was at a time prior to the expansion of the
      federal system under Work Choices, the department expects this figure
      to remain relatively stable due to the introduction of the Small
      Business Fair Dismissal Code and the reduction of the time limit to
      lodge an unfair dismissal claim from 21 days to 7 days which will
      contract the window of opportunity for dismissed employees to lodge a
      claim.


Estimates of the costs of dismissal action


 244. Estimates of the costs of dismissal action are available from
      Oslington and Freyens[54]. The authors estimated that the average cost
      of an uncontested dismissal for employers under the old pre-Work
      Choices system is $3,044, representing 10.3 per cent of annual wage
      cost, $9,780 for a dismissal that reached conciliation and $12,818 for
      an arbitrated dismissal. This comprises:


     . time spent writing warnings;


     . obtaining managerial and legal advice;


     . gathering evidence and documenting the dismissal action; and


     . meeting with the employee to guarantee the employee's right to
       respond to the charges and meeting with union delegates (It may also
       include the time originally needed to take a decision with respect
       to poor performance or misbehaviour).


 245. These costs are based on the previous process in the AIRC. As noted
      above, the process for dealing with unfair dismissal claims will be
      far simpler and more efficient under FWA resulting in minimal costs to
      employers. Therefore, the Oslington and Freyens figures cannot be used
      to reliably estimate the potential cost to employers of the system
      proposed in the Bill.


Benefits to employees


 246. The removal of the 100-employee exemption for unfair dismissal laws
      carries is likely to provide significant benefits to a large number of
      employees. Indeed, survey data show that employees strongly support
      unfair dismissal laws because of the protection they offer via
      increased job security and a reduced feeling of vulnerability in the
      workplace.


 247. The March 2008 Sensis Consumer Report found that 26 per cent of
      Australians felt Work Choices has had a negative impact on them
      compared with 13 per cent who felt Work Choices had a positive impact
      (the report includes responses by business operators), resulting in an
      overall net negative impact of 13 per cent.


 248. In terms of unfair dismissal related concerns, the Sensis Consumer
      Report found that the main reasons given for Work Choices having a
      negative impact were: a view that employees were more vulnerable (21
      per cent), a feeling that it was negative in general (10 per cent), a
      feeling that the impact would be negative (6 per cent).


 249. For details on employee coverage of unfair dismissal laws please see
      Attachment B.


Table 8: Employer and employee stakeholder views on the new unfair
dismissal legislation

|                   |                                                     |
|Employer           |Almost all employer groups welcome the Fair Dismissal|
|Stakeholders       |Code's simplicity, clarity, and ease in application. |
|                   |                                                     |
|                   |Employer groups want to ensure that speculative or   |
|                   |frivolous unfair dismissal claims could not be       |
|                   |lodged, and that the proposed provisions take into   |
|                   |account the needs of small businesses.               |
|                   |                                                     |
|                   |Employer groups want to retain the current exemptions|
|                   |for unfair dismissal claims. Some also consider the  |
|                   |six month compensation cap to be too high.           |
|                   |                                                     |
|Employee           |Most support the existence of the Fair Dismissal Code|
|Stakeholders       |and other additional protections afforded under      |
|                   |unfair dismissal provisions, but they want these     |
|                   |provisions to be implemented immediately, and want   |
|                   |them administered by a strong umpire.                |
|                   |                                                     |
|                   |Unions believe that workers in small businesses      |
|                   |should have the same access to unfair dismissal      |
|                   |provisions as those in large businesses.             |

5. INDUSTRIAL ACTION

Current Arrangements


Protected industrial action - employees


 250. The concepts of protected action and a limited right to strike within
      a bargaining period were introduced in the Industrial Relations Reform
      Act 1993. The WR Act introduced prohibitions on action during the life
      of an agreement and payment during strikes and restored the
      prohibition against secondary boycotts.


 251. Protected employee industrial action may only be taken by an employee
      who is a negotiating party to the proposed agreement or an employee
      who is a member of a union that applied for a ballot order authorising
      the action.


 252. Employee industrial action is not protected if it is:


     . taken in support of prohibited content;


     . taken while a bargaining period is suspended;


     . taken, or organised by, persons who are not protected for that
       industrial action;


     . taken in support of pattern bargaining;


     . taken during the life of an agreement;


     . not authorised by a protected action ballot or taken in response to
       employer industrial action;


     . taken before the required notice has been given;


     . taken, or organised by, an employee or union who have not complied
       with Commission orders and directions; or


     . taken by a union but not authorised according to the union's rules.


 253. The prohibited content rules, introduced as part of the Work Choices
      amendments, restricted the matters over which employees could take
      protected industrial action.


Occupational Health and Safety (OHS) Exception


 254. Action taken by an employee because of a 'reasonable' concern of an
      imminent risk to his or her own health or safety is not classified as
      industrial action. Therefore, the employee is not susceptible to
      orders, sanctions or strike pay provisions. Currently, the onus of
      proof falls on an employee claiming this exemption.


Protected industrial action - employers


 255. Prior to the Work Choices amendments, the WR Act defined industrial
      action as 'the performance of work in a manner different from that in
      which it is customarily performed' and included bans, limitations or
      restrictions on the performance of work, or on acceptance of or
      offering for work [s.4(1)]. Until 2004, the AIRC took the view that
      the pre-Work Choices WR Act definition applied to action by employers,
      and on a number of occasions issued s127 orders that employer
      industrial action cease. In 2004, the Full Bench of the AIRC ruled, in
      a matter commonly known as The Age case, that termination of
      employment or giving notice of a termination could not be considered
      industrial action.[55]


 256. Work Choices limited the definition of employer industrial action to
      lockouts. Section 420(3) defines a lockout as: 'an employer locks out
      employees from their employment if the employer prevents the employees
      from performing work under their contracts of employment without
      terminating those contracts (except to the extent that this would be
      an expansion of the ordinary meaning of that expression)'.


 257. The narrowing of the definition ended the symmetry in the treatment of
      employer industrial action and employee industrial action under the WR
      Act.


 258. Protected employer industrial action may be taken by employers for the
      purpose of responding to employee industrial action or taken
      proactively to support or advance claims made in respect of a proposed
      agreement. Industrial action by an employer is not protected if the
      employer has not genuinely tried to reach agreement.


Strike pay


 259. The "no work-as-directed, no pay" principle has been part of the
      common law for more than 20 years. Since 1996, the WR Act has
      prohibited employers from making a payment to an employee in relation
      to a period in which the employee takes industrial action. It is also
      prohibited for employees to demand or accept such a payment from an
      employer.


 260. Work Choices introduced the 'four hour rule' whereby an employer must
      withhold four hours pay for a period of industrial action less than
      four hours in a day. For industrial action longer than four hours, the
      employer must not pay the employee for the total duration of the
      action on that day. The four hour rule applies to both protected and
      unprotected action.


 261. The four hour rule has been a source of confusion for some
      stakeholders and, it could be argued, in some cases, has resulted in
      employees taking action for longer periods than otherwise planned. The
      deduction of four hours pay for very short periods of industrial
      action is arguably punitive in nature for protected industrial action.
      For example, the breadth of the industrial action definition means the
      provisions technically require the docking of fours hours pay where
      employees return to work slightly late after a meeting during an
      unpaid period. There have been cases where workers have been docked
      four hours pay for holding brief meetings with little impact on an
      employer's business. In relation to overtime bans, the rule could
      arguably operate to prohibit payment for ordinary hours worked (for
      example, a 30 minute overtime ban could result in a loss of 3.5 hours
      of ordinary pay).


Protected action ballots


 262. The current protected action ballot process is set out in detail in
      the WR Act, running to some 44 sections. The process is complicated
      and prescriptive. The protected action ballot provisions in the WR Act
      impose the following requirements:


     . the application must have the support of at least the prescribed
       number of relevant employees;


     . the nominal expiry date of the relevant collective agreement(s) must
       have passed;


     . a copy of the application must be given to the other party and any
       person nominated to conduct the application within 24 hours; and


     . the application must include:


   - the question or questions to be asked;


     - details on the types of employees to be balloted;


     - any details required by the Rules of the Commission;


     - a copy of the notice to initiate bargaining;


     - a declaration that the industrial action to which the application
       relates is not for the purpose of supporting or advancing claims for
       prohibited content; and


     - written notice that the application has been duly authorised
       according with the union's rules (if the application is by a union);
       or


     - a document containing the name of each employee applicant (if the
       application is by a group of employees).


 263. Currently, a ballot order may only be issued by the AIRC if it is
      satisfied that the applicant:


     . has, during the bargaining period, genuinely tried to reach
       agreement with the employer; and


     . is genuinely continuing to attempt to reach agreement with the
       employer; and


     . is not engaged in pattern bargaining.


 264. The AIRC has discretion to refuse an application if granting it would
      be inconsistent with the objects of the protected action ballots
      division.


 265. Protected industrial action is available for 30 days after the
      declaration of the ballot result. The AIRC may, on application by the
      ballot applicant and the employer, extend this period by up to 30
      days.


 266. Currently, a ballot may be conducted by the AEC or another qualified
      ballot agent. The applicant must pay 20 per cent of protected action
      ballot costs, with the Commonwealth funding the remaining 80 per cent,
      regardless of who conducts the ballot. To date, only one application
      for a ballot order has been made by an employee and that application
      was made with the assistance of a union. There is an argument that
      this is likely due to the complexity of the process and the liability
      of the applicant to meet 20 per cent of the costs of the ballot.


 267. It is currently an offence to breach the protected action ballot
      provisions, although there have not been any criminal prosecutions to
      date.


 268. If a party challenges an order for a protected action ballot, the
      order can be stayed until the challenge is determined. This delays the
      conduct of the ballot and in some cases, has led to the ballot order
      expiring while the challenge is still being heard.


Suspending and terminating industrial action/a bargaining period


 269. The AIRC must order unprotected industrial action to stop, not occur
      or not be organised. Such an application must, as far as practicable,
      be heard and determined within 48 hours. If the AIRC is unable to do
      so, it must make an interim order.


 270. The AIRC must make an order to suspend or terminate a bargaining
      period (and therefore end access to protected action that is occurring
      or being organised) if it is satisfied that:


     . a party has failed to genuinely try and reach agreement with other
       parties;


     . there has been a failure to comply with an AIRC direction or order;


     . a union is organising industrial action in relation to employees who
       are not eligible to be members;


     . the industrial action relates to a demarcation dispute;


     . pattern bargaining is taking place; or


     . the industrial action is adversely affecting, or would adversely
       affect, the employer or employees; and is threatening or would
       threaten:


     - to endanger the life, the personal safety or health or the welfare,
       of the population or part of it ; or


     - to cause significant damage to the Australian economy or any part of
       it.


 271. The AIRC also has power to suspend a bargaining period if:


     . a party is taking protected industrial action and the Commission
       considers that a cooling off suspension is appropriate and would
       assist the parties to resolve the dispute; or


     . the action is adversely affecting the employer or employees and
       third parties are directly threatened with significant harm from the
       industrial action.


 272. The Federal Court may grant an injunction against industrial action if
      pattern bargaining is occurring or industrial action is taken during
      the life of an agreement.


 273. Ministerial power to terminate a bargaining period (which ends access
      to protected industrial action) applies if industrial action (or
      proposed action) adversely affects the negotiating parties and
      threatens, or would threaten:


     . the life, safety, health or welfare of the population (or part of
       it); or


     . significant damage to the Australian economy or an important part of
       it.


 274. If a bargaining period has been terminated by the AIRC or the Minister
      due to a threat to the life, safety, healthy or welfare of the
      population or the economy, a negotiating period applies in which the
      parties must attempt to settle the matters at issue. If the parties
      have not settled the matters by the end of the negotiating period (21
      days), a Full Bench of the AIRC must make a workplace determination.
      The workplace determination applies as if it were a collective
      agreement.


Proposed Changes


Protected industrial action


 275. Protected industrial action will continue to be available only during
      negotiations for an enterprise agreement.


 276. A pre-condition for taking protected industrial action will be that
      the participants are genuinely trying to reach agreement and are
      complying with any good faith bargaining orders in place.


 277. The requirement to hold a mandatory secret ballot authorising
      industrial action will be retained. However, provisions will be
      streamlined and simplified, impacting positively on users of the
      system. Further details are provided below.


 278. The protected action provisions will also be changed so that an
      "unprotected" person joining protected action will be subject to
      orders and penalties, but the action and its protected participants
      will not. This change will address any actual or perceived inequities
      in the current arrangements.


 279. These requirements are aimed at ensuring that industrial action is
      only taken during genuine bargaining and not for spurious reasons.
      This is consistent with minimising the economic impact of industrial
      action.


OHS Exception


 280. The reverse onus of proof regarding the health and safety exception to
      the definition of industrial action, introduced under Work Choices,
      will be removed - restoring the position that existed pre Work
      Choices. While employees will not be able to use the OHS exception as
      justification for action taken for industrial reasons, the burden will
      no longer be on the employee to demonstrate that he or she acted out
      of a reasonable concern for his or her health or safety.


 281. The few published decisions that considered the operation of the pre-
      Work Choices OHS exception make clear that it was not sufficient for
      an employee to simply assert that the action was based on a reasonable
      concern about an imminent risk to his or her safety. In these matters,
      the AIRC in effect required employees to establish the reasonableness
      of their concern as a defence to the employer's claim. Generally
      employees did not succeed.


Protected action ballots


 282. When making an application for a secret ballot, there will still be a
      requirement for applicants to be genuinely trying to reach agreement,
      but the current complex and prescriptive procedural requirements will
      be streamlined reducing the red tape burden on applicants, Fair Work
      Australia (FWA), the Australian Electoral Commission (AEC) and
      alternative approved ballot agents.


 283. Protected action ballots may be conducted by the AEC or alternative
      approved ballot agents. The Commonwealth will bear the full cost of
      conducting all the ballots conducted by the AEC.


 284. For ballots conducted by alternative ballot agents, the applicant will
      meet the full cost of conducting the ballot. As only a small number of
      ballots have been conducted by agents other than the AEC since the
      commencement of the secret ballot provisions.


 285. This measure will provide additional flexibility for ballot
      applicants. Stakeholders indicate that where a very small number of
      employees are to be balloted, some applicants find using an
      alternative provider to be quicker than the AEC. Applicants, such as
      non-union employee representatives who may lack funds to utilise an
      alternative approved ballot agent will no longer have any actual or
      perceived disincentive to apply for a ballot order, as they will be
      able to utilise the AEC, with the Government funding the total costs
      of conducting the ballot.


 286. Alternative ballot agents, and applicants choosing to use alternative
      ballot agents, will need to comply with regulations dealing with
      alternative ballot agents, including matters relating to the conduct
      of the ballot. For ballots not conducted by AEC, FWA will have the
      appropriate power to issue directions relating to the conduct of the
      ballot, including the timetable, compilation of roll and reports about
      the conduct of ballots. This should ensure that such ballots meet
      accountability expectations.


 287. FWA will no longer be able to stay protected action ballot orders in
      the event of a challenge to the application by an employer. Employers
      will still have recourse to FWA if industrial action is taken after
      the ballot and it is found that the other (non-ballot) requirements
      for protected action have not been met (for example, the party taking
      action is not genuinely trying to reach agreement). This will reduce
      delays in the protected action ballot process and prevent parties from
      having to re-apply for ballot orders that have expired during a
      challenge. The requirement that 50 per cent of employees must vote in
      a ballot to take industrial action and 50 per cent of these employees
      must support industrial action remains.


 288. Industrial action will continue to be protected if taken within 30
      days after the result of the ballot has been declared. FWA may extend
      the period by up to 30 days upon application by the applicant. As
      employers will no longer be required to consent to this application,
      employee access to protected industrial action will increase.


 289. Protected action ballot offences will be subject to civil penalties,
      not criminal proceedings. Any offences may be enforced by a wider
      range of people, such as FWA inspectors. This will ensure that ballot
      applicants and agents adhere to the provisions and it will increase
      protection for other parties.


 290. Applications for protected action ballot orders will be able to be
      made up to 30 days prior to the Nominal Expiry Date (NED), of an
      enterprise agreement. From a practical perspective, this will give
      employees access to protected industrial action earlier than is
      currently the case, as under current arrangements, a ballot order
      cannot be applied for until the NED of an agreement has past.


Employer industrial action


 291. Employer industrial action will continue to be defined as a lockout.
      However, employer industrial action will only be protected where the
      employer locks out employees in response to employee industrial
      action.


 292. This measure may reduce the incidence of lockouts and their negative
      impact on productivity and the economy. During a lockout, all
      production is typically lost and the financial impact on employees can
      be profound.


Strike pay


 293. The four hour rule for strike pay will be retained for unprotected
      industrial action. Additional options will be introduced to provide
      employers flexibility in managing partial work bans. Providing
      employers with some discretion on partial work bans should assist in
      resolving some disputes more quickly and efficiently.


 294. It will continue to be unlawful for an employer to pay, or an employee
      to demand or to accept strike pay for any period of protected or
      unprotected action. However, strike pay provisions will differ
      according to whether the industrial action is protected or
      unprotected.


Unprotected action


 295. Employers will be required to withhold four hours pay for any incident
      of unprotected industrial action up to, or including, four hours. For
      action longer than four hours, the employer will be required to
      withhold pay for the total duration of the action. This would include
      complete withdrawals of labour, overtime bans and partial work bans or
      restrictions. The rate of pay required to be withheld will be the rate
      of pay that would have applied to the period during which action was
      taken.


 296. This should act as a strong disincentive to taking unprotected action.
      Unprotected action typically has a greater impact on the economy as it
      is often targeted to cause significant damage to a business, with no
      opportunity afforded to the employer to prepare for or manage the
      impact.


Protected action: complete withdrawal of labour


 297. For protected action where there is a complete withdrawal of labour,
      such as a stoppage or strike, employers will be required to withhold
      pay for the actual period of industrial action taken. This is a more
      balanced response to protected industrial action, and may see the
      duration of periods of industrial action fall (e.g. stop work meeting
      of one hour then a return to work, rather than no production for four
      hours, if staff fail to return to work immediately following the
      meeting due to the four hour rule).


Protected action: overtime bans


 298. In the case of protected overtime bans, employees will not be paid for
      the overtime hours not worked, but pay for ordinary hours worked will
      be unaffected.


Protected action involving partial work bans or restrictions


 299. The employer will now be able to choose to:


     . accept the partial performance by employees and continue to pay full
       salary, or


     . lock out the employees, or


     . refuse to accept partial performance and (where the agreement or
       contract allows) stand the employees down until such time as they
       are prepared to perform all their duties, or


     . issue a 'partial work notice' and apportion pay according to work
       performed.


 300. This measure will provide employers with more discretion and
      flexibility on how to best manage the impact of the situation when
      action of this nature is taken. This may assist in resolving disputes
      more efficiently and may prevent the escalation of some disputes.


Process for apportioning pay where partial performance is accepted and a
"partial work notice" is issued


 301. An employer will be required to issue a written notice accepting
      partial performance and specifying the proportion of the employee's
      wages to be deducted that are reasonably attributable to the work
      which is the subject of the ban. The amount to be deducted will not be
      damages suffered by the business, but will relate to the proportion of
      the employee's work not performed and his or her normal wages. At
      least one working day must elapse after the notice before a deduction
      is made.


 302. FWA will have the power to settle any dispute about the proportion of
      wages that should be deducted.


 303. There will be no deduction from wages if an employee has not done
      anything except express an intention to not do something if asked, for
      example, work unrostered overtime or commence a task.


Termination of industrial action


 304. The concept of a bargaining period has been removed in the Bill,
      although industrial action will continue to be protected during
      bargaining for an enterprise agreement. FWA will be required to order
      industrial action to end if it is causing or may cause significant
      harm to the Australian economy or to the safety or welfare of the
      community.


 305. FWA will have discretion to end industrial action and determine a
      settlement where industrial action is protracted and significant
      economic harm is being caused to, or is imminent for, both of the
      bargaining parties.


 306. However, Ministerial power to terminate industrial action will be
      restricted to 'essential services' only. This is likely to have a
      neutral impact, as, to date, the Ministerial power to stop industrial
      action has never been used. This will also help ensure the
      independence of FWA.


Impact Analysis


 307. Many of the current industrial action provisions are retained in the
      Bill. The Bill retains clear, tough rules regarding industrial action,
      though aspects of the framework will be streamlined and simplified.
      From a regulatory perspective, this should impact positively on
      employers and employees and their representatives. Where provisions
      have been streamlined, for example the definition of pattern
      bargaining, feedback from stakeholders has been taken into account to
      ensure no effective change to the regulations.


 308. While, generally speaking, industrial action has a negative impact on
      productivity, these proposals recognise the right of bargaining
      participants to take protected industrial action and provide the
      employer with a proportionate response. The options for managing
      partial work bans give additional flexibility and discretion to
      employers. The provisions will provide clarity and improve the
      regulatory impact in this regard.


Protected industrial action


OHS exception


 309. To the department's knowledge, since Work Choices, there have been six
      applications for section 496 orders made to the AIRC which have
      concerned the OHS exception. Of these six, one application was upheld,
      one application was withdrawn after employees subsequently returned to
      work and four attempts to rely on the OHS exception were unsuccessful.




 310. The limited number of OHS exception claims in relation to section 496
      orders made to the Commission may reflect that the express requirement
      to prove the OHS case has dissuaded employees from stopping work over
      legitimate OHS concerns.


 311. Two OHS exception claims were also made by employees as a response to
      orders or injunctions sought by employers under s36 of the Building
      and Construction Industry Improvement Act 2005 and s494 of the WR Act.
      Neither of these exception claims was successful.


 312. While removing the reverse onus of proof will reduce the regulatory
      burden on an employee for action taken out of concern for his or her
      health or safety, this may result in employees being more prepared to
      take action over legitimate OHS concerns.


Protected action ballots


Genuinely trying to reach agreement


 313. The current pre-requisite for a protected action ballot application is
      that the party must be genuinely trying to reach agreement. From the
      commencement of Work Choices in 2006 to 18 February 2008, there were
      19 decisions published where an application was not approved - 11 of
      these applications were refused because the party was not genuinely
      trying to reach agreement. Retaining the requirement for parties to be
      genuinely trying to reach agreement before a ballot order is granted
      will help to ensure that parties focus on agreement making and the
      Government does not fully fund ballots authorising industrial action
      which would be unprotected at the time of the application.


Results of protected action ballots


 314. Of the 19 unsuccessful protected action ballot applications in which
      reasons were published, seven were rejected because of procedural
      errors. These errors included:


     . the bargaining period was not properly notified as the notice
       referred to wrong employer, employees, or provisions in Act;


     . the bargaining period notice was unsigned;


     . the nominal expiry date hadn't passed; and


     . the employee applicant didn't advise the employer of the application
       in time.



 315. Streamlining the protected action ballot provisions and reducing
      procedural complexity will have a positive regulatory impact on
      applicants.


Employer industrial action


 316. The number of employee applications for orders that employer
      industrial action cease, or not occur, has fallen sharply since the
      Work Choices amendments. In 2007, there were two such applications
      compared with 38 in 2005.


 317. Evidence on the number of working days lost due to lockouts is
      limited, but research presented by Briggs suggests that while lockouts
      comprised a small proportion of disputes between 1999 and 2003, they
      were responsible for just over half of long disputes (disputes that
      lasted more than a month) and therefore a disproportionate number of
      working days lost.[56]


 318. It is possible therefore that restricting protected employer
      industrial action to reactive lockouts only will reduce the number of
      working days lost to disputes, impacting positively on productivity
      and the economy more broadly.


Table 7: Employer and employee stakeholder views on new industrial action
provisions

|                   |                                                     |
|Employer           |Employer groups generally support the retention of   |
|Stakeholders       |existing industrial action provisions, including     |
|                   |secret ballots.                                      |
|                   |                                                     |
|                   |While supporting the role of FWA in issues arising   |
|                   |with secret ballots, some groups are concerned with  |
|                   |the proposed arbitration powers of FWA for protracted|
|                   |disputes. Employer groups have suggested that if such|
|                   |provisions are to be in the Bill, the threshold for  |
|                   |arbitration must be very high and the notion of harm |
|                   |should be defined as 'economic harm'.                |
|                   |                                                     |
|                   |Most employer groups support the four hour rule,     |
|                   |noting that this has been a disincentive to taking   |
|                   |industrial action. One group would like some         |
|                   |discretion in applying the rule, but this is not     |
|                   |generally supported by other employer groups.        |
|                   |                                                     |
|Employee           |Employee groups are dissatisfied with retaining the  |
|Stakeholders       |four hour rule for unprotected industrial action.    |
|                   |They do not support the four hour rule, and have     |
|                   |argued that it is counter-productive to business, as |
|                   |it provides no incentive for workers to return to    |
|                   |work for the remaining work day.                     |
|                   |                                                     |
|                   |Unions are opposed to holding secret ballots for     |
|                   |initiating protected industrial action.              |
|                   |                                                     |
|                   |Employee groups reaffirm the need for a strong umpire|
|                   |to settle disputes, believing that otherwise         |
|                   |employers could deliberately frustrate collective    |
|                   |bargaining negotiations. As such, they support last  |
|                   |resort arbitration to resolve protracted disputes.   |
6. INSTITUTIONAL FRAMEWORK

Current Arrangements


 319. Under the current system, there are a range of separate statutory
      agencies that share responsibility for various aspects of the
      workplace relations system. The various agencies and their roles and
      responsibilities are detailed as follows:


     . Australian Industrial Relations Commission (AIRC) is responsible for
       creating modern awards, resolving industrial disputes and dealing
       with unfair dismissal claims. The AIRC has a five-tier officeholder
       structure: the President, Vice Presidents, Senior Deputy Presidents,
       Deputy Presidents and Commissioners


     . Australian Industrial Registry (AIR): provides registry and
       administrative support to the AIRC and is headed by the Industrial
       Registrar, a statutory office holder and agency head.


     . Australian Fair Pay Commission (AFPC): is responsible for conducting
       wage reviews and exercising wage-setting powers, as well as
       promoting an understanding of matters relevant to its wage-setting
       and other functions. The AFPC consists of the AFPC Chair, four AFPC
       Commissioners and is supported by a secretariat.


     . Workplace Authority (WA): is headed by a Director and has
       responsibility for a number of functions including: promoting the
       understanding of federal workplace relations legislation and the
       making of workplace agreements; providing education, assistance and
       advice to employees, employers and organisations; accepting
       lodgement of workplace agreements and notices about transmission of
       instruments; assessing workplace agreements to determine whether
       they pass the No Disadvantage Test; authorising multiple business
       agreements; analysing workplace agreements; and, referring matters,
       where necessary, to the Workplace Ombudsman for investigation.


     . Workplace Ombudsman (WO): is a statutory agency, headed by the
       Workplace Ombudsman, and is responsible for promoting and monitoring
       compliance with, and investigating suspected contraventions of,
       federal workplace relations laws, awards and agreements.


     . Australian Building and Construction Commission (ABCC): is a
       statutory agency, established under the Building and Construction
       Industry Improvement Act 2005, to undertake a compliance function in
       the building and construction industries.


     . Judicial functions are also conferred by the WR Act on the Federal
       Court, the Federal Magistrates Court and in some cases, state and
       territory courts.


Government Policy on the Workplace Relations Institutional Framework


 320. The Government's objectives for the workplace relations institutional
      framework are twofold. One is to efficiently integrate the services
      that currently span seven agencies, to ensure the public is provided
      with a streamlined, accessible, one-stop shop on workplace relations
      issues. The other key objective is to combine the best elements of the
      past arrangements, particularly the historical independence of
      Australia's industrial umpire, with new approaches so that they are
      less formal, legalistic and adversarial. The aim is to ensure the new
      institutional framework is both accessible and responsive in providing
      fair, efficient services to users.


Proposed Changes


 321. The Government will establish a new institution, Fair Work Australia
      (FWA), which will replace the AIRC, AIR, AFPC, WA and WO from 1
      January 2010 and the ABCC from 1 February 2010. The key functions of
      FWA will include:


     . minimum wage-setting and adjustment by a specialist Minimum Wages
       Panel to be established within FWA;


     . award variation;


     . ensuring good faith bargaining;


     . facilitating multi-employer bargaining for the low paid;


     . dealing with industrial action:


     . approval of agreements; and


     . resolution of disputes and unfair dismissal matters.


 322. A diagram illustrating the structure of FWA is at Figure 3. FWA will
      comprise the FWA President, deputy presidents, commissioners and
      specialist Minimum Wages Panel members, as well as a general manager
      and administrative staff.


 323. FWA members will be appointed via a merit based process. A panel of
      federal and state and territory senior government officials will
      shortlist candidates with bipartisan consultation and consultation
      with the President of FWA to be undertaken before appointments can be
      made. All current AIRC members will be invited to become FWA members.


 324. FWA will be complemented by a related but independent and separate
      statutory agency, the Office of the Fair Work Ombudsman, and newly
      created Fair Work Divisions of the Federal Court and the Federal
      Magistrates Court. The Office of the Fair Work Ombudsman will be
      headed by the Fair Work Ombudsman. It will have separate governance
      arrangements and will have an educative role in the new system.
      However, its day-to-day operations will be practically integrated with
      FWA. Fair Work Inspectors will be appointed by the Fair Work
      Ombudsman. It will be possible for the Fair Work Ombudsman to
      establish specialist divisions in the Office to focus on persistent or
      pervasive unlawful behaviour in particular industries or sectors.


 325. Fair Work Divisions of the Federal Court and the Federal Magistrates
      Court will operate as the independent judicial arm of FWA. Matters
      brought under the Bill will be required to be heard and determined in
      the Fair Work Divisions. State and territory courts will continue to
      have jurisdiction to hear and determine claims in respect of breaches
      of awards, workplace agreements and minimum entitlements.


 326. The Wilcox Inquiry is reviewing the operation of the ABCC. The Hon
      Murray Wilcox QC, a former Australian Federal Court judge, is
      conducting consultation on the structure, independence, powers,
      resourcing and other matters relating to the new specialist division
      and will report to the Government by the end of March 2009.


Figure 2: Structure of Fair Work Australia

|Fair Work Australia                     |Office of the    |Fair Work Divisions|
|                                        |Fair Work        |of the Federal     |
|                                        |Ombudsman        |Court and the      |
|                                        |                 |Federal Magistrates|
|                                        |                 |Court              |
|President of FWA                        |                 |                   |
|Statutory office holder with tenure to  |Fair Work        |New specialist Fair|
|age 65                                  |Ombudsman        |Work Divisions will|
|                                        |Statutory office |be created in      |
|                                        |holder           |Federal Court and  |
|                                        |Will promote     |Federal Magistrates|
|                                        |compliance with  |Court              |
|                                        |legislation,     |Will deal with all |
|                                        |including through|matters arising    |
|                                        |education,       |under new workplace|
|                                        |information and  |legislation        |
|                                        |assistance       |Will deal with     |
|                                        |Will appoint Fair|entitlements under |
|                                        |Work Inspectors  |a contract of      |
|                                        |                 |employment about   |
|                                        |                 |matters in the NES |
|                                        |                 |(e.g. leave) or    |
|                                        |                 |modern awards (e.g.|
|                                        |                 |wages)             |
|                                        |                 |Small claims       |
|                                        |                 |procedure extended |
|                                        |                 |to the Federal     |
|                                        |                 |Magistrates Court  |
|Tribunal functions |Non-Tribunal       |                 |                   |
|                   |functions          |                 |                   |
|                   |                   |                 |                   |
|FWA Members        |General Manager and|                 |                   |
|Statutory office   |staff              |                 |                   |
|holders with tenure|Statutory office   |                 |                   |
|to age 65          |holder             |                 |                   |
|Functions/powers,  |Will provide       |                 |                   |
|include:           |assistance to      |                 |                   |
|Approval of        |President and FWA  |                 |                   |
|enterprise         |members            |                 |                   |
|agreements         |Exercise powers    |                 |                   |
|Awards review and  |under delegation of|                 |                   |
|variation          |President          |                 |                   |
|Good faith         |Will manage FWA    |                 |                   |
|bargaining orders  |staff, who will    |                 |                   |
|Unfair dismissal   |assist FWA members |                 |                   |
|Industrial action  |to discharge       |                 |                   |
|orders             |functions          |                 |                   |
|Mediation and      |(including         |                 |                   |
|dispute resolution |ancillary          |                 |                   |
|FWA will have broad|non-determinative  |                 |                   |
|powers to conduct  |functions, e.g.    |                 |                   |
|matters and inform |provide registry   |                 |                   |
|itself as it       |functions, gather  |                 |                   |
|considers          |information for    |                 |                   |
|appropriate in an  |matters before FWA)|                 |                   |
|informal and       |                   |                 |                   |
|non-adversarial way|Provide information|                 |                   |
|(e.g. compulsory   |about role and     |                 |                   |
|conferences)       |functions of FWA   |                 |                   |
|                   |                   |                 |                   |
|                   |                   |Fair Work        |                   |
|                   |                   |Inspectors       |                   |
|                   |                   |Powers include:  |                   |
|                   |                   |Entry to premises|                   |
|                   |                   |to monitor       |                   |
|                   |                   |compliance with  |                   |
|                   |                   |legislation or   |                   |
|                   |                   |instruments made |                   |
|                   |                   |under legislation|                   |
|                   |                   |(e.g. NES,       |                   |
|                   |                   |awards,          |                   |
|                   |                   |agreements)      |                   |
|                   |                   |Bring court      |                   |
|                   |                   |proceedings to   |                   |
|                   |                   |enforce rights   |                   |
|                   |                   |and obligations  |                   |
|                   |                   |Investigate and  |                   |
|                   |                   |enforce common   |                   |
|                   |                   |law entitlements |                   |
|                   |                   |that relate to   |                   |
|                   |                   |the NES or modern|                   |
|                   |                   |awards           |                   |
|                   |                   |                 |State and Territory|
|                   |                   |                 |Courts             |
|                   |                   |                 |                   |
|                   |                   |                 |State and Territory|
|                   |                   |                 |Courts will retain |
|                   |                   |                 |existing           |
|                   |                   |                 |jurisdiction and   |
|                   |                   |                 |powers             |
|Minimum Wages Panel|                   |                 |                   |
|                   |                   |                 |                   |
|Will set and adjust|                   |                 |                   |
|wages in its annual|                   |                 |                   |
|wage review        |                   |                 |                   |
|Headed by President|                   |                 |                   |
Less formality


 327. FWA will move away from formal, adversarial processes, with legal
      representation and intervening parties. There will also be a higher
      bar set for representation. Permission for representation will only be
      granted to parties (including the Minister) where it would enable the
      matter to be dealt with more efficiently or fairly.[57] It is
      envisaged that in most cases legal representation will not be
      necessary.


 328. The language employed to describe FWA functions and powers will move
      away from powers and procedures premised on all matters being dealt
      with by hearing and instead reflect the fact that matters may be dealt
      with through a range of processes (for example, on the papers). The
      ability to decide matters 'on the papers' combined with the proposed
      FWA less-adversarial style will add to the informality of proceedings.




 329. In most cases, FWA's powers and functions will be exercised by a
      single FWA member with FWA staff performing ancillary non-
      determinative functions. Staff will conduct initial enquiries and
      gather information about a matter before FWA. This will be
      particularly important in relation to approval of agreements and
      unfair dismissal applications. This large range of ancillary functions
      to be performed by FWA staff will allow FWA to act quickly, informally
      and by avoiding unnecessary technicality.


 330. When dealing with a matter under the small claims procedure, the Fair
      Work Division may act in an informal manner, will not be bound by
      formal rules of evidence, and may act without regard to legal form and
      technicality. The Court will have discretion to allow a person to be
      represented by a lawyer but in most cases this will not be necessary.


A 'one-stop shop' - closer to workplaces, more accountable and quicker in
response


 331. FWA staff will perform ancillary non-determinative functions for
      workplace agreement and unfair dismissal matters. In addition, the
      need for legal representation before FWA will be minimised as there
      will be a move away from a third person 'intervening' in a proceeding
      towards a 'right to be heard'. FWA will only grant permission for a
      person to be heard where it would enable the matter to be dealt with
      more efficiently, or the person or organisation (or its members) are
      likely to be directly affected by the outcome of the matter, or it
      would be in the public interest. This means that a person being heard
      or making a submission will not have the right to cross-examine,
      appeal, or exercise a range of other rights enjoyed by parties. These
      two measures should minimise delays and quicken proceedings while
      still according the parties procedural fairness.


 332. It is anticipated that restricting responsibility for decision making
      to FWA members however, will improve the consistency of decision
      making and consequently reduce the rate of appeals - making for a
      shorter process and greater accountability. A potentially lower rate
      of FWA appeals would contrast with the proportionate increase in the
      number of AIRC appeals under Work Choices. Currently, appeals to a
      full bench are restricted to AIRC and AIR matters. Appeals against WA
      decisions (for example in relation to whether an agreement passes the
      No Disadvantage Test) however are prohibitive as they must currently
      go to the High Court. Under FWA, appeals against a decision by a
      single member (or by the General Manager or FWA staff under
      delegation) will generally be by leave to a Panel. This will provide
      greater accountability in relation to, for example, decisions on
      whether agreements pass the BOOT.


 333. In relation to any subsequent appeals, it will be cheaper and more
      streamlined for litigants to commence appeal proceedings in the
      Federal Court, rather than the High Court which is currently the case
      for decisions of the AIRC, Registry, AFPC and the WA.


 334. FWA will be required to disclose information about, and provide copies
      of, notifications or applications to FWA and orders, decisions or
      actions made by FWA to the Office of the Fair Work Ombudsman. This
      will address the current problem of the AIRC not being able to pass on
      information that contains 'personal information' to the WO, and is
      consistent with the two agencies operating as a 'one-stop shop' to
      reduce delays.


 335. Delays will also be reduced through requiring employers to 'allow
      access' to inspectors. Currently WO investigations may be sometimes
      frustrated by employers not facilitating the work of inspectors
      through access to premises. Inspectors will also be able to perform
      their functions more effectively by being able to take assistants,
      such as an interpreter or forensic accountant, on-site.


 336. Inspectors will also be allowed to investigate and enforce common law
      safety net entitlements, that is, entitlements relating to the NES or
      a modern award, where there is a breach of the NES, modern award,
      enterprise agreement or wages order. This will allow the Fair Work
      Ombudsman to assist employees resolve statutory and basic common law
      underpayments at the same time, and provides a 'one-stop shop' for
      enforcement of these matters.


 337. The legislation will allow entitlements under a common law contract of
      employment that relate to matters in the NES, such as leave and notice
      of termination and redundancy, or modern awards (for example, wages,
      penalty rates and allowances) to be enforced by the Federal Court and
      the Federal Magistrates Court. This will make it easier to enforce
      related entitlements at the same time. State and territory courts will
      also be able to hear claims about these matters.


 338. The existing small claims mechanism will be extended to the Fair Work
      Division of the Federal Magistrates Court and the monetary limitation
      of the small claims mechanism will be increased from $10,000 to
      $20,000 (including in relevant state and territory courts). This will
      allow employees to elect to have claims about entitlements, such as
      underpayment of wages, dealt with under a simple and quick mechanism. 


Dispute Mediation and Resolution


 339. The Department expects that case flow measures will improve as a
      result of FWA being responsive and able to visit workplaces to offer
      assistance and resolve issues quickly and informally. As shown in
      Table 8 below, the average time taken to hold the first hearing in a
      dispute resolution of 28 days includes an average of 16 days taken by
      the AIR to formally list the hearing.[58] In relation to termination
      of employment claims, 85 per cent of cases are finalised within 102
      days. As FWA will be more flexible, the Department expects that these
      processing times will fall. This is likely to be particularly the case
      in relation to dispute resolution, an area in which case flow times
      have increased since Work Choices.


Table 8: Current AIRC case flow statistics

|Nature of proceeding |Event        |No. of|Days from lodgement              |
|                     |             |cases |                                 |
|                     |             |%     |                                 |
|                                     |             |             |2003-04      |
|                                     |Target       |Outturn      |Target       |
|                                     |target       |outturn      |target       |
|                                                          |target|outtur|target|
|                                                          |      |n     |      |
|Number of collective conciliation requests received       |896   |912   |952   |
|Number of workplace projects started                      |237   |221   |245   |
|Number of requests for trade dispute arbitration          |47    |47    |57    |
|Number of calls answered by the national helpline         |885,35|839,33|906,55|
|                                                          |3     |5     |3     |
|Number of calls answered by Equality Direct               |5,238 |6,181 |5,061 |
|Number of advisory visits                                 |1,9724|1,343 |2,002 |
|Number of training sessions delivered                     |2,500 |2,707 |2,964 |
|Number of equality contracts delivered                    |1995  |1,008 |135   |
|Parties to tribunal cases who felt that ACAS helped speed |n/a   |n/a   |81%   |
|up the resolution of their case                           |      |      |      |
|Costs of completed collective conciliation cases where a  |£2,773|£2,044|£1,673|
|settlement was achieved or significant progress made      |      |      |      |
|Cost of an arbitration hearing                            |£2,414|£2,287|£1,650|
|Cost of an individual conciliation case settled or        |£213  |£219  |£280  |
|withdrawn                                                 |      |      |      |
|Cost of a helpline enquiry answered                       |£8.50 |£9.11 |£7.33 |
|                                                          |      |      |      |
|[62] This figure was reported as 80% in 2005/06 but was later adjusted to 68%  |
|2 This KPI has been changed. Therefore, it is not possible to have direct      |
|comparisons with previous years.                                               |
|3 This KPI has been changed. Therefore, it is not possible to have direct      |
|comparisons with previous years.                                               |
|4 For 2007/08 this includes in-depth advisory telephone calls which have       |
|replaced some visits to maximise the number of employees assisted with the     |
|available resource                                                             |
|5 The variance between 2006/07 and 2007/08 is due to a change in the           |
|methodology for recording equality and diversity contracts. The new system now |
|focuses solely on recording equality and diversity policies, procedures and    |
|health checks with all advice and workplace training captured elsewhere. It is |
|not therefore possible to make a direct comparison between the years.          |


 340. The Office of the Fair Work Ombudsman will investigate and enforce NES
      and modern award entitlements much in the same manner as the Workplace
      Ombudsman currently investigates and enforces award and agreement
      entitlements.


 341. The new Fair Work Divisions of the Federal Court and the Federal
      Magistrates Court will likely result in a reduced regulatory impact as
      employees and employers will be able to have claims about entitlements
      dealt with under a simple and quick mechanism.


Table 10: Employer and employee stakeholder views on new institutional
framework provisions

|                   |                                                     |
|Employer           |Employer groups have raised concerns over the        |
|Stakeholders       |separation of FWA's judicial and non judicial roles. |
|                   |Many are satisfied with the incorporation of powers  |
|                   |from current stand-alone institutions into FWA, but  |
|                   |want assurances that there will be no arbitration for|
|                   |matters above the safety net.                        |
|                   |                                                     |
|                   |All employer groups want the existing powers of the  |
|                   |Australian Building and Construction Commission to be|
|                   |incorporated into the Fair Work Inspectorate beyond  |
|                   |2010, although some want the ABCC to remain as a     |
|                   |stand-alone entity. Some groups warn that major      |
|                   |projects are at risk should the powers of the ABCC be|
|                   |watered down.                                        |
|                   |                                                     |
|                   |Some employer groups support current members of the  |
|                   |AIRC being appointed to FWA.                         |
|                   |                                                     |
|                   |Some employer groups have also sought a lower        |
|                   |threshold to appeal decisions of FWA (particularly   |
|                   |any arbitrated outcomes).                            |
|                   |                                                     |
|Employee           |Unions want FWA to have strong powers to enforce     |
|Stakeholders       |collective rights and resolve disputes in the new    |
|                   |bargaining framework, to enforce the provisions in   |
|                   |the NES, and to enforce unfair dismissal protections |
|                   |for workers.                                         |
|                   |                                                     |
|                   |All unions want the powers of the ABCC, and the      |
|                   |institution, to be abolished and are critical of its |
|                   |proposed retention by the Government until 31 January|
|                   |2010. Unions are unhappy that workers in the building|
|                   |and construction industry are regulated differently  |
|                   |to the rest of the workforce.                        |

POST IMPLEMENTATION REVIEW

 342. The Government is committed to ensuring that the new workplace
      relations system provides a fair and flexible workplace relation
      system that achieves the right balance between employers and
      employees. As part of this commitment, the Government will be putting
      in place appropriate information gathering mechanisms. This will
      ensure that, once implemented, the new measures can be closely
      monitored, to enable the evaluation of their effectiveness in
      achieving the Government's policy objectives as stated in this impact
      analysis in a clear and transparent manner.



                                                                ATTACHMENT A

Table A1: Consultations conducted by the Australian Government in the
development of the Substantive Bill

|Forum    |Membership                                           |Meetings |
|         |                                                     |         |
|Workplace|Council of federal, state and territory Workplace    |1 Feb 08 |
|Relations|Relations Ministers, with the New Zealand Minister of|23 May 08|
|Ministers|Labour invited as an observer.                       |         |
|' Council|                                                     |22 Aug 08|
|         |Current Membership:                                  |         |
|(WRMC)   |                                                     |5 Nov 08 |
|         |The Hon Julia Gillard MP   |Mr John Hargreaves MLA   |         |
|         |(Cth)                      |(ACT)                    |         |
|         |The Hon John Hatzistergos  |The Hon Troy Buswell MLA |         |
|         |MLC (NSW)                  |(WA)                     |         |
|         |The Hon Joseph Tripodi     |The Hon Paul Caica MP    |         |
|         |(NSW)                      |(SA)                     |         |
|         |The Hon Robert Knight MLA  |The Hon Allison Ritchie  |         |
|         |(NT)                       |MLC (TAS)                |         |
|         |The Hon John Mickel MP     |The Hon Trevor Mallard MP|         |
|         |(QLD)                      |(NZ)                     |         |
|         |The Hon Tim Holding MP     |                         |         |
|         |(VIC)                      |                         |         |
|         |The Hon Rob Hulls MP (VIC) |                         |         |
|         |                           |                         |         |
|         |                                                     |         |
|High     |At a meeting of WRMC on 1 February 2008, members     |7 Feb 08 |
|Level    |agreed to establish a high level officials' group to |18 Feb 08|
|Officials|collaborate on the development of the new workplace  |         |
|' Group  |relations system and its interface with state        |25 Feb 08|
|(HLOG)   |systems.                                             |         |
|         |                                                     |6-7 Mar  |
|         |                                                     |08 13 Mar|
|         |                                                     |08       |
|         |                                                     |9 Apr 08 |
|         |                                                     |30 Apr 08|
|         |                                                     |         |
|         |                                                     |16 Jun 08|
|         |                                                     |         |
|         |                                                     |2 Jul 08 |
|         |                                                     |17 Jul 08|
|         |                                                     |         |
|         |                                                     |29 Jul 08|
|         |                                                     |         |
|         |                                                     |17 Sept  |
|         |                                                     |08       |
|         |                                                     |         |
|         |                                                     |         |
|National |Chair: The Hon Julia Gillard MP, Minister for        |24 Jan 08|
|Workplace|Employment and Workplace Relations. Membership is    |         |
|Relations|made up of seven representatives from employer       |14 Mar 08|
|Consultat|associations, and seven representatives from the     |         |
|ive      |ACTU:                                                |16 Sept  |
|Council  |                                                     |08       |
|(NWRCC)  |Current Membership:                                  |         |
|         |Mr Jeff Lawrence (ACTU)    |Mr Peter Anderson (ACCI) |         |
|         |Ms Sharan Burrow (ACTU)    |Mr Steven Knott (ACCI)   |         |
|         |Mr Geoff Fary (ACTU)       |Mr Graham Harris (ACI)   |         |
|         |Mr Joe De Bruyn (ACTU)     |Ms Denita Wawn (NFF)     |         |
|         |Ms Cath Bowtell (ACTU)     |Mrs Heather Ridout (AiG) |         |
|         |(Vacant, to be determined) |Mr Richard Calver (MBA)  |         |
|         |(ACTU)                     |Dr Ruth Dunkin (BCA)     |         |
|         |(Vacant, to be determined) |                         |         |
|         |(ACTU)                     |                         |         |
|         |                                                     |         |
|Committee|COIL is a sub-committee of NWRCC.                    |7-17 Oct |
|on       |                                                     |08       |
|Industria|On 18 December 2007, the Deputy Prime Minister       |14 Nov 08|
|l        |invited all NWRCC members to attend COIL. On 16      |         |
|Legislati|September 2008, the Deputy Prime Minister indicated  |         |
|on       |that other stakeholders such as state territory      |         |
|(COIL)   |officials would be invited to consider the draft     |         |
|         |Workplace Relations Bill.                            |         |
|         |                                                     |         |
|         |                                                     |         |
|         |                                                     |         |
|         |                                                     |         |
|         |                                                     |         |
|         |                                                     |         |
|Business |Chair:                                               |27 Feb 08|
|Advisory |Mr John Denton, Partner and Chief Executive Officer, |         |
|Group    |Corrs Chambers Westgarth                             |4 March  |
|(BAG)    |National Workplace Relations Consultative Council    |08       |
|         |(NWRCC) Representative:                              |11 April |
|         |Ms Heather Ridout, Chief Executive of the Australian |08       |
|         |Industry Group                                       |22 April |
|         |                                                     |08       |
|         |                                                     |16 Sept  |
|         |                                                     |08       |
|         |Current Membership:           |                      |         |
|         |Australian Hotels Association |Mr Bill Healey        |         |
|         |                              |Mr Margy Osmond       |         |
|         |Australian National Retailers |Dr Ron Silberberg     |         |
|         |Association                   |Mr Greg Paramor       |         |
|         |Housing Industry Association  |Mr John Hartigan      |         |
|         |Mirvac                        |Ms Julie Mills        |         |
|         |News Limited                  |Mr Stephen Creese     |         |
|         |Recruitment & Consulting      |Mr Ron Finemore       |         |
|         |Services Australia            |Mr Paul Fegan         |         |
|         |Rio Tinto Australia           |Mr Don Voelte         |         |
|         |Ron Finemore Transport        |                      |         |
|         |St. George Bank               |                      |         |
|         |Woodside                      |                      |         |
|Workers' |Chair: The Hon Julia Gillard MP, Minister for        |5 March  |
|Advisory |Employment and Workplace Relations                   |08       |
|Group    |                                                     |4 April  |
|(WAG)    |                                                     |08       |
|         |                                                     |20 May 08|
|         |                                                     |         |
|         |                                                     |14 July  |
|         |                                                     |08       |
|         |                                                     |2 Sept 08|
|         |Current Membership:        |                         |         |
|         |Mr Jeff Lawrence (ACTU)    |Mr Stephen Jones (CPSU)  |         |
|         |Ms Sharan Burrow (ACTU)    |Mr John Sutton (CFMEU)   |         |
|         |Ms Cath Bowtell (ACTU)     |Mr David Carey           |         |
|         |Ms Susan Hopgood (AEU)     |(CPSU-SPSF)              |         |
|         |Mr Julius Roe (AMWU)       |Mr Peter Tighe (ETU)     |         |
|         |Ms Ged Kearney (ANF)       |Ms Louise Tarrant (LHMU) |         |
|         |Ms Linda White (ASU)       |Mr Charlie Donnelly (NUW)|         |
|         |Mr Paul Howes (AWU)        |                         |         |
|         |                           |Mr Tony Sheldon (TWU)    |         |
|         |                           |Mr John Robertson (Unions|         |
|         |                           |NSW)                     |         |
|         |                           |                         |         |
|Small    |Chair: The Hon Craig       |                         |27 Feb 08|
|Business |Emerson MP, Minister for   |                         |         |
|Working  |Small Business, Independent|                         |7 March  |
|Group    |Contractors and the Service|                         |08       |
|(SBWG)   |Economy                    |                         |1 July 08|
|         |Current membership:        |                         |         |
|         |Council of Small Business  |Mr Tony Steven           |         |
|         |of Australia               |Mr Greg Holmes           |         |
|         |Hotel, Motel and           |Mr Andrew Arkell         |         |
|         |Accommodation Association  |Mr Frank McManus         |         |
|         |Institute of Chartered     |Mr Gary Black            |         |
|         |Accountants                |Mr Wendy Phillips        |         |
|         |McDonald's                 |Mr Neil Fisher           |         |
|         |National Retailers'        |Mr John Hart             |         |
|         |Association                |Mrs Leyla Yilmaz         |         |
|         |Pharmacy Guild             |Ms Patricia Murdock      |         |
|         |Real Estate Institute of   |                         |         |
|         |Australia                  |                         |         |
|         |Restaurant and Catering    |                         |         |
|         |Australia                  |                         |         |
|         |Victorian Automobile       |                         |         |
|         |Chamber of Commerce        |                         |         |
|         |Victorian Farmers          |                         |         |
|         |Federation                 |                         |         |
|         |                           |                         |         |
|         |                           |                         |         |
|Union    |Chair: The Hon Craig       |                         |28 Feb 08|
|Working  |Emerson MP, Minister for   |                         |         |
|Group on |Small Business, Independent|                         |7 March  |
|Unfair   |Contractors and the Service|                         |08       |
|Dismissal|Economy                    |                         |         |
|(UWG)    |                           |                         |         |
|         |Current membership:        |                         |         |
|         |Mr Jeff Lawrence (ACTU)    |Ms Deborah Ralston (QCU) |         |
|         |Mr Richard Watts (ACTU)    |Ms Sue-Anne Burnley (SDA)|         |
|         |Mr Barry Terzic (AMWU)     |                         |         |
|         |Mr John Nucifora (ASU)     |Ms Bev Myers (TCFUA)     |         |
|         |Mr Neal Swancott (LHMU)    |Mr Angus Storey (Unions  |         |
|         |                           |SA)                      |         |



                                                                ATTACHMENT B

Employee coverage of unfair dismissal laws


|Under Work Choices                |No of employees     |% of        |
|                                  |                    |employees   |
|Total number of employees eligible|3,739,661           |44          |
|for UFD (October 2008 estimate)   |                    |            |
|Total number of employees not     |4,664,834           |56          |
|eligible for UFD (October 2008    |                    |            |
|estimate)                         |                    |            |
|Total number of employees (October|8,404,496           |100         |
|2008)                             |                    |            |


|Under Forward with Fairness       |No of employees     |% of        |
|                                  |                    |employees   |
|Total number of employees eligible|6,747,074           |80          |
|for UFD (October 2008 estimate)   |                    |            |
|Total number of employees not     |1,657,422           |20          |
|eligible for UFD (October 2008    |                    |            |
|estimate)                         |                    |            |
|Total number of employees (October|8,404,496           |100         |
|2008)                             |                    |            |


Source: DEEWR calculations using ABS data

 . Under Work Choices legislation, approximately 3.7 million employees (44
   per cent) had access to unfair dismissal laws. The Government's proposed
   changes to unfair dismissal laws will see the number of employees who
   will have access to unfair dismissal laws increase to 6.7 million or 80
   per cent of employees.


Estimated number of employees covered by unfair dismissal laws under Work
Choices


Employees of businesses with 100 or more employees


Permanent employees (May 2006):


A) Total number permanent employees (ex working proprietors)[63] =
3,453,522


B) Number of permanent employees (ex working proprietors) with less than 6
months tenure =  310,817


Casual employees (May 2006):


C) Total number of casual employees =  700,878


D) Total number of casual employees with less than 12 months tenure =
319,820


Employees of businesses with 1 - 99 employees


E) All employees excluded from UFD





Employees eligible for unfair dismissal laws


F) Total number of employees eligible for UFD (May 2006) = (A-B) + (C-D) =
3,523,763


G) Employment growth between May 2006 to October 2008 = 6.1%


H) Taking G into account, the total number of employees eligible for UFD
(September 2008) = F * (1.061) =  3,739,661


(Conversely, total number of employees not eligible for UFD (October 2008)
=  4,664,834)


Estimated number of employees covered by unfair dismissal laws under this
Bill


Employees of businesses with 15 or more employees


Permanent employees (May 2006):


A) Total number permanent employees (ex working proprietors)[64] =
4,854,999


B) Number of permanent employees (ex working proprietors) with less than 6
months tenure =  436,950


Casual employees (May 2006):


C) Total number of casual employees =  1,192,961


D) Total number of casual employees with less than 6 months tenure =
349,249


Employees of businesses with 1 - 14 employees


Permanent employees (May 2006):


E) Total number of permanent (ex working proprietors) =  1,457,703


F) Total number of permanent (ex working proprietors) less than 12 months
tenure =  269,675


Casual employees (May 2006):


G) Total number of casual employees =  499,507


H) Total number of casual employees with less than 12 months tenure =
227,932


Non-award employees earning $98,200 or more per year


I) Total number of non-award employees earning $98,200 or per year (May
2006)


=  363,812


Employees eligible for unfair dismissal laws


J) Total number of employees eligible for UFD (May 2006) = (A-B) + (C-D) +
(E-F) + (G-H) - I =   6,357,552


K) Employment growth between May 2006 to October 2008 = 6.1%


L) Taking K into account, the total number of employees eligible for UFD
(October 2008) = J * (1.061) =   6,747,074


(Conversely, total number of employees not eligible for UFD (October 2008)
=   1,657,422)








NOTES ON CLAUSES


In this notes on clause the following abbreviations are used:

|AEC              |Australian Electoral Commission                              |
|AIRC             |Australian Industrial Relations Commission                   |
|EEZ              |Exclusive economic zone                                      |
|FWA              |Fair Work Australia                                          |
|FWO              |Fair Work Ombudsman                                          |
|HREOC            |Human Rights and Equal Opportunity Commission                |
|NES              |National Employment Standards                                |
|Transitional and |Fair Work (Transitional Provisions and Consequential         |
|Consequential    |Amendments) Bill 2009                                        |
|Bill             |                                                             |
|WR Act           |Workplace Relations Act 1996                                 |
|                 |                                                             |


                          Chapter 1 - Introduction


                          Part 1 - 1 - Introduction


Division 1 - Preliminary


Clause 1 - Short title


   1. Once enacted, the short title of the Act will be the Fair Work Act
      2008.


Clause 2 - Commencement


   2. The table in this clause sets out when the Bill's provisions commence.


   3. Clauses 1 and 2 commence on the day the Fair Work Act receives Royal
      Assent (item 1 of the table).  Clauses 3 to 800 commence on a day or
      days to be fixed by Proclamation (item 2).


   4. Transitional arrangements and consequential amendments relating to the
      Bill will be set out in separate legislation, to be known as the Fair
      Work (Transitional Provisions and Consequential Amendments) Bill 2009.




   5. It is intended that no provision of the Bill will commence before the
      Transitional and Consequential Bill is enacted and that no provision
      will commence later than six months after that enactment.


   6. These arrangements will phase in the new workplace relations system
      and ensure that it operates in a seamless and comprehensive way.


Division 2 - Object of this Act


Clause 3 - Object of this Act


   7. This clause sets out the object of the Bill, which is to provide a
      balanced framework for cooperative and productive workplace relations
      that promotes national economic prosperity and social inclusion by the
      means set out in the clause.


Division 3 - Guide to this Act


Clause 4 - Guide to this Act


   8. This clause provides a guide to this Bill.


Clause 5 - Terms and conditions of employment (Chapter 2)


Clause 6 - Rights and responsibilities of employees, employers,
organisations, etc (Chapter 3)


Clause 7 - Compliance and enforcement (Chapter 4)


Clause 8 - Administration (Chapter 5)


Clause 9 - Miscellaneous (Chapter 6)


   9. Clauses 5 to 9 set out the key elements to each of the chapters in the
      Bill.




                           Part 1-2 - Definitions


Division 1 - Introduction


Clause 10 - Guide to this Part


  10. This clause provides a guide to this Part.


Clause 11 - Meanings of employee and employer


  11. The terms employer and employee are used in various contexts in the
      Bill and have their ordinary meanings in this Part unless otherwise
      specified.


Division 2 - The Dictionary


  12. The Dictionary contains a list of every term that is defined in the
      Bill.  It includes a number of 'signpost' definitions that refer
      readers to the sections in which terms are substantively defined.  For
      example, in relation to the meaning of the term covers, readers are
      referred to clause 48 in relation to a modern award, clause 53 in
      relation to an enterprise agreement and clause 277 in relation to a
      workplace determination.


  13. Key definitions are explained below in alphabetical order.


4 yearly review of modern awards


  14. A 4 yearly review of modern awards is a review conducted under clause
      156.


  15. Under clause 156, FWA must conduct a regular review of modern awards
      starting as soon as practicable after each 4 year anniversary of the
      commencement of the award.  These reviews are the principal way in
      which an award is maintained as a fair and relevant safety net of
      terms and conditions.


annual wage review


  16. An annual wage review is a review referred to in clause 285.  During
      an annual wage review, FWA must review modern award minimum wages and
      the national minimum wage order and:


     . may make one or more determinations to set, vary or revoke award
       minimum wages; and


     . must make a new national minimum wage order.


associated entity


  17. Associated entity has the meaning given by section 50AAA of the
      Corporations Act 2001.  The definition includes, but is not limited
      to, the following structures:


     . a principal entity controlling an associate entity;


     . an associate entity controlling a principal entity, where the
       operations, resources or affairs of the principal are material to
       the associate; and


     . a principal entity and associate entity that are related bodies
       corporate.


Australian ship


  18. The definition of Australian ship has the meaning given by section 29
      of the Shipping Registration Act 1981.  It includes ships registered
      under that Act, as well as unregistered ships that are Australian-
      owned (within the meaning of section 3 of that Act) or wholly owned or
      operated by residents of Australia, or Australian nationals, or both.
      The definition is relevant to provisions dealing with the geographical
      application of the Bill (Division 3 of Part 1-3).


award/agreement free employee


  19. An award /agreement free employee means a national system employee to
      whom neither a modern award nor an enterprise agreement applies.


continental shelf


  20. The definition of continental shelf has the meaning given by the
      Schedule to the Seas and Submerged Lands Act 1973.  The Schedule sets
      out relevant Parts of the United Nations Convention on the Law of the
      Sea (Montego Bay, 10 December 1982) [1994] ATS 31.  Article 76 of the
      Convention defines the continental shelf of a coastal state to mean
      the sea-bed and subsoil of the submarine areas that extend beyond the
      territorial sea throughout the natural prolongation of its land
      territory to the outer edge of the continental margin, or (where the
      outer edge of the continental margin does not extend up to that
      distance), to a distance of 200 nautical miles from the territorial
      sea baseline.


  21. The definition is relevant to provisions dealing with the geographical
      application of the Bill (Division 3 of Part 1-3).


Commonwealth authority


  22. The definition of Commonwealth authority includes a body corporate
      established for a public purpose under a Commonwealth law, and a body
      corporate incorporated under a law of the Commonwealth or a State or
      Territory and in which the Commonwealth has a controlling interest.
      The definition is relevant in a number of provisions of the Bill,
      including the definition of national system employer (in clause 14).


constitutional corporation


  23. The definition of constitutional corporation means a corporation to
      which paragraph 51(xx) of the Constitution (the corporations power)
      applies.  The corporations power enables the Parliament to legislate
      with respect to foreign corporations, and trading or financial
      corporations formed within the limits of the Commonwealth.  The
      definition is relevant to the definition of national system employer
      (in clause 14) and to a number of other provisions, including those
      relating to general protections (Part 3-1) and right of entry (Part 3-
      4).


constitutional trade or commerce


  24. The definition of constitutional trade or commerce means trade or
      commerce between Australia and a place outside Australia, among the
      States, between a State and a Territory, between two Territories or
      within a Territory.


  25. This definition reflects the scope of the Parliament's capacity to
      regulate trade and commerce with other countries and among the States
      under paragraph 51(i) of the Constitution (the trade and commerce
      power), and in relation to the territories under section 122 of the
      Constitution (the Territories power).  The definition is relevant to
      the definition of national system employer (in clause 14).


de facto partner


  26. A de facto partner of a national system employee includes an
      employee's same sex de facto partner.  This is consistent with
      amendments being made to Commonwealth legislation to remove
      discrimination and has the effect of ensuring that entitlements under
      the NES to carer's leave, compassionate leave and birth-related unpaid
      parental leave apply to members of same sex couples and their
      children.


employee, employer


  27. These definitions refer readers to the provisions in the first
      Division of each Part in which the terms employee and employer appear.
       Those provisions give these terms their constitutionally limited
      national system meanings (see clauses 13 and 14) or their ordinary
      meanings (see clause 15).


  28. National system employers and national system employees are employers
      and employees (at common law) who are within the constitutional
      limitations set out in clauses 13 and 14.  Generally speaking, the
      ordinary meanings of employer and employee encompass but are not
      limited to national system employers and national system employees.


     . In some parts of the Bill, the ordinary meanings are used because
       rights and obligations may be imposed on any employer (e.g., in Part
       3-1 (General protections), in circumstances where an employer's
       action affects a constitutional corporation (as defined in clause
       12) or certain other persons).


     . In other parts (e.g., Part 4-1 (Civil remedies) and Part 5-1 (Fair
       Work Australia)), the ordinary meanings are used because references
       to employer and employee are incidental to substantive rights and
       obligations that arise under other parts of the Bill, which are
       supported by relevant heads of constitutional power.  A provision in
       Part 4-1 or 5-1 could relate to national system employers and their
       employees, or to other employers and employees, depending on the
       part of the Bill that creates the substantive right or obligation.


  29. However, the ordinary meanings are also used where they relate to
      employers and employees who are not national system employers and
      employees.  For example, Part 6-3 (Extension of NES entitlements),
      relies on paragraph 51 (xxix) of the Constitution (the external
      affairs power) to assist in giving effect to Australia's international
      obligations.  These provisions can therefore extend to employers and
      employees who are not within the national system definitions.


enterprise


  30. The term enterprise is used in various clauses in the Bill.


  31. The definition makes it clear that an enterprise includes an activity.
       This is intended to ensure that an enterprise includes activities
      carried out by not-for-profit organisations and government
      authorities.  For example, an employer that is government authority,
      such as the Commonwealth, or a State or Territory, may make a
      greenfields agreement in relation to a genuine new activity that it
      proposes to undertake (see clause 172).


  32. The definition of enterprise also includes a project to enable
      employers and employee organisations to make a greenfields agreement
      in relation to a genuine new project.


exclusive economic zone


  33. The definition of exclusive economic zone has the meaning given by
      section 3 of the Seas and Submerged Lands Act 1973, which refers to
      Articles 55 and 57 of the United Nations Convention on the Law of the
      Sea (Montego Bay, 10 December 1982) [1994] ATS 31, set out in the
      Schedule to that Act.  Article 57 of the Convention provides that the
      EEZ is the area beyond and adjacent to the territorial sea, and
      extends up to 200 nautical miles from the territorial sea baseline.


  34. The definition is relevant to provisions dealing with the geographical
      application of the Bill (Division 3 of Part 1-3).


fixed platform


  35. The definition of fixed platform means an artificial island,
      installation or structure that is permanently attached to the sea-bed
      for the purpose of exploration for, or exploitation of, resources or
      for other economic purposes.

The definition is relevant to provisions dealing with the geographical
application of the Bill (Division 3 of Part 1-3).


flight crew officer, maritime employee, pilot, waterside worker


  36. These definitions are relevant to the definition of national system
      employee (in clause 13) and national system employer (in clause 14) to
      the extent that those definitions rely on paragraph 51(i) of the
      Constitution (the trade and commerce power).


industrial association


  37. The definition of industrial association is mainly relevant to the
      general protections in Part 3-1 of the Bill.  It has three limbs.


  38. Paragraph (a) of the definition provides that an industrial
      association means an association of employees and/or independent
      contractors, or an association of employers, which is registered, or
      recognised as such an association (however described), under a
      workplace law (as defined in this clause).


  39. Paragraph (b) of the definition provides that an industrial
      association means an association of employees and/or independent
      contractors (whether formed formally or informally), a purpose of
      which is the protection and promotion of their interests in matters
      concerning their employment, or interests as independent contractors,
      as the case requires.  This element of the definition differs from the
      pre-reform definition in subsection 779(1) of the WR Act in two
      respects:


     . it now includes informal associations of employees and/or
       independent contractors; and


     . the requisite purpose of protecting and promoting their interests
       does not need to be a principal purpose of the association.


  40. Paragraph (c) of the definition provides that an industrial
      association means an association of employers, a principal purpose of
      which is the protection and promotion of their interests in matters
      concerning employment and/or independent contractors.


  41. Industrial association is also defined to include a branch of an
      industrial association, an organisation (as defined in clause 12) and
      a branch of an organisation.


minimum wages objective


  42. Clause 284 sets out the minimum wages objective and provides for when
      the minimum wages objective applies.


  43. The minimum wages objective requires FWA to establish and maintain a
      safety net of fair minimum wages, taking into account factors that are
      specified in clause 284.


  44. The minimum wages objective applies to the performance or exercise of
      FWA's functions and powers under Part 2-6 (Minimum wages).  The
      minimum wages objective also applies when FWA performs or exercises
      its functions or powers under Part 2-3 (Modern awards) to set, vary or
      revoke modern award minimum wages.


modern awards objective


  45. Clause 134 sets out the modern awards objective and provides for when
      the modern awards objective applies.


  46. The modern awards objective requires FWA to ensure that modern awards,
      together with the NES, provide a fair and relevant minimum safety net
      of terms and conditions, taking into account factors that are
      specified in clause 134.


  47. The modern awards objective applies to the exercise of FWA's functions
      and powers under Part 2-3 (Modern awards).  The modern awards
      objective also applies when FWA exercises its powers or functions
      under Part 2-6 (Minimum wages), to the extent that they relate to
      setting, varying or revoking modern award minimum wages.


modifications


  48. The term modifications is used in various clauses in the Bill.  For
      example, it is used in Part 6-3 to describe the additions, omissions
      and substitutions that are made to the NES.


  49. Further additions, omissions and substitutions may be provided for in
      the regulations in relation to:


     . the application of the Bill, including extensions of the Bill (see
       Division 3 of Part 1-3);


     . variations of enterprise agreements (see subclause 211(6)).


national minimum wage order


  50. The national minimum wage order is the national minimum wage order
      made in an annual wage review (as defined in this clause).  Each
      national minimum wage order must set:


     . the national minimum wage;


     . special national minimum wages for junior employees, employees to
       whom training arrangements apply and employees with a disability;
       and


     . the casual loading for award/agreement free employees.

The national minimum wage order applies to award/agreement free employees.



nominal expiry date


  51. The Bill provides the following in relation to the nominal expiry date
      of enterprise agreements and workplace determinations:


     . In the case of an enterprise agreement approved under clause 186 or
       a workplace determination - the nominal expiry date is the date
       specified in the agreement or determination as its nominal expiry
       date, which must not be more than 4 years after the day on which FWA
       approves the agreement or determination.  (Note that an agreement
       cannot be varied to extend its nominal expiry date to a date that is
       more than four years after the day on which FWA approved the
       agreement - see paragraph 211(1)(b));


     . In the case of an agreement approved under clause 189 - the nominal
       expiry date is the date specified in the agreement as its nominal
       expiry date or two years after the day on which FWA approved the
       agreement.


outworker


  52. An employee is an outworker if the employee, for the purpose of his or
      her employer, performs work at residential premises or other premises
      that would not conventionally be regarded as business premises.


  53. An individual who is not an employee may also be an outworker.  An
      individual, who is not an employee, is an outworker if, for the
      purposes of a contract for the provision of services, she or he
      performs work in the textile, clothing or footwear industry at
      residential premises or at other premises that would not
      conventionally be regarded as business premises.


outworker entity


  54. The term outworker entity means any of the following entities, other
      than in the entity's capacity as a national system employer:


     . a constitutional corporation;


     . the Commonwealth;


     . a Commonwealth authority;


     . a body corporate incorporated in a Territory;


     . a person who carries on an activity (whether of a commercial,
       governmental or other nature) in a Territory in Australia, in
       connection with the activity carried on in the Territory.


  55. A modern award may cover an outworker entity in relation to the
      outworker terms included in the award.


outworker terms


  56. Clause 140 defines outworker terms.  Outworker terms are terms that
      relate to the conditions under which an employer may employ outworkers
      or terms that relate to the conditions under which an outworker entity
      may arrange for work to be carried out for the entity (either directly
      or indirectly), if the work is, or is reasonably likely to be, carried
      out by outworkers.  Terms that are incidental to these terms or are
      machinery terms are also outworker terms.


  57. Outworker terms may include, but are not limited to, terms relating to
      pay and conditions of outworkers.  Clause 140 is intended to give FWA
      broad scope to include terms in modern awards dealing with outworkers.
       In particular, it allows terms dealing with chain of contract
      arrangements, registration of employers, employer record keeping and
      inspection to be included in modern awards.


relevant employee organisation


  58. The definition of relevant employee organisation is relevant to
      greenfields agreements.  An employer is prevented from making a
      greenfields agreement with an employee organisation that is not
      entitled to represent the industrial interests of the employees who
      will be covered by the agreement.


ship


  59. The definition of ship (as distinct from Australian ship, as defined
      in clause 12) is an inclusive, not exhaustive, definition.  The
      definition is relevant to provisions dealing with the geographical
      application of the Bill (Division 3 of Part 1-3).


vocational placement


  60. The definition of vocational placement is relevant to the meanings of
      employee (as defined in clause 15) and national system employee (as
      defined in clause 13).  These terms exclude persons on a vocational
      placement.  A vocational placement is a period of unpaid placement
      with an employer as part of an education or training course which is
      authorised under a law or an administrative arrangement of the
      Commonwealth, a State or a Territory.


workplace instrument


  61. Workplace instrument is defined to mean an instrument that is made
      under, or recognised by, a workplace law (as defined in clause 12) and
      concerns the relationships between employers and employees.  This
      definition is relevant to the protection in Part 3-1 of a person's
      workplace rights (see subclause 341(1)).


workplace law


  62. Workplace law means this Bill, Schedule 1 to the WR Act, the
      Independent Contractors Act 2006 or any other law of the Commonwealth,
      a State or a Territory that regulates the relationships between
      employers and employees (including by dealing with occupational health
      and safety matters).  This definition is relevant to the protection in
      Part 3-1 of a person's workplace rights (see subclause 341(1)).


Division 3 - Definitions relating to the meanings of employee, employer
etc.


Clause 13 - Meaning of national system employee


Clause 14 - Meaning of national system employer


  63. The definitions of national system employee and national system
      employer in these clauses operate together to provide the
      constitutional support for most parts of the Bill.


  64. These parts rely on the Parliament's power to legislate with respect
      to foreign corporations and trading or financial corporations
      (paragraph 51(xx) of the Constitution), the territories (section 122
      of the Constitution), interstate and overseas trade and commerce
      (paragraph 51(i) of the Constitution) and the Commonwealth's power to
      regulate its own employment relationships (incidentally to other
      legislative powers).


  65. The links to these heads of power are established by defining national
      system employer as the following, in their capacities as employers of
      individuals:


     . a constitutional corporation;


     . the Commonwealth or a Commonwealth authority;


     . a person who employs a flight crew officer, maritime employee or
       waterside worker in connection with constitutional trade or
       commerce;


     . a body corporate incorporated in a Territory; or


     . a person who carries on an activity in a Territory and employs a
       person in connection with the activity.


  66. The definition of national system employer includes a constitutional
      corporation that usually employs an individual and national system
      employee includes an individual usually employed by a national system
      employer.


  67. The Federal Court considered the meaning of 'usually employed' in
      Australian Meat Industry Employees' Union v Belandra Pty Ltd [2003]
      FCA 910; 126 IR 165.  In that case, the Court held that while an
      employer ceased operating for a period of time and did not have any
      employees during that period, it was still an employer for the
      purposes of then paragraph 298K(1)(c) of the WR Act.  Other cases
      considered in that decision indicate that a casual or daily hire
      employee may still be an employee for the purposes of the Bill, even
      though their employment relationship terminates at the end of each
      shift or daily period of employment.


  68. The definition of national system employee makes clear that a person
      on a vocational placement (as defined in clause 12) is not within the
      definition.


  69. A reference to a person in the definition of national system employer
      includes a body politic or body corporate as well as an individual
      (section 22 of the Acts Interpretation Act 1901).  Only legal persons
      can enter into contracts of employment with employees.  In the case of
      a partnership, an employee's contract of employment is with each and
      every partner.  In the case of an unincorporated body, an employee's
      contract of employment is with an individual member or individual
      members of that body.


  70. While an industrial instrument may use the name of a partnership or
      association as a description of the persons to whom an instrument
      applies, any action for contravention of the instrument must name the
      actual individual employers (see Devane v Gati (1956) 95 CLR 174; Re
      Independent Schools' Staff Association (ACT); Ex parte Hubert (1986)
      65 ALR 673; Peckham v Moore [1975] 1 NSWLR 353; Executive Council of
      Australian Jewry v Scully (1998) 79 FCR 537.


Clause 15 - Ordinary meanings of employee and employer


  71. In some Parts of the Bill, the terms employee and employer have their
      ordinary meanings (see clause 12).  Clause 15 provides that:


     . a reference to an employee, within the ordinary meaning of that
       term, includes a reference to a person who is usually an employee,
       but does not include a person on a vocational placement; and


     . a reference to an employer, within the ordinary meaning of that
       term, includes a reference to a person who is usually an employer.


  72. As noted above, the concepts of 'usually employed' and 'usually
      employs' were considered by the Federal Court in Australian Meat
      Industry Employees' Union v Belandra Pty Ltd [2003] FCA 910; 126 IR
      165.


Division 4 - Other definitions


Clause 16 - Meaning of base rate of pay


  73. Subclause 16(1) defines base rate of pay as the rate payable to a
      national system employee for his or her ordinary hours of work, but
      does not include incentive based payments and bonuses, loadings,
      monetary allowances, overtime and penalty rates and any other
      separately identifiable amounts.


  74. The definition is relevant to calculating the amount payable to an
      employee when they take various forms of leave under the NES,
      including paid annual leave, paid personal carer's leave, payment for
      an absence from work on a public holiday or when a female employee
      takes paid no safe job leave.


  75. Subclause 16(2) provides that the base rate of pay for pieceworkers is
      specified in an applicable modern award or enterprise agreement or in
      the regulations for award/agreement free pieceworkers.


Clause 17 - Meaning of child of a person


  76. Subclause 17(1) defines child for the purposes of the Bill.  This
      definition is relevant to entitlements in the NES to request flexible
      working arrangements (Division 4 of Part 2-2), unpaid parental leave
      (Division 5 of Part 2-2) and carer's and compassionate leave
      (Division 7 of Part 2-2).


  77. The definition is inclusive, and builds upon the ordinary meaning of
      the word child.  A child of a person includes a person who is:


     . a person's child within the meaning of the Family Law Act 1975 (see
       further detail below); and


     . an adopted child or step-child of the person.


  78. The definition also clarifies that a person may be the child of a
      person even though the child is an adult (this is relevant to the NES
      entitlements to personal/carer's leave and compassionate leave).


  79. Child within the meaning of the Family Law Act 1975 includes, but is
      not limited to:


     . a child conceived by an artificial conception procedure (whether or
       not there is a biological link), where the child is a child of a
       woman under a prescribed law of a State or Territory;


     . a child of a man who is the parent of the child under a prescribed
       law of a State or Territory (even though not biologically related to
       the child); or


     . a child born under a surrogacy arrangement, if a court has made an
       order under a prescribed law of a State or Territory determining
       that the person is a parent of the child.


  80. Subclause 17(2) clarifies that if one person is the child of another
      person, then other family relationships are determined on the basis
      that the child is the child of the other person.  This clarification
      is relevant to the concept of a national system employee's immediate
      family and the NES entitlements to carer's leave and compassionate
      leave.  For example, for the purposes of personal/carer's and
      compassionate leave, the de facto partner of the child's father is the
      child's parent and the children of the de facto partner are the
      child's siblings.


Clause 18 - Meaning of full rate of pay


  81. Subclause 18(1) defines full rate of pay as the rate of pay payable to
      a national system employee for his or her ordinary hours of work,
      including any incentive-based payments and bonuses, loadings, monetary
      allowances, overtime or penalty rates and any other separately
      identifiable amounts.


  82. The definition is relevant for two entitlements under the NES.  A
      pregnant female employee who is transferred to an appropriate safe job
      under subclause 81(5) is entitled to be paid at her full rate of pay,
      as is an employee who receives a payment in lieu of notice on the
      termination of his or her employment under paragraph 117(2)(b).


  83. Any other separately identifiable amounts could include amounts
      otherwise payable to an employee that the employee has agreed, under a
      permissible salary sacrifice or other arrangement, to forgo in order
      to receive other benefits.


  84. Subclause 18(2) provides that the full rate of pay for pieceworkers
      will be specified in an applicable modern award or enterprise
      agreement or in the regulations for award/agreement free pieceworkers.




Clause 19 - Meaning of industrial action


  85. Clause 19 sets out the definition of industrial action.


  86. The definition of industrial action identifies:


     . the kind of action that can be taken by an employee, employer and
       their bargaining representatives that is capable of being protected
       industrial action under the Bill (if the requirements in Division 2
       of Part 3-3 are met); and


     . the kind of action that if taken by an employee, employer and their
       bargaining representatives could be subject to statutory and common
       law remedies (including those contained in Division 4 of Part 3-3)
       for taking industrial action that is not protected industrial action
       under the Bill.


  87. Subclause 19(1) sets out the types of conduct by an employee that
      constitute industrial action, including:

    . performing work in a manner that is different from the manner in which
      work is customarily performed or adopting a practice in relation to
      work the result of which is a restriction or limitation on or delay in
      the performance of work;
    . a ban, limitation or restriction on the performance of work or on the
      acceptance of or offering for work;
    . a failure or refusal to attend for work or a failure or refusal to
      perform any work at all by the employees who attend for work.

  88. The subclause also defines industrial action by employers as locking
      out employees from their employment.


  89. An employer locks out employees from employment if the employer
      prevents the employees from performing work under their contracts of
      employment in circumstances where the contracts of employment have not
      been terminated (subclause 19(3)).


  90. The legislative note at the end of subclause 19(1) alerts the reader
      to the decision of the AIRC in Automotive, Food Metals, Engineering,
      Printing and Kindred Industries Union v The Age Company Ltd [2004]
      AIRC 1254.  The note is included to clarify that the definition of
      industrial action is only intended to cover actions that have an
      industrial character and occur within the area of disputation and
      bargaining.


  91. Subclause 19(2) provides that action is not considered industrial
      action if the action has been authorised or agreed to by the person to
      whom the action is directed.


  92. Paragraph 19(2)(c) provides an exception to the definition of
      industrial action for action based on occupational health and safety
      concerns.  Action by an employee is not industrial action if:

    . the action was based on a reasonable concern of the employee about an
      imminent risk to his or her health and safety; and
    . the employee did not unreasonably fail to comply with a direction of
      the employer to perform other available work, whether at the same or
      another workplace, that was safe and appropriate for the employee to
      perform.

Clause 20 - Meaning of ordinary hours of work for award/agreement free
employees


  93. The concept of an employee's ordinary hours of work is central to the
      accrual and payment rules for a number of entitlements under the NES.




  94. The definition of ordinary hours of work in clause 20 only applies to
      an award/agreement free employee.


  95. Under subclause 20(1), the ordinary hours of work for an
      award/agreement free employee are the hours agreed as such between the
      employee and his or her employer.


  96. If no such agreement is reached, the ordinary hours of work for an
      award/agreement free employee are 38 hours for a full-time employee
      and the lesser of 38 hours or the employee's usual weekly hours of
      work for an employee who is not a full-time employee
      (subclause 20(2)).


  97. Subclause 20(3) is designed to protect employees who are not full-time
      employees who may have agreed ordinary hours of work under
      subclause 20(1) which are less than the employee's usual weekly hours
      of work.  In this situation, the employee's ordinary hours of work are
      the lesser of 38 hours or the employee's usual weekly hours of work.


  98. Subclause 20(4) enables regulations to be made to specify the usual
      weekly hours of work for the purposes of subclauses (2) and (3) for an
      award/agreement free employee who is not a full-time employee and who
      does not have usual weekly hours of work.


  99. The Bill does not define the concept of an employee's ordinary hours
      of work for those employees to whom a modern award or enterprise
      agreement applies.


 100. The ordinary hours of work for an employee to whom a modern award
      applies are the ordinary hours set out in the award (all awards are
      required to provide ordinary hours, or a means of identifying ordinary
      hours).  The ordinary hours of work for an employee to whom an
      enterprise agreement applies are the hours identified in the
      agreement.  (An agreement should identify ordinary hours, or a means
      of identifying ordinary hours, in order for the agreement to satisfy
      the better off overall test.)


Clause 21 - Meaning of pieceworker


 101. Subclause 21(1) defines pieceworker as an employee who is defined or
      described as a pieceworker in a modern award or enterprise agreement
      that applies to the employee.  Regulations may also be made to
      identify a class of award/agreement free employees as pieceworkers.


 102. Subclause 21(2) lists ways in which regulations could describe a class
      of award/agreement free employees as pieceworkers (e.g., by reference
      to an industry or a particular kind of work).


Clause 22 - Meanings of service and continuous service


 103. Clause 22 defines the meaning of service and continuous service in
      general terms that apply to the Bill as a whole (including the NES),
      and also in the specific context of identified Divisions of the NES
      where a particular meaning is required.


 104. Under subclause 22(1), a period of service by a national system
      employee with his or her national system employer is a period during
      which the employee is employed by the employer, less any excluded
      period that does not count as service.


 105. Subclause 22(2) identifies the periods that are excluded and therefore
      do not count as service.  They are:


     . any period of unauthorised absence (e.g., when an employee has
       abandoned his or her employment, is engaging in industrial action or
       is otherwise absent from work for a period contrary to a direction
       made by an employer) (paragraph 22(2)(a));


     . any period of unpaid leave (e.g., unpaid parental leave or unpaid
       carer's leave) or unpaid authorised absence other than a period when
       the employee is absent from work on community service leave, a
       period when an employee is stood down from work (under Part 3-5 of
       the Bill or under an applicable enterprise agreement or contract of
       employment) or a period or absence prescribed by the regulations
       (paragraph 22(2)(b)).


 106. Subclause 22(3) confirms that while an excluded period does not count
      as service, it does not break the employee's continuity of service.


 107. Subclause 22(4) sets out a different rule for the calculation of an
      employee's service for the purposes of Division 4 (Requests for
      flexible working arrangements), Division 5 (Parental leave and related
      entitlements) and Subdivision A of Division 11 (Notice of termination
      or payment in lieu of notice) of Part 2-2 (the NES).


 108. Under this subclause, a period of service by a national system
      employee with his or her national system employer is a period during
      which the employee is employed by the employer, less any period of
      unauthorised absence that does not count as service
      (paragraph 22(4)(a)).  However, the period of unauthorised absence
      does not break the employee's continuity of service, even though the
      period does not count towards the length of service
      (paragraph 22(4)(b)).  The general meanings of service and continuous
      service otherwise do not apply (paragraph 22(4)(c)).


 109. The effect of this definition is that an employee's absence from work
      on unpaid parental leave, for example, does count as service for the
      purpose of determining the employee's entitlement to a later period of
      unpaid parental leave, even though it does not count as service for
      the purpose of accruing other entitlements under the NES, such as paid
      annual leave or paid personal/carer's leave.


 110. Subclause 22(5) provides that where a transfer of employment (as
      defined in subclause 22(7)) occurs, an employee's service with one
      employer is treated as service with another employer.  It also
      provides that any period that occurs between the employee's employment
      with the first employer and the second employer does not break the
      employee's continuity of service (although the period does not count
      towards the length of an employee's continuous service with the second
      employer).


 111. Subclause 22(7) defines a transfer of employment as:


     . where an employee's employment with the first employer ceases and
       the employee accepts new employment with an associated entity of the
       first employer within three months (defined as a transfer of
       employment between associated entities); or


     . where an employee is a transferring employee in relation to a
       transfer of business and the first employer and the second employer
       are not associated entities (defined as a transfer of employment
       between non-associated entities).


 112. Associated entity is defined in clause 12.


 113. Broadly, these provisions are intended to ensure that an employee's
      service-related entitlements under the NES are not affected merely
      because the employee's employer changes as a result of a transfer of
      business, or because the employee's employer changes within a group of
      employers who are associated entities.


Illustrative example


Teneille has worked as a beautician at Nifty Nails for 18 months.  While an
employee of Nifty Nails, she has accrued 15 days of paid personal/carer's
leave under the NES.  Following a transfer of business, Teneille becomes
employed by Acrylics-R-Us.  Acrylics-R-Us is required to recognise
Teneille's service with Nifty Nails - in effect, recognising the paid
personal/carer's leave she accrued with Nifty Nails.


 114. A legislative note under paragraph 22(5)(b) makes clear that this
      subclause does not apply to a transfer of employment between non-
      associated entities in relation to the NES annual leave provisions in
      Division 6 of Part 2-2 of the Bill, or the NES redundancy pay
      provisions in Subdivision B of Division 11 of Part 2-2 if the second
      employer decides not to recognise the employee's service with the
      first employer.


 115. Subclause 22(6) is an 'anti-double dipping' provision.  Where an
      employee has taken the benefit of an entitlement and that entitlement
      was calculated by reference to a period of service with the first
      employer, then subclause 22(5) does not result in the employee's
      period of service with the first employer being counted again when
      calculating the employee's entitlements of that kind as an employee of
      the second employer.


 116. A legislative note under subclause 22(6) provides two examples of how
      the subclause is intended to operate.


 117. The first example provides that an employee with an entitlement to
      accrued paid annual leave as an employee of the second employer does
      not include any period of paid annual leave that the employee has
      already taken as an employee of the first employer.  This includes any
      accrued annual leave paid to the employee on the ending of the
      employee's employment with the first employer.


 118. The second example provides that an amount of notice of termination or
      payment in lieu of notice that an employee receives at the end of
      their employment with the first employer is not counted again in
      calculating an amount of notice of termination or payment in lieu of
      notice to which the employee is entitled as an employee of the second
      employer.


 119. Subclause 22(7) provides a definition of transfer of employment (see
      above).  A legislative note under paragraph 22(7)(b) makes clear that
      paragraph 22(7)(a) applies whether or not there is a transfer of
      business from the first employer to the second employer.


 120. For the purposes of paragraph 22(7)(b), the operative transfer of
      business provisions are located in Part 2-8 (Transfer of business).
      Transferring employee is also defined in Part 2-8.


 121. Subclause 22(8) provides that a transfer of employment is:


     . a transfer of employment between associated entities if paragraph
       22(7)(a) applies; and


     . a transfer of employment between non-associated entities if
       paragraph 22(7)(b) applies.


Clause 23 - Meaning of small business employer


 122. The definition of small business employer is relevant to determining
      an employer's obligation to pay redundancy pay under clause 119 (see
      paragraph 121(b)), provide notice of termination of employment under
      clause 117 (see paragraph 123(3)(a)), determine the applicable minimum
      employment period (see clause 383) and determine the applicability of
      the Small Business Fair Dismissal Code (see clause 388).


 123. Under subclause 23(1), an employer is a small business employer if the
      employer employs fewer than 15 employees at a particular time.  The
      particular time referred to in this subclause is set by the applicable
      provision that relies on this definition.  For example, in clause 121
      (exclusions from obligation to pay redundancy pay), the particular
      time is either immediately before the time of termination of
      employment or when the employee is given notice of the termination
      (whichever happens first).


 124. The effect of subclause 23(2) is that, for the purpose of calculating
      the number of employees at a particular time, all employees employed
      by the employer are counted.  All casual employees are included in the
      calculation if they have, at the particular time, been employed on a
      regular and systematic basis.  Employees employed by associated
      entities are also included in the count (subclause 23(3)).


 125. The purpose of subclause 23(4) is to confirm that, when calculating
      the number of employees at a particular time in relation to the ending
      of an employee's employment, employees of an employer include not only
      the employee whose employment is ending, but also other employees of
      the employer whose employment is ending.




                     Part 1-3 - Application of this Act


Division 1 - Introduction


Clause 24 - Guide to this Part


 126. This clause provides a guide to this Part.


Division 2 - Interaction with State and Territory laws


 127. This Part establishes the basis for a national workplace relations
      system that recognises the appropriate balance between Commonwealth,
      State and Territory regulation.  This framework includes mechanisms
      that enable this balance to be adjusted in light of future
      circumstances.


 128. The Bill is intended to cover the workplace relations field by
      excluding the application of State and Territory industrial laws to
      national system employers and their employees.  This approach was
      upheld by the High Court in New South Wales v Commonwealth (2006) 219
      CLR 1.


 129. However, the Bill does not exclude State and Territory laws that
      impose obligations on national system employers and employees in
      relation to matters outside the central area of workplace relations.


Clause 25 - Meanings of employee and employer


 130. The terms employer and employee are used in various contexts in this
      Part and have their ordinary meanings unless otherwise specified.


Clause 26 - Act excludes State or Territory industrial laws


 131. Subclause 26(1) excludes State and Territory industrial laws so far as
      they would otherwise apply to national system employers and national
      system employees.


 132. Paragraph 26(2)(a) excludes general State industrial laws - that is,
      the State Acts specified in subclause 26(3).  Paragraph 26(2)(b)
      excludes State or Territory laws that apply to employment generally
      (considered further below) and have the main purpose, or one or more
      main purposes, of:


     . regulating workplace relations (including settling industrial
       disputes and regulating industrial action and collective
       bargaining);


     . providing for the establishment or enforcement of terms and
       conditions of employment;


     . providing for the making and enforcement of statutory individual
       agreements, collective agreements and other industrial instruments
       or orders that determine terms and conditions of employment;


     . regulating conduct relating to a person's membership or non-
       membership of an industrial association;


     . providing rights and remedies connected with termination of
       employment or conduct that adversely affects an employee in his or
       her employment.


 133. These provisions therefore exclude the application, to persons in
      their capacities as national system employers and national system
      employees, of named State industrial relations Acts, as well as
      present or future State or Territory laws that are within the scope of
      clause 26(2)(b).


 134. In addition, subclause 26(2) excludes State or Territory laws that:


     . apply to employment generally and deal with leave, other than long
       service leave or leave for victims of crime (paragraph 26(2)(c));


     . provide for State tribunals or courts to make equal remuneration
       orders (paragraph 26(2)(d)), or to vary or set aside unfair
       contracts (paragraph 26(2)(e)); or


     . provide rights of entry for trade unions (paragraph 26(2)(f)).


 135. Paragraph 26(2)(g) excludes legislative instruments (such as
      regulations) made under the excluded State or Territory laws.
      Paragraph 26(2)(h) excludes State or Territory laws, and legislative
      instruments made under those laws, that are prescribed by the
      regulations.


 136. For the purposes of paragraph 26(2)(b) and paragraph 26(2)(c),
      subclause 26(4) provides that a law applies to employment generally if
      it applies to all employers and employees in a State or Territory,
      even though:


     . for constitutional reasons, the law does not apply to some employers
       and employees (such as national system employers and their
       employees);


     . some classes of employers and employees (e.g., by reference to
       industry sectors or classifications) are excluded from the law's
       scope;


     . the law applies to other persons (such as independent contractors);
       or


     . an exercise of power under the law (e.g., to make a modern award)
       does not affect all employers and employees.


 137. Examples of State or Territory laws that apply to employment generally
      are laws dealing with annual leave for all employees in the State or
      laws setting State-wide minimum terms and conditions of employment.
      Examples of laws that do not apply to employment generally include
      laws that apply to a single industry sector, or to a particular class
      of employees and their employers or to only one employer and its
      employees (e.g., a law creating a body corporate and setting terms and
      conditions of employment for its employees).


Clause 27 - State or Territory industrial laws that are not excluded


 138. Clause 27 'saves' certain State or Territory laws that might otherwise
      be excluded by making clear that they are not part of the field
      covered by clause 26 and are intended to apply to national system
      employers and national system employees.  Under subclause 27(1), the
      following State or Territory laws are not excluded:


     . laws dealing with discrimination and/or equal employment
       opportunity;


     . laws prescribed by the regulations;


     . laws dealing with the non-excluded matters set out in subclause
       27(2); and


     . laws dealing with rights and remedies that are incidental to any of
       these laws.


 139. Paragraph 27(1)(a) saves the application to national system employers
      and employees of State and Territory anti-discrimination and equal
      employment opportunity legislation, including laws about
      discrimination in relation to parental or carer responsibilities (such
      as the Equal Opportunity Act 1995 (Vic)).  Such laws are not saved to
      the extent that they are, or are contained in, State or Territory
      industrial laws (e.g., a State industrial relations Act).


 140. The intention is that rights and remedies in relation to termination
      of employment and other adverse treatment for discriminatory reasons
      in State and Territory anti-discrimination and equal employment
      opportunity legislation are preserved in their application to national
      system employers and employees.  A person whose employment has been
      terminated or who has been adversely treated in employment for reasons
      such as race, colour, sex, sexual preference, age or other
      discriminatory reasons could seek a remedy under either a State or
      Territory anti-discrimination or equal employment opportunity law or a
      remedy for contravention of the protections under Division 5 of Part 3-
      1 (General protections), but not both (see Division 3 of Part 6-
      1(Multiple actions)).


 141. Clause 66 provides that it is not intended to exclude State or
      Territory laws to the extent that they provide more beneficial
      entitlements to a national system employee than Division 4 of Part 2-2
      (the NES) in relation to requests for flexible work arrangements.
      Under the Equal Opportunity Act 1995 (Vic), for example, employers
      must not unreasonably refuse arrangements to accommodate an employee's
      parental or carer responsibilities.


 142. Paragraph 27(1)(c) saves State or Territory laws dealing with the
      following non-excluded matters, which are set out in subclause 27(2):


     . superannuation;


     . workers compensation;


     . occupational health and safety;


     . outworkers;


     . child labour (such as minimum age of employment, restrictions on
       working hours, supervision and parental contact requirements and
       permitted types of child employment);


     . training arrangements (such as the administration of training
       contracts and the award of training qualifications), but not terms
       and conditions of employment dealt with by the NES or that can be
       included in modern awards (such as classifications and rates of pay,
       certain monetary allowances and penalty rates);


     . long service leave, but not for employees who have long service
       leave entitlements under the NES (Division 9 of Part 2-2);


     . leave for victims of crime (such as provided for under Part 4B of
       the Industrial Relations Act 1996 (NSW));


     . attendance for jury service or emergency service duties (including
       entitlements to payment for such service);


     . declaration, prescription or substitution of public holidays, but
       not employee and employer public holiday rights and obligations,
       which are dealt with by the NES (Division 10 of Part 2-2);


     . directions to perform work at any time, or in any place, or in a
       particular way, in relation to disruptions to essential services or
       in situations of emergency (such as pandemics or natural disasters);


     . regulation of employer and employee organisations and their members;


     . workplace surveillance;


     . business trading hours (including functions conferred on inspectors
       who are appointed under a general State industrial law in connection
       with regulation of trading hours); and


     . claims for enforcement of contracts of employment (e.g., under
       section 14 of the Fair Work Act 1994 (SA)), but not the variation or
       setting aside of unfair contracts.


 143. In relation to the general saving of State or Territory laws dealing
      with jury service or emergency service duties (paragraph 27(2)(i)),
      clause 112 in Division 8 of Part 2-2 (the NES) specifically provides
      that it is not intended to exclude State or Territory laws to the
      extent that they provide entitlements in relation to participation in
      eligible community service activities that are more beneficial to
      national system employees than entitlements provided under the NES.


     . For example, under the Juries Act 2000 (Vic), an employee may be
       entitled to a higher level or longer period of 'make up' payment
       from an employer while absent from work during a period of jury
       service.


 144. State or Territory laws dealing with attendance for jury service and
      emergency service duties also apply to national system employers and
      their employees under paragraph 27(1)(c) and paragraph 27(2)(i),
      including in relation to matters not within the meaning of eligible
      community service activity in subclause 109(1).


 145. The regulations could may save additional State or Territory laws
      (paragraph 27(1)(b)) and also prescribe additional non-excluded
      matters (paragraph 27(2)(p)).  State or Territory laws dealing with
      rights or remedies that are incidental to any of the non-excluded laws
      are also saved (paragraph 27(1)(d)).


     . For example, rights of entry under State or Territory laws about
       outworkers and occupational health and safety are saved (despite
       paragraph 26(2)(f)).  Rights of entry under State or Territory laws
       about occupational health and safety operate subject to the
       requirements set out in Division 3 of Part 3-4 (Rights of entry).


     . Remedies for termination of employment and other adverse treatment
       in employment under the non-excluded State and Territory laws are
       preserved in their application to national system employers and
       employees.


Clause 28 - Act excludes prescribed State and Territory laws


 146. Clause 28 provides that the regulations may prescribe additional State
      or Territory laws that are excluded, so far as they would otherwise
      apply to national system employers and their employees, even if the
      law is not excluded by reason of clause 27.  This enables the
      regulations to prescribe an excluded State or Territory law in
      circumstances where it would not be appropriate for regulations under
      paragraph 26(2)(h) to prescribe such a law as a State or Territory
      industrial law (a definition which is also relevant in Part 3-4 (Right
      of entry)).


Clause 29 - Interaction of modern awards and enterprise agreements with
State and Territory laws


 147. Subclause 29(1) provides that a modern award or enterprise agreement
      prevails over a State or Territory law (such as an industry-specific
      employment law that is not already excluded as a State or Territory
      industrial law) to the extent of any inconsistency.


 148. Such a law cannot operate, in relation to persons in their capacities
      as national system employers and national system employees, to the
      extent that it prescribes rights and obligations that are inconsistent
      with their rights and obligations set out in a modern award or
      enterprise agreement.


     . Modern awards can only include terms that are permitted or required
       under subclause 136(1) to provide a minimum safety net of terms and
       conditions of employment.


     . Enterprise agreements can only contain permitted matters
       (subclause172(1)).


 149. However, subclause 29(2) provides that a modern award or enterprise
      agreement is subject to any of the State or Territory laws that are
      saved by clause 27, as well as any State or Territory laws prescribed
      by the regulations.  This means that a modern award or enterprise
      agreement cannot diminish, but may supplement, rights and obligations
      under these laws.


 150. Subclause 29(3) enables the regulations to prescribe State or
      Territory laws to which modern awards or enterprise agreements are not
      subject.


Clause 30 - Act may exclude State and Territory laws etc.  in other cases


 151. This clause provides that Division 2 of Part 1-3 does not
      comprehensively state the circumstances in which the Bill prevails
      over or excludes State or Territory laws and instruments.  This clause
      makes clear that:


     . where no express provision is made about the relationship between
       the Bill and State or Territory laws and instruments, other
       provisions of the Bill might nevertheless, by implication, leave no
       room for the operation of a State or Territory law or instrument;
       and


     . the existence of clauses 26, 27 and 28 does not affect the drawing
       of such an implication.


Division 3 - Geographical application of this Act


 152. This Division provides for the extraterritorial operation of the new
      workplace relations system.  It includes mechanisms to adjust rights
      and obligations where necessary to reflect Australia's obligations
      under international law and to suit particular circumstances.  This
      framework recognises limits on the extent to which the Bill's
      extraterritorial application is possible and appropriate.


 153. The Bill applies geographically in Australia and in other areas or
      circumstances in relation to which Australia has sovereign rights.


 154. The Bill applies generally in Australia, the coastal sea and the
      territories of Christmas Island and the Cocos (Keeling) Islands.  An
      express statement to this effect in the Bill is not necessary because
      the Acts Interpretation Act 1901 makes this clear (see the note to
      clause 31).  Coastal sea is defined in section 15B of the Acts
      Interpretation Act 1901 and includes the territorial sea of Australia,
      as well as the sea on the landward side of the territorial sea and the
      airspace over, and the seabed and subsoil under, those waters.


Clause 31 - Exclusion of persons etc.  insufficiently connected with
Australia


 155. Under clause 31, the regulations may prescribe persons or entities in
      relation to whom the Bill does not apply.  Before any regulations are
      made, the Minister needs to be satisfied that the person or entity
      does not have a sufficient connection to Australia.


Clause 32 - Regulations may modify application of this Act in certain parts
of Australia


 156. This clause enables the making of regulations to modify the operation
      of the Bill in relation to the waters out to the limits of the
      territorial sea, the internal waters of the States and Territories,
      and in relation to the territories of Christmas Island and the Cocos
      (Keeling) Islands.  Under clause 12, modifications includes additions,
      omissions and substitutions.


 157. The Bill's application in Australia is subject to any modifications
      prescribed by the regulations that are necessary to adapt the
      workplace relations system in these areas (see clause 32).


     . For example, regulations may be made to exclude foreign-flagged
       ships engaged in innocent passage across the coastal sea between an
       overseas port and an Australian port.


 158. The regulation making power allows different modifications to be made
      in relation to each area or territory.


Clause 33 - Extension of this Act to the exclusive economic zone and the
continental shelf


 159. Under paragraphs 33(1)(a) and (b), the Bill applies generally to
      Australian ships and fixed platforms in the EEZ and the continental
      shelf (these terms are defined in clause 12).


 160. The Bill applies to foreign-flagged ships in the EEZ and over the
      continental shelf that operate to and from Australian ports and that
      service or operate in conjunction with fixed platforms (paragraph
      33(1)(c)).


 161. Under paragraph 33(1)(d), the Bill applies to foreign-flagged ships in
      the EEZ and over the continental shelf that are operated or chartered
      by an Australian employer (see subclause 35(1)) and that use Australia
      as a base.  For this purpose, references in relevant provisions of the
      Bill to employer and employee are deemed to mean, respectively,
      Australian employer and employee of an Australian employer (subclause
      33(2)).


 162. The Bill's application to these ships and platforms is subject to any
      modifications prescribed by the regulations that are necessary to
      adapt the workplace relations system in these areas.  Modifications
      may be made in relation to different parts of the EEZ and continental
      shelf (subclauses 33(4) and (5)).


 163. Subject to any modifications prescribed by regulations made under
      clause 32, ships and platforms located in the coastal sea are within
      the Bill's scope because of its application in Australia, which, under
      the Acts Interpretation Act 1901, includes the coastal sea.


Clause 34 - Extension of this Act beyond the exclusive economic zone and
the continental shelf


 164. The Bill applies beyond the EEZ and the continental shelf within
      recognised limits under international law.  In general terms, this
      means there must be a sufficient connection between the Bill and
      Australia in terms of geography or nationality of persons.


 165. In the area beyond the EEZ and Australia's continental shelf, the Bill
      applies to Australian ships and to foreign-flagged ships operated or
      chartered by an Australian employer and using Australian ports as a
      base (subclause 34(1)).  For this purpose, subclause 34(2) deems
      references in relevant provisions of the Bill to employer and employee
      to mean, respectively, Australian employer and employee of an
      Australian employer.


 166. The regulations are able further to extend or modify the application
      of the Bill beyond the EEZ and continental shelf in relation to
      Australian employers and Australian-based employees (as defined in
      clause 35).


     . For example, regulations could apply minimum terms and conditions of
       employment to Australian-based employees of Australian employers
       working overseas for a period or provide for the application of an
       enterprise agreement to those employees.


 167. In making regulations, account will be taken of Australia's
      international law obligations.  As with any extraterritorial
      application of law, the Bill's application is subject to the
      concurrent jurisdiction of other countries which also have sovereign
      rights in relation to areas within the scope of the Bill in which work
      is performed.  Inconsistency may arise and, in these circumstances, it
      may not be possible to enforce the provisions of the Bill.


Clause 35 - Meanings of Australian employer and Australian-based employee


 168. The definitions of Australian employer and Australian-based employee
      in clause 35 encompass employers and employees with a substantial
      connection to Australia, for the purpose of applying provisions of the
      Bill to certain ships, and to persons beyond the EEZ and the
      continental shelf.


 169. The definition of Australian employer includes Australian trading and
      financial corporations (but not foreign corporations), the
      Commonwealth and Commonwealth authorities and bodies corporate
      incorporated in a Territory (each of which is also within the
      definition of national system employer).  The definition of Australian
      employer also includes an employer that carries on an activity in
      Australia, in the EEZ or on or over the continental shelf and whose
      central management and control is in Australia (paragraph 35(1)(f)).
      This clause and any regulations extending the Bill's application
      beyond the EEZ and continental shelf to employers within this meaning
      is supported by paragraph 51(xxix) of the Constitution (the external
      affairs power).


 170. The definition of Australian-based employee means an employee:


     . whose primary place of work is in Australia or who is prescribed by
       the regulations (e.g., such regulations could clarify whether the
       primary place of work of a class of employees is in Australia); or


     . who is employed by an Australian employer, whether the employee is
       in Australia or elsewhere (but under subclause 35(3) this does not
       include an employee engaged outside Australia and the external
       Territories to perform duties outside these places).


Division 4 - Miscellaneous


Clause 36 - Geographical application of offences


 171. This clause displaces the application of Division 14 of the Criminal
      Code in relation to an offence under the Bill.  That Division provides
      for the geographical jurisdiction applicable to offences under
      Commonwealth laws.


 172. Division 3 of Part 1-3 sets out the geographical application of the
      Bill.  That scheme is appropriate for the workplace relations system
      under the Bill.  It is not necessary or appropriate to rely on the
      operation of Division 14 of the Criminal Code in relation to this
      system.


Clause 37 - Act binds Crown


 173. This clause provides that the Bill binds the Crown in each of its
      capacities.  This does not render the Crown liable for prosecution for
      an offence under the Bill.


Clause 38 - Act not to apply so as to exceed Commonwealth power


 174. This clause reflects the intention that the Bill not operate beyond
      the limits of the constitutional power of the Commonwealth.  The
      clause enables any invalid application of the Bill to be read down so
      that only the valid application is taken to have been intended.  The
      reading down of invalid applications is not available where otherwise
      valid applications can only operate together with the invalid
      applications.


Clause 39 - Acquisition of property


 175. It is not anticipated that the Bill (or instruments made under it)
      effects any acquisition of property other than on just terms contrary
      to paragraph 51(xxxi) of the Constitution.  Clause 39 is included out
      of an abundance of caution to ensure that an acquisition contrary to
      paragraph 51(xxxi) cannot take place.  In any circumstance where an
      acquisition contrary to paragraph 51(xxxi) is effected, the relevant
      law or instrument does not apply.


Clause 40 - Interaction between fair work instruments and public sector
employment laws


 176. Clause 40 is about the interaction between fair work instruments that
      deal with public sector employment and public sector employment laws.


     . Fair work instruments are defined in clause 12 as a modern award, an
       enterprise agreement, a workplace determination and an order of FWA.


     . Subclause 40(3) defines public sector employment law for the
       purposes of this clause as any law of the Commonwealth (other than
       the Fair Work Act) or a Territory, or of an instrument made under
       such a law, that deals with public sector employment.


     . Public sector employment is defined in subclauses 795(4) and (5).



 177. Subclause 40(1) provides that, in general, a public sector employment
      law prevails over a fair work instrument that deals with public sector
      employment to the extent of any inconsistency.  This means, for
      example, that determinations made by the Police Arbitral Tribunal
      under the Police Administration Act (NT) prevail over a fair work
      instrument that applies to the Police Force of the Northern Territory.


 178. However, subclause 40(2) allows regulations to prescribe a fair work
      instrument or term, or class of fair work instruments or terms, so
      that they prevail over particular public sector employment laws.  For
      example, a regulation could be made under subclause 40(2) to provide
      for an enterprise agreement to prevail over a specified term or
      condition contained in a determination made by an Agency Head under
      subsection 24(1) of the Public Service Act 1999, except where the
      determination is made for the purposes of a machinery of government
      change.


 179. Subclause 40(4) ensures that a fair work instrument cannot prevail
      over certain public sector laws including the Safety, Rehabilitation
      and Compensation Act 1988, specified laws dealing with superannuation
      matters or instruments made under those laws.


 180. Subclause 40(5) clarifies the relationship between this clause and
      clause 29.  Clause 29 provides that a modern award or enterprise
      agreement prevails over a law of a State or Territory to the extent of
      any inconsistency.  The two rules are inconsistent in so far as they
      deal with the interaction between a modern award or enterprise
      agreement on the one hand and Territory public sector employment laws
      on the other.  Subclause 40(5) provides that clause 40 prevails over
      clause 29 to the extent of any inconsistency.  This ensures that
      Territory public sector employment laws and instruments made under
      those laws prevail over fair work instruments.




               Chapter 2 - Terms and conditions of employment


                 Part 2-1 - Core provisions for this Chapter


Overview


 181. Part 2-1 is a set of core provisions for Chapter 2 of the Bill.  The
      rest of the Chapter provides for the fundamental terms and conditions
      of employment (such as wages and leave) of national system employees
      (as defined in clause 13).  The principal sources of these terms and
      conditions are the NES, modern awards and enterprise agreements.


 182. The core provisions detail how the NES, awards and agreements give
      rise to rights and obligations of employers and employees and, in some
      cases, organisations (as defined in clause 12) and outworker entities
      (as defined in clause 12), which can be enforced under Part 4-1 (Civil
      remedies).  This includes the rules which determine how rights and
      obligations under the NES, modern awards and enterprise agreements
      interact with each other.


Division 1 - Introduction


Clause 41 - Guide to this Part


 183. This clause provides a guide to this Part.


Clause 42 - Meanings of employee and employer


 184. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Division 2 - Core provisions for this Chapter


Subdivision A - Terms and conditions of employment provided under this Act


Clause 43 - Terms and conditions of employment provided under this Act


 185. This clause lists the sources of the terms and conditions of
      employment provided for in Chapter 2 of the Bill.


Subdivision B - Terms and conditions of employment provided by the National
Employment Standards


Subdivision C - Terms and conditions of employment provided by a modern
award


Subdivision D - Terms and conditions of employment provided by an
enterprise agreement


Clause 44 - Contravening the National Employment Standards


Clause 45 - Contravening a modern award


Clause 50 - Contravening an enterprise agreement


 186. Clause 44 provides that an employer must not contravene a provision of
      the NES.  Similar clauses provide that a person to whom a modern award
      or an enterprise agreement applies must not contravene a term of the
      award (clause 45) or agreement (clause 50).


 187. The prohibitions on contravening a provision of the NES, or a term of
      an award or an agreement, are civil remedy provisions under Part 4-1
      (Civil remedies).


     . Under Part 4-1, a person who contravenes clauses 44, 45 or 50 may be
       subject to a maximum civil penalty of 60 penalty units (i.e.,
       $6,600) in the case of an individual, and 300 penalty units (i.e.,
       $33,000) in the case of a body corporate, and may be ordered to pay
       amounts not paid to a person in contravention of a provision of the
       NES or a term of an award or an agreement.  Penalty and payment
       orders can be made by an eligible State or Territory court, the
       Federal Court or the Federal Magistrates Court.  The Federal Court
       or the Federal Magistrates Court may also make such other orders as
       they see fit.


     . However, orders cannot be made in relation to a contravention (or
       alleged contravention) of subclauses 65(5) or 76(4) of the NES.
       These subclauses provide that an employer may only refuse a request
       for flexible work arrangements or extended parental leave on
       reasonable business grounds.  This is also reflected in the scope of
       FWA's power to deal with disputes about the operation of the NES
       (see subclause 739(2)).  However, an employer is still required to
       provide details about a decision to refuse such a request (see notes
       on clauses 65 and 76).


Subdivision C - Terms and conditions of employment provided by a modern
award


Clause 46 - The significance of a modern award applying to a person


Clause 47 - When a modern award applies to an employer, employee,
organisation or outworker entity


Clause 48 - When a modern award covers an employer, employee, organisation
or outworker entity


Clause 49 - When a modern award is in operation


Subdivision D - Terms and conditions of employment provided by an
enterprise agreement


Clause 51 - The significance of an enterprise agreement applying to a
person


Clause 52 - When an enterprise agreement applies to an employer, employee
or employee organisation


Clause 53 - When an enterprise agreement covers an employer, employee or
employee organisation


Clause 54 - When an enterprise agreement is in operation


 188. The NES apply to national system employees at all times, whether as a
      direct source of entitlements or as a minimum standard underpinning
      their entitlements under a modern award, enterprise agreement or
      contract of employment.  The remaining provisions of this Part deal
      with when a modern award or enterprise agreement applies to an
      employee (or employer, organisation or outworker entity) to provide a
      direct source of entitlements (such that the term providing the
      entitlement cannot be contravened).  Subdivisions C and D contain
      provisions dealing with the concepts which govern the operation and
      effect of modern awards and enterprise agreements.


Operate


 189. Clauses 49 and 54 deal with when modern awards and enterprise
      agreements 'operate'.  Awards and agreements do not necessarily start
      to operate when (in the case of awards) they are made or (in the case
      of agreements) they are approved by FWA.  Further, once they operate,
      they may or may not apply to determine entitlements of any person (or
      any particular person).  For instance, an agreement in operation may
      be displaced by another agreement in operation (see clause 58).


 190. For modern awards, the general rule is that an award starts operating
      on 1 July in the financial year after it is made (or on the day it is
      made if the award is made on 1 July) (subclause 49(1)).  This timing
      is consistent with when changes to modern award minimum wages commence
      (see Part 2-6), and is designed to ensure certainty and predictability
      for employers and employees.


 191. However, if FWA is satisfied that it is appropriate to specify a
      different date then it has power to do so (subclause 49(2)).  This
      date may not be earlier than the day on which the modern award is made
      (subclause 49(3)).


 192. Subclauses 49(4) and (5) provide for the revocation of modern awards.
      If FWA makes a determination to revoke a modern award the
      determination will come into operation on the date that is specified
      in the determination (subclause 49(4)).  This cannot be earlier than
      the day on which the revocation determination was made
      (subclause 49(5)).


 193. A modern award or a determination revoking a modern award does not
      take effect in respect of a particular employee until the start of an
      employee's first full pay period that starts on or after the day the
      award or determination comes into operation.


 194. Subclause 49(7) provides that a modern award continues in operation
      until it is revoked.


 195. On the other hand, an enterprise agreement operates from seven days
      after the agreement is approved by FWA or from a later date specified
      in the agreement (subclause 54(1)).


 196. The terms of an agreement can only have any effect when an agreement
      commences operation.  However, this does not preclude an agreement
      from including a term that has retrospective effect (e.g., a backdated
      wage increase).


 197. An enterprise agreement will operate indefinitely unless it ceases to
      operate under subclause 54(2).  This subclause provides that an
      enterprise agreement ceases to operate on the earlier of the following
      days:


     . the day on which a termination of the agreement comes into operation
       (under clause 224 or clause 227); or


     . the day clause 58 has the effect that the agreement does not apply
       to any employee.


 198. Subclause 54(3) provides that an enterprise agreement can never
      operate again if it has ceased to operate.


Illustrative example


An online service provider makes an enterprise agreement with its IT
specialists (the earlier agreement).  The earlier agreement comes into
operation on 1 May 2010 and specifies a nominal expiry date of 10 February
2013 (the agreement will continue to operate beyond this date if it is not
replaced).  The online service provider later makes a single-enterprise
agreement with the entire workforce (the later agreement), which covers all
the IT specialists.  The later agreement comes into operation on 21 June
2013 - after the nominal expiry date of the earlier agreement.  Paragraph
58(2)(e) provides that the earlier agreement ceases to apply to the IT
specialists when the later agreement commences operation.  The effect of
clause 54(2)(b) is that the earlier agreement will cease to operate on
21 June 2013 when the later agreement commences operation because it will
no longer apply to any employees.  Once the earlier agreement has ceased to
operate, it can never operate again.


Covers and applies


 199. A modern award or enterprise agreement covers a person if, in effect,
      the person is within the scope or coverage of the award or agreement,
      even if the instrument does not actually confer entitlements or impose
      obligations on that person at a particular time (because the
      instrument is not yet in operation or because it has been displaced by
      or under the Bill by other entitlements and obligations which operate
      instead).  This is subject to any contrary provision of the Bill or an
      order made under the Bill - e.g., in a transfer of business situation,
      FWA can order that a transferable instrument that covers a
      transferring employee does not in fact cover the employee (see,
      generally, Part 2-8).


 200. On the other hand, a modern award or enterprise agreement applies to a
      person if the relevant instrument is in operation, covers the person
      and actually confers entitlements or imposes obligations on that
      person at a particular time.  It is only where the award or agreement
      applies to a person that the person has obligations under the
      instrument which the person is capable of contravening (see clauses 46
      and 51).


 201. Thus, coverage of a modern award or enterprise agreement is a broader
      concept than application of the award or agreement.  An award or
      agreement that covers a person does not necessarily apply to the
      person.  For example, an award will not apply to a person where an
      agreement applies to the person (see clause 57) or where the person is
      a high-income employee (see subclause 47(2)).  Similarly, an agreement
      may not apply to a person where another agreement applies to the
      person, depending on which agreement applied first and the agreements'
      nominal expiry dates (see clause 58).


 202. The note to subclause 46(2) points to the fact that modern awards do
      not apply to outworkers who are not employees but that this does not
      affect whether outworker terms in a modern award relate to those
      outworkers, or whether those outworkers are affected by a
      contravention of such terms, for the purposes of giving those
      outworkers standing to enforce those terms.


 203. Even though coverage of a modern award or enterprise agreement does
      not necessarily determine who has enforceable entitlements and
      obligations under those instruments, coverage of the instrument can be
      significant for a variety of other reasons.  For example, coverage
      means that, from the time the award is made or the agreement is
      approved by FWA until the time the award or agreement ceases to
      operate:


     . persons covered by the award or agreement can apply to vary the
       instrument;


     . employers and employees can participate in bargaining and industrial
       action for an agreement which will cover them, even if the agreement
       will not necessarily apply to them once it operates;


     . the application of the better off overall test (including for high-
       income employees) will depend on the award which covers the
       employee, whether or not the award applies to the employee (as long
       as, in this case, the award is in operation); and


     . certain awards and agreements can transfer on a transfer of business
       even if not yet in operation.


 204. The provisions setting out when modern awards and enterprise
      agreements cover, and apply to, persons are formulated slightly
      differently only because:


     . agreements cover, and apply to, employers, employees and employee
       organisations, and modern awards also cover, and apply to, outworker
       entities (in relation to outworker terms) and employer
       organisations; and


     . the way organisations become covered by awards and agreements is
       different.  An award must contain coverage provisions stating which
       persons (including which organisations) are covered by the award.
       Although an agreement will necessarily cover the employer(s) and
       employees it is expressed to cover (however coverage is described),
       an employee organisation is covered by an agreement only if it
       notifies FWA that it wishes to be covered (non-greenfields
       agreement) or makes the agreement (greenfields agreement).


 205. Subclauses 47(3), 48(3), 52(2) and 3(6) make it clear that a reference
      in the Bill to a modern award or enterprise agreement applying to, or
      covering, an employee is a reference to the award or agreement
      applying to, or covering, the employee in relation to particular
      employment.  This means that, if a national system employee has more
      than one job, each job is treated separately in determining the effect
      of an award or agreement on the employee's entitlements in relation to
      each job.  For instance, the rule that only one enterprise agreement
      can operate in relation to a person at a particular time (see clause
      58) does not mean that two agreements cannot cover, or apply to, an
      employee in relation to two different jobs.


Division 3 - Interaction between the National Employment Standards, modern
awards and enterprise agreements


Subdivision A - Interaction between the National Employment Standards and a
modern award or an enterprise agreement


Clause 55 - Interaction between the National Employment Standards and a
modern award or enterprise agreement


Clause 56 - Terms of a modern award or enterprise agreement contravening
section 55 have no effect


 206. Clause 55 sets out the relationship between the NES on the one hand
      and modern awards and enterprise agreements on the other.


 207. No specific rule is provided about the relationship between the NES
      and contracts of employment.  That relationship is governed by well
      established principles (e.g., a term in the contract of employment
      that is less favourable than a statutory entitlement is not effective)
      and does not require additional legislative elaboration.


 208. The intent of the NES is that it provides enforceable minimum
      entitlements for all eligible employees.  This is reflected in
      subclause 55(1), which provides that a modern award or enterprise
      agreement may not exclude the NES, or any part of it.


 209. This prohibition extends both to statements that purport to exclude
      the operation of the NES or a part of it, and to provisions that
      purport to provide lesser entitlements than those provided by the NES.
       For example, a clause in an enterprise agreement that purported to
      provide three weeks' annual leave would be contrary to subclause
      55(1).  Such a clause would be inoperative (clause 56).


 210. Some provisions of the NES expressly authorise a modern award or
      enterprise agreement to deal with certain issues in a way that would,
      or might, otherwise be contrary to the NES - and which may therefore
      be prohibited by subclause 55(1).  For example:


     . clauses 93 and 101 allow for the cashing out of paid annual leave
       and paid personal/carer's leave; and


     . subclause 107(5) allows a modern award or enterprise agreement to
       specify the kind of evidence that must be provided to access paid
       personal/carer's leave.


 211. Subclause 55(2) ensures that such terms are able to be included in a
      modern award or enterprise agreement.  Subclause 55(2) also ensures
      that an award or agreement may include any additional matters
      permitted by regulations made under clause 127.


 212. The NES operates subject to such terms (subclause 55(3)).


 213. A modern award or enterprise agreement can also include:


     . terms that are incidental or ancillary to the operation of NES
       entitlements; and


     . terms that supplement NES entitlements,

provided that the effect of those terms is not detrimental to an employee
in any respect compared to the NES (subclause 55(4)).

 214. This provision allows modern awards and enterprise agreements to deal
      with machinery issues (such as when payment for leave must be made).
      It also allows awards to provide more beneficial entitlements than the
      minimum standards provided by the NES.  For example, an award or
      agreement could provide for more beneficial payment arrangements for
      periods of leave, or provide redundancy entitlements to employees of
      small business employers.  Similarly, an agreement could provide a
      right to flexible working arrangements.  The term about a dispute
      settlement procedure would also apply to that right.


 215. A term permitted by subclause 55(4) does not contravene subclause
      55(1) (subclause 55(5)).


 216. A legislative note to this section points readers to the approval
      requirements for enterprise agreements, and notes that an enterprise
      agreement term that contravenes this section must not be approved (see
      clause 186).


 217. Clause 56 provides that if a modern award term or enterprise agreement
      term contravenes clause 55 it will have no effect.


Subdivision B - Interaction between modern awards and enterprise agreements


Clause 57 - Interaction between modern awards and enterprise agreements


 218. This clause provides for the interaction between a modern award and an
      enterprise agreement that each cover an employee in relation to
      particular employment at the same time.


 219. Subclause 57(1) provides that a modern award does not apply to an
      employee in relation to particular employment at a time when an
      enterprise agreement applies to the employee in relation to that
      employment.  The effect of this subclause is that an agreement that is
      in operation and covers an employee determines the employee's rights
      and obligations in relation to particular employment, even if an award
      covers the employee in relation to that employment.


 220. This subclause highlights the difference between when an agreement
      covers an employee and when it applies to an employee.  An employee
      may be covered by both a modern award and an enterprise agreement in
      relation to particular employment at the same time; however, both
      types of industrial instrument cannot apply to an employee in relation
      to that particular employment at the same time.


     . Clause 206 provides a limited exception to this rule: where an
       enterprise agreement contains a base rate of pay for an employee
       that is less than the base rate of pay that would apply to that
       employee under an award that covers them, the base rate of pay from
       the award is taken to be a term of the agreement.


Illustrative example


Rihanna is a clerical officer.  The Clerks Award (the award) applies to
determine the rights and obligations between Rihanna and her employer.  Her
employer makes a single-enterprise agreement with its employees.  The
agreement comes into operation on 12 September 2011 and applies to
Rihanna's employment as a clerical officer.  When the enterprise agreement
applies to Rihanna, the award will no longer apply.  The award does,
however, still cover Rihanna's employment as a clerical officer.  This
means that if, e.g., the agreement was later terminated (and consequently
ceased to operate), the award would apply to Rihanna again.


 221. Subclause 57(2) provides that where a modern award does not apply to
      an employee because of subclause 57(1), the award does not apply to an
      employer or employee organisation in relation to the employee.  For
      example, if an employee is covered by a modern award and an enterprise
      agreement commences operation in relation to his or her employment,
      the modern award would cease to apply to:


     . the employee (subclause 57(1));


     . his or her employer, in relation to the employee; and


     . an employee organisation of which the employee is a member and who
       is covered by the award and entitled to represent the employee's
       industrial interests under the agreement, in relation to the
       employee.


Subdivision C - Interaction between one or more enterprise agreements


Clause 58 - Only one enterprise agreement can apply to an employee


 222. This clause sets out the interaction between enterprise agreements
      where more than one agreement covers an employee at a particular time.


 223. Subclause 58(1) provides that only one enterprise agreement can apply
      to an employee at a particular time.  While an employee may be covered
      by more than one agreement at a particular time, only one agreement
      can apply to that employee.  This is intended to encourage employees
      and employers to make comprehensive agreements.


 224. Subclause 58(2) provides for the interaction between two enterprise
      agreements where:


     . an enterprise agreement (the earlier agreement) applies to an
       employee in relation to particular employment; and


     . another enterprise agreement (the later agreement) that covers the
       employee in relation to the same employment comes into operation;
       and


     . the interaction rule dealing with single-enterprise agreements and
       multi-enterprise agreements (subclause 58(3)) does not apply.


 225. In that situation, subclause 58(2) provides for the interaction
      between the earlier and the later agreement where the earlier
      agreement:


     . has not passed its nominal expiry date; or


     . has passed its nominal expiry date.


 226. Paragraph 58(2)(c) provides that if the earlier agreement has not
      passed its nominal expiry date and the later agreement comes into
      operation, the later agreement cannot apply to an employee until the
      earlier agreement has passed its nominal expiry date.  When the
      earlier agreement reaches its nominal expiry date it will cease to
      apply to the employee and the later agreement will apply.


 227. Paragraph 58(2)(d) provides that if the earlier agreement has passed
      its nominal expiry date it ceases to operate when the later agreement
      comes into operation.


 228. Subclause 58(2) has the effect that an earlier agreement that ceases
      to operate in relation to an employee can never apply again to that
      employee.


Illustrative example


Luke works as an engineer in a car factory.  An enterprise agreement is in
operation that only covers the engineers in the factory (the earlier
agreement).  This agreement applies to Luke and his employer.  The earlier
agreement has a nominal expiry date of 31 October 2010.  In May 2010,
Luke's employer agrees to bargain collectively with all of the employees in
the factory and an agreement is made and approved by FWA (the later
agreement).  The later agreement specifies a nominal expiry date of
31 May 2014.  The later agreement commences operation on 14 August 2010,
before the earlier agreement has reached its nominal expiry date.  It would
not apply to Luke at this time.  On 31 October 2010, the earlier agreement
would cease to apply to Luke and the later agreement would then apply to
determine the rights and obligations between Luke and his employer.


 229. Subclause 58(3) provides for the interaction between a single-
      enterprise agreement and a multi-enterprise agreement.  Despite
      subclause 58(2), if a multi-enterprise agreement applies to an
      employee in relation to particular employment and a single-enterprise
      agreement that covers the employee in relation to the same employment
      commences operation, the multi-enterprise agreement ceases to apply to
      the employee when the single-enterprise agreement comes into
      operation.  Unlike subclause 58(3), this interaction rule does not
      depend on whether or not the multi-enterprise agreement had passed its
      nominal expiry date.


 230. The interaction rule in subclause 58(3) only takes effect where a
      single-enterprise agreement comes into operation after a multi-
      enterprise agreement has come into operation.  Where a multi-
      enterprise agreement comes into operation during the life of a single-
      enterprise agreement the interaction rules in subclause 58(2) apply.
      This will allow an earlier agreement that is a single-enterprise
      agreement to be replaced by a later multi-enterprise agreement only
      after the nominal expiry date of the single-enterprise agreement.


Illustrative example


Willow Tree Childcare Pty Ltd (Willow Tree) is one of a number of employers
to which the North Townsville Childcare Centres Agreement 2011 (NTCC
Agreement) applies.  The NTCC agreement - a multi-enterprise agreement -
started operating from 5 August 2011 and has a nominal expiry date of 30
September 2014.  In June 2013, Willow Tree and its employees make a single-
enterprise agreement.  The single-enterprise agreement would, from the day
it starts operating, replace the NTCC Agreement as it applies to Willow
Tree and its employees, even though the NTCC Agreement has not passed its
nominal expiry date.  The NTCC Agreement would continue to apply to the
other employers that it covers and their employees.




                Part 2-2 - The National Employment Standards


Overview


 231. Part 2-2 contains the NES.  The NES are minimum entitlements listed in
      clause 61.


 232. The NES provide entitlements which, together with modern awards (Part
      2-3) and the national minimum wage order (Part 2-6), provide a safety
      net of terms and conditions for national system employees (as defined
      in clause 13).  The NES also provide a benchmark for bargaining and
      underpin enterprise agreements (see Part 2-4).


 233. The NES is designed to 'lock in' to modern awards and enterprise
      agreements.  It does this by including provisions that specifically
      allow awards and agreements to deal with specific issues.  Modern
      awards and enterprise agreements can also 'build on' the NES by
      including terms that supplement, or are ancillary or incidental to,
      the NES.  But, other than as expressly allowed, an award or agreement
      cannot be detrimental to an employee in any respect when compared to
      the NES.


 234. There are a number of concepts that are used regularly in Part 2-2.
      These are explained below.


 235. Various employee entitlements under the NES are based on the
      employee's ordinary hours of work.


     . The ordinary hours of work for an employee to whom a modern award
       applies will be the ordinary hours set out in the modern award (all
       awards are required to provide ordinary hours, or a means of
       determining ordinary hours) (see clause 147).


     . The ordinary hours of work for an employee to whom an enterprise
       agreement applies will be the hours identified in the enterprise
       agreement.  (An agreement should identify ordinary hours, or a means
       of determining ordinary hours, in order for the agreement to pass
       the better off overall test.)


     . The ordinary hours of work for an award/agreement free employee (as
       defined in clause 12) are calculated in the manner set out in
       clause 20.


 236. An employee's base rate of pay is defined in clause 16 as the rate of
      pay payable for the employee's ordinary hours of work, but does not
      include any incentive-based payments and bonuses, loadings, monetary
      allowances, overtime or penalty rates or any other separately
      identifiable amount.


 237. An employee's full rate of pay is defined in clause 18 as the rate of
      pay payable for the employee's ordinary hours of work, including any
      incentive-based payments and bonuses, loadings, monetary allowances,
      overtime or penalty rates and any other separately identifiable amount
      (which may, for example, include superannuation payments).


Division 1 - Introduction


Clause 59 - Guide to this Part


 238. This clause provides a guide to this Part.


Clause 60 - Meanings of employee and employer


 239. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Division 2 - What are the National Employment Standards?


Clause 61 - The National Employment Standards are minimum standards
applying to employment of employees


 240. The NES are minimum standards that employers are required to provide
      to employees (clause 61).  The NES relate to:


     . maximum weekly hours;


     . requests for flexible working arrangements;


     . parental leave and related entitlements;


     . annual leave;


     . personal/carer's leave and compassionate leave;


     . community service leave;


     . long service leave;


     . public holidays;


     . notice of termination and redundancy pay; and


     . the Fair Work Information Statement.


 241. These standards are explained in more detail in Divisions 3 to 12 of
      Part 2-2.


Division 3 - Maximum weekly hours


 242. This Division establishes the maximum weekly hours for employees and
      also the circumstances in which an employee may refuse a request or
      requirement to work additional hours if the hours are unreasonable.


 243. This Division also sets out arrangements for the averaging of hours of
      work under a modern award or enterprise agreement, or by agreement
      between an employer and an award/agreement free employee.


Clause 62 - Maximum weekly hours


 244. Subclause 62(1) provides that an employer must not request or require
      an employee to work more than a specified number of hours in a week,
      unless the additional hours are reasonable.


 245. The specified hours are:


     . for a full-time employee - 38 hours; or


     . for an employee who is not a full-time employee  - the lesser of 38
       hours or the employee's ordinary hours of work in a week.


 246. The ordinary hours of work for an employee to whom a modern award or
      enterprise agreement applies will be those hours set out in the modern
      award or enterprise agreement.  The ordinary hours of work for an
      award/agreement free employee are calculated in the manner set out in
      clause 20.


 247. An employer may request or require an employee to work additional
      hours either expressly or by implication (e.g., by setting tasks that
      could only be completed by the employee working additional hours).


 248. An employee may refuse to work additional hours if the additional
      hours are unreasonable (subclause 62(2)).


 249. Subclause 62(3) contains a non-exhaustive list of factors that must be
      taken into account in determining whether additional hours are
      reasonable or unreasonable.  These are:


     . any risk to employee health and safety from working the additional
       hours;


     . the employee's personal circumstances, including family
       responsibilities;


     . the needs of the workplace or enterprise in which the employee is
       employed;


     . whether the employee is entitled to receive overtime payments,
       penalty rates or other compensation for, or a level of remuneration
       that reflects the expectation of, working additional hours;


     . any notice given by the employer of any request or requirement to
       work the additional hours;


     . any notice given by the employee of his or her intention to refuse
       to work the additional hours;


     . the usual patterns of work in the industry, or part of the industry,
       in which the employee works;


     . the nature of the employee's role and the employee's level of
       responsibility;


     . whether the additional hours are in accordance with an averaging
       arrangement; and


     . any other relevant matter.


 250. The relevance of each of these factors and the weight to be given to
      each of them will vary according to the particular circumstances.  In
      some cases, a single factor will be of great importance and outweigh
      all others.  Other cases will require a balancing exercise between
      factors.  For example:


     . There may be a situation where, although an employer provides
       advance notice of the requirement to work additional hours and the
       requirement to work those hours is based on the needs of the
       workplace, the hours are nonetheless unreasonable when the risks to
       employee health and safety or the employee's family responsibilities
       are taken into account.


     . The significant remuneration and other benefits paid to a senior
       manager, together with the nature of the role and level of
       responsibility, may be sufficient to ensure that additional hours
       are reasonable in many cases.


     . The additional hours an employee is required to work may also be
       reasonable if the hours are worked at a particular time and in a
       particular manner in order to meet the employer's operational
       requirements, or are worked in accordance with a particular pattern
       or roster that is prevalent in a particular industry, such as the
       fly-in-fly-out arrangements in the mining industry.  The fact that a
       requirement to work additional hours is set out in the offer of
       employment accepted by an employee will also be relevant, though not
       determinative.


 251. Subclause 62(4) provides that, for the purposes of subclause 62(1),
      the hours an employee works in a week must be taken to include any
      hours of authorised paid or unpaid leave or absence.


Clause 63 - Modern awards and enterprise agreements may provide for
averaging of hours of work


 252. Clause 63 permits a modern award or enterprise agreement to include
      terms providing for the averaging of hours of work over a specified
      period.  The average weekly hours over the period must not exceed 38
      hours (for a full-time employee), or the lesser of 38 hours or the
      employee's ordinary hours of work in a week (for an employee other
      than a full-time employee).  Hours worked in a week in excess of this
      number of hours are additional hours and must not be unreasonable.
      The fact that additional hours are worked in accordance with an
      averaging arrangement does not necessarily mean that those hours are
      reasonable.  Rather, the averaging arrangement is one factor to be
      considered in the particular circumstances.


 253. The clause does not restrict the period over which the hours can be
      averaged under a modern award or enterprise agreement.


 254. The general protections set out in Part 3-1 of the Bill, and in
      particular clause 344 which prohibits the exertion of undue influence
      and undue pressure, apply when an employer and employee enter into an
      averaging arrangement under a term included in a modern award or
      enterprise agreement.  This is designed to ensure that averaging
      arrangements are genuinely consensual.


Clause 64 - Averaging of hours of work for award/agreement free employees


 255. Clause 64 permits an employee who is not covered by a modern award or
      enterprise agreement to make a written agreement with their employer
      to average their hours of work over a specified period of no more than
      26 weeks.


 256. The average weekly hours over the period must not exceed 38 hours (for
      a full-time employee), or the lesser of 38 hours or the employee's
      ordinary hours of work in a week (for an employee other than a full-
      time employee).  Hours worked in a week in excess of this number of
      hours are additional hours and must not be unreasonable.  The fact
      that additional hours are worked in accordance with an averaging
      arrangement does not necessarily mean that those hours are reasonable.
       Rather, the averaging arrangement is one factor to be considered in
      the particular circumstances.


 257. The general protections set out in Part 3-1 of the Bill, and in
      particular clause 344 which prohibits the exertion of undue influence
      and undue pressure, apply when an employer and employee enter into an
      agreement under this clause.


Illustrative example


Averaging arrangements and reasonable additional hours


The modern award regulating Alex's employment includes averaging
arrangements in relation to hours of work so that full-time employees would
ordinarily work 152 hours over four weeks (an average of 38 hours per
week).  Over a four week period, Alex's work pattern was as follows:


Week 1 - worked 21 hours


Week 2 - worked 60 hours


Week 3 - worked 38 hours


Week 4 - worked 33 hours


The averaging arrangement would be relevant in determining the
reasonableness of the additional 22 hours that Alex was required to work in
week 2.  Other factors such as Alex's family responsibilities, his health
and safety and the notice he was given of having to work those additional
22 hours would also be relevant.


Division 4 - Requests for flexible working arrangements


 258. Division 4 establishes a right to request flexible working
      arrangements in certain circumstances.  The intention of these
      provisions is to promote discussion between employers and employees
      about the issue of flexible working arrangements.


Clause 65 - Requests for flexible working arrangements


 259. Subclauses 65(1) and (2) establish a right to request flexible working
      arrangements for employees (including casual employees) where:


     . the employee is a parent of a child under school age, or a person
       with a responsibility for the care of a child under school age
       (e.g., a foster parent);


     . the change is to assist the employee to care for the child; and


     . the employee has 12 months continuous service with the employer, or
       (in the case of a casual employee) is a long term casual employee
       with an expectation of ongoing employment on a regular and
       systematic basis.


 260. School age is defined in clause 12 of the Bill to mean the age at
      which a child is required to start attending school in the relevant
      State or Territory.


 261. A child of a person includes someone who is the person's child within
      the meaning of the Family Law Act 1975, or an adopted child or step
      child of the person (see clause 17).


 262. For the purpose of this Division, continuous service is defined in
      subclause 22(4) to mean the employee's period of service with their
      employer other than any period of unauthorised absence.  (The period
      of unauthorised absence does not break the employee's continuous
      service, but does not count as service.)


 263. A long term casual employee is defined in clause 12 of the Bill as an
      employee who, at a particular time, is casual employee who has been
      employed by the employer on a regular and systematic basis for a
      sequence of periods of employment during a period of at least 12
      months.


 264. A request for flexible working arrangements must be in writing and set
      out the change sought and reasons for the change (subclause 65(3)).


 265. Subclause 65(4) requires that the employer give the employee a written
      response to the request within 21 days, stating whether the request is
      granted or refused.  If the employer refuses the request, the written
      response is required to include details of the reasons for the refusal
      (subclause 65(6)).  The intention is that an employee is able to
      clearly understand why their request is being rejected.  A bare
      refusal (i.e., without reasons) is insufficient.


 266. Subclause 65(5) provides that the employer may only refuse the request
      on reasonable business grounds.


 267. The Bill does not identify what may, or may not, comprise reasonable
      business grounds for the refusal of a request.  Rather, the
      reasonableness of the grounds is to be assessed in the circumstances
      that apply when the request is made.  Reasonable business grounds may
      include, for example:


     . the effect on the workplace and the employer's business of approving
       the request, including the financial impact of doing so and the
       impact on efficiency, productivity and customer service;


     . the inability to organise work among existing staff; and


     . the inability to recruit a replacement employee or the practicality
       or otherwise of the arrangements that may need to be put in place to
       accommodate the employee's request.


 268. It is envisaged that FWA will provide guidance on this issue.


 269. Rather than refusing a request, it would be open for an employee and
      their employer to discuss the request and come up with an approach
      that would accommodate the needs of both parties.


 270. An employee who is not eligible to request flexible working
      arrangements under this Division (e.g., because they do not have the
      requisite service) is not prevented from requesting flexible working
      arrangements.  However, such a request would not be subject to the
      procedures in this Division.


Illustrative example


Michael would like to start work at 10am, four days a week, to enable him
to take his three year old son to pre-school.  He submits a written request
to his employer setting out the reasons for requesting the change in hours.
 His employer considers the request but is unable to agree to the changes,
as they would mean that Michael misses an important nationwide
teleconference each morning.


However, instead of simply refusing the request, Michael's employer
discusses the situation with him.  They agree to an arrangement where
Michael will start work at 10am four days a week and participate in the
teleconference by phone hook-up before he leaves home, while attending in
person for the most important weekly agenda-setting meeting.


Michael's employer gives Michael a written response, setting out details of
the reasons for the refusal of the initial request as well as a statement
of the revised arrangements they have agreed.


Clause 66 - State and Territory laws that are not excluded


 271. Clause 66 makes clear that State and Territory laws that provide
      employee entitlements in relation to flexible work arrangements are
      not excluded and continue to apply to employees where they provide
      more beneficial employee entitlements than the entitlements under
      Division 4.


 272. The intention of clause 66 is to ensure the application to national
      system employers and their employees of more beneficial State or
      Territory laws that confer a right to request flexible work
      arrangements and deal with discrimination in relation to parental or
      carer responsibilities.  For example, this clause is intended to
      enable the operation of provisions in the Equal Opportunity Act 1995
      (Vic) that oblige an employer in Victoria to accommodate an employee's
      responsibilities as a parent or carer and that prescribe remedies if
      an employer breaches those obligations.  (See also paragraph 27(1)(a)
      of the Bill.)


 273. An employee may also have remedies under relevant discrimination
      legislation (including federal anti-discrimination legislation) if an
      employee considers they have been discriminated against by the
      employer's handling or refusal of their request.


Division 5 - Parental leave and related entitlements


 274. This Division establishes minimum parental leave and related
      entitlements for eligible national system employees.  (See, also, Part
      6-3 which provides for the extended application of this entitlement to
      non-national system employees.)


 275. Under the Bill, parental leave includes birth-related leave and
      adoption-related leave.  The separate labels of maternity and
      paternity leave are not used.  The leave must be associated with the
      birth of a child to the employee, the employee's spouse or the
      employee's de facto partner, or the placement of a child under 16
      years of age with the employee for adoption.


 276. Under this Division, each member of an employee couple will be
      entitled to be absent from work for separate periods of up to 12
      months.


 277. However, if only one person is taking leave, or if one member of an
      employee couple wishes to take more than 12 months leave, the employee
      may request a longer period from their employer.  The period of the
      extension cannot exceed 12 months less any period of parental leave
      taken, or intended to be taken, by the other member of an employee
      couple in relation to a child (i.e., the total period of leave for an
      employee couple cannot exceed 24 months).


 278. Specific provision is made to cover the situation where only one
      member of a couple is an employee.


 279. The parental leave NES recognises same-sex de facto relationships for
      the purpose of determining unpaid parental leave entitlements.  This
      means, for example, that the same-sex de facto partner of either a
      person who gives birth or the biological parent of a child may be
      eligible to take unpaid birth-related parental leave, if they are
      otherwise eligible.


 280. The parental leave NES also provides the following related
      entitlements:


     . unpaid special maternity leave;


     . a right to transfer to a safe job in appropriate cases, or take paid
       no safe job leave;


     . consultation requirements;


     . a return to work guarantee; and


     . unpaid pre-adoption leave.


Subdivision A - General


 281. This Subdivision establishes the eligibility rules for:


     . unpaid parental leave and related entitlements taken in association
       with the birth of a child; and


     . unpaid parental leave and unpaid pre-adoption leave taken in
       association with the placement of a child for adoption.


 282. In general terms, an employee must have completed at least 12 months
      of continuous service with their employer immediately before the
      proposed leave is to start.


 283. Specific rules apply to determine the eligibility of long term casual
      employees (see subclause 67(2)).


 284. The eligibility rules in clause 67 do not apply to unpaid pre-adoption
      leave.


 285. This Subdivision also sets out rules that apply in a transfer of
      employment situation to ensure recognition of notice and other
      information relevant to an employee's application for leave, or to
      enable an employee on leave to continue on leave.


Clause 67 - General rule - employee must have completed at least 12 months
of service


 286. Subclause 67(1) requires an employee (other than a casual employee) to
      have completed at least 12 months of continuous service immediately
      before the date that applies under subclause 67(3) to be entitled to
      unpaid parental leave.


 287. For the purpose of this Division, continuous service is defined in
      subclause 22(4) to mean the employee's period of service with their
      employer other than any period of unauthorised absence.  (The period
      of unauthorised absence does not break the employee's continuous
      service, but does not count as service.)  Subclause 67(2) establishes
      a corresponding eligibility rule for casual employees.


 288. To be entitled to unpaid parental leave (other than unpaid pre-
      adoption leave), a casual employee must qualify as a long term casual
      employee of the employer immediately before the date that applies
      under subclause 67(3) (paragraph 67(2)(a)).


 289. A long term casual employee is defined in clause 12 as an employee
      who, at a particular time, is a casual employee who has been employed
      by the employer on a regular and systematic basis for a sequence of
      periods of employment during a period of at least 12 months.


 290. Additionally, the casual employee must have a reasonable expectation
      of continuing employment by the employer on a regular and systematic
      basis, but for the birth or expected birth or placement or the
      expected placement of the child or the taking of unpaid parental leave
      (paragraph 67(2)(b)).


 291. Subclause 67(3) specifies the date at which an employee must have
      completed 12 months of service in order to qualify for unpaid parental
      leave (other than unpaid pre-adoption leave).  The relevant date is:


     . for birth-related leave - the date of birth, or the expected date of
       birth, of the child (subparagraph 67(3)(a)(i));


     . for adoption-related leave - the day of placement, or the expected
       day of placement, of the child (subparagraph 67(3)(a)(ii));


     . for an employee taking a period of leave that is to start within 12
       months after the birth or placement of the child under
       subclause 71(6) (which deals with the situation where a member of a
       couple is not an employee) - the date on which the employee's period
       of leave is to start (paragraph 67(3)(b)); or


     . for an employee who is a member of an employee couple taking a
       period of leave that is to start after the other member's period of
       leave finishes - the date on which the employee's period of leave is
       to start (paragraph 67(3)(c)).


 292. Subclauses 67(4) to (6) define the terms birth related leave, adoption-
      related leave and day of placement respectively for purposes of this
      Division:


     . Birth-related leave means unpaid parental leave taken in association
       with the birth of a child and unpaid special maternity leave.


     . Adoption-related leave means unpaid parental leave taken in
       association with the placement of a child for adoption and unpaid
       pre-adoption leave.


     . The day of placement, in relation to the adoption of a child, means
       the earlier of the day on which the employee first takes custody of
       the child or the day on which the employee starts any travel that is
       reasonably necessary to take custody of the child for adoption.


Clause 68 - General rule for adoption-related leave - child must be under
16 etc.


 293. Clause 68 establishes additional eligibility rules for adoption-
      related leave.

Under this clause, adoption-related leave (including unpaid pre-adoption
leave) is only available if the child placed with the employee:

     . is, or will be, under 16 years of age as at the day of placement, or
       the expected day of placement;


     . has not, or will not have, lived continuously with the employee for
       six months or more as at the day of placement, or the expected day
       of placement; and


     . is not (otherwise than because of the adoption) a child of the
       employee or the employee's spouse or de facto partner.





Clause 69 - Transfer of employment situations in which employee is entitled
to continue on leave etc.


 294. Clause 69 enables employees to take their parental leave entitlements
      when they are involved in a transfer of employment (as defined in
      subclause 22(7)).  The clause allows an employee to continue their
      leave:


     . when they are already on parental leave at the time their employment
       with the first employer ends; or


     . when they have taken steps to take their parental leave.


 295. Subclause 69(1) provides that an employee is entitled to continue to
      take leave under Division 5:


     . if there is a transfer of employment in relation to the employee;
       and


     . the employee had already started the period of leave when their
       employment with the first employer ended.


 296. Subclause 69(2) provides that:


     . if there is a transfer of employment in relation to an employee; and




     . the employee has, in relation to the first employer, already taken a
       step that is required or permitted by a provision of this Division
       in relation to taking a period of leave,

then the employee is deemed to have taken that step in relation to the
second employer.

 297. A legislative note under subclause 69(2) states that an example of a
      step taken by the employee could include giving the first employer
      notice to take leave under subclause 74(1), confirmation or advice
      under subclause 74(4) or evidence under subclause 74(5).


Subdivision B - Parental leave


Clause 70 - Entitlement to unpaid parental leave


 298. Clause 70 provides an eligible employee with a minimum entitlement of
      up to 12 months of unpaid parental leave.


 299. The leave can be taken in association with the birth of a child to the
      employee, or the employee's spouse or de facto partner, or the
      placement of a child with the employee for adoption (paragraph 70(a)).


 300. However, the leave is only available if the employee has or will have
      a responsibility for the care of the child (paragraph 70(b)).


 301. The following definitions apply for the purpose of the entitlement to
      unpaid parental leave:


     . A child of a person includes someone who is the person's child
       within the meaning of the Family Law Act 1975, or an adopted child
       or step child of the person (clause 17).


     . An employee's de facto partner means a person who, although not
       legally married to the employee, lives with the employee in a
       relationship as a couple on a genuine domestic basis (whether the
       employee and the person are of the same sex or different sexes) and
       also includes an employee's former de facto partner (clause 12).


     . An employee's spouse includes a former spouse (clause 12).


 302. The definition of de facto partner in clause 12 of the Bill ensures
      that same-sex de facto relationships are recognised for the purpose of
      determining unpaid parental leave entitlements.  This means that the
      same-sex de facto partner of either a person who gives birth or a
      biological parent may be eligible to take unpaid birth-related leave,
      including:


     . a female employee whose female de facto partner gives birth to the
       child;


     . a female employee whose female de facto partner is the biological
       mother of the child; or


     . a male employee whose male de facto partner is the biological father
       of a child.


 303. The legislative notes following this clause remind readers of the
      eligibility rules for unpaid parental leave in clause 67 and explain
      circumstances in which an employee's entitlement to unpaid parental
      leave is reduced (e.g, where special maternity leave has been taken by
      the employee in relation to the pregnancy).


Clause 71 - The period of leave - other than for members of an employee
couple who each intend to take leave


 304. The purpose of clause 71 is to provide rules for the taking of unpaid
      parental leave if only one parent intends to take unpaid parental
      leave because:


     . the employee is not a member of an employee couple (e.g., a single
       person, or an employee who is in a relationship, but the other
       person is a contractor); or


     . the employee is a member of an employee couple and the other member
       of the couple does not intend to take unpaid parental leave
       (subclause 71(1)).


 305. An employee couple is defined in clause 12 to mean two national system
      employees where each employee is the spouse or de facto partner of the
      other.  (Part 6-3 provides for the extended application of this
      entitlement to non-national system employees.)


 306. Under subclause 71(2), unpaid parental leave must be taken in a single
      continuous period (not broken periods) - subject to specific
      exceptions about concurrent leave around the time of the child's birth
      or placement under subclause 72(5) and (6) and directed leave under
      clause 73.


 307. A legislative note points readers to clause 79 to explain that this
      rule does not prevent an employee from taking a form of paid leave
      (e.g., paid annual leave) while on unpaid parental leave.


 308. Subclauses 71(3) to (5) specify when unpaid parental leave must start:


     . For a pregnant female employee, the period of leave may start up to
       6 weeks before the expected date of birth of her child, but no later
       than the date of the child's birth (subclause 71(3)).


     . For an employee other than the pregnant female employee, unpaid
       parental leave must start on the child's date of birth
       (subclause 71(4)).


     . For adoption leave, the leave must start on the day of placement of
       the child (subclause 71(5)).


 309. Subclause 71(6) qualifies the rules about when parental leave may
      start, in cases where the employee's spouse or de facto partner is not
      an employee and the spouse or de facto partner will have
      responsibility for the care of the child between the birth or
      placement and the date the employee starts their unpaid parental
      leave.  In this situation, the employee's leave may start anytime
      within 12 months after the date of birth or day of placement of the
      child.


 310. The legislative note under this subclause set out an example of the
      intended operation of this subclause and makes clear that an employee
      who starts their leave under this provision is still entitled to
      request an extension of the period of unpaid parental leave under
      clause 76, but the period of the leave may not extend beyond 24 months
      after the date of birth or placement of the child (see
      subclause 76(7)).


Clause 72 - The period of leave - members of an employee couple who each
intend to take leave


 311. Clause 72 provides for the way in which unpaid parental leave may be
      taken (including when leave must start) if each member of an employee
      couple intends to take unpaid parental leave (subclause 72(1)).


 312. Unpaid parental leave must be taken in a single continuous period (not
      broken periods) (subclause 72(2)) - subject to limited exceptions
      about concurrent leave (subclauses 72(5) and (6)) or directed leave
      under clause 73.


 313. Subclauses 72(3) and (4) specify when unpaid parental leave must start
      for birth-related and adoption leave respectively and ensures that
      members of a couple take their leave consecutively.


 314. Subclause 72(5) creates a limited exception to the prohibition on both
      members of an employee couple taking unpaid parental leave at the same
      time.  Both employees are entitled to take leave at the same time for
      a period of up to three weeks from the date of the child's birth or
      day of placement (paragraphs 72(5)(a) and (b)).


 315. However, by agreement with the employer, the concurrent leave (which
      can only be a maximum period of three weeks) may be taken at any time
      during an extended period ending no later than six weeks after the
      child's birth or placement (paragraph 72(5)(c)).


 316. Concurrent leave is parental leave and reduces the entitlement an
      employee otherwise has to unpaid parental leave (subclause 72(6)).


Clause 73 - Pregnant employee may be required to take unpaid parental leave
within 6 weeks before the birth


 317. Clause 73 sets out the circumstances in which a pregnant employee who
      proposes to work during the six week period before her child's
      expected date of birth may be required to start unpaid parental leave
      early.  This clause does not alter or override an employer's general
      duty of care to the employee.


 318. If a pregnant employee continues to work within six weeks before the
      estimated date of birth, an employer may ask the employee to provide a
      medical certificate, stating whether the employee is fit for work
      (paragraph 73(1)(a)) and, if so, whether it is inadvisable for the
      employee to continue working in her present position during a stated
      period because of any of the specified risk factors
      (paragraph 73(1)(b)).  The risk factors include any illness or risks
      arising out of the employee's pregnancy, or hazards connected with the
      employee's position.


 319. Under subclause 73(2), an employer may require an employee to start
      unpaid parental leave as soon as practicable if the employee fails to
      provide the certificate within seven days, or if the certificate
      states that the employee is not fit for work.  The employer may also
      require an employee to start unpaid parental leave as soon as
      practicable if the employee is certified as fit for work, but:


     . the certificate indicates that it is inadvisable for the employee to
       continue in her present position for a specified reason; and


     . the employee is not entitled to transfer to a safe job or to no safe
       job leave (see clause 81).


 320. This form of directed leave runs until the end of the employee's
      pregnancy, or the date the employee's planned leave was due to start
      (subclause 73(3)).  The leave is parental leave and, therefore, counts
      as part of an employee's 12 month entitlement.


 321. This form of leave is an exception to the usual requirements about
      notice, when leave must start and that leave be taken in a continuous
      period (subclauses 73(4) and (5)).


Clause 74 - Notice and evidence requirements


 322. Clause 74 sets out the notice and evidence requirements for taking a
      period of unpaid parental leave.  An employee must comply with these
      requirements to be eligible for unpaid parental leave
      (subclause 74(7)).


 323. Subclauses 74(1) and (2) require an employee to give the employer at
      least 10 weeks' written notice before starting the leave or, if that
      is not practicable, to provide notice as soon as practicable (which
      may be a time after the leave has started).  For example, it may not
      be practical for an employee to give the requisite notice in relation
      to the premature birth of a child, but valid notice could still be
      given as soon as practicable after the child's birth.


 324. The notice must specify the intended start and end dates of the leave
      (subclause 74(3)).  Subclause 74(4) requires an employee to confirm
      the intended start and end dates of the leave (or advise of any
      changes) at least 4 weeks before the intended start date, unless it is
      not practicable to do so.


 325. An employer may require an employee who has given notice of the taking
      of unpaid parental leave to provide evidence of the child's actual or
      expected date of birth or the day or expected day of placement for
      adoption and that the child is or will be under 16 years of age as at
      that date.  The evidence must be sufficient to satisfy a reasonable
      person and, in the case birth-related leave, the employer may require
      that this be a medical certificate (subclauses 74(5) and (6)).

Separate notice and evidence requirements apply in relation to special
maternity leave (see clause 80) and unpaid pre-adoption leave (see
clause 85).

Clause 75 - Extending period of unpaid parental leave - extending to use
more of available parental leave period


 326. Clause 75 enables an employee to extend a period of unpaid parental
      leave once leave has commenced.  Leave may not be extended by more
      than the period which the employee has available to them up to the
      maximum allowable period of 12 months (subclauses 75(1), (2) and (6)).


 327. Subclauses 75(3) and (4) enable an employee to extend the period of
      leave once as of right, by providing at least four weeks' notice in
      writing to the employer before the end date of the original leave
      period.  Further extensions may be agreed between the employer and
      employee (subclause 75(5)).


Clause 76 - Extending period of unpaid parental leave - extending for up to
12 months beyond available parental leave period


 328. Clause 76 enables an employee to request an additional period of
      unpaid parental leave.  The maximum period of additional leave that
      may be sought is 12 months.  In a case where both members of an
      employee couple intend to take unpaid parental leave, the additional
      amount of leave an employee may request is reduced by any leave that
      the other member of the couple has taken or will take.  The amount of
      unpaid parental leave the other member of the couple is entitled to
      take is reduced by the period of the extension (subclause 76(6)).


 329. These arrangements allow members of an employee couple flexibility in
      configuring their combined leave entitlement over a period of up to 24
      months.


 330. To be eligible to request an extension of unpaid parental leave for up
      to an additional 12 months, the employee must first take their full
      entitlement to 12 months' unpaid parental leave (which may include any
      periods of the kind described in paragraphs 75(2)(a) to (e), such as
      special maternity leave) (subclause 76(1)).  Any proposed extension
      must be continuous with the employee's unpaid parental leave.


 331. Subclauses 76(2) to (5) set out the process for an employee to make a
      request and the employer to respond.  The process involves:


     . the employee providing at least 4 weeks' notice in writing before
       the end of the employee's period of leave, requesting an extension;


     . the employer responding to the request, in writing, as soon as
       practicable and not later than 21 days after the request is made, by
       either granting or refusing the employee's request (a request may
       only be refused on reasonable business grounds); and


     . the employer including details of the reasons for a refusal.  The
       intention is that if the request is refused, the employer must give
       details of the grounds upon which the request was refused.  A bare
       refusal (i.e.  without reasons) is insufficient.


 332. The Bill does not identify what may, or may not, be reasonable
      business grounds for the refusal of a request.  Rather, the
      reasonableness of the grounds is to be assessed in the circumstances
      that apply when the request is made.  Reasonable business grounds may
      include, for example:


     . the effect on the workplace and the employer's business of approving
       the request, including the financial impact of doing so and the
       impact on efficiency, productivity and customer service;


     . the inability to organise work among existing staff; or


     . the inability to recruit a replacement employee or the practicality
       or otherwise of the arrangements that may need to be put in place to
       accommodate the employee's request.


 333. It is envisaged that FWA will provide guidance on this issue.


 334. Subclause 76(7) confirms that an employee is not entitled to extend
      the period of unpaid parental leave beyond 24 months after the date of
      birth or day of placement of the child.























Illustrative example:


Rosa is a pregnant employee entitled to unpaid parental leave.  She has
taken two weeks of unpaid special maternity leave, on account of a
pregnancy-related illness.  Rosa intends to take four weeks' paid annual
leave from the proposed start date of her period of unpaid parental leave.


Rosa also intends to apply to extend her unpaid parental leave entitlement,
so she can care for the child up to the child's second birthday.


Rosa's spouse Jim is also entitled to unpaid parental leave, but only
intends to take one week of concurrent leave around the time of the child's
birth.  Rosa and Jim are treated as an employee couple for purposes of this
entitlement.


The maximum entitlement of any employee to unpaid parental leave is 12
months.  (Rosa and Jim are entitled to a maximum of 12 months' unpaid
parental leave each.)


Rosa's entitlement to unpaid parental leave is reduced by the amount of
unpaid special maternity leave she has taken (i.e., two weeks).


Rosa may take any period of paid annual leave at the same time she is
taking unpaid parental leave.


The maximum extension to a period of unpaid parental leave is 12 months,
but this is reduced by the amount of unpaid parental leave and related
entitlements that the other member of the employee couple may have taken.
Extensions are only available to an employee if the employee takes their
available initial parental leave period.  (For Rosa, the available parental
leave period would be the initial 12 month period of leave less the two
weeks of unpaid special maternity leave.)


Rosa meets this requirement and is entitled to request (in writing and
subject to certain notice requirements) a further period of leave of up to
12 months less one week (i.e., the amount of unpaid parental leave taken by
Jim).


Rosa's employer may only refuse this request in writing on reasonable
business grounds.


If Rosa's employer agrees to the extension, Jim's entitlement to unpaid
parental leave would be effectively reduced by a corresponding amount.
Because Rosa will be extending her period of unpaid parental leave by a
further 12 months (less one week's leave taken by Jim), Jim could not take
any further unpaid parental leave in relation to this child.


Clause 77 - Reducing period of unpaid parental leave


 335. Clause 77 enables an employee and employer to agree to reduce a period
      of scheduled unpaid parental leave.  This clause is included to avoid
      any doubt, as there is nothing to prevent such an agreement being
      made.


Clause 78 - Employee who ceases to have responsibility for care of child


 336. This clause provides for an early return to work if an employee who is
      on unpaid parental leave ceases to have any responsibility for the
      care of the relevant child.


Clause 79 - Interaction with paid leave


 337. Clause 79 deals with the interaction between unpaid parental leave and
      other kinds of leave.


 338. Subject to certain exceptions, subclause 79(1) enables an employee to
      take paid leave at the same time the employee is taking unpaid
      parental leave.  The period of unpaid parental leave would run
      concurrently with the period of paid leave taken by the employee and
      will not break the continuity of the period of unpaid parental leave.
      The requirements for taking the other form of leave would still apply
      - e.g., the employer agreeing to the employee taking paid annual leave
      (see clause 88).


 339. Subclauses 79(2) and (3) ensure that an employee is not eligible to
      take paid personal/carer's leave or compassionate leave while taking
      unpaid parental leave, and is not eligible for any payment under
      Division 8 (community service leave).  However this does not deprive
      an employee of their entitlement to be paid for their jury service
      under applicable State or Territory jury service laws (see
      clause 112).


Subdivision C - Other entitlements


Clause 80 - Unpaid special maternity leave


 340. Clause 80 enables an eligible pregnant employee to take unpaid special
      maternity leave if the employee is not fit to work because of a
      pregnancy-related illness, or because the pregnancy ends otherwise
      than by the birth of a living child within 28 weeks of the expected
      date of birth (subclause 80(1)).  Any period of special maternity
      leave taken by the employee while she was pregnant counts as part of
      the employee's entitlement to 12 months of unpaid parental leave under
      clause 70 (subclause 80(7)).


 341. To be eligible for this entitlement, the employee must meet the
      service requirement in clause 67 and also comply with the notice and
      evidence requirements set out in subclauses 80(2) to (4).


 342. Subclause 80(5) enables the employer to require the employee to
      provide a medical certificate as evidence of entitlement to the leave.




Clause 81 - Transfer to a safe job


 343. Clause 81 provides an eligible pregnant employee with an entitlement
      to be transferred to a safe job in specified circumstances.


 344. Subclause 81(1) establishes that the entitlement applies if the
      employee:


     . is entitled to unpaid parental leave;


     . has complied with the notice and evidence requirements for accessing
       unpaid parental leave; and


     . provides evidence that would satisfy a reasonable person that she is
       fit for work, but it is inadvisable for her to continue in her
       present position during a period because of illness or risks arising
       out of her pregnancy, or hazards connected with that position.


 345. An employer may require the evidence to be in the form of a medical
      certificate (subclause 81(2)).


 346. If these requirements are met, the employee must be transferred, for
      the risk period, to an appropriate safe job with no other change to
      the employee's terms and conditions of employment
      (paragraph 81(3)(a)).


 347. Subclause 81(4) defines appropriate safe job to be a safe job that has
      the same ordinary hours of work as the employee's present position,
      subject to agreed changes to those hours.  (The meaning of ordinary
      hours of work is described at the beginning of this Part.)


 348. Subclause 81(5) requires an employer to pay the transferred employee
      at their full rate of pay (as defined in clause 18) for the position
      she was in before the transfer for the hours that she works in the
      risk period.  (The meaning of full rate of pay is described at the
      beginning of this Part.)


 349. If there is no appropriate safe job available, the employee is
      entitled to take paid 'no safe job' leave for the risk period
      (paragraph 81(3)(b)).


 350. Subclause 81(6) requires an employer to pay the employee who takes no
      safe job leave at the employee's base rate of pay (as defined in
      clause 16) for the employee's ordinary hours of work in the risk
      period.  (The meaning of base rate of pay is described at the
      beginning of this Part.)


 351. Subclause 81(7) clarifies that the risk period ends when the pregnancy
      ends.  The employee's absence from work on no safe job leave does not
      reduce the employee's entitlement to unpaid parental leave under this
      Division.


Clause 82 - Employee on paid no safe job leave may be asked to provide a
further medical certificate


 352. Clause 82 applies if a pregnant employee is on paid no safe job leave
      in the 6 week period before the expected date of birth of the child.


 353. The provision ensures that, in such a situation, an employer has the
      same ability as applies generally (under clause 73) to seek a medical
      certificate about fitness for work in the 6 weeks before the expected
      date of birth and, if necessary, direct the employee to take unpaid
      parental leave.


Clause 83 - Consultation with employee on unpaid parental leave


 354. Subclause 83(1) provides employees on unpaid parental leave with an
      entitlement to be kept informed of decisions by their employer that
      will have a significant effect on the status, pay or location of the
      employee's pre-parental leave position.


 355. The employer must take all reasonable steps to give the employee
      information about, and an opportunity to discuss, the effect of the
      decision on the employee's position.  The employer satisfies this
      provision by taking all reasonable steps to contact the employee using
      their last known contact details.


 356. Subclause 83(2) defines the employee's pre-parental leave position to
      be the position the employee held before starting the unpaid parental
      leave or the position held by the employee before she was transferred
      to a safe job or reduced her working hours due to her pregnancy.


Clause 84 - Return to work guarantee


 357. Clause 84 provides employees with a return to work guarantee
      immediately following a period of unpaid parental leave, entitling
      them to return to:


     . their pre-parental leave position; or


     . if that position no longer exists - an available position for which
       the employee is qualified and suited that is nearest in status and
       pay to the employee's pre-parental leave position.


Clause 85 - Unpaid pre-adoption leave


 358. Subclause 85(1) provides all employees (i.e., irrespective of length
      of service) with an entitlement to up to 2 days of unpaid pre-adoption
      leave, to attend any interviews or examinations required in order to
      obtain approval for the employee's adoption of a child.  Leave may be
      taken in a single continuous period, or in separate periods agreed
      between the employer and employee (subclause 85(3)).


 359. However, the entitlement does not apply if the employee could instead
      take some other form of leave and the employer directs the employee to
      take that other form of leave (e.g., paid annual leave)
      (subclause 85(2)).


 360. Subclauses 85(4) to (7) set out the notice and evidence requirements
      for taking a period of unpaid pre-adoption leave.


Division 6 - Annual leave


 361. This Division establishes a minimum entitlement to annual leave for
      employees.


Clause 86 - Division applies to employees other than casual employees


 362. This clause provides the entitlement to paid annual leave applies to
      all employees, other than casual employees.


Clause 87 - Entitlement to annual leave


 363. The minimum entitlement to paid annual leave is four weeks for each
      year of service, unless the employee is a shiftworker, in which case
      the employee is entitled to a minimum of five weeks' paid annual leave
      for each year of service (subclause 87(1)).  Leave accrues
      progressively according to an employee's ordinary hours of work and is
      cumulative (subclause 87(2)).  (The meaning of ordinary hours of work
      is outlined at the beginning of this Part.)


 364. The additional week of leave for shiftworkers applies where:


     . a modern award or enterprise agreement applies to the employee and
       defines or describes the employee as a shiftworker for the purposes
       of the NES; or


     . an award/agreement free employee (as defined in clause 12) meets the
       criteria for the shiftworker annual leave entitlement under
       subclause 87(3).

An award/agreement free employee will qualify for the shiftworker annual
leave entitlement of five weeks of paid annual leave per year of service
under subclause 87(3) if:

     . the employee is employed in a business in which shifts are
       continuously rostered 24 hours a day for seven days a week, is
       regularly rostered to work those shifts, and regularly works on
       Sundays and public holidays; or


     . the employee is in a class of employees prescribed by the
       regulations as shiftworkers for the purpose of the NES.


 365. Subclauses 87(4) and (5) permit the regulations to exclude a class of
      award/agreement free employees from qualifying as shiftworkers for
      annual leave purposes.


 366. As part of the award modernisation process, the AIRC is to have regard
      to whether it is appropriate to include a definition of shiftworker in
      a modern award for the purpose of the NES annual leave entitlement.


 367. The entitlement to annual leave set out in this clause is a minimum
      entitlement and does not prevent an employer and employee from
      agreeing to, or an award or enterprise agreement providing for, a more
      generous entitlement.


Clause 88 - Taking paid annual leave


 368. Annual leave may be taken for a period agreed between the employee and
      the employer (subclause 88(1)).  The employer must not unreasonably
      refuse to agree to a request by the employee to take paid annual leave
      (subclause 88(2)).


Clause 89 - Employee not taken to be on paid annual leave at certain times

Under clause 89, an employee will not be taken to be on paid annual leave:

     . during a day or part-day that is a public holiday which falls during
       the period of their absence from work on annual leave; or


     . while the employee takes other types of leave provided for under the
       NES, with the exception that paid annual leave may be taken in
       conjunction with unpaid parental leave.


 369. The effect of this clause is that if a public holiday falls during a
      period when an employee is absent from work, or the employee is sick
      and takes paid sick leave for the period of their illness, then the
      employee's annual leave accrual will not be reduced by that day or
      period.


Clause 90 - Payment for annual leave


 370. Subclause 90(1) entitles an employee to be paid at their base rate of
      pay (as defined in clause 16) for the employee's ordinary hours of
      work for the period of their absence on leave.  (The meaning of
      ordinary hours of work and base rate of pay are outlined at the
      beginning of this Part.)


 371. This is a minimum entitlement and would not prevent an employer and
      employee from agreeing to, or an award or enterprise agreement
      providing for, more generous payment terms.


 372. Subclause 90(2) provides that, on termination of employment, an
      employee is entitled to receive a payment in respect of any untaken
      paid annual leave.  The payment will be equivalent to the amount that
      the employee would have been paid if the employee had taken the annual
      leave.


Clause 91 - Transfer of employment situations that affect entitlement to
payment for period of untaken paid annual leave


 373. Subclause 91(1) provides that subclause 22(5) (which provides for the
      automatic recognition of service where there is a transfer of
      employment) does not apply for the purposes of Division 6 to a
      transfer of employment between non-associated entities if the second
      employer decides not to recognise an employee's service with the first
      employer.


 374. The intention of this subclause is that an employee's service with the
      first (old) employer does not have to be recognised by the second
      (new) employer in relation to the employee's untaken paid annual leave
      entitlements where there is a transfer of business between two non-
      associated employers.


 375. The old employer will be required to pay out an employee's untaken
      paid annual leave where the new employer does not agree to recognise
      service with the old employer.


 376. Subclause 91(2) provides that if subclause 22(5) applies for the
      purposes of Division 6 to a transfer of employment in relation to an
      employee, the employee is not entitled to be paid an amount under
      subclause 90(2) for the period of untaken paid annual leave.


Clause 92 - Paid annual leave must not be cashed out except in accordance
with permitted cashing out terms


 377. Clause 92 states that paid annual leave may only be cashed out in
      accordance with the terms included in a modern award or enterprise
      agreement under clause 93 or by agreement between an employer and an
      award/agreement free employee (as defined in clause 12) under
      clause 94.  For example, if an award or agreement that applies to the
      employee does not include a cashing out provision for annual leave,
      cashing out of paid annual leave is not permitted.


Clause 93 - Modern awards and enterprise agreements may include terms
relating to cashing out and taking paid annual leave


 378. Subclauses 93(1) and (2) permit a modern award or enterprise agreement
      to include terms providing for the cashing out of paid annual leave.
      In recognition of the importance of employees taking leave for the
      purposes of rest and recreation, the cashing out terms in an award or
      agreement must require that:


     . the employee retain a minimum balance of four weeks' accrued annual
       leave after the cash out;


     . each cashing out arrangement be a separate agreement in writing
       between the employer and the employee; and


     . the employee receive at least the full amount that would have been
       payable so the paid annual leave cannot be cashed out at a lower
       rate than the employee would have received had the employee taken
       the leave.


 379. The effect of cashing out paid annual leave is that the payment the
      employee receives for cashing out paid annual leave is in addition to
      the payment that the employee would be entitled to receive for working
      during the period covered by the cash out.


 380. The general protections provisions in Part 3-1 of the Bill will apply
      to entering into a cashing out arrangement under this clause (see, in
      particular, clause 344, which prohibits the exertion of undue
      influence or undue pressure on an employee to agree to cash out the
      leave).


 381. Subclause 93(3) permits terms to be included in an award or agreement
      that require an employee, or that enable an employer to require or
      direct an employee, to take paid annual leave in particular
      circumstances, but only if the requirement is reasonable.  This may
      include the employer requiring an employee to take a period of annual
      leave to reduce the employee's excessive level of accrual or if the
      employer decides to shut down the workplace over the Christmas/New
      Year period.


 382. In assessing the reasonableness of a requirement or direction under
      this subclause it is envisaged that the following are all relevant
      considerations:


     . the needs of both the employee and the employer's business;


     . any agreed arrangement with the employee;


     . the custom and practice in the business;


     . the timing of the requirement or direction to take leave; and


     . the reasonableness of the period of notice given to the employee to
       take leave.


 383. Subclause 93(4) enables an award or agreement to include other terms
      about the taking of paid annual leave - e.g., the taking of paid
      annual leave in advance of accrual.


Clause 94 - Cashing out and taking paid annual leave for award/agreement
free employees


 384. Subclause 94(1) enables an employer and an award/agreement free
      employee (as defined in clause 12) to agree to cash out a particular
      amount of the employee's accrued annual leave and imposes the same
      conditions on the cashing out arrangement as those that apply to a
      cashing out arrangement under terms included in a modern award or
      enterprise agreement (see above).  Clause 344 in Part 3-1 (General
      protections) is equally applicable to a cashing out arrangement under
      this subclause.


 385. Subclause 94(5) allows an employer to require an award/agreement free
      employee to take a period of paid annual leave, but only if the
      requirement is reasonable.  The factors for assessing the
      reasonableness of a requirement identified for subclause 93(3) equally
      apply here.


 386. Subclause 94(6) enables an employer and an award/agreement free
      employee to agree on when and how paid annual leave may be taken by
      the employee.  The legislative note to this subclause contains
      examples of the matters that could be agreed.


The concept of an employee's ordinary hours of work is central to the paid
annual leave entitlement as it determines the rate at which the entitlement
accrues and also entitlement to payment when leave is taken.  For example:


     . a full-time employee whose ordinary hours of work each week are 38
       will accrue 2 weeks' leave (76 hours ) over a 6 month period.  If
       the employee then takes that leave, the employee will be paid for 2
       weeks of leave (76 hours) at their base rate of pay; and


     . a part-time employee whose ordinary hours of work each week are 12
       hours will also accrue 2 weeks' leave (24 hours) over the same 6
       month period.  If the part-time employee then takes that leave, the
       employee will be paid for 2 weeks of leave (24 hours) at their base
       rate of pay.


If an employee changes the basis of their employment (e.g., from full-time
to part-time), they would not lose accrued leave, although the future rate
of accrual will be different (based on the employee's new ordinary hours of
work).


Division 7 - Personal/carer's leave and compassionate leave


 387. This Division establishes minimum entitlements for employees to paid
      personal/carer's leave, unpaid carer's leave and paid and either paid
      or unpaid compassionate leave.


Subdivision A - Paid personal/carer's leave


Clause 95 - Subdivision applies to employees other than casual employees


 388. This clause states that the entitlement to paid personal/carer's leave
      applies to all employees, other than casual employees.


Clause 96 - Entitlement to paid personal/carer's leave


 389. The minimum entitlement to paid personal/carer's leave is ten days for
      each year of service (subclause 96(1)).


 390. Leave accrues progressively according to an employee's ordinary hours
      of work and is cumulative (subclause 96(2)).


 391. The entitlement to personal/carer's leave set out in this clause is a
      minimum entitlement and does not prevent an employer and employee from
      agreeing to, or a modern award or enterprise agreement providing for,
      a more generous entitlement.


Clause 97 - Taking paid personal/carer's leave


 392. An employee may take paid personal/carer's leave:


     . if the employee is not fit for work because of a personal illness,
       or personal injury; or


     . to provide care or support to a member of the employee's immediate
       family, or a member of the employee's household, who requires care
       or support because of a personal illness or personal injury, or an
       unexpected emergency.


 393. The legislative note that follows this clause is a reminder of the
      need to comply with the notice and evidence requirements set out in
      clause 107 to be entitled to take paid personal/carer's leave.


Clause 98 - Employee taken not to be on paid personal/carer's leave on
public holiday


 394. Clause 98 has the effect that an employee will not be taken to be on
      paid personal/carer's leave when a day or part-day that is a public
      holiday falls during the employee's absence on leave.


Clause 99 - Payment for paid personal/carer's leave


 395. If an employee takes a period of paid personal/carer's leave, the
      employer must pay the employee at the employee's base rate of pay for
      the employee's ordinary hours of work in the period (clause 99).  (The
      meaning of base rate of pay and ordinary hours of work are outlined at
      the beginning of this Part.)


 396. This is a minimum entitlement and would not prevent an employer and
      employee from agreeing to, or an award or enterprise agreement
      providing for, more generous payment terms (see subclause 55(4)).











The concept of an employee's ordinary hours of work is central to the paid
personal/carer's leave entitlement as it determines the rate at which the
entitlement accrues and also the entitlement to payment when leave is
taken.


General principles


Leave accrues according to an employee's ordinary hours of work (which may
be set out in a modern award or enterprise agreement, or are calculated in
the manner set out in clause 20).  Such hours are often expressed as a
number of hours per week.  In effect, therefore, the Bill ensures an
employee will accrue the equivalent of two weeks' paid personal/carer's
leave over the course of a year of service.


Although this is expressed as an entitlement to 10 days (reflecting a
'standard' 5 day work pattern), by relying on an employee's ordinary hours
of work, the Bill ensures that the amount of leave accrued over a period is
not affected by differences in the actual spread of an employee's ordinary
hours of work in a week.


Therefore, a full-time employee who works 38 hours a week over five days
(Monday to Friday) will accrue the same amount of leave as a full-time
employee who works 38 ordinary hours over four days per week.  Over a year
of service both employees would accrue 76 hours of paid personal/carer's
leave


Similarly, the requirement to pay an employee for their absence on the
basis of their ordinary hours of work for the period of the absence means
that the employee is entitled to be paid for his or her ordinary hours of
work on the days in the week they would have worked but for being absent
from work on paid personal/carer's leave (i.e., excluding overtime).





Illustrative examples


The following examples illustrate the intended operation of the accrual and
payment provisions.


     . Tulah is a full-time employee whose ordinary hours of work are 38
       per week.  On average, she also works an additional two hours of
       overtime per week.  Tulah will accrue ten days' personal/carer's
       leave based on her ordinary hours of work (76 hours) over a year of
       service.  If she takes a week's personal/carer's leave because she
       is sick or to care for a member of her immediate family who is sick,
       she will be entitled to be paid for 38 ordinary hours at her base
       rate of pay.


     . Brendan is a part-time employee whose ordinary hours of work are 19
       per week.  He will accrue half the amount of paid personal/carer's
       leave over a year of service as Tulah (38 hours), reflecting the
       lower number of ordinary hours that he works.  This is also
       reflected in how much he is entitled to be paid if he takes a week's
       paid personal/carer's leave.  If he takes a week's personal/carer's
       leave, he will be entitled to be paid for 19 ordinary hours at his
       base rate of pay.


     . Sudhakar is a full time employee who has entered into a permissible
       averaging arrangement under the NES and works an average of 152
       hours every four weeks (based on 38 ordinary hours per week).  The
       number of ordinary hours that Sudhakar works on any given day may
       vary according to the averaging arrangement.  However, over a year
       he accrues ten days (76 hours) of paid personal/carer's leave.  If
       he is sick and takes leave for a day, he will be entitled to be paid
       for the number of ordinary hours he was rostered to work on that day
       (but not for any additional overtime hours that he was to work).


If an employee changes the basis of their employment (e.g., if the employee
changes from a full-time employee to a part-time employee), they would not
lose accrued leave, although the future rate of accrual will be different
(based on the employee's new ordinary hours of work).


Clause 100 - Paid personal/carer's leave must not be cashed out except in
accordance with permitted cashing out terms


 397. Clause 100 makes clear that paid personal/carer's leave may only be
      cashed out in accordance with the terms included in a modern award or
      enterprise agreement under clause 101.  If a modern award or
      enterprise agreement that applies to the employee does not include a
      cashing out provision for paid personal/carer's leave, the cashing out
      of this leave is not permitted.


Clause 101 - Modern awards and enterprise agreements may include terms
relating to cashing out paid personal/carer's leave


 398. Subclauses 101(1) and (2) permit a modern award or enterprise
      agreement to include terms providing for the cashing out of paid
      personal/carer's leave.  To ensure that employees retain access to
      paid leave in the event of illness or injury, the cashing out terms in
      a modern award or enterprise agreement must require that:


     . the employee retain a minimum balance of 15 days of paid
       personal/carer's leave after the cash out;


     . each cashing out arrangement be a separate agreement in writing
       between the employer and the employee; and


     . the employee receive at least the full amount that would have been
       payable had the employee taken the leave.


 399. In essence, the requirement to retain a minimum balance of 15 days'
      leave means that the employee must retain the equivalent of three
      weeks' leave based on their ordinary hours.  The effect of cashing out
      paid personal/carer's leave is that the payment the employee receives
      for cashing out the leave is in addition to the payment that the
      employee would be entitled to receive for working during the period
      covered by the cash out.


 400. The general protections provisions in Part 3-1 of the Bill will also
      apply to entering into a cashing out arrangement under this clause
      (see, in particular, clause 344, which prohibits the exertion of undue
      influence or undue pressure on an employee to agree to cash out the
      leave).


Subdivision B - Unpaid carer's leave


 401. The unpaid carer's leave provisions in this subdivision apply to all
      employees, including casual employees.


Clause 102 - Entitlement to unpaid carer's leave


 402. Clause 102 entitles an employee to 2 days of unpaid carer's leave for
      each occasion when a member of the employee's immediate family or
      household requires care or support because of a personal illness,
      personal injury or unexpected emergency, affecting the family or
      household member.


Clause 103 - Taking unpaid carer's leave


 403. Subclause 103(1) enables an employee to take unpaid carer's leave to
      provide the care and support referred to in clause 102.


 404. The leave may be taken as a single period of up to 2 days or separate
      periods agreed between the employer and employee (subclause 103(2)),
      but the employee cannot take unpaid carer's leave if the employee
      could have taken paid personal/carer's leave instead
      (subclause 103(3)).


 405. The legislative note that follows this clause is a reminder of the
      need to comply with the notice and evidence requirements set out in
      clause 107 to be entitled to take unpaid personal/carer's leave.








Subdivision C - Compassionate leave


 406. The compassionate leave provisions in this Subdivision apply to all
      employees, including casual employees.  However, the entitlement to
      payment does not apply to casual employees; for such employees the
      entitlement is unpaid.


Clause 104 - Entitlement to compassionate leave


 407. Clause 104 entitles an employee to 2 days of compassionate leave for
      each occasion when a member of the employee's immediate family or a
      member of the employee's household:


     . contracts or develops a personal illness or sustains a personal
       injury that poses a serious threat to the member's life; or


     . dies.


Clause 105 - Taking compassionate leave


 408. Subclause 105(1) enables an employee to take leave:


     . to spend time with the member of their immediate family or household
       who has contracted the serious illness or sustained the serious
       injury; or


     . following the death of a member of the employee's immediate family
       or household.


 409. The leave may be taken as a single, continuous period of 2 days, or 2
      separate periods of 1 day each, or any separate periods agreed between
      the employer and employee (subclause 105(2)).


 410. Subclause 105(3) provides that if the permissible occasion for taking
      compassionate leave is the contraction or development of a personal
      illness, or the sustaining of a personal injury, the employee may take
      the compassionate leave entitlement for that occasion at any time
      while the illness or injury persists.


 411. The legislative note that follows this clause is a reminder of the
      need to comply with the notice and evidence requirements set out in
      clause 107 to be entitled to take compassionate leave.


Clause 106 - Payment for compassionate leave (other than for casual
employees)


 412. Clause 106 entitles an employee, other than a casual employee, to
      receive his or her base rate of pay for ordinary hours of work during
      a period of compassionate leave.


Subdivision D - Notice and evidence requirements


Clause 107 - Notice and evidence requirements


 413. Subclause 107(1) requires an employee to give his or her employer
      notice of the taking of paid personal/carer's leave, unpaid carer's
      leave or compassionate leave.


 414. The notice must be given as soon as practicable (which may be a time
      after the leave has started) and must identify the period, or expected
      period, of the leave (subclause 107(2)).


 415. Subclause 107(3) enables an employer to require an employee who has
      given notice to provide evidence that would satisfy a reasonable
      person that the employee is entitled to the leave.  The types of
      evidence commonly requested include a medical certificate or statutory
      declaration.  It may not be reasonable on every occasion of personal
      illness for an employer to require an employee to provide a medical
      certificate.  However, in cases of an absence extending beyond a short
      period or repeated absences on particular days (e.g., before or after
      a weekend or public holiday), it may be reasonable for an employer to
      request a medical certificate in support of the employee's request for
      leave.


 416. An employee who has not complied with the notice and evidence
      requirements is not entitled to take the leave (subclause 107(4)).


 417. Subclause 107(5) allows a modern award or enterprise agreement to
      include terms relating to the kind of evidence that an employee must
      provide in order to be entitled to leave under this Division.


Illustrative example


Brenda and her de facto partner Gladys are employed by companies in
Wollongong, NSW.  Brenda works full-time and Gladys is a casual employee.


Brenda learns in April that her grandmother, Bonnie, who lives in Adelaide,
has been diagnosed with a terminal illness.  The treating doctor has
advised that Bonnie faces a sharp deterioration in her psychological well-
being without strong family support.  Brenda and Gladys visit Bonnie in
June and November, missing five days of work on each occasion and attend
the funeral in December.


Is there an entitlement to paid personal/carer's leave?


Brenda would be entitled to paid personal/carer's leave for both the June
and November visits to Bonnie, as the leave is being taken to provide care
and support to a member of her immediate family who requires care and
support because of an illness.


Brenda may be required to provide evidence that would satisfy a reasonable
person that Bonnie, as a member of her immediate family, required Brenda's
care and support.  This might be evidenced in, e.g., a statutory
declaration by Brenda or a letter from a family member confirming that the
visits would provide necessary support.


Gladys is a casual employee and is not entitled to take paid
personal/carer's leave.


Is there an entitlement to unpaid carer's leave?


Gladys may have access to unpaid carer's leave as Bonnie is member of her
immediate family (as the grandmother of her de facto partner).  Whether she
would be entitled to leave would depend on whether the leave would be for
the purpose of providing care or support.


Is there an entitlement to compassionate leave?


Because Bonnie is a member of both Brenda and Gladys' immediate family and
developed a terminal illness before passing away, there are two permissible
occasions for taking compassionate leave.  Subject to notice and evidence
requirements, Brenda and Gladys could take two days of compassionate leave
over the course of their June and November visits and a further two days
after Bonnie passes away.  Brenda's compassionate leave would be paid and
Gladys' (as a casual employee) would be unpaid.


Division 8 - Community service leave


 418. Division 8 provides minimum safety net entitlements to community
      service leave for employees, including casual employees.


Clause 108 - Entitlement to be absent from employment for engaging in
eligible community service activity


 419. Clause 108 entitles an employee who is engaged in an eligible
      community service activity to be absent from his or her employment if:


     . the absence is limited to the time that the employee is engaged in
       the activity, reasonable travelling time associated with the
       activity and reasonable rest time immediately following the
       activity; and


     . the absence (other than absence on jury service) is reasonable in
       all the circumstances.


Clause 109 - Meaning of eligible community service activity


 420. Subclause 109(1) defines an eligible community service activity as:


     . jury service, including attendance for jury selection;


     . voluntary emergency management activity (as defined by
       subclause 109(2)); or


     . an activity prescribed in the regulations.


 421. Subclauses 109(2) and (3) define relevant terms.


 422. Subclause 109(4) allows regulations to prescribe an activity that is
      of a community service nature as an eligible community service
      activity.


Clause 110 - Notice and evidence requirements


 423. Clause 110 requires an employee to comply with notice and evidence
      requirements before becoming entitled to take community service leave.


 424. Subclause 110(1) requires an employee to give his or her employer
      notice of the taking of community service leave.  An absence from work
      will not be covered by the community service leave provisions unless
      the employee has complied with the notice and evidence requirements
      (subclause 110(4)).

Notice must be given as soon as practicable (which may be a time after the
leave has started) and advise of the period, or expected period, of the
leave (subclause 110(2)).

 425. An employer may require an employee who has given notice of taking
      community service leave to provide evidence that would satisfy a
      reasonable person that the employee is entitled to the leave
      (subclause 110(3)).


Clause 111 - Payment to employees (other than casuals) on jury service


 426. Clause 111 sets out the manner and circumstances in which an employee,
      other than a casual employee, is entitled to be paid while absent for
      a period because of jury service.

Subclauses 111(2) to (5) set out an employee's qualified entitlement to be
paid during the period of the employee's absence from work during a period
of jury service.

 427. An employer may require an employee to provide evidence of the steps
      taken by the employee to obtain any amount of jury service pay to
      which the employee is entitled and the employee is not entitled to be
      paid unless the evidence is provided.


 428. If the evidence is provided, the amount payable to the employee for
      their absence is reduced by the amount of any payment received (or to
      be received) by the employee.


 429. An employer's obligation to pay an employee is capped at ten days in
      total.


     . This would mean that a full-time employee working Monday to Friday,
       would be entitled to be paid for the first two weeks of absence.  In
       the case of a part-time employee working two days per week, the ten
       day cap would cover a five week absence.


 430. An employee is entitled to be paid at their base rate of pay for
      ordinary hours of work for the relevant period.


 431. Subclauses 111(6) and (7) define jury service pay (as excluding
      amounts in the nature of expense-related allowances) and jury service
      summons.



Illustrative example


Deborah is a part-time employee working four days a week in Sydney, NSW.
Deborah's gross wage is $800 per week ($200 per day).


Deborah receives a summons to attend for jury service before the District
Court of NSW.  After being selected as a juror, Deborah is absent from work
for four weeks.


Under the Jury Act 1977 (NSW) and Jury Regulation 2004 (NSW), Deborah is
entitled to an attendance fee of $88.40 per day for the first week of jury
service, rising to $102.60 per day for the second week and $119.70 per day
for the third and fourth weeks.*  Deborah is also entitled to a travelling
allowance of up to $29.60 per day.*


Subclause 5(1A) of the Jury Regulation provides that the attendance fee is
only payable to an employee if the employee's full wage or salary is
reduced during the period of jury service and only to the extent of that
reduction.  Subclause 5(2) of the Jury Regulation requires Deborah to
provide a statutory declaration when claiming the attendance fee.  The
statutory declaration must verify that Deborah was not paid a full wage or
salary by her employer while attending for jury service.


Deborah's employer requires her to provide evidence that she has taken all
necessary steps to obtain jury service pay and the amount paid or payable
before she is paid.


Deborah submits a statutory declaration to the effect that she has not been
paid a full wage or salary during the period of jury service and will be
entitled to receive from that office the attendance fee prescribed in the
Jury Regulation.


This evidence satisfies the employer of Deborah's entitlement.


The make up pay that the employer is required to provide is as follows:


Payment to be made by employer


     . Week 1: $446.40, calculated as $800 (four days at $200 each) less
       jury allowance of $353.60 (four days' jury allowance of $88.40);


     . Week 2: $389.60, calculated as $800 (four days at $200) less jury
       allowance of $410.40 (four days' jury allowance of $102.60);


     . Week 3: $160.60, calculated as $400 (two days at $200) less jury
       allowance of $239.40 (two days'** jury allowance of $119.70); and


     . Week 4: Nil.**

* These rates are sourced from Schedule 1 of the Jury Regulation 2004 (NSW)
and applicable as at 21 November 2008.
** Reduced entitlement in these two weeks because of the ten day cap.





Clause 112 - State and Territory laws that are not excluded


 432. Subclause 112(1) states that State or Territory laws that provide
      employee entitlements in relation to engaging in eligible community
      service activities are not excluded and continue to apply to employers
      and their employees where they provide more beneficial employee
      entitlements than the entitlements under Division 8.


 433. The intention of subclause 112(1) is to ensure the application of a
      State or Territory law to an employer and employee to the extent that
      it adds to employee entitlements provided under Division 8.


 434. The legislative note under this clause provides an example of the
      intended operation of this clause by confirming that the Bill does not
      exclude a State or Territory law that entitles a casual employee to be
      paid jury service pay.  Also, the intention is that State or Territory
      laws that entitle an employee to be paid when absent from work while
      engaging in a voluntary emergency management activity (the absence is
      unpaid under the NES) will continue to apply.  Further, the intention
      is that a State or Territory law applies where it obliges an employer
      to provide payment to an employee during a period of jury service, in
      addition to jury service fees paid by a State or Territory government
      body, after the 10 day period referred to in subclause 111(5), if the
      employee's period of jury service is longer than ten days.


 435. Subclause 112(2) enables the rule in subclause 112(1) to apply to any
      further community service activity prescribed in regulations made
      under subclause 109(4), subject to any contrary intention set out in
      the regulations.


Division 9 - Long service leave


 436. This Division sets out the entitlement to long service leave for
      national system employees.


 437. This entitlement is a transitional entitlement, pending development of
      a uniform, national long service leave standard with the States and
      Territories.


 438. This Division preserves long service leave entitlements in pre-
      modernised awards (referred to as applicable award-derived long
      service leave terms).


 439. If an employee does not have applicable award-derived long service
      leave terms, any entitlement to long service leave will be derived
      from State or Territory long service leave legislation (subject to its
      modification or exclusion by certain industrial instruments).


Clause 113 - Entitlement to long service leave


 440. An employee is entitled to long service leave under this Division in
      accordance with applicable award-derived long service leave terms
      (subclause 113(1)).


 441. This clause preserves the effect of long service leave terms in pre-
      modernised awards (i.e., awards as they stood immediately before
      commencement of the NES).


 442. To determine whether there are applicable award-derived long service
      leave terms, it is necessary to consider the award that would have
      applied to the employee's current employment if the employee had been
      in that employment immediately before commencement (paragraph
      113(3)(a)).  (This applies to existing employees and new employees
      after commencement of the NES.)


 443. In making this assessment, the effect of any pre-commencement
      workplace agreement, AWA or workplace determination that applies or
      applied to the employee is ignored (paragraph 113(3)(b)).


 444. However, subclause 113(2) provides that an employee's award-derived
      entitlement will not apply if:


     . a workplace agreement or AWA that came into operation before the
       commencement of the Bill continues to apply to the employee after
       commencement (whether or not that agreement deals with long service
       leave); or


     . one of a number of listed industrial instruments that came into
       operation before commencement applies to the employee and expressly
       deals with long service leave.


 445. The legislative note after this subclause makes clear if such an
      agreement or instrument ceases to apply, the employee will then be
      entitled to long service leave in accordance with any applicable award-
      derived long service leave terms.


 446. If an employee does not have applicable award-derived long service
      leave terms, any entitlement to long service leave will be derived
      from State or Territory long service leave legislation (subject to its
      modification or exclusion by certain industrial instruments).


Division 10 - Public Holidays


 447. This Division establishes an entitlement to be absent from work on a
      public holiday.  The Division also allows an employer to request an
      employee to work on a public holiday where this is reasonable and
      entitles an employee to refuse to do so in certain circumstances.


Clause 114 - Entitlement to be absent from employment on public holiday


 448. Subclause 114(1) entitles an employee to be absent from work on a day
      or part-day that is a public holiday where the employee is based for
      work purposes.


 449. Under subclause 114(2), an employer may ask an employee to work on a
      public holiday, if the request is reasonable.


 450. However, an employee may refuse a request to work on a public holiday
      if the request is not reasonable, or if the refusal is reasonable
      (subclause 114(3)).


 451. Subclause 114(4) sets out a non-exhaustive list of matters to be taken
      into account when determining whether a request, or a refusal of a
      request, to work on a public holiday is reasonable.  The factors to be
      taken into account are:


     . the nature of the employee's workplace or enterprise (including its
       operational requirements) and the nature of the work performed by
       the employee;


     . the employee's personal circumstances, including family
       responsibilities;


     . whether the employee could reasonably expect that the employer might
       request work on the public holiday;


     . whether the employee is entitled to overtime, penalty rates or other
       compensation for, or a level of remuneration that reflects an
       expectation of, work on the public holiday;


     . the type of employment of the employee (e.g., full-time, part-time,
       casual or shiftwork);


     . the amount of notice in advance of the public holiday given by the
       employer when making the request;


     . in relation to the refusal of a request - the amount of notice in
       advance of the public holiday given by the employee when refusing
       the request; and


     . any other relevant matter.


 452. The relevance of each of these factors and the weight to be given to
      each will vary according to the particular circumstances.  In some
      cases, a single factor will be of great importance and outweigh all
      others, in others there will be a balancing exercise between factors.


 453. For example, where an employee is employed in a workplace that
      requires a certain level of staffing on a public holiday (like a
      hospital) and has been given warning of the likelihood of being
      required to work on public holidays, a request by an employer to work
      may be considered reasonable.


 454. On the other hand, a refusal by an employee of a request to work on a
      public holiday may be reasonable where, e.g., the employee has
      notified the employer in advance that she or he will not be able to
      work on the public holiday because of family commitments.


Clause 115 - Meaning of public holiday


 455. Subclause 115(1) defines public holiday.


 456. Eight common days are specifically named.  Other days or part-days
      declared or prescribed by or under a law of a State or Territory to be
      observed generally, or within a region of that State or Territory, are
      also considered public holidays.  Regulations may exclude a day or
      part-day (or a kind of day or part-day) from the definition of a
      public holiday.


 457. Where a law of a State or Territory substitutes a day or part-day for
      a day or part-day that would otherwise be a public holiday, the
      substituted day or part-day is considered to be the public holiday for
      the purposes of the NES (subclause 115(2)).  That is, where a day is
      substituted under State or Territory law, an employee is entitled to
      be absent on the substituted day instead of the original public
      holiday, not on both days and an employer will not be required to
      provide public holiday entitlements on 2 days in respect of the one
      holiday.


 458. Subclause 115(3) permits a modern award or enterprise agreement to
      include terms providing for an employer and employee to agree on the
      substitution of a day or part-day for a day or part-day that would
      otherwise be a public holiday under subclauses 115(1) or (2).  This
      means that a modern award or agreement cannot provide that a
      substitute day can be determined unilaterally by the employer.


 459. Subclause 115(4) provides equivalent scope for the substitution of
      public holidays for employees who are not covered by an award or
      agreement.  An award/agreement free employee may agree with their
      employer to substitute a day or part-day for a day or part-day that
      would otherwise be a public holiday under subclauses 115(1) or (2).
      The general protections set out in Part 3-1 of the Bill, in particular
      clause 344 which prohibits the exertion of undue influence and undue
      pressure, apply when an employer and employee enter into an agreement
      under this clause.


Clause 116 - Payment for absence on public holiday


 460. Clause 116 entitles an employee to payment when absent from work on a
      public holiday.  Where an employee is absent on a day or part-day that
      is a public holiday under this Division, the employer is liable to pay
      the employee at his or her base rate of pay for ordinary hours of
      work.


 461. An employee is not entitled to any payment for absence on a public
      holiday if they would not ordinarily have worked on that day.



Illustrative example


Erika usually works overtime in addition to her ordinary hours of work on
Tuesdays, receiving penalty rates for the overtime hours under a modern
award.  Erika is absent on the public holiday on Tuesday, 26 January 2010.
Erika is entitled to her base rate of pay for her ordinary hours.  She is
not entitled to payment for the overtime hours she would have worked had it
not been a public holiday.


Erika's colleague Toby is a part-time employee who is rostered to work
Wednesday to Friday only.  As Toby's ordinary hours of work do not include
Tuesdays, Toby is not entitled to payment for the public holiday on
26 January 2010.


Another employee, Holger is on unpaid parental leave for the first half of
2010.  Holger would not be entitled to payment for the public holiday on
26 January 2010.



Division 11 - Notice of termination and redundancy pay


 462. This Division provides entitlements to notice of termination of
      employment and redundancy pay for national system employees.





Subdivision A - Notice of termination or payment in lieu of notice


 463. This Subdivision provides an entitlement to notice upon termination of
      employment, or payment in lieu of that notice.  (See, also, Part 6-3
      which provides for the extended application of this entitlement to non-
      national system employees.)


Clause 117 - Requirement for notice of termination or payment in lieu


 464. Subclause 117(1) specifies that an employer must not terminate the
      employment of an employee unless they have given the employee written
      notice of the day of termination.  A legislative note refers to
      provisions in the Acts Interpretation Act 1901 that explain that an
      employer may give notice to the employee by:


     . delivering it personally;


     . leaving it at the employee's last known address; or


     . sending it by pre-paid post to the employee's last known address.


 465. Subclause 117(2) provides that an employer must not terminate an
      employee's employment unless they have given the employee the
      necessary period of notice worked out under subclause 117(3), or they
      have paid the employee in lieu of that notice.  If the employee is
      paid in lieu of notice, paragraph 117(2)(b) requires that the employee
      must be paid at least the amount the employee would have received had
      they continued in employment until the end of the required notice
      period.  That is, the employee must be paid for hours they would have
      worked during that period, at their full rate of pay (as defined in
      clause 18).


 466. The intention of paragraph 117(2)(b) is to impose on an employer that
      makes the payment in lieu of notice, an obligation to pay either to
      (or for the benefit of or on behalf of) the employee, everything which
      the employee would have been entitled to receive had the employee
      worked out the required period of notice.  This would include
      superannuation contributions an employer would otherwise have been
      required to make, on behalf of an employee, to a superannuation fund:
      see Furey v Civil Service Association of WA (Inc) [1999] FCA 1492; 91
      FCR 407.  It would also include amounts payable to an employee that
      the employee has agreed, under a permissible salary sacrifice or other
      arrangement, to forgo in order to receive other benefits.


 467. Subclause 117(3) outlines the amount of notice, or payment in lieu,
      that must be provided.  This amount is based largely on the length of
      an employee's continuous service on the day notice is given:


     . if not more than 1 year - 1 week;


     . if more than 1 year, but not more than 3 years - 2 weeks;


     . if more than 3 years, but not more than 5 years - 3 weeks; or


     . if more than 5 years - 4 weeks.


 468. In addition, an employee who is over 45 years old is entitled to an
      extra week's notice if they have at least two years' continuous
      service.


 469. The amount of notice required by the NES reflects longstanding minimum
      standards.


Clause 118 - Modern awards and enterprise agreements may provide for notice
of termination by employees


 470. Clause 118 permits a modern award or enterprise agreement to include
      terms setting out the period of notice an employee must give in order
      to terminate his or her employment.


Subdivision B - Redundancy pay


 471. This Subdivision sets out the circumstances in which an employee is
      entitled to redundancy pay upon termination of their employment.


Clause 119 - Redundancy pay


 472. Subclause 119(1) entitles an employee to redundancy pay from their
      employer where employment is terminated:


     . at the employer's initiative because the employer no longer requires
       the job done by the employee to be done by anyone (except where this
       is due to the ordinary and customary turnover of labour); or


     . because the employer is bankrupt or insolvent.


 473. Subclause 119(2) specifies the scale of payment for redundancy pay
      that must be paid to an employee at their base rate of pay for
      ordinary hours of work.  The scale is based on the length of an
      employee's continuous service on termination:


     . at least 1 year, but less than 2 years - 4 weeks;


     . at least 2 years, but less than 3 years - 6 weeks;


     . at least 3 years, but less than 4 years - 7 weeks;


     . at least 4 years, but less than 5 years - 8 weeks;


     . at least 5 years, but less than 6 years - 10 weeks;


     . at least 6 years, but less than 7 years - 11 weeks;


     . at least 7 years, but less than 8 years - 13 weeks;


     . at least 8 years, but less than 9 years - 14 weeks;


     . at least 9 years, but less than 10 years - 16 weeks; or


     . at least 10 years - 12 weeks.


Clause 120 - Variation of redundancy pay for other employment or incapacity
to pay


 474. This clause enables an employer to apply to FWA for a determination
      reducing the employer's liability to pay redundancy pay under
      clause 119 to a specified amount (that may be nil) if FWA considers it
      appropriate.  The employer may apply for the determination if an
      employee is entitled to redundancy pay and the employer finds other
      acceptable employment for the employee, or cannot pay the amount
      (subclauses 120(1) and (2)).  The reduced amount determined by FWA
      will become the amount of redundancy pay the employee is entitled to
      receive under clause 119 (subclause 120(3)).


Clause 121 - Exclusions from obligation to pay redundancy pay


 475. Clause 121 provides that the entitlement to redundancy pay under
      clause 119 does not apply where immediately before the time of
      termination, or at the time when notice of termination was given as
      required by subclause 117(1) (whichever happened first):


     . the employee's period of continuous service with the employer is
       less than 12 months (paragraph 121(a)); or


     . the employer is a small business employer (paragraph 121(b)).


 476. Small business employer is defined in clause 23 as an employer with
      fewer than 15 employees at the relevant time.


Clause 122 - Transfer of employment situations that affect the obligation
to pay redundancy pay


 477. Subclause 122(1) provides that subclause 22(5) (which provides for
      automatic recognition of service) does not apply in relation to
      redundancy pay where there is a transfer of employment between non-
      associated entities, if the second (new) employer decides not to
      recognise the employee's service with the first (old) employer.


 478. The intention of this subclause is that an employee's service with the
      old employer does not have to be recognised by the new employer in
      relation to the employee's redundancy pay entitlements where there is
      a transfer of business between two non-associated employers.


 479. If the new employer does not agree to recognise an employee's service
      in relation to redundancy pay, the old employer will be required to
      pay out that employee's redundancy pay.


 480. Subclause 122(2) provides that if subclause 22(5) applies for the
      purposes of Subdivision B of this Division to a transfer of employment
      in relation to an employee, the employee is not entitled to redundancy
      pay under clause 119 in relation to the termination of their
      employment with the old employer.


 481. A legislative note under subclause 122(2) indicates that subclause
      22(5) generally provides that service with the old employer counts as
      service with the new employer on a transfer of employment.


 482. Subclause 122(3) provides that an employee is not entitled to
      redundancy pay under clause 119 on the termination of their employment
      with an employer (the first employer) if the employee rejects an offer
      of employment made by another employer (the second employer) that:

    . is on substantially similar (and overall no less favourable) terms and
      conditions as applied to the employee immediately before the
      termination;
    . recognises the employee's service with the first employer for the
      purpose of the entitlement to redundancy pay; and
    . had the employee accepted the offer, there would have been a transfer
      of employment in relation to the employee.

 483. Where the second employer is willing to provide the transferring
      employees with similar and overall no less favourable employment and
      to recognise their previous service for redundancy pay purposes, this
      clause removes any entitlement to redundancy pay.


 484. However, an employee not entitled to redundancy pay at the time of a
      transfer of employment due to the operation of subclause 122(3) would
      still remain entitled to redundancy pay if terminated by the second
      employer at a later date due to the employee's position being made
      redundant.


 485. Subclause 122(4) enables FWA to make an order that the first employer
      pay the employee a specified amount of redundancy pay, if FWA is
      satisfied that it would be unfair to deny the employee a redundancy
      payment due to the operation of subclause 122(3).  The specified
      amount must not exceed the amount that the employee would otherwise be
      entitled to under clause 119, but for the operation of
      subclause 122(3).


Subdivision C - Limits on scope of this Division


 486. This Subdivision identifies the categories of employees not covered by
      the notice of termination and/or redundancy pay provisions in this
      Division.


Clause 123 - Limits on scope of this Division


 487. Subclause 123(1) lists the categories of employees that are excluded
      from the entitlements to notice of termination of employment and
      redundancy pay set out in this Division.  The following employees are
      excluded:


     . an employee employed for a specified period of time, specified task,
       or for the duration of a specified season;


     . an employee whose employment is terminated because of serious
       misconduct;


     . a casual employee;


     . an employee (other than an apprentice) to whom a training
       arrangement applies and whose employment is for a specified period
       of time or is limited to the duration of the training arrangement;
       and


     . an employee prescribed by the regulations as an employee to whom
       this Division does not apply.


 488. Subclause 123(2) is an 'anti-avoidance' provision.  The subclause
      provides that an employee employed for a specified period of time,
      specified task, or for the duration of a specified season is not
      excluded if a substantial reason for employing the employee on that
      basis was to avoid the application of this Division.


 489. Subclause 123(3) lists further categories of employees not covered by
      the notice of termination provisions in this Division.  The employees
      not covered are:

    . an employee who had not served the requisite qualifying period (12
      months if the employer is a small business employer (as defined in
      clause 23) and six months otherwise);
    . a daily hire employee working in the building and construction
      industry;
    . a daily hire employee working in the meat industry in connection with
      the slaughter of livestock;
    . a weekly hire employee working in connection with the meat industry
      and who is terminated solely as a result of seasonal factors; and
    . an employee prescribed by the regulations as an employee to whom the
      notice of termination entitlement does not apply.

 490. Subclause 123(4) lists further categories of employees not covered by
      the redundancy pay provisions in this Division.  The employees not
      covered are:


     . an apprentice;


     . an employee to whom an industry-specific redundancy scheme in a
       modern award applies (see clause 141);


     . an employee to whom a redundancy scheme in an enterprise agreement
       applies (if the scheme is an industry-specific redundancy scheme and
       is incorporated by reference into the enterprise agreement from a
       modern award); and


     . an employee prescribed by the regulations as an employee to whom the
       redundancy pay entitlement does not apply.


 491. An employee excluded from the entitlement to redundancy pay because
      they are covered by an industry-specific redundancy scheme would
      derive their entitlement to redundancy pay from the industry-specific
      redundancy scheme.  Such a scheme is enforceable as a term of the
      award or agreement; it does not become a term of the NES.


Division 12 - Fair Work Information Statement


 492. This Division establishes the entitlement to be provided with the Fair
      Work Information Statement upon commencement of employment and
      describes what the Statement must contain.


Clause 124 - FWA to determine and publish Fair Work Information Statement


 493. Subclause 124(1) requires FWA to determine a Fair Work Information
      Statement and publish the Statement in the Gazette.


 494. The Statement must contain information about:


     . the NES;


     . modern awards;


     . agreement making under the Act;


     . the right to freedom of association; and


     . the role of FWA and the Fair Work Ombudsman (subclause 124(2)).


 495. Subclause 124(3) authorises the making of regulations prescribing
      other matters relating to the content or form of the Statement, or the
      way in which employers can give the Statement to employees.


Clause 125 - Giving new employees the Fair Work Information Statement


 496. An employer is required to give each employee the Fair Work
      Information Statement before, or as soon as practicable after, the
      employee starts employment, but need not give a particular employee
      the Statement more than once in any 12 month period where an employer
      employs an employee more than once in the 12 month period (e.g., a
      casual employee).


Division 13 - Miscellaneous


Clause 126 - Modern awards and enterprise agreements may provide for school-
based apprentices and trainees to be paid loadings in lieu


 497. Clause 126 permits a modern award or enterprise agreement to provide
      for school-based apprentices or school-based trainees to be paid
      loadings in lieu of any of the following:


     . paid annual leave;


     . paid personal/carer's leave; or


     . paid absence under Division 10 (which deals with public holidays).


 498. The legislative note under this clause highlights the effect
      clause 199 has on whether FWA may approve an enterprise agreement
      covering an employee who is a school-based apprentice or school-based
      trainee if the employee is to be paid in lieu for these entitlements.



The following terms are defined in clause 12:

     . school-based apprentice means an employee who is an apprentice to
       whom a school-based training arrangement applies;


     . school-based trainee means an employee (other than a school-based
       apprentice) to whom a school-based training arrangement applies; and


     . school-based training arrangement means a training arrangement
       undertaken as part of a course of secondary education.


Clause 127 - Regulations about what modern awards and enterprise agreements
can do


 499. Clause 127 allows regulations to be made to permit modern awards or
      enterprise agreements or both to include terms that would, or might,
      otherwise be contrary to the NES.  Clause 127 also permits regulations
      to be made to prohibit modern awards or enterprise agreements or both
      from including terms that would or might otherwise be permitted by the
      NES.


 500. The interaction between the NES and modern awards and enterprise
      agreements more generally is dealt with by clause 55.


Clause 128 - Relationship between NES and agreements etc.  permitted by
this Part for award/agreement free employees


 501. Provisions of the NES allow an employer and an award/agreement free
      employee (as defined in clause 12) to agree on certain matters.  For
      example:


     . under clause 94, an employer and an award/agreement free employee
       may agree to the employee cashing out a period of annual leave
       (subject to certain requirements being met); and


     . under clause 115, an employer and an award/agreement free employee
       may agree to substitute a public holiday for another day.


 502. Clause 94 also allows an employer to require an award/agreement free
      employee to take a period of annual leave, if the requirement is
      reasonable.


 503. Clause 128 makes clear that the NES has effect subject to any
      agreement or requirement that is permitted by the terms of the NES
      itself or by regulations made under clause 129.


Clause 129 - Regulations about what can be agreed to etc.  in relation to
award/agreement free employees


 504. Clause 129 allows regulations to be made to permit employers and
      award/agreement free employees (as defined in clause 12) to agree
      about matter that may otherwise be contrary to the NES.


 505. Regulations can also be made to prohibit employers and award/agreement
      free employees from agreeing on matters, and to prohibit employers
      from making requirements, that would or might otherwise be permitted
      by the NES.


 506. An equivalent regulation making power is provided in relation to the
      interaction of the NES with modern awards and enterprise agreements
      (clause 127).





Clause 130 - Restriction on taking or accruing leave or absence while
receiving workers' compensation


 507. An employee who is absent from work and in receipt of workers'
      compensation is not entitled to take or accrue any paid or unpaid
      leave or absence under the NES unless the taking or accruing of the
      leave is permitted by a Commonwealth, State or Territory law that
      provides for workers' compensation (subclauses 130(1) and (2)).


 508. Subclause 130(3) ensures that the ability of an employee to take to
      take unpaid parental leave is not affected.


 509. The effect of clause 130 is to 'switch-off' the leave accrual and
      taking rules in this Part for the period of the employee's absence
      from work in receipt of workers' compensation.  It is not intended
      that the provisions of this clause impact on the calculation of an
      employee's service or continuous service under clause 22.


Clause 131 - Relationship with other Commonwealth laws


 510. Clause 131 makes clear the intention that this Part establishes
      minimum standards that supplement and do not override entitlements
      under other Commonwealth laws.


 511. For example, the unpaid parental leave provisions in Division 5 of
      Part 2-2 would not affect the entitlement to paid maternity leave
      under the Maternity Leave (Commonwealth Employees) Act 1973.




                          Part 2-3 - Modern awards


Overview


 512. Part 2-3 provides for making, varying and revoking modern awards.
      Modern awards, together with the NES, provide a safety net of terms
      and conditions and the benchmark for collective bargaining for award
      covered employees.


 513. Part 2-1 (Core Provisions for this Chapter) deals with the manner in
      which modern awards operate and how they give rise to rights and
      obligations.


Division 1 - Introduction


Clause 132 - Guide to this Part


 514. This clause provides a guide to this Part.


Clause 133 - Meanings of employee and employer


 515. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Division 2 - Overarching provisions


Clause 134 - The modern awards objective


 516. Clause 134 sets out the modern awards objective and when the modern
      awards objective applies.


 517. The modern awards objective requires FWA to ensure that modern awards,
      together with the NES, provide a fair and relevant minimum safety net
      of terms and conditions, taking into account the following factors:


     . relative living standards and the needs of the low paid;


     . the need to encourage collective bargaining;


     . the need to promote social inclusion through increased workforce
       participation;


     . the need to promote flexible modern work practices and the efficient
       and productive performance of work;


     . the principle of equal remuneration for work of equal or comparable
       value;


     . the likely impact of any exercise of modern award powers on
       business, including on productivity, employment costs and the
       regulatory burden;


     . the need to ensure a simple, easy to understand, stable and
       sustainable modern award system for Australia that avoids
       unnecessary overlap of modern awards; and


     . the likely impact of any exercise of modern award powers on
       employment growth, inflation and the sustainability, performance and
       competitiveness of the national economy.


 518. In ensuring that the minimum safety net of terms and conditions is
      relevant, it is anticipated that FWA will take account of changes in
      community standards and expectations, and that the terms and
      conditions will be tailored (as appropriate) to the specific industry
      or occupation covered by the award.


 519. The modern awards objective applies to the exercise of FWA's functions
      and powers under this Part.  The objective also applies when FWA
      exercises its powers or functions under Part 2-6 (which relates to
      minimum wages), to the extent that they relate to setting, varying or
      revoking modern award minimum wages (subclause 134(2)).  The
      legislative note to this subclause points out that the minimum wages
      objective is also relevant when FWA is setting, varying or revoking
      modern award minimum wages.  The minimum wages objective is described
      Part 2-6.


Clause 135 - Special provisions relating to modern award minimum wages


 520. Subclause 135(1) sets out the specific circumstances in which modern
      award minimum wages can be varied under Part 2-3 (modern award minimum
      wages will generally only be varied in an annual wage review under
      Part 2-6).  These circumstances are:


     . in a 4 yearly review of modern awards, if FWA is satisfied that the
       variation is justified by work value reasons (see notes on
       subclause 156(3));


     . outside a 4 yearly review if FWA is satisfied that the variation is
       justified by work value reasons and making the determination outside
       the system of annual wage reviews and 4 yearly reviews of modern
       awards is necessary to achieve the minimum wages objective (see
       notes on subclause 157(2)); or


     . on referral by the HREOC, or to remove an ambiguity or uncertainty
       or to correct an error (see notes on clauses clause 160 and 161).


 521. In exercising its powers under this Part to set, vary or revoke modern
      award minimum wages, FWA must take into account the rate of the
      national minimum wage in the national minimum wage order (subclause
      135(2)).


Division 3 - Terms of modern awards


Subdivision A - Preliminary


Clause 136 - What can be included in modern awards?


 522. Clause 136 sets out content rules for modern awards.


 523. Subclause 136(1) provides that a modern award must only include terms
      that are permitted or required by:


     . Subdivision  B (which deals with terms that may be included in
       modern awards); or


     . Subdivision C (which deals with terms that must be included in
       modern awards); or


     . Part 2-2 (which deals with the NES); or


     . clause 55 (which deals with the interaction between the NES and a
       modern award or enterprise agreement).


 524. Subclause 136(2) provides that a modern award must not include terms
      that contravene:


     . Subdivision D (which deals with terms that must not be included in
       modern awards); or


     . clause 55 (which deals with the interaction between the NES and a
       modern award or enterprise agreement).


 525. The provisions of clause 55 will have the following effect on the
      content of modern awards:


     . a modern award must not exclude the NES or any provision of the NES
       (subclause 55(1)) - 'exclude' in this context means that a modern
       award cannot provide a lesser entitlement than is provided by the
       NES, or seek to remove an entitlement provided by the NES;


     . a modern award may include any terms that it is expressly permitted
       to include under Part  2-2 (dealing with the NES) or regulations
       made pursuant to clause 127 (subclause 55(2)) - paragraph 127(a)
       will allow the regulations to permit terms of modern awards that
       would otherwise be contrary to Part 2-2;


     . a modern award may include terms that are ancillary or incidental to
       the operation of an entitlement of an employee under the NES, but
       only if the effect of those terms is not detrimental to an employee
       in any respect when compared to the NES (paragraph 55(4)(a));


     . a modern award may include terms that supplement the NES, but only
       if the effect of those terms is not detrimental to an employee in
       any respect when compared to the NES (paragraph 55(4)(b)).


Clause 137 - Terms that contravene clause 136 have no effect


 526. Clause 137 provides that a term of a modern award has no effect to the
      extent that it contravenes clause 136.  This would mean, for example,
      that a term of a modern award that excludes a term of the NES (by
      providing a lesser entitlement, or no entitlement) will be of no
      effect.


Clause 138 - Achieving the modern awards objective


 527. Clause 138 provides that a modern award may include terms that it is
      permitted or required to include, only to the extent necessary to
      achieve the modern awards objective and (to the extent applicable) the
      minimum wages objective.  That is, the scope and effect of permitted
      and mandatory terms of a modern award must be directed at achieving
      the modern awards objective of a fair and relevant safety net that
      accords with community standards and expectations.


Subdivision B - Terms that may be included in modern awards


 528. Subdivision B sets out general and specific terms that may be included
      in modern awards.


Clause 139 - Terms that may be included in modern awards - general


 529. Clause 139 sets out the kinds of terms that may be included in modern
      awards.  These terms reflect those that the legislation instigating
      the award modernisation process permits modern awards to include (see
      section 576J of the WR Act).  These terms are:


Minimum wages


 530. Paragraph 139(1)(a) provides for minimum wages to be included in
      modern awards.  This allows modern awards to include terms about
      minimum wages, including wage rates for junior employees, employees
      with a disability and employees to whom training arrangements apply.
      It would also allow modern awards to include terms about skill-based
      classifications and career structures, incentive-based payments, piece
      rates and bonuses.


Type of employment


 531. Paragraph 139(1)(b) allows terms about type of employment to be
      included in modern awards.  This includes terms about full-time
      employment, casual employment, regular part-time employment and shift
      work.  This paragraph would also allow modern awards to include terms
      about the facilitation of flexible working arrangements, particularly
      for employees with family responsibilities.


Arrangements for when work is performed


 532. Paragraph 139(1)(c) allows terms about arrangements for when work is
      performed to be included in modern awards.  This would allow modern
      awards to include terms about hours of work, rostering, notice
      periods, rest breaks and variations to working hours.


Overtime rates


 533. Paragraph 139(1)(d) provides that terms about overtime may be included
      in modern awards.


Penalty rates


 534. Paragraph 139(1)(e) provides that terms about penalty rates may be
      included in modern awards, including penalty rates for any of the
      following:


     . employees working unsocial, irregular or unpredictable hours;


     . employees working weekends or public holidays;


     . shift workers.


Annualised wage arrangements


 535. Paragraph 139(1)(f) provides that annualised wage or salary
      arrangements may be included in modern awards provided these
      arrangements:


     . take into account the pattern of work in an occupation, industry or
       enterprise;


     . provide an alternative to the separate payment of wages or salaries,
       and other monetary entitlements; and


     . include appropriate safeguards to ensure that individual employees
       are not disadvantaged.


Allowances


 536. Paragraph 139(1)(g) provides for modern awards to include terms
      dealing with allowances, including allowances for:


     . expenses incurred in the course of employment;


     . responsibilities or skills that are not taken into account in rates
       of pay;


     . disabilities associated with the performance of particular tasks or
       work in particular conditions or locations.


 537. An example of an allowance that might be included in an award under
      this paragraph is accident make-up pay.


Leave, leave loadings and arrangements for taking leave


 538. Paragraph 139(1)(h) provides that terms dealing with leave, leave
      loadings and arrangements for taking leave may be included in modern
      awards.


Superannuation


 539. Paragraph 139(1)(i) provides that terms about superannuation may be
      included in modern awards.


Procedures for consultation, representation and dispute settlement


 540. Paragraph 139(1)(j) provides that procedures for consultation,
      representation and dispute settlement may all be included in modern
      awards.  Paragraph 139(1)(j) is in addition to clause 146 which
      requires a modern award to include a term for settling disputes about
      matters arising under the modern award or in relation to the NES.


 541. Subclause 139(2) provides that any allowance included in a modern
      award must be separately and clearly identified in the modern award.
      This interacts with clause 149 that requires award terms providing
      certain allowances to also provide for the automatic variation of the
      allowance when wage rates in modern awards are varied.


Clause 140 - Outworker terms


 542. Clause 140 permits a modern award to include terms that relate
      specifically to outworkers.


 543. The term outworker is defined in clause 12.  An employee is an
      outworker if the employee, for the purpose of the business of his or
      her employer, performs work at residential premises, or other premises
      that would not conventionally be regarded as business premises.


 544. An individual who is not an employee may also be an outworker.  An
      individual, who is not an employee, is an outworker if, for the
      purposes of a contract for the provision of services, they perform
      work in the textile, clothing or footwear industry at residential
      premises or at other premises that would not conventionally be
      regarded as business premises.


 545. Outworker terms may relate to the conditions under which an employer
      may employ employee outworkers.


 546. Outworker terms may also relate to the conditions under which an
      outworker entity may arrange for work to be performed for the entity
      (either directly or indirectly), if the work is, or is reasonably
      likely to be, performed by outworkers.


 547. The term outworker entity is defined in clause 12 to mean any of the
      following entities, other than in the entity's capacity as a national
      system employer:


     . a constitutional corporation;


     . the Commonwealth;


     . a Commonwealth authority;


     . a body corporate incorporated in a Territory;


     . a person who carries on an activity (whether of a commercial,
       governmental or other nature) in a Territory in Australia, in
       connection with the activity carried on in the Territory.


 548. Outworker terms may include, but are not limited to, terms relating to
      pay and conditions of outworkers.  Clause 140 is intended to give FWA
      broad scope to include terms in modern awards dealing with outworkers.
       In particular, it will allow terms dealing with chain of contract
      arrangements, registration of employers, employer record keeping and
      inspection to be included in modern awards.


 549. Clause 140 is broader than section 576K of the WR Act and ensures that
      a modern award may include outworker terms relating to work that is,
      or is reasonably likely to be, performed by outworkers (paragraph
      140(1)(b)).  This is intended to make it clear that an outworker
      entity does not need to be aware that an outworker will perform work
      at the time of arranging for work to be undertaken in order for
      outworker terms to apply to that entity.


 550. The definition of outworker has also been expanded to cover a broader
      range of situations where an individual performs outwork in the
      textile, clothing or footwear industry.  For example, it is designed
      to allow a modern award to deal with a situation where a contract is
      made with a company and an individual performs work in the capacity as
      a director of the company.  The definition also applies to work
      performed at a broader range of premises.


Clause 141 - Industry-specific redundancy schemes


 551. Clause 141 permits a modern award to include an industry-specific
      redundancy scheme in limited circumstances, and also provides rules
      about varying or omitting such a scheme.  A legislative note reminds
      readers that an employee to whom an industry-specific redundancy
      scheme in a modern award applies is not entitled to redundancy
      entitlements under the NES.


 552. Subclauses 141(1) and (2) allow a modern award to include an industry-
      specific redundancy scheme if the scheme was included in the modern
      award in the award modernisation process.  The award modernisation
      request issued by the Minister for Education, Employment and Workplace
      Relations sets out the following factors relevant to whether such a
      scheme is included in a modern award:


     . when considered in totality, whether the scheme is no less
       beneficial to employees in the industry than the redundancy
       provisions of the NES; and


     . whether the scheme is an established feature of the industry.


 553. FWA may also include an industry-specific scheme in a modern award
      where it makes or varies another modern award so that it covers
      employees who were previously covered by a modern award that included
      such a scheme.  In such a situation, FWA must ensure that the coverage
      of the scheme is not extended to classes of employees that it did not
      previously cover.


 554. The intention is that the industry specific nature of such a scheme
      should be retained if it is to remain in a modern award.  This is
      because industry-specific schemes, developed with the needs of
      employees and employers in the particular industry in mind, operate to
      the exclusion of the general redundancy entitlements in the NES.  If
      such a scheme no longer meets industry specific needs, the NES should
      apply.


 555. Subclauses 141(3) and (4) set out the limited ways in which an
      industry-specific redundancy scheme may be varied - i.e., to vary the
      amount of redundancy payment in the scheme, or in the limited
      circumstances permitted by Subdivision B of Division 5 (e.g., to
      remove an ambiguity).


 556. In varying an industry-specific redundancy scheme, FWA must retain the
      industry-specific character of the scheme.


 557. FWA may also omit an industry-specific redundancy scheme (subclause
      141(5)).


 558. In addition to industry specific-schemes dealt with by clause 141, a
      modern award may also deal with redundancy by including terms that
      supplement the NES (see paragraph 55(4)(b)).


Clause 142 - Incidental and machinery terms


 559. Clause 142 permits a modern award to include incidental or machinery
      terms.


 560. Subclause 142(1) provides that a modern award may include terms that
      are incidental to a term that is permitted or required to be in the
      modern award and essential for the purpose of making a particular term
      operate in a practical way.


 561. Subclause 142(2) provides that a modern award may include machinery
      terms, including formal matters (such as a title, date or table of
      contents).


Subdivision C - Terms that must be included in modern awards


 562. This Subdivision sets out mandatory content for modern awards.


Clause 143 - Coverage terms


 563. Clause 143 sets out requirements for a modern award to contain
      coverage terms.


 564. The Bill distinguishes between an award 'covering' a person and an
      award 'applying' to a person.  This is explained in Part 2-1 (Core
      Provisions for this Chapter).


 565. FWA is required to include in a modern award terms that clearly
      identify the persons and bodies that are covered by the award
      (subclause 143(1)).


 566. A modern award must be expressed to cover specified employers and
      specified employees of those employers (subclause 143(2)).


 567. A modern award may provide for an organisation to be covered in
      relation to some or all employees or employers covered by the award
      (subclause 143(3)).


 568. A modern award may cover specified outworker entities but only in
      relation to the outworker terms included in the award
      (subclause 143(4)).


 569. Subclauses 143(5) and (6) set out the manner in which the employers,
      employees, organisations and outworker entities covered by a modern
      award may be described.  A modern award must not be expressed to cover
      classes of employees who, because of the nature or seniority of their
      role, have traditionally not been covered by awards (whether made
      under laws of the Commonwealth or the States) or who perform work that
      is not of a similar nature to work that has traditionally been
      regulated by such awards (subclause 143(7)).


Clause 144 - Flexibility terms


 570. Clause 144 requires a modern award to include a flexibility term.  A
      flexibility term is a term that enables an employee and his or her
      employer to agree on an individual flexibility arrangement that will
      vary the operation of the award to meet the genuine needs of the
      employee and the employer.  For example, an individual flexibility
      arrangement might provide for varied working hours to allow parents or
      guardians to drop off or pick up children from school where this
      suited the business needs of the employer.


 571. Subclause 144(1) requires a flexibility term to be included in each
      modern award.


 572. Subclause 144(2) provides that if an employee and employer agree to an
      individual flexibility arrangement under a flexibility term in a
      modern award:


     . the modern award has effect in relation to the employee and the
       employer as if it were varied by the flexibility arrangement; and


     . the arrangement is taken, for the purposes of the Act, to be a term
       of the modern award (this means that an individual flexibility
       arrangement is enforceable as a term of the award).


 573. Subclause 144(3) clarifies that an individual flexibility arrangement
      between an employer and a particular employee does not change the
      effect the modern award has in relation to any other employee of the
      employer.


 574. Subclause 144(4) provides that the flexibility term in a modern award
      must:


     . identify the terms of the modern award the effect of which may be
       varied by an individual flexibility arrangement;


     . require that the employee and the employer genuinely agree to any
       individual flexibility arrangement;


     . require the employer to ensure that any individual flexibility
       arrangement must result in the employee being better off overall
       than the employee would have been if no individual flexibility
       arrangement were agreed to;


     . set out how any flexibility arrangement may be terminated by the
       employee or the employer;


     . require the employer to ensure that any individual flexibility
       arrangement must be in writing and signed by the employee and the
       employer and (if the employee is under 18) by a parent or guardian
       of the employee; and


     . require the employer to ensure that a copy of any individual
       flexibility arrangement is given to the employee.


 575. A flexibility term must not require that any individual flexibility
      arrangement be approved, or consented to, by another person (e.g., the
      flexibility term could not require any individual flexibility
      agreement to be approved by a trade union or employer association)
      (subclause 144(5)).  This subclause operates subject to
      subparagraph (4)(e)(ii) which requires a flexibility arrangement to be
      signed by a parent or guardian of an employee who is under 18.


Clause 145 - Effect of individual flexibility arrangement that does not
meet requirements of flexibility term


 576. Clause 145 deals with the situation where an individual flexibility
      arrangement does not meet a requirement of clause 144.  In this
      situation, the arrangement still has effect as if it were an
      individual flexibility arrangement.


 577. Where an employer is required to ensure that a requirement for a
      flexibility term in subclause 144(4) is met (such as ensuring that the
      employee is better off overall), failure to do so is a contravention
      of the flexibility term of the award (subclause 145(3)).  A
      contravention of a term of a modern award is a civil remedy provision
      (clause 45) and may be enforced under Part 4-1 (Civil remedies).


 578. Subclause 145(4) enables the individual flexibility arrangement to be
      terminated.  The subclause allows an arrangement to be terminated by
      either the employer or employee giving not more than 28 days written
      notice.  It also allows an arrangement to be terminated at any time if
      the employer and employee agree in writing to the termination.


Clause 146 - Terms about settling disputes


 579. Clause 146 requires a modern award to include a term for settling
      disputes about any matters arising under the modern award and in
      relation to the NES.  (Under Part 6-2, FWA is not able to deal with
      disputes about whether an employer had reasonable business grounds for
      refusing certain requests under the NES).


 580. Clause 146 does not limit paragraph 139(1)(j) which permits a modern
      award to contain procedures for consultation, representation and
      dispute settlement.


Clause 147 - Ordinary hours of work


 581. Clause 147 requires a modern award to specify or provide for the
      determination of the ordinary hours of work for each classification of
      employee covered by the modern award and each type of employment
      permitted by the modern award.


 582. This is necessary because many of the entitlements (such as paid
      annual leave) under the NES are calculated on the basis of an
      employee's ordinary hours of work.


Clause 148 - Base and full rates of pay for pieceworkers


 583. Clause 148 only applies if a modern award defines or describes
      employees covered by the award as pieceworkers.  In such a case, the
      modern award must include terms specifying, or providing for the
      determination of, base and full rates of pay for those employees for
      the purposes of the NES.  This is relevant to calculating a
      pieceworker's entitlements (e.g., to paid annual leave) under the NES.


Clause 149 - Automatic variation of allowances


 584. Clause 149 requires a modern award to include terms providing for the
      automatic variation of any allowances that FWA considers are of a kind
      that should be varied when wage rates in the modern award are varied.
      The intention is to ensure variation of such allowances automatically
      occurs as a result of an annual wage review that varies minimum wages,
      and is not limited to 4 yearly reviews.

Subdivision D - Terms that must not be included in modern awards

 585. Subdivision D prohibits a modern award from containing certain
      specified terms - including discriminatory terms and terms that
      contain State based differences.


Clause 150 - Objectionable terms


 586. Clause 150 prohibits a modern award from including an objectionable
      term.  An objectionable term is defined in clause 12 to include terms
      that require or permit a breach of the general protections under
      Part 3-1 or payment of a bargaining services fee.


Clause 151 - Terms about payments and deductions for benefit of employer


 587. Clause 151 prohibits a modern award from including a term that is of
      no effect because:


     . the term includes unreasonable payments and deductions for the
       benefit of an employer (subclause 326(1)); or


     . the term relates to unreasonable requirements in relation to how
       employees  spend their wages or other amounts (subclause 326(3)).


 588. Although such terms are of no effect, this clause ensures that such
      terms are not included in awards, as their inclusion (even though
      inoperative) could be confusing and create uncertainty.


Clause 152 - Terms about right of entry


 589. Clause 152 prohibits a modern award from including terms that require
      or authorise an official of an organisation to enter premises to hold
      discussions with, or interview, an employee or to inspect any work,
      process or object.


 590. Right of entry for these purposes is provided by Part 3-4.





Clause 153 - Terms that are discriminatory


 591. Clause 153 prohibits a modern award from including certain
      discriminatory terms.


 592. Subclause 153(1) prohibits modern award terms that discriminate
      against an employee because of, or for reasons including, the
      employee's race, colour, sex, sexual preference, age, physical or
      mental disability, marital status, family or carer's responsibilities,
      pregnancy, religion, political opinion, national extraction or social
      origin.


 593. However, subclause 153(2) provides that a term of a modern award does
      not discriminate against an employee:


     . if the reason for the discrimination is the inherent requirements of
       the particular position held by the employee; or


     . merely because it discriminates, in relation to employment of the
       employee as a member of the staff of an institution that is
       conducted in accordance with the doctrines, tenets, beliefs or
       teachings of a particular religion or creed, in good faith and to
       avoid injury to the religious susceptibilities of adherents of that
       religion or creed.


 594. Subclause 153(3) provides that a term of a modern award does not
      discriminate against an employee because the term provides a minimum
      wage for all (or a class of) junior employees, employees with a
      disability or employees to whom training arrangements apply.


Clause 154 - Terms that contain State-based differences


 595. Clause 154 prohibits a modern award from containing State-based
      difference terms; that is, terms that:


     . are determined by reference to State or Territory boundaries; or


     . are not capable of having effect in each State and Territory.


 596. However, clause 154 allows a modern award to contain State-based
      difference terms for up to five years from award modernisation, to
      allow for the orderly phasing out of such arrangements
      (subclauses 154(2) and (3)).


 597. It is not intended that clause 154 would prohibit modern awards
      including terms that have differing practical operation in different
      States and Territories, provided that they are capable of applying in
      each State or Territory.  For example, a modern award could contain a
      provision that allowed for the payment of a remote location allowance
      or tropical allowance to address a particular degree of remoteness or
      particular climatic conditions.


Clause 155 - Terms dealing with long service leave


 598. Clause 155 prevents a modern award from including terms dealing with
      long service leave.  This clause is not intended to prevent terms that
      have an incidental effect on long service leave entitlements - such as
      a term that states whether a particular type of leave counts as
      service.


 599. This prohibition anticipates the development of a national long
      service leave entitlement under the NES.  This ensures that modern
      awards do not pre-empt the outcome of the development of a national
      standard.


Division 4 - 4 yearly reviews of modern awards


Clause 156 - 4 yearly review of modern awards to be conducted


 600. Clause 156 establishes a system of 4 yearly reviews of modern awards.
      These reviews are the principal way in which a modern award is
      maintained as a fair and relevant safety net of terms and conditions.


 601. FWA must conduct a 4 yearly review of modern awards starting as soon
      as practicable after each 4 year anniversary of the commencement of
      the award provisions (subclause 156(1)).


 602. The modern awards objective and (where relevant) the minimum wages
      objective apply to the conduct of such reviews.


 603. A 4 yearly review must be conducted by one or more Full Benches of FWA
      (clause 616).  However, the process for conducting 4 yearly reviews is
      largely left to the discretion of the President of FWA - who may issue
      directions about the conduct of such reviews under clause 582.


 604. FWA must review all modern awards as part of the 4 yearly reviews of
      modern awards and may vary, make or revoke modern awards during this
      process (subclause 156(2)).  Special criteria apply to changing
      coverage of modern awards or revoking modern awards.  These criteria
      are set out in clause 163 and clause 164.


 605. Subclause 156(3) ensures that FWA may only vary wages as part of a 4
      yearly review where it is satisfied that the variation of minimum
      award wages is justified by work value reasons.  The annual wage
      review is the main way in which wages will be set and varied by FWA.
      Variation of minimum award wages in a 4 yearly review for work value
      reasons is a limited exception to this approach.


 606. The term work value reasons is defined in subclause 156(4) as reasons
      justifying the amount that employees should be paid for doing a
      particular kind of work, being reasons related to any of the
      following:


     . the nature of the work;


     . the level of skill or responsibility involved in doing the work;


     . the conditions under which the work is done.


 607. This limitation does not apply to setting new rates (e.g., including
      new classifications, and associated minimum wage arrangements for
      junior employees).


 608. In conducting a 4 yearly review, FWA must ensure that each modern
      award is reviewed in its own right.  This does not prevent FWA
      reviewing two or more modern awards at the same time, as long each
      modern award is reviewed in its own right (subclause 156(5)).


Division 5 - Exercising modern award powers outside 4 yearly reviews and
annual wage reviews


 609. Division 5 sets out limited circumstances in which modern awards may
      be made, varied or revoked outside the system of annual wage and 4
      yearly modern award reviews.

Subdivision A - Exercise of powers if necessary to achieve modern awards
objective

Clause 157 - FWA may vary etc.  modern awards if necessary to achieve
modern awards objective


 610. Clause 157 provides FWA with the power to vary modern awards outside
      the system of 4 yearly reviews in limited circumstances.


 611. FWA may vary a modern award (other than in relation to modern award
      minimum wages), make a modern award or revoke a modern award outside
      the 4 yearly reviews if it is satisfied that to do so is necessary to
      achieve the modern awards objective (subclause 157(1)).


 612. The modern awards objective requires FWA to take account of a number
      of matters, including the need to ensure a stable modern award system.
       It is intended that in deciding whether to vary, make or revoke a
      modern award outside the 4 yearly reviews, FWA will balance the
      considerations contained in the modern awards objective to determine
      whether it is necessary to exercise the power outside the system of 4
      yearly reviews.


 613. FWA may also vary modern award minimum wages outside the system of 4
      yearly reviews, where it is satisfied that:


     . the variation is justified by work value reasons (that is, by
       reasons justifying the amount that employees should be paid for
       doing a particular kind of work relating to: the nature of the work;
       the level of skill or responsibility involved in doing the work; or
       the conditions under which the work is done); and


     . making the variation outside the 4 yearly reviews is necessary to
       achieve the modern awards objective (subclause  157(2)).


 614. FWA may make, vary or revoke a modern award under clause 157 either on
      its own initiative or as a result of an application (subclause
      157(3)).


Clause 158 - Applications


 615. Clause 158 sets out the persons who may apply to FWA to exercise its
      power to make, vary or revoke a modern award under clause 157.  An
      applicant may apply for two or more related things at the same time
      (e.g., the making of a modern award and the related revocation of an
      existing modern award).

Subdivision B - Other situations

 616. Subdivision B sets out other circumstances in which FWA may vary a
      modern award outside the system of 4 yearly and annual wage reviews.


Clause 159 - Variation of modern award to update or omit name of employer,
organisation or outworker entity


 617. Clause 159 allows FWA to vary a modern award to update or remove the
      name of an employer, outworker entity or organisation.


Clause 160 - Variation of modern award to remove ambiguity or uncertainty
or correct error


 618. Clause 160 allows FWA to make a determination varying a modern award
      to remove an ambiguity or uncertainty or to correct an error.  FWA may
      make the determination at its own initiative or on application by an
      employer, employee, organisation or outworker entity that is covered
      by the modern award.  Clauses 165 and 166 set out when a determination
      comes into operation.  Clause 167 sets out special rules relating to
      retrospective variations of awards.


Clause 161 - Variation of modern award on referral by HREOC


 619. Clause 161 requires FWA to review a modern award referred to it under
      section 46PW of the Human Rights and Equal Opportunity Commission Act
      1986 (which deals with discriminatory industrial instruments).


 620. FWA must make a determination varying the modern award if it considers
      that the award requires a person to do an act that would be unlawful
      under Part II of the Sex Discrimination Act 1984 (but for the fact
      that the act would be done in direct compliance with the modern
      award).  The legislative note refers to special criteria applying to
      changing coverage of modern awards set out in clause 163.


Division 6 - General provisions relating to modern award powers


Clause 162 - General


 621. Clause 162 explains that Division 6 contains some specific provisions
      about the exercise of modern award powers.  The clause notes that Part
      5-1 (Fair Work Australia) also contains general provisions about the
      exercise of modern award powers.  These include:


     . the power of the President to issue directions (clause 582); and


     . the manner in which FWA may inform itself (clause 590).


Clause 163 - Special criteria relating to changing coverage of modern
awards


 622. Clause 163 contains a number of specific criteria that apply to FWA
      decisions about changing the coverage of modern awards.


 623. Subclause 163(1) provides that FWA must not vary a modern award to
      restrict coverage unless it is satisfied that the relevant employers
      or employees will instead become covered by another modern award
      (other than the miscellaneous modern award) that is appropriate to
      them.  This requirement, together with the modern awards objective, is
      designed to ensure that when considering a change in award coverage,
      FWA considers whether the content of the new award is an appropriate
      safety net for the employers and employees that would become covered
      by it.


 624. Subclause 163(2) relates to FWA decisions about whether to make a new
      modern award.  This subclause requires FWA to consider whether it
      could vary an existing modern award to cover certain employers or
      employees before making a new modern award.  It is intended that FWA
      should vary an existing award to cover certain employers or employees,
      rather than make a new award, if it is appropriate to do so.  This is
      designed to limit the proliferation of new awards, by ensuring that
      making a new award occurs only where variation of coverage of an
      existing award is not appropriate.


 625. Subclause 163(3) prohibits FWA from making or varying a modern award
      to cover an organisation unless the organisation is entitled to
      represent the industrial interests of one or more employers or
      employees who are or will be covered by the modern award.


Clause 164 - Special criteria for revoking modern awards


 626. Clause 164 deals with when FWA may revoke a modern award.  This clause
      provides that FWA must not revoke a modern award unless it is
      satisfied that:


     . the modern award is obsolete or no longer capable of operating; or


     . all the employees covered by the modern award are covered by a
       different modern award (other than the miscellaneous modern award)
       that is appropriate to them, or will be so covered when the
       revocation comes into operation.


 627. An award may become obsolete by the making of a new modern award.  In
      such cases it is envisaged that commencement of the new award and
      revocation of the existing award would be co-ordinated to ensure no
      gap in award coverage.


Clause 165 - When variation determinations come into operation, other than
determinations setting, varying or revoking modern award minimum wages


 628. Clause 165 provides rules for working out when a determination comes
      into operation.  These rules do not relate to determinations setting,
      varying or revoking modern award minimum wages (commencement of these
      determinations is dealt with by clause 166).


 629. A determination that varies a modern award, other than in relation to
      modern award wages, will come into operation on the day specified in
      the determination (subclause 165(1)).  This day will almost always be
      on or after the day that the determination is made.  FWA may only vary
      an award retrospectively in very limited circumstances, where:


     . the determination relates to a variation to remove an ambiguity or
       uncertainty, or to correct an error; and


     . FWA is satisfied that there are exceptional circumstances that
       justify doing so (subclause 165(2)).


 630. A determination takes effect in relation to a particular employee at
      the start of the employee's next full pay period (subclause 165(3)).


Clause 166 - When variation determinations setting, varying or revoking
modern award minimum wages come into operation


 631. Clause 166 provides for when determinations setting, varying or
      revoking modern award minimum wages come into operation.  (These rules
      apply to determinations made under this Part.  Wage variations flowing
      from annual wage reviews commence in accordance with rules in Part 2-
      6.)


 632. A determination affecting modern award minimum wages will generally
      come into operation on 1 July in the next financial year, or on the
      day it is made if made on 1 July (clause 166(1)).  This is consistent
      with the commencement of wage variations from annual wage reviews, and
      is designed to ensure certainty and predictability for employers and
      employees (see clause 286).


 633. However, if FWA is satisfied that it is appropriate to do so it may
      specify another day on which the determination comes into operation
      (clause 166(2)).


 634. This day will almost always be on or after the day that the
      determination is made.  FWA may only vary an award retrospectively in
      very limited circumstances, where:


     . the determination relates to a variation to remove an ambiguity or
       uncertainty, or to correct an error; and


     . FWA is satisfied that there are exceptional circumstances that
       justify doing so (subclause 166(3)).


 635. FWA may provide that changes to modern award minimum wages take effect
      in stages if it is satisfied that it is appropriate to do so
      (subclause 166(4)).


 636. A determination setting, varying or revoking modern award minimum
      wages will generally take effect in relation to a particular employee
      at the start of the employee's next full pay period on or after the
      day that the determination comes into operation.  However, where a
      determination is to take effect in stages, it will not take effect in
      relation to a particular employee until the start of the employee's
      next full pay period on or after the day that the change to modern
      award minimum wages is specified to take effect (subclause 166(5)).


Clause 167 - Special rules relating to retrospective variations of awards


 637. Clause 167 ensures that a person who has contravened a term of award
      or an enterprise agreement due to a retrospective amendment of the
      award under subclause 165(2) or 166(3) is not liable to pay a
      pecuniary penalty in respect of the contravention.


 638. A breach of an enterprise agreement may arise from variation of the
      award because of the requirement in clause 206 that the base rate of
      pay payable to an employee under an enterprise agreement must not be
      less than would be payable under an award that covers the employee.


Clause 168 - Varied modern award must be published


 639. Clause 168 requires FWA to publish (on its website or otherwise) a
      varied modern award as soon as practicable.




                      Part 2-4 - Enterprise Agreements


Overview


 640. Part 2-4 provides for the making of enterprise agreements through
      collective bargaining primarily at the enterprise level.  It enables
      employers and employees, and their bargaining representatives, to
      bargain in good faith to make an enterprise agreement.


 641. Employers and employees can make an enterprise agreement about
      permitted matters.  Permitted matters include matters pertaining to
      the relationship between an employer and its employees, matters
      pertaining to the relationship between an employer and an employee
      organisation that will be covered by the agreement, deductions from
      wages and how the agreement operates.


Types of enterprise agreements


 642. Enterprise agreements are collective agreements that will cover a
      group of employees.  Part 2-4 provides for the making of two types of
      enterprise agreement - single-enterprise agreements and multi-
      enterprise agreements.  A single-enterprise agreement or multi-
      enterprise agreement relating to a genuine new enterprise may also be
      a greenfields agreement.


 643. The term 'proposed enterprise agreement' is a generic term that is
      used in Part 2-4 and in Part 3-3 (Industrial action) to describe 'an
      agreement' that is being negotiated with a view to being approved as
      an enterprise agreement (see the observations of French J in
      Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering,
      Printing and Kindred Industries Union (No 2) [2004] FCA 1737; 138 IR
      362).  A proposed agreement can be an idea, or it can be a series of
      claims on behalf of a group of employees whose bargaining
      representatives seek to negotiate with the employer with a view to it
      becoming an agreement that is ultimately approved by FWA.


Single-enterprise agreements


 644. Single-enterprise agreements are made between a single employer, or
      two or more employers that are single interest employers, and a group
      of employees.  Two or more employers can bargain together for a single-
      enterprise agreement if they are related bodies corporate, or they are
      engaged in a joint venture or common enterprise, or they are specified
      in a single interest employer authorisation (clause 248).


Multi-enterprise agreements


 645. Multi-enterprise agreements are made between two or more employers and
      groups of their employees.  Other than in the low-paid bargaining
      stream, employers must voluntarily agree to bargain together for a
      multi-enterprise agreement.


 646. A special stream of bargaining for multi-enterprise agreements is
      available to enable low-paid employees who have not historically
      participated in enterprise level collective bargaining to make a multi-
      enterprise agreement.  FWA can make low paid authorisations that allow
      access to this stream (clause 243).  Low-paid authorisations enable
      employers and employees to, among other things, seek assistance from
      FWA in order to bargain for a multi-enterprise agreement.


Greenfields agreements


 647. Greenfields agreements are made between an employer or employers and
      an employee organisation or employee organisations.  They must relate
      to a genuine new enterprise and be made before the employer or
      employers employ any of the persons who will be necessary for the
      normal conduct of the new enterprise.


Bargaining and representation during bargaining


 648. Employers and employees are entitled to appoint any person as their
      bargaining representative for a proposed enterprise agreement.
      Employers are required to take all reasonable steps to notify each
      employee of their right to be represented during bargaining.  The Bill
      provides a more significant formal role for bargaining representatives
      in the bargaining process compared to bargaining agents under the WR
      Act.


 649. Bargaining representatives for a proposed enterprise agreement must
      meet the good faith bargaining requirements.  A bargaining
      representative may apply to FWA for a bargaining order to ensure that
      the good faith bargaining requirements are being met and that
      bargaining is proceeding efficiently and fairly.


 650. Failure to comply with a bargaining order exposes a bargaining
      representative to pecuniary penalties and other court orders.  If the
      contravention is serious and sustained and significantly undermines
      the bargaining process, a bargaining representative may also apply to
      FWA for a serious breach declaration.  The consequence of such a
      declaration is that FWA may make a bargaining-related workplace
      determination (see Part 2-5).


 651. If an employer does not agree to bargain with its employees, a
      bargaining representative for an employee may apply to FWA for a
      majority support determination.  If FWA determines that there is
      majority support among employees for collective bargaining, the
      employer is required to bargain.  If the employer still refuses to
      bargain, the employee bargaining representative may seek a bargaining
      order to require the employer to meet the good faith bargaining
      requirements.  Where there is a dispute about which classes or groups
      of employees will be covered by the proposed enterprise agreement, FWA
      has power to make scope orders.  A scope order is available on
      application by a bargaining representative.


 652. Bargaining representatives may also apply to FWA for assistance in
      dealing with a dispute about a proposed enterprise agreement.


Availability of protected industrial action and orders


 653. One of the significant aspects of an enterprise agreement being of a
      particular type is the effect that this has on the availability of
      protected industrial action and orders that facilitate bargaining.

|Type of enterprise  |Protected |Bargaining    |Majority      |Scope     |
|agreement           |industrial|orders/Serious|support       |orders    |
|                    |action    |breach        |determination |          |
|                    |          |declaration   |              |          |
|Single-enterprise   |          |              |              |          |
|agreement with a    |          |              |              |          |
|single employer or  |          |              |              |          |
|two or more         |(         |(             |(             |(         |
|employers that are  |          |              |              |          |
|related bodies      |          |              |              |          |
|corporate, or       |          |              |              |          |
|engaged in a joint  |          |              |              |          |
|venture or common   |          |              |              |          |
|enterprise          |          |              |              |          |
|Single-enterprise   |          |              |              |          |
|agreement with two  |          |              |              |          |
|or more employers   |(         |(             |(             |(         |
|that are specified  |          |              |              |          |
|in a single interest|          |              |              |          |
|employer            |          |              |              |          |
|authorisation       |          |              |              |          |
|Multi-enterprise    |          |              |              |          |
|agreement with two  |          |              |              |          |
|or more employers   |(         |(             |(             |(         |
|specified in a      |          |              |              |          |
|low-paid            |          |              |              |          |
|authorisation       |          |              |              |          |
|Multi-enterprise    |          |              |              |          |
|agreement with two  |          |              |              |          |
|or more employers   |(         |(             |(             |(         |
|that are not        |          |              |              |          |
|specified in a      |          |              |              |          |
|low-paid            |          |              |              |          |
|authorisation       |          |              |              |          |


Approval and operation of enterprise agreements


 654. An enterprise agreement that is not a greenfields agreement is made
      when it is approved by the employees of the employer or employers that
      will be covered by the agreement.  A greenfields agreement is made
      when it is signed by each employer and each relevant employee
      organisation.


 655. After an enterprise agreement has been made, a bargaining
      representative for that agreement must apply to FWA for approval of
      the agreement.  FWA can approve an enterprise agreement if it is
      satisfied that all approval requirements are met.  Among other things,
      the approval requirements will ensure that enterprise agreements do
      not undermine the guaranteed safety net of minimum terms and
      conditions set out in the NES and in modern awards.  An enterprise
      agreement will only come into operation after it has been approved by
      FWA.


 656. Employers and employees can agree to vary or terminate an enterprise
      agreement at any time.  A variation or termination will come into
      operation when it is approved by FWA.


Division 1 - Introduction


Clause 169 - Guide to this Part


 657. This clause provides a guide to this Part.


Clause 170 - Meaning of employee and employer


 658. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Clause 171 - Objects of this Part


 659. This clause sets out the objects of Part 2-4.


Division 2 - Employers and employees may make enterprise agreements


Clause 172 - Making an enterprise agreement


 660. This clause provides for the making of enterprise agreements.
      Enterprise agreements can be made about 'permitted matters'
      (subclause 172(1)).  The permitted matters are:


     . matters pertaining to the relationship between an employer or
       employers and employees (paragraph 172(1)(a));


     . matters pertaining to the relationship between an employer or
       employers and an employee organisation or employee organisations
       (paragraph 172(1)(b));


     . deductions from wages authorised by an employee
       (paragraph 172(1)(c)); or


     . how the agreement will operate (paragraph 172(1)(d)).


 661. In Electrolux Home Products Pty Limited v The Australian Workers'
      Union and others (2004) 221 CLR 309 the High Court found, when
      considering a provision similar to clause 172(1), that industrial
      action could not be taken in support of claims that could not be
      validly included in an agreement under the WR Act as in force at the
      time.


 662. After the High Court's decision, the AIRC carefully checked whether
      each term of an agreement pertained to the employment relationship in
      order to determine whether the application before it for certification
      of the agreement was valid.


 663. To resolve any uncertainty following the High Court's decision, the
      Parliament enacted the Workplace Relations Amendment (Agreement
      Validation) Act 2004 to ensure that agreements that contained non-
      pertaining terms were valid to the extent that they contained
      pertaining terms.


 664. Clause 253 will have the effect that an agreement will still be valid
      even where it includes terms that are not about permitted matters.  It
      is not intended that FWA will have to scrutinise each enterprise
      agreement to ensure that all its terms are about permitted matters as
      this would unduly delay the agreement approval process.


 665. However, to the extent that a term of an enterprise agreement is not
      about permitted matters, the term will be of no effect.


 666. It is intended that each substantive term of an enterprise agreement
      must be about one or more of the permitted matters in order for the
      agreement to be characterised as about permitted matters.  This would
      not prevent an enterprise agreement from containing other, valid,
      terms where the term is ancillary or incidental to, or a machinery
      provision, relating to a permitted matter (Electrolux ibid.  at [96]-
      [97], per McHugh J).


 667. Whether an enterprise agreement is about permitted matters is also
      significant in the context of protected industrial action for the
      purpose of clause 409 (which deals with employee claim action).
      Employees and their bargaining representatives cannot organise or take
      protected industrial action in support of claims for a proposed
      enterprise agreement that will include terms that are not about
      permitted matters.


 668. Paragraph 172(1)(a) refers to 'matters pertaining to the relationship
      between an employer that will be covered by the agreement and that
      employer's employees who will be covered by the agreement', referred
      to after this as 'matters pertaining to the employment relationship'.


 669. The matters pertaining to the employment relationship formulation is
      of long standing.  Under both the Industrial Relations Act 1988 and
      the WR Act prior to 27 March 2006, collective agreements had to be
      about matters pertaining to the employment relationship.  Since
      27 March 2006, a term of a workplace agreement that was not about such
      matters was 'prohibited content'.  Between 1904 and 2006, the formula
      was also used in the definition of 'industrial dispute' under
      successive Commonwealth industrial relations statutes.


 670. Although the precise words used have changed from time to time, the
      courts have construed each manifestation of the formula in a similar
      way.  There is substantial jurisprudence about what the phrase means.
      It is intended that paragraph 172(1)(a) should be read in line with
      that jurisprudence.  The courts' interpretation of the formulation has
      evolved over time in line with changing community understandings and
      expectations about the kinds of matters that pertain to the employment
      relationship, and it is expected that this approach will continue.


 671. Whether a particular term is about matters pertaining to the
      employment relationship will depend on its precise construction, as
      well as the circumstances surrounding the particular employment
      relationship.  Frequently, it will be obvious that a term pertains to
      the employment relationship - e.g., a term about the payment of wages
      or a term about hours of work and shift patterns.  However, there are
      some terms where it is not so immediately clear whether the terms are
      about matters pertaining to the employment relationship (see, e.g.,
      the discussion in Re Schefenacker Vision Systems Australia Pty Ltd,
      AWU, AMWU Certified Agreement 2004 [2004] AIRC 1064.


 672. It is intended that the following terms would be within the scope of
      permitted matters for the purpose of paragraph 172(1)(a):


     . terms relating to particular staffing levels (subject to any other
       applicable legislative requirements or limitations) particularly if
       those terms are aimed at ensuring the health, safety and well-being
       of employees;


     . terms relating to conditions or requirements about employing casual
       employees or engaging labour hire or contractors if those terms
       sufficiently relate to employees' job security - e.g.  a term which
       provided that contractors must not be engaged on terms and
       conditions that would undercut the enterprise agreement;


     . terms that would provide that casual employees are converted to
       permanent employees after a set period of time;


     . terms that would prevent an employer from seeking a contribution or
       indemnity from an employee in respect of personal injuries or losses
       suffered by that person where such injuries or losses were cause by
       the employee in the course of their employment.


 673. The following terms would not be intended to be within the scope of
      permitted matters for the purpose of paragraph 172(1)(a):


     . terms that would contain a general prohibition on the employer
       engaging labour hire employees or contractors;


     . terms that would contain a general prohibition on the employer
       employing casual employees;


     . terms that would require an employer or employee covered by to the
       enterprise agreement to make a donation to a political party or
       charity;


     . terms that would require an employer to source only products from a
       particular supplier or Australian made products (unless, e.g., such
       a term was directly related to employees' job security);


     . terms that would require an employer to engage or not engage
       particular clients, customers or suppliers who had agreed to commit
       to certain employment, environmental or ethical standards (unless,
       e.g., such a terms was directly related to employees' health and
       safety);


     . terms that relate to corporate social responsibility, e.g., terms
       requiring an employer to participate in charity events or commit to
       climate change initiatives.


 674. The permitted matters in paragraph 172(1)(a) are focussed on the
      employment relationship.  One effect of this is that terms that are
      about the relationship between an employer and an employee
      organisation may not pertain to the employment relationship, even
      where the terms are closely associated with the organisation's
      representation of employees under the agreement.


 675. Paragraph 172(1)(b) permits terms in agreements that are about matters
      pertaining to the relationship between the employer or employers, and
      the employee organisation or employee organisations that will be
      covered by the agreement.  For an agreement term to fall within
      paragraph 172(1)(b), the term needs to relate to the employee
      organisation's legitimate role in representing the employees to be
      covered by the agreement.


 676. The following terms are examples of those intended to fall within the
      scope of permitted matters for the purpose of paragraph 172(1)(b):


     . terms relating to union training leave and leave for training
       conducted by a union;


     . terms that provide for employees to have paid time off to attend
       union meetings or participate in union activities;


     . terms that provide for union involvement in dispute settlement
       procedures;


     . terms that allow unions to promote membership or have noticeboards
       in the workplace or otherwise provide information to employees;


     . terms that require an employer to provide information to a union
       about employees who are covered by an enterprise agreement or
       information about a union to an employee;


     . terms that provide for the union to attend the workplace for certain
       purposes such as dispute resolution or consultation meetings
       (subject to the rules governing unlawful content - clause 194).


 677. The fact that a term falls with paragraph 172(1)(b) does not prevent
      it from also falling within the description in paragraph 172(1)(a).


 678. Because of the way in which the relationship arises, there are
      limitations on the types of terms that would pertain to the
      relationship between an employer and an employee organisation.  For
      example, a term granting a lease over property owned by the employer
      to the employee organisation would not be a term about a permitted
      matter because it would not concern the relationship between the
      employer as an employer and the employee organisation as a
      representative of the employees covered by the agreement.


 679. Paragraph 172(1)(c) provides that agreements will be able to contain
      terms about deductions from wages provided that they are authorised by
      an employee.  This would, for example, permit terms dealing with
      salary sacrifice, payments to superannuation or the deduction of union
      membership fees.  This has been expressly included because courts have
      held that such terms may not be a permitted matter under
      paragraph 172(1)(a) - see R v Portus; Ex parte ANZ Banking Group Ltd
      (1972) 127 CLR 353 and Re Alcan Australia Ltd; Ex parte Federation of
      Industrial, Manufacturing and Engineering Employees (1994) 181 CLR 96.




 680. There are some other limits on terms about deductions from wages.  For
      example, terms relating to bargaining agents fees are unlawful terms
      (see paragraph 194(b)) and terms that provide for unreasonable
      deductions from wages are of no effect (see Division 2 of Part 2-9).


 681. Paragraph 172(1)(d) permits an agreement to contain terms about how
      the agreement operates.  This could include, e.g.,  terms setting out
      how and when the negotiations for a replacement agreement will be
      conducted, about the nominal expiry date or terms specifying who the
      agreement will cover (subject to subclause 186(3)).


 682. This clause also sets out the different types of enterprise
      agreements.  There are two types of enterprise agreements - single-
      enterprise agreements and multi-enterprise agreements.


 683. Enterprise agreements that are not greenfields agreements are made
      between employers and their employees.  The use of the phrase
      'employees who will be covered by the agreement' in clause 172 is
      intended to make clear that the employees covered by the agreement are
      not limited to those employees who were employed at the time the
      agreement was made.  An agreement covers all employees whom it is
      expressed to cover (clause 53).  This includes persons employed at the
      time the agreement was made and persons employed at a later time
      provided that they fall within a class or group of employees who are
      expressed to be covered by the agreement.


 684. Subclause 172(2) describes a single-enterprise agreement.  A single
      employer, or two or more employers that are single-interest employers,
      may make a single-enterprise agreement with their employees
      (paragraph 172(2)(a)) or, in the case of a greenfields single-
      enterprise agreement, with one or more relevant employee organisations
      (paragraph 172(2)(b)).


 685. Paragraph 172(2)(a) provides for the making of a single-enterprise
      agreement with the employees employed at the time the agreement is
      made (see subclause182(1)) and who will be covered by the agreement.


 686. Paragraph 172(2)(b) provides for the making of a single-enterprise
      agreement that is a greenfields agreement.  An employer, or two or
      more employers that are single-interest employers, may make a single-
      enterprise agreement that is a greenfields agreement with one or more
      relevant employee organisations (see subclause 182(3)) if:


     . the agreement relates to a genuine new enterprise that the employer
       or employers are establishing or propose to establish; and


     . the employer or employers have not employed any of the persons who
       will be necessary for the normal conduct of that enterprise.


 687. Subclause 172(3) describes the concept of a multi-enterprise
      agreement.  This is an agreement with two or more employers that are
      not single interest employers and their employees or, in the case of a
      greenfields multi-enterprise agreement, with one or more relevant
      employee organisations.


 688. Paragraph 172(3)(a) provides for the making of a multi-enterprise
      agreement with two or more employers and the employees employed at the
      time the agreement is made (see subclause 182(2)) and who will be
      covered by the agreement.


 689. Paragraph 172(3)(b) provides for the making of a multi-enterprise
      agreement that is a greenfields agreement.  A multi-enterprise
      agreement that is greenfields agreement cannot be made with two or
      more employers specified in a low-paid authorisation.  This is because
      a greenfields agreement, by definition, cannot be made once the
      employers have employed any persons that will be necessary for the
      normal conduct of the enterprise.


 690. Subclause 172(4) provides that a greenfields agreement is a single-
      enterprise agreement as referred to in paragraph 172(2)(b) or a multi-
      enterprise agreement as referred to in paragraph 172(3)(b).  A
      greenfields agreement must be made with one or more relevant employee
      organisations.  A relevant employee organisation is defined in Part 1-
      2 as an employee organisation that is entitled to represent the
      industrial interests of one or more employees who will be covered by
      the agreement, in relation to work to be performed under the agreement
      (see clause 12).  A demarcation order may provide that an employee
      organisation is not entitled to represent the industrial interests of
      a particular class or group of employees, despite those employees
      being eligible to be members of that employee organisation.


 691. A greenfields agreement must relate to a genuine new enterprise that
      the employer or employers are establishing or proposing to establish.
      The legislative notes following subclauses 172(2) and 172(3) make it
      clear that a genuine new enterprise includes a genuine new business,
      activity, project or undertaking.  They do this by referring to
      clause 12 which defines an enterprise as a business, activity, project
      or undertaking.  The definition of enterprise also permits an employer
      that is the Commonwealth, or a State or Territory, or one of its
      authorities, to make a greenfields agreement in relation to a genuine
      new activity that it proposes to undertake.


 692. The use of the word 'genuine' in paragraphs 172(2)(b) and 172(3)(b) is
      intended to make it clear that the enterprise must be a new enterprise
      rather than an existing enterprise that the employer or employers
      acquire, or propose to acquire, as a going concern (see the decision
      of the AIRC in Re Patrick Cargo Pty Limited Certified Agreement 2002
      (2002) 115 IR 443).  In other words, a genuine new enterprise is not
      an enterprise that has been previously carried out by another
      employer.  For example, a supermarket operator could not make a
      greenfields agreement if it acquired a chain of liquor stores in a
      transfer of business situation.  Similarly, a new employer cannot make
      a greenfields agreement where it acquires or proposes to acquire an
      enterprise that has previously been conducted by another employer.


 693. The nature of the genuine new enterprise may nonetheless be the same
      or similar to the employer's existing enterprise, particularly in the
      case of a new project.  For example, an existing employer in the
      construction industry could make a greenfields agreement in relation
      to a genuine new construction project.  However, an existing employer,
      such as a major retailer, could not make a greenfields agreement in
      relation to a new store that it is proposing to establish if that
      store is part of the employer's existing enterprise.


 694. Subclause 172(5) sets out the meaning of single interest employer.
      Single interest employers can bargain together for a single-enterprise
      agreement (see subclause 172(2)).  Two or more employers are single
      interest employers in relation to a proposed enterprise agreement if
      they are:


     . engaged in a joint venture or common enterprise; or


     . related bodies corporate (as defined in the Corporations Act 2001);
       or


     . specified in a single interest employer authorisation that is in
       operation in relation to the agreement.


 695. Two or more employers may jointly apply for a single interest employer
      authorisation under clause 248.  FWA must make a single interest
      authorisation if the requirements of clause 249 are met.


Division 3 - Bargaining and representation during bargaining


 696. Division 3 sets out the rights of employers and employees to appoint a
      person of their choice as their bargaining representative.  It also
      ensures that each employee is notified of his or her right to
      representation when bargaining for a proposed enterprise agreement.
      These rules are adjusted for a proposed enterprise agreement that is a
      greenfields agreement and for a multi-enterprise agreement in relation
      to which a low-paid authorisation is in operation.


 697. Bargaining representatives have a more significant formal role in the
      bargaining process compared to bargaining agents under the WR Act.
      Bargaining representatives are entitled to: bargain for enterprise
      agreements and depending on the type of agreement will usually be
      entitled to apply for (among other things) protected action ballot
      orders, bargaining orders, majority support determinations, scope
      orders and serious breach declarations.  Bargaining representatives
      are also entitled to represent a person in matters before FWA (see
      clause 596).  As part of their responsibilities, bargaining
      representatives for a single-enterprise agreement and a multi-
      enterprise agreement to which a low paid authorisation is in operation
      are required to meet the good faith bargaining requirements set out in
      subclause 228(1).  Non-compliance with the requirements exposes a
      bargaining representative to bargaining orders.  Division 3 also makes
      clear that an employer must not refuse to recognise or bargain with a
      bargaining representative.


Clause 173 - Notice of employee representational rights


 698. Subclause 173(1) requires an employer to take all reasonable steps to
      give notice to each employee of their right to be represented by a
      bargaining representative.  Reasonable steps could include sending the
      notice by email to each employee or posting the notice to a forum or
      site that is known by and accessible to the relevant employees.  The
      requirement applies to those employees employed at the notification
      time.  Separate rules apply for proposed greenfields agreements.


 699. The notification time for a proposed enterprise agreement is specified
      in subclause 173(2) as being the time when:


     . the employer agrees to bargain, or initiates bargaining, for the
       agreement; or


     . a majority support determination in relation to the agreement comes
       into operation; or


     . a scope order in relation to the agreement comes into operation; or


     . a low-paid authorisation in relation to the agreement that specifies
       the employer comes into operation.


 700. The legislative note to subclause 173(2) serves as a reminder to the
      reader that an employer cannot request employees to approve a proposed
      enterprise agreement under subclause 181(2) until 21 days after the
      last notice of employee representational rights is given.


 701. The notice of employee representational rights is required to be given
      as soon as practicable and not later than 14 days after the
      notification time (subclause 173(3)).  If the proposed enterprise
      agreement will cover two or more employers, each employer will need to
      give the notice to its respective employees.


 702. Subclause 173(4) does not require an employer to give a notice of
      employee representational rights to an employee if the employer has
      already given the employee a notice within a reasonable period before
      the notification time for the agreement.  For example, if an employer
      issues an employee with a notice at the time the employer agrees to
      bargain, the employer is not required to issue another notice to that
      employee if a scope order subsequently varies who will be covered by
      the agreement, provided the notice was issued within a reasonable
      period of the scope order.


 703. Subclause 173(5) allows the regulations to prescribe how notices of
      employee representational rights may be given by the employer to
      employees.


Clause 174 - Content of notice of employee representational rights


 704. This clause sets out four content requirements for the notice of
      employee representational rights.


 705. First, the notice must specify that the employee may appoint a
      bargaining representative to represent the employee in bargaining for
      the agreement and in a matter before FWA that relates to bargaining
      for the agreement (subclause 174(2)).


 706. Secondly, the notice must explain that, if the employee is a member of
      an employee organisation and the employee has not appointed another
      person as his or her bargaining representative, the organisation is
      automatically the bargaining representative for the employee
      (subclause 174(3)).  This rule only applies if the third rule
      described below does not apply.


 707. Thirdly, if a low-paid authorisation in relation to the proposed
      agreement that specifies the employer comes into operation and an
      employee organisation applied for the authorisation, the notice must
      explain the effect of paragraph 176(1)(b) and subsection 176(2), which
      is that the organisation is taken to be the bargaining representative
      of the employee unless the employee appoints another person as his or
      her bargaining representative (subclause 174(4)).


 708. Fourthly, the notice must explain that if an employee appoints a
      bargaining representative, a copy of the instrument of appointment
      must be given to the employee's employer (subclause 174(5)).


Clause 175 - Relevant employee organisations to be given notice of
employer's intention to make greenfields agreements etc.


 709. This clause requires each employer that agrees to bargain, or
      initiates bargaining, for a proposed greenfields agreement to take all
      reasonable steps to give notice of its intention to make the agreement
      to each relevant employee organisation.  The employer is not required
      to give the notice if the employer does not know, or could not
      reasonably be expected to know, that an employee organisation is a
      relevant employee organisation.  A relevant employee organisation is
      defined in Part 1-2 as an employee organisation that is entitled to
      represent the industrial interests of one or more of the employees who
      will be covered by the greenfields agreement, in relation to work to
      be performed under the agreement (see clause 12).


 710. The notice is required to state that the employee organisation is a
      bargaining representative for the agreement.  Clause 177 lists the
      other bargaining representatives for greenfields agreements.

The legislative note to subclause 175(1) is a reminder to readers that an
employer cannot make the agreement until 14 days after the last notice is
given.

 711. Subclause 175(4) requires the employer to give the notice as soon as
      reasonably practicable and not later than 14 days after the employer
      agrees to bargain or initiates bargaining for a greenfields agreement.
       At the same time or as soon as reasonably practicable after giving
      the notice to the relevant employee organisations, the employer must
      give a copy of the notice to FWA.  If FWA was of the view that a
      relevant employee organisation had not been given notice of the
      employer's intention to make a greenfields agreement, it could advise
      the employer, thereby giving the employer the opportunity to give a
      notice to that organisation and thereby meet the requirements for
      approval of a greenfields agreement.


 712. Subclause 175(6) enables regulations to prescribe how notices under
      this clause may be given.


Clause 176 - Bargaining representatives for proposed enterprise agreements
that are not greenfields agreements


 713. This clause specifies the persons who are the bargaining
      representatives for proposed enterprise agreements that are not
      greenfields agreements.  Bargaining representatives are required to
      meet the good faith bargaining requirements set out in
      subclause 228(1).


 714. An employer is always a bargaining representative for a proposed
      enterprise agreement, although the employer may also appoint, in
      writing, another bargaining representative such as an organisation of
      employers or a consultant.  If the proposed enterprise agreement will
      cover two or more employers, each employer is a bargaining
      representative and similarly each employer can appoint another person
      or organisation as its bargaining representative.


 715. An employee may appoint any person (including himself or herself), in
      writing, as his or her bargaining representative.  If the employee
      does not appoint someone as his or her bargaining representative and
      the employee is a member of an employee organisation, then the
      employee organisation is automatically the bargaining representative
      for the employee.  If a member of an employee organisation appoints a
      bargaining representative other than the organisation, the employee
      must notify the employer but need not advise the employee
      organisation.


 716. There is no restriction on when a person may appoint a bargaining
      representative.  This means, for example, that during bargaining, an
      employee who is a member of an employee organisation may appoint his
      or her own bargaining representative with the effect that the
      automatic appointment of the employee organisation as that employee's
      bargaining representative will cease to apply.


 717. If the proposed enterprise agreement is a multi-enterprise agreement
      in relation to which a low-paid authorisation is in operation and an
      employee has not appointed another person as his or her
      representative, then the employee organisation that applied for the
      authorisation is the bargaining representative for the employee.  This
      will be the case even if the employee is a member of another employee
      organisation unless that organisation was one of the applicants for
      the authorisation (subclause 176(2)).


 718. Subclause 176(3) provides that an employee organisation cannot be a
      bargaining representative for an employee unless the employee
      organisation is entitled to represent the industrial interests of the
      employee in relation to work that will be performed under the proposed
      enterprise agreement.  In this context, it is relevant to note that an
      employee organisation can only apply for a low-paid authorisation in
      relation to a multi-enterprise agreement if it is entitled to
      represent the industrial interests of an employee in relation to work
      to be performed under the agreement (paragraph 242(1)(b)).


Clause 177 - Bargaining representatives for proposed greenfields agreements


 719. This clause specifies the persons who are the bargaining
      representatives for a proposed greenfields agreement as being: the
      employer; a person who has been appointed by the employer in writing;
      and a relevant employee organisation (as defined in clause 12).


Clause 178 - Appointment of bargaining representatives - other matters


 720. Subclause 178(1) provides that an appointment of a bargaining
      representative comes into force on the day specified in the instrument
      of appointment.  There is no restriction on when a person may appoint
      a bargaining representative.  The instrument of appointment may be
      revoked in the same manner (i.e.  by instrument of revocation) in
      reliance on the Acts Interpretation Act 1901.


 721. Subclause 178(2) requires an employee to give a copy of the instrument
      of appointment of a bargaining representative to his or her employer.
      This process ensures the employer knows who the bargaining
      representatives for the proposed agreement are and is consistent with
      the duty bargaining representatives have to abide by the good faith
      bargaining requirements set out in clause 228(1).


 722. If an employer appoints a bargaining representative for a proposed
      enterprise agreement, a copy of the instrument of appointment must be
      given, on request, to an employee's bargaining representative
      (paragraph 178(2)(b)).  If the agreement is a proposed greenfields
      agreement, then a copy of the instrument of an appointment must be
      given, on request, to a relevant employee organisation that is a
      bargaining representative (paragraph 178(2)(c)).


 723. Subclause 178(3) enables regulations to prescribe the matters relating
      to the qualifications or appointment of bargaining representatives.


 724. Bargaining representatives cannot be appointed in relation to a
      variation or termination of an enterprise agreement under Division 7.


Clause 179 - Employer etc.  must not refuse to recognise or bargain with
other bargaining representatives


 725. Subclause 179(1) provides that an employer, or a bargaining
      representative for an employer, must not refuse to recognise or
      bargain with another bargaining representative for the proposed
      enterprise agreement.


 726. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


 727. However, if the employer or the bargaining representative for the
      employer does not know or could not reasonably be expected to know
      that the other person is a bargaining representative for the agreement
      then subclause 179(1) will not apply.  For example, an employer may
      not know that a person is a bargaining representative where an
      employee organisation - automatically appointed as a bargaining
      representative under clause 176 - has not attempted to take part in
      the process and the employer does not know if any of the employees are
      members of that organisation.


 728. The obligation in this subclause on the employer or its bargaining
      representative is in addition to any good faith bargaining
      requirements that they are required to meet under subclause 228(1).


Division 4 - Approval of enterprise agreements


Subdivision A - Pre-approval steps and applications for FWA approval


Clause 180 - Employees must be given a copy of a proposed enterprise
agreement etc.


 729. This clause sets out the pre-approval steps that an employer must
      carry out in relation to a proposed enterprise agreement.


 730. Subclause 180(1) provides that an employer must comply with the
      requirements of this clause before requesting the employees to approve
      the proposed enterprise agreement.  Where the proposed enterprise
      agreement is a single-enterprise agreement with two or more single
      interest employers, or a multi-enterprise agreement, each employer
      must comply with the requirements of this clause.


 731. FWA cannot approve an agreement where an employer has not complied
      with the requirements of this clause (see paragraph 186(2)(a) and
      subparagraph 188(a)(i)).


 732. Subclause 180(2) requires the employer to take all reasonable steps to
      ensure that the relevant employees are given a copy of, or access to,
      the proposed enterprise agreement and any other material incorporated
      by reference in the agreement prior to approving the agreement.  The
      relevant employees are the employees employed during the access period
      that will covered by the agreement.  This may include new employees
      that commence employment during that period.


 733. An agreement can incorporate by reference any written material (see
      clause 257).  This enables an employer and employee to incorporate by
      reference terms from materials such as an earlier written agreement,
      modern award or enterprise award, a State or Territory law or a
      workplace policy.  Subparagraph 180(2)(b)(ii) provides that if an
      agreement incorporates by reference material contained in another
      instrument the employer must take all reasonable steps to ensure that
      the relevant employees are given, or have access to, a copy of that
      material for the entire seven day access period.


 734. Subclause 180(3) requires the employer to take all reasonable steps to
      notify the relevant employees before the start of the access period
      of:


     . the time and place at which the vote will occur; and


     . the voting method that will be used.


 735. This ensures that the relevant employees are informed at least seven
      days prior to the vote for the agreement about how and when the vote
      will occur.


 736. Subclause 180(4) defines the access period as the period of seven days
      ending immediately before the start of the voting for the proposed
      agreement (see subclause 181(1)).


 737. The access period can run concurrently with the 21-day period referred
      to in subclause 181(2), so that the shortest period between the day on
      which an employer gives the last notice of employee representational
      rights to its employees and the day that the employer requests the
      employees to vote on the agreement is 21 days.


 738. The employer is required to take all reasonable steps to ensure that
      the relevant employees are given a copy of the proposed enterprise
      agreement and any other material incorporated in the agreement at the
      beginning of the access period.


 739. This could include providing electronic copies of the material, or
      making copies of the material available for inspection by employees.
      In cases where an employee is not at the workplace, for example,
      because the employee is on maternity leave, it may include providing a
      copy of the agreement and other materials by post.


 740. There may also be situations where an employee commences employment or
      returns to work during the access period.  For example, a new employee
      may commence employment during the access period or an existing
      employee who was leave, such as maternity leave, may return to work
      during the access period.  In situations such as these, the employer
      must take all reasonable steps to ensure that the employee is given a
      copy of the agreement and other materials on the day the employee
      commences employment or returns to work.  FWA will consider whether
      the employer took all reasonable steps to ensure that relevant
      employees were given access to the agreement during the access period
      in deciding whether to approve the agreement.


 741. Subclause 180(5) requires the employer to take all reasonable steps to
      ensure that the terms of the agreement and the effect of those terms
      are explained to the relevant employees prior to the employees
      approving the agreement.  The explanation must take into account the
      particular circumstances and needs of the relevant employees.


 742. Subclause 180(6) provides examples of the kinds of employees whose
      circumstances and needs the employer must take into account when
      explaining the terms of the agreement and the effect of those terms.
      The examples are:


     . employees from culturally and linguistically diverse backgrounds -
       for these employees, an employer may need to use an interpreter or
       translated materials to explain the terms of the agreement;


     . young employees - for these employees, an employer may need to
       explain the terms of an agreement to both the employee and to their
       parent or guardian;


     . employees who did not have a bargaining representative for the
       proposed agreement - for these employees, it may be reasonable for
       an employer to provide a more detailed explanation of the agreement.


Clause 181 - Employers may request employees to approve a proposed
enterprise agreement


 743. An employer may request employees to approve a proposed enterprise
      agreement by voting for it.  An agreement cannot be approved by FWA
      unless employees have approved the agreement.


 744. This approval step is not relevant for a greenfields agreement.  This
      is because a greenfields agreement, by definition, relates to a
      genuine new enterprise where the employer or employers have not yet
      employed any persons that will be necessary for the normal conduct of
      the enterprise.


 745. Subclause 181(2) provides that an employer cannot request employees to
      vote for the proposed enterprise agreement until at least 21 days
      after the employer has given the last notice of employee
      representational rights to the employees employed at the notification
      time who will be covered by the agreement under clause 173.
      Clause 173 provides that an employer must take all reasonable steps to
      notify all employees employed at the notification time that they have
      the right to be represented.


 746. Subclause 181(3) makes clear that, among other methods of voting, the
      employer may request that the employees vote by ballot (secret or not)
      or by an electronic method.  The vote could also be conducted by a
      show of hands or by another method that demonstrates the employees'
      genuine agreement.


Clause 182 - When an enterprise agreement is made


 747. This clause states the point in time at which each of the different
      types of enterprise agreement described in clause 172 is made.


 748. Once an agreement has been made, a bargaining representative must make
      an application for the agreement to be approved by FWA.


 749. Subclause 182(1) provides that a proposed single-enterprise agreement
      that is not a greenfields agreement is made when the agreement is
      approved by a majority of the employees who will be covered by the
      agreement and who cast a valid vote for the agreement (see
      subclause 181(1)).  In the case of a proposed single-enterprise
      agreement that will cover two or more employers that are single
      interest employers, the agreement is made when it is approved by a
      majority of the employees (taken as a group) who will be covered by
      the agreement and who cast a valid vote for the agreement.


 750. Subclause 182(2) provides that a proposed multi-enterprise agreement
      that is not a greenfields agreement is made on an enterprise by
      enterprise basis.  A multi-enterprise agreement is made immediately
      after the voting process referred to in subclause 181(1) where the
      employees of each of the employers that will be covered by the
      proposed agreement have voted for the agreement and it has been
      approved by a majority of the employees of at least one of those
      employers who cast a valid vote for the agreement.


 751. Subclause 182(3) provides that a greenfields agreement (whether a
      single-enterprise or multi-enterprise agreement) is made when it is
      signed by each employer and each employee organisation that will be
      covered by the agreement.  This ensures that the time at which a
      greenfields agreement is made is certain.


 752. Subclause 182(4) provides that a greenfields agreement cannot be
      signed by each employer and each employee organisation until at least
      14 days after the day on which the last notice of the employer's
      intention to make a greenfields agreement was given to the relevant
      employee organisation or organisations.


Clause 183 - Entitlement of an employee organisation to have an enterprise
agreement cover it


 753. After an enterprise agreement has been made, an employee organisation
      that was a bargaining representative for a proposed agreement may
      notify FWA, in writing that it wants to be covered by the agreement.
      (For the rules on coverage, see clause 53.)  When an employee
      organisation is covered by an agreement, it will have certain
      entitlements that it would not otherwise have.  For example, an
      employee organisation that is covered by an agreement would be able to
      enforce the agreement to ensure that the employer is meeting its
      obligations.  Furthermore, the permitted matters that may be included
      in an agreement include matters pertaining to the relationship between
      the employer or employers and the employee organisations that will be
      covered by the agreement.


 754. Subclause 183(2) provides that an employee organisation must give the
      notice that it wants to be covered by the agreement to FWA before FWA
      approves the agreement.  A copy of the notice must also be given to
      each employer covered by the agreement before FWA approves the
      agreement.


 755. The legislative note at the end of clause 183 refers to
      subclause 201(2) which requires FWA to note in its decision to approve
      an enterprise agreement that the agreement covers the employee
      organisation.


Clause 184 - Multi-enterprise agreement to be varied if not all employees
approve the agreement


 756. This clause enables a bargaining representative to vary a multi-
      enterprise agreement after it has been made (under subclause 184(2))
      if the agreement was not approved by the employees of all the
      employers who requested their employees to vote for the agreement.
      This ensures that the agreement is expressed to cover the correct
      employees and employers (see clause 53).


 757. Subclause 184(1) provides that a bargaining representative may vary a
      multi-enterprise agreement where the agreement has been made and the
      agreement was not approved by the employees of all of the employers
      who requested their employees to vote for the agreement under
      subclause 181(1).


 758. Subclause 184(2) provides that prior to making the application for FWA
      approval of the agreement, the relevant bargaining representative must
      vary the agreement so that it is only expressed to cover each employer
      whose employees approved the agreement and the employees of each of
      those employers.  This is to ensure that the agreement FWA is asked to
      approve is expressed to cover the correct employers and their
      employees.


 759. Subclause 184(3) requires the bargaining representative who makes the
      variation under subclause 184(2) to give written notice of the
      variation to all other bargaining representatives for the agreement.
      The notice must specify the employers and employees that the agreement
      as varied covers (subclause 184(4)).


 760. Subclause 184(5) makes it clear that the bargaining representative who
      makes the variation is not required to give notice of the variation to
      a person that it does not know, or could not reasonably be expected to
      know, is a bargaining representative for the agreement.


Clause 185 - Bargaining representatives must apply for FWA approval of an
enterprise agreement


 761. Subclause 185(1) requires a bargaining representative to apply for FWA
      approval of an enterprise agreement that has been made.  This can be
      the employer, a bargaining representative for an employer, or a
      bargaining representative for an employee.


 762. Subclause 185(2) sets out the material that must accompany the
      application for FWA approval.  The bargaining representative must
      provide FWA with a signed copy of the agreement and any other
      declarations required by the procedural rules of FWA.  The requirement
      for a bargaining representative to provide FWA with a signed copy of
      the agreement is intended to ensure that the agreement that FWA
      considers for approval is the one that the parties have made.  The
      power for FWA to make procedural rules about the requirements for
      making an application is set out in clause 609.  This enables FWA to
      make procedural rules about the form and content of the declarations
      that must accompany the agreement.


     . For example, the procedural rules may require that the bargaining
       representative declare that all other bargaining representatives
       involved in the bargaining have been notified of the employer's
       intention to apply to FWA for approval of the agreement.


 763.  The powers of FWA enable it to inform itself in relation to the
      application in such manner as it considers appropriate (clause 590),
      including contacting the employer or employers, their employees, and
      bargaining representatives.


 764. Subclause 185(3) provides that an application for FWA approval of an
      enterprise agreement that is not a greenfields agreement must be made
      within 14 days after the agreement has been made.  A bargaining
      representative may make an application for FWA approval any time
      within the 14 day period, including immediately after the agreement is
      made.  If none of the bargaining representatives makes an application
      for FWA approval within 14 days of the agreement being made, FWA may
      extend that period if it considers it fair to do so in all the
      circumstances.


 765. Subclause 185(4) provides that an application for FWA approval of a
      greenfields agreement must be made within 14 days after the agreement
      has been made.  There is no provision for an extension of time.


 766. Subclause 185(5) allows the regulations to prescribe the requirements
      in relation to the signing of an agreement, including who may sign the
      agreement and the type of signature that is permissible (e.g., a hand
      written signature or digital certificate).


Subdivision B - Approval of enterprise agreements by FWA


Clause 186 - When FWA must approve an enterprise agreement - general
requirements


 767. This clause provides that FWA must approve an enterprise agreement if
      the requirements of this clause and clause 187 are met.  An enterprise
      agreement that has been made in accordance with clause 182 does not
      have any legal effect until it is approved by FWA.  Therefore, an
      enterprise agreement cannot have effect at general law.


 768. It is intended that FWA will usually act speedily and informally to
      approve agreements, with most agreements being approved on the papers
      within 7 days.  This period has not been legislated, however, as there
      may be instances where approval takes longer because FWA has concerns
      about approving the agreement and it is necessary to seek further
      information from the bargaining representatives.  FWA may hold a
      hearing, but it need not.  An example of a case where FWA might hold a
      hearing is where there is insufficient information before it as to
      ordinary time working patterns to be satisfied on the papers that the
      agreement passes the better off overall test in relation to a group of
      employees covered by the agreement.


 769. Subclause 186(1) requires FWA to approve an enterprise agreement where
      a bargaining representative has made an application for FWA approval
      and the requirements of this clause and clause 187 are met.


 770. The legislative note following subclause 186(1) makes it clear that
      FWA may approve an enterprise agreement under this clause with
      undertakings, as provided for in clause 190.


 771. Subclause 186(2) requires FWA to be satisfied that:


     . the agreement has been genuinely agreed to by employees
       (clause 188), except if it is a greenfields agreement;


     . in the case of a multi-enterprise agreement - the agreement has also
       been genuinely agreed to by each employer covered by the agreement
       and no person coerced, or threatened to coerce, any of the employers
       to make the agreement;


     . the terms of the agreement do not contravene the NES; and


     . the agreement passes the better off overall test (clause 193).


 772. The legislative notes at the end of subclause 186(2) set out
      references to the provisions dealing with genuine agreement, FWA
      approval of an agreement that does not pass the better off overall
      test and FWA approval of an agreement with undertakings.  The final
      note makes it clear that an agreement can supplement the NES as
      permitted by clause 55.


 773. The requirements relating to genuine agreement, the guarantee
      concerning the application of the NES and the operation of the better
      off overall test in relation to modern awards means that the safety
      net cannot be undermined by the terms of an enterprise agreement.


 774. An employee and employer may agree to an individual flexibility
      arrangement (clause 202) in accordance with the flexibility term of an
      enterprise agreement (such a term must require the employee to be
      better off overall as against the agreement - clause 203(4)).


 775. Subclause 186(3) provides that if the agreement does not cover all
      employees, the group of employees covered by the agreement must be
      fairly chosen.  There is no requirement that an agreement should cover
      all the employees of an employer.


 776. The effect of paragraph 186(3) is that where an agreement covers a
      group of employees that do not work in a geographically, operationally
      or organisationally distinct part of an employer's enterprise, FWA is
      required to assess whether the group covered by the agreement was
      fairly chosen.


 777. It is intended that in assessing whether the group of employees
      covered by the agreement is fairly chosen, FWA might have regard to
      matters such as:


     . the way in which the employer has chosen to organise its enterprise;
       and


     . whether it is reasonable for the excluded employees to be covered by
       the agreement having regard to the nature of the work they perform
       and the organisational and operational relationship between them and
       the employees who will be covered by the agreement.


 778. This subclause allows an agreement to cover a group of employees that
      is constituted in any fair and appropriate way (e.g., all the
      electricians employed by the employer or employers).


Illustrative example


A single employer operates five organisationally distinct units within its
enterprise.  The employer makes an agreement with all of the employees in
two organisationally distinct units, as well as ten employees who are the
only non-union members within from another organisational unit that has a
total of 30 employees.  FWA is required to decide whether the group of
employees covered by the agreement is fairly chosen.


In this example, the group of employees covered by the agreement is likely
to be unfair, particularly as the employees were unfairly chosen.


 779. Subclause 186(4) requires FWA to be satisfied that the agreement does
      not contain any unlawful terms (see clause 194).


 780. Paragraph 186(5)(a) requires FWA to be satisfied that an agreement
      specifies a nominal expiry date.  FWA will not be able to approve an
      agreement without a nominal expiry date.  The absence of such a term
      will require the employer to request employees to re-cast their vote
      on the agreement - which this time would need to include a nominal
      expiry date.


 781. Paragraph 186(5)(b) requires that the nominal expiry date must not be
      more than four years after the day on which FWA approves that
      agreement.  However, the nominal expiry date of agreements approved
      under clause 189 must not be more than two years after the day on
      which FWA approves the agreement (paragraph 189(4)(b)).  Clause 189
      allows FWA to approve agreements that do not pass the better off
      overall test if, because of exceptional circumstances, approval of the
      agreement would not be contrary to the public interest.


 782. Paragraph 186(6)(a) requires FWA to be satisfied that the agreement
      includes a term that provides a procedure that requires or allows FWA
      or another person independent of the persons covered by the agreement
      to settle disputes:


     . about any matters arising under the agreement; and


     . in relation to the NES.


 783. A disputes procedure could not, for example, provide for disputes to
      be resolved by:


     . the managing director of the employer; or


     . a disputes board made up of officials of a union covered by the
       agreement.


 784. Paragraph 186(6)(b) provides that the term of an agreement that
      provides a procedure for dealing with disputes must also allow for the
      representation of employees covered by the agreement when dealing with
      disputes.


 785. The legislative note following subclause 186(6) refers to
      subclause 739(2) and subclause 740(2) which provide that FWA or a
      person must not deal with a dispute about whether an employer had
      reasonable business grounds under certain provisions of the NES
      (subclause 65(5) or subclause 76(4)).


 786. However, an agreement could include a term providing for a right to
      flexible working arrangements separate to subclause 65(5).  The
      enterprise agreement may also provide for the agreement's disputes
      procedure to apply in respect of any such term.


Clause 187 - When FWA must approve an enterprise agreement - additional
requirements


 787. This clause sets out additional requirements that must be met before
      FWA approves an enterprise agreement (subclause 187(1)).


 788. Subclause 187(2) provides for an additional approval requirement where
      a scope order is in operation in relation to a proposed enterprise
      agreement, or enterprise agreement.  This subclause is intended to
      deal with the situation where a bargaining representative has made an
      application for FWA approval of an enterprise agreement that is not
      expressed to cover all the employees and employers specified in a
      scope order issued by FWA in relation to that agreement.  FWA may
      approve an enterprise agreement in that situation provided that it is
      satisfied that the approval of the agreement would not be inconsistent
      with or undermine good faith bargaining by one or more of the
      bargaining representatives.


 789. If (despite a scope order) the bargaining representatives have
      subsequently all agreed to make an agreement of a different scope,
      this may not undermine good faith bargaining.  However, if the
      employer has obtained employee approval for an agreement despite a
      scope order against the wishes of a group of employees who should have
      been covered (or excluded) as a result of the scope order, then this
      clause is likely to be triggered.


 790. Subclause 187(3) provides an additional approval requirement in
      relation to a multi-enterprise agreement that has been varied as
      mentioned in clause 184 (i.e., where the agreement was not approved by
      the employees of all the employers).


 791. Where a bargaining representative has varied the agreement as
      mentioned in clause 184, FWA must be satisfied that:


     . the agreement has been properly varied - see subclause 184(2); and


     . the bargaining representative that made the variation has given
       written notice to all the other bargaining representatives for the
       agreement in accordance with subclause 184(3).


 792. Subclause 187(4) provides that FWA must be satisfied that the
      provisions of Subdivision E must be complied with in relation to
      shiftworkers, pieceworkers, school-based apprentices and trainees and
      outworkers.


Clause 188 - When employees have genuinely agreed to an enterprise
agreement


 793. This clause sets out a non-exhaustive list of the matters for FWA to
      consider when determining whether an enterprise agreement has been
      genuinely agreed to by employees covered by the agreement.


 794. Paragraph 188(a) requires FWA to be satisfied that the employer or
      each of the employers has complied with the pre-approval steps
      (subclauses 180(2), (3) and (5)) and that the request for employees to
      approve the agreement was made at least 21 days after the day on which
      the employer provided the last employee with a notice of
      representational rights (subclause 181(3)).


 795. Paragraph 188(b) requires FWA to be satisfied that the agreement was
      made in accordance with clause 182 - the requirement that an agreement
      must be approved by the employees who will be covered by the
      agreement.


 796. Paragraph 188(c) provides that FWA must only approve an agreement if
      there are no other reasonable grounds to believe that the agreement
      was not genuinely agreed to by the employees.  FWA can refuse to
      approve an agreement where there are reasonable grounds to believe
      that the agreement has not been genuinely agreed to by the employees
      who will be covered by the agreement.


 797. In determining whether there are reasonable grounds for believing that
      the agreement has not been genuinely agreed to by employees, FWA may
      consider whether the agreement has been validly made in accordance
      with clause 182 (see, e.g., Construction Forestry Mining and Energy
      Union v Australian Industrial Relations Commission (1999) 93 FCR 317
      and the decision of the AIRC in Grocon Pty Ltd Enterprise Agreement
      (Victoria) (2003) 127 IR 13).


Clause 189 - FWA may approve an enterprise agreement that does not pass
better off overall test - public interest test


 798. This clause enables FWA to approve an enterprise agreement that does
      not pass the better off overall test if, because of exceptional
      circumstances, approval of the agreement would not be contrary to the
      public interest (subclause 189(2)).


 799. Subclause 189(1) provides that this clause applies where the only
      reason why FWA is not required to approve an agreement under
      clause 186 is that it does not pass the better off overall test.


 800. The legislative note following subclause 189(2) makes it clear that
      FWA may approve an agreement in exceptional circumstances with
      undertakings under clause 190 in relation to a concern about whether
      the agreement meets the approval requirements.


 801. Subclause 189(3) provides an example of a case in which FWA may
      approve an agreement under this clause.


 802. Subclause 189(4) provides that the nominal expiry date of an agreement
      approved under this clause is either the date specified in the
      agreement as its nominal expiry date, or two years after the day on
      which FWA approved the agreement, whichever is earlier.


Clause 190 - FWA may approve an enterprise agreement with undertakings


 803. This clause provides that FWA may approve an enterprise agreement with
      undertakings where the approval requirements in clause 186 and 187
      have not been met.


 804. Subclause 190(1) provides that this clause only applies if FWA has a
      concern that the agreement does not meet one or more of the
      requirements in clauses 186, 187 and 189.


     . For example, an enterprise agreement may contain a term that the
       employer will not approve requests for annual leave during the end
       of financial year accounts processing.


 805.  Subclause 88(2) provides that an employer must not unnecessarily
      refuse to agree to a request by an employee to take paid annual leave.
       FWA may be concerned that the term might breach clause 55 (which
      deals with the interaction of enterprise agreements and the NES)
      because it excludes subclause 88(2).  Paragraph 186(2)(c) requires FWA
      to be satisfied that the terms of an agreement do not contravene
      clause 55.  FWA might accept an undertaking from the employer that it
      will not unnecessarily refuse an employee's request to take paid
      annual leave at any time, including during the end of financial year
      accounts processing.  Note that the fact that the employer needs all
      employees to work at this time would be relevant to whether a refusal
      was unreasonable under subclause 88(2).


 806. Subclause 190(2) enables FWA to approve the agreement under clause 186
      or clause 189 where it is satisfied that the undertaking clarifies the
      intended operation of the agreement.


 807. Subclause 190(3) provides that FWA may only accept a written
      undertaking from one or more employers covered by the agreement if FWA
      is satisfied that the effect of accepting the undertaking is not
      likely to cause financial detriment to any employee covered by the
      agreement, or result in substantial changes to the agreement.  This
      enables FWA to accept an undertaking that addresses a concern it has,
      e.g., about whether an enterprise agreement passes the better off
      overall test under clause 193.

















Illustrative example


The EN & EM Surveillance Pty Ltd Enterprise Agreement 2011 covers 800
employees working in a local security business.  FWA has a concern that the
agreement may not pass the better off overall test for a group of 80
employees employed under the classification of Static Guard.  The agreement
would pass the better off overall test if the base rate of pay under the
agreement was increased by 23 cents per hour.  FWA may accept an
undertaking from the employer to pay the additional 23 cents an hour,
without putting the agreement out for a further approval process, because
it is not likely to cause financial detriment to any employee covered by
the agreement, and would not result in substantial changes to the
agreement.


FWA also has a concern that the EN & EM Surveillance Pty Ltd Enterprise
Agreement 2011 would not pass the better off overall test for employees
employed under the classification of Security Patrol Officers if those
employees were rostered to work on Sundays.  In this situation, FWA could
not accept an undertaking from the employer that those employees would no
longer be required to work on Sundays because such an undertaking is likely
to cause financial detriment to those employees as they would lose the
opportunity to work on Sundays for penalty rates.  This would change the
nature of the agreement and may have affected the way the employees chose
to vote on it.


 808. Subclause 190(4) requires FWA to seek the views of each person who FWA
      knows is a bargaining representative for the agreement before
      accepting an undertaking under subclause 190(3).  FWA cannot accept a
      unilateral undertaking made by an employer without seeking the views
      of each person it knows is a bargaining representative for the
      agreement.


 809. Subclause 190(5) provides that the undertaking must meet any
      requirements relating to the signing of undertakings that are
      prescribed by the regulations.


Clause 191 - Effect of undertakings


 810. This clause provides for the effect of an undertaking accepted by FWA
      under subclause 190(3).


 811. Where FWA accepts an undertaking under subclause 190(3) in relation to
      an agreement that covers a single employer, the undertaking is taken
      to be a term of the agreement (subclause 191(1)).


 812. Subclause 191(2) provides that where FWA accepts an undertaking under
      subclause 190(3) in relation to an agreement that covers two or more
      employers (whether or not single interest employers), the undertaking
      is taken to be a term of the agreement, as the agreement applies to
      each employer that gave the undertaking.  For example, FWA may accept
      an undertaking from two employers in relation to a multi-enterprise
      agreement that covers five employers.  The undertaking is taken to be
      a term of the agreement as it applies to those two employers but not
      in relation to the other three employers.


Clause 192 - When FWA may refuse to approve an enterprise agreement


 813. Subclause 192(1) provides that FWA may refuse to approve an agreement
      if it considers that compliance with the terms of the agreement may
      result in:


     . a person committing an offence against a law of the Commonwealth; or


     . the imposition of a pecuniary penalty on a person for a
       contravention of a Commonwealth law.


 814. Subclause 192(2) makes it clear that FWA may refuse to approve an
      agreement on this basis even if it would otherwise be required to
      approve the agreement under clause 186 or clause 189.


 815. Subclause 192(3) enables FWA to refer an enterprise agreement to any
      person or body it considers appropriate where it refuses to approve an
      agreement under this clause.


Subdivision C - Better off overall test


Clause 193 - Passing the better off overall test


 816. This clause provides when an enterprise agreement passes the better
      off overall test.


 817. Subclause 193(1) provides that an agreement that is not a greenfields
      agreement passes the better off overall if FWA is satisfied, as at the
      test time, that each award covered employee and each prospective award
      covered employee would be better offer overall if they were employed
      under the agreement than under the relevant modern award.


 818. Although the better off overall test requires FWA to be satisfied that
      each award covered employee and each prospective award covered
      employee will be better off overall, it is intended that FWA will
      generally be able to apply the better off overall test to classes of
      employees.  In the context of the approval of enterprise agreements,
      the better off overall test does not require FWA to enquire into each
      employee's individual circumstances.


























Illustrative example


Moss Hardware and Garden Supplies Pty Ltd makes an enterprise agreement to
cover approximately 1800 employees working at its national chain of retail
garden and hardware supplies outlets.  All of these employees are 'award
covered employees'.  The seven classifications under the agreement broadly
correlate to seven classifications under the relevant modern award.
Because there will be many employees within each classification under the
agreement and the agreement affects each employee within a classification
in the same way, FWA could group employees together when assessing the
employees against the better off overall test.  It is intended that FWA
could assess a hypothetical employee in each of the classifications under
the agreement against the relevant classification under the modern award.


If FWA were satisfied that the agreement affected each employee within the
classification in the same way, and that the agreement passed the better
off overall test for the hypothetical employee within the classification,
FWA could be satisfied that the agreement passed the better off overall
test for each award covered employee and prospective award covered employee
within that classification.


 819. Subclause 193(2) requires FWA to disregard any individual flexibility
      arrangement that has been agreed to by an award covered employee and
      his or her employer under the flexibility term of the relevant modern
      award when assessing whether that employee would be better off overall
      under the agreement.  It is envisaged that an employee and employer
      who have agreed to an individual flexibility arrangement under a
      modern award would take into account the terms of that arrangement
      when negotiating a proposed new agreement.  If the flexibilities set
      out in the arrangement were not included in the agreement, it would be
      open to an employee and employer, subject to the terms of the
      agreement, to agree to a similar individual flexibility arrangement
      under the flexibility term of the agreement.


 820. Subclause 193(3) provides that a greenfields agreement passes the
      better off overall if FWA is satisfied that each prospective award
      covered employee would be better off overall if the employee was
      employed under the agreement than under the relevant modern award.


 821. Subclause 193(4) defines an award covered employee.  Subclause 193(4)
      would provide that an award covered employee is an employee who, at
      the test time, is covered by the agreement and is covered by a modern
      award that is in operation and covers the employee's employer.  The
      modern award must cover the employee in relation the work that she or
      he is to perform under the agreement.


 822. The better off overall test refers to all award covered employees,
      including those that have been given a guarantee of annual earnings
      (as defined in clause 330).  This is because an employee that has been
      given a guarantee of annual earnings remains covered by a modern award
      even though the award ceases to apply to the employee where the annual
      rate of the guarantee exceeds the high income threshold (see clause
      328).


 823. Subclause 193(5) defines a prospective award covered employee as an
      employee who, if she or he were employed at the test time, would be
      covered by the agreement and would be covered by the relevant modern
      award that is in operation and covers the employer.  The relevant
      modern award would need to cover the employee in relation the work
      that she or he would perform under the agreement.


 824. The better off overall test also refers to prospective award covered
      employees because sometimes an agreement may cover classifications of
      employees in which no employees are actually engaged at the test time.
       Extending the application of the better off overall test to these
      types of employees guarantees the integrity of the safety net.  Note
      that where an agreement covers a large number of classifications of
      employees in which no employees are actually engaged there may be a
      question as to whether the agreement has been genuinely agreed - see
      clause 188.


Illustrative example


The Moss Hardware and Garden Supplies Pty Ltd Enterprise Agreement 2010
covers the classification of Assistant Store Manager.  At the test time for
the better off overall test, Moss Hardware and Garden Supplies Pty Ltd does
not employ any Assistant Store Managers.  However, it has recently
announced that it will restructure its staffing arrangements to introduce
this new position.  The Assistant Store Manager classification is covered
by the relevant modern award.  Assistant Store Managers employed after the
agreement commences operation would therefore be prospective award covered
employees.  FWA would need to be satisfied that the agreement passed the
better off overall test in respect of these persons.


 825. Subclause 193(6) defines the time at which the better off overall test
      is applied.  The better off overall test is a point in time test,
      which requires each award covered employee and prospective award
      covered employee to be better off overall at the test time.  The test
      time would be the time that a bargaining representative made the
      application for FWA approval of the agreement under clause 185.


Subdivision D - Unlawful terms


Clause 194 - Meaning of unlawful term


 826. This clause specifies the terms of an enterprise agreement that are
      unlawful terms.


 827. Paragraph 194(a) provides that a discriminatory term is an unlawful
      term.  The meaning of discriminatory term is set out in clause 195.


 828. Paragraph 194(b) provides that a term of an enterprise agreement is an
      unlawful term if it is an objectionable term (as defined in clause
      12).


 829. Paragraph 194(c) provides that a term of an enterprise agreement is an
      unlawful term if it gives an employee, who has not completed the
      minimum employment period (clause 383) and who would be protected from
      unfair dismissal under Part 3-2 after completing that period (clause
      382), an entitlement or remedy in relation to a termination of the
      employee's employment that is unfair (however described).


 830. For example, a term of an enterprise agreement would be unlawful if it
      purported to confer a remedy of reinstatement or damages on employees
      who were unfairly dismissed after at least three months of employment.
       As the minimum employment period is either six months for an employee
      who is working for an employer that is not a small business, or
      12 months for an employee who is working for an employer that is a
      small business, a term of an agreement cannot purport to confer an
      entitlement or remedy on an employee who has only completed a period
      of three months of employment.


 831. Paragraph 194(d) provides that a term of an enterprise agreement is an
      unlawful term if it excludes or modifies the application of the unfair
      dismissal provisions in Part 3-2.  An agreement may supplement the
      unfair dismissal provisions, but it cannot exclude or modify the
      application of those provisions in a way that is detrimental to a
      person.


 832. For example, a term of an agreement that purported to extend the
      minimum employment period to a period of 24 months would be an
      unlawful term because it modifies the application of Part 3-2 in way
      that is detrimental to the employee.  However, a term of an agreement
      might provide that the employer must not dismiss an employee for poor
      performance except in accordance with the employer's performance
      management procedure, as this term does not modify the application of
      the unfair dismissal provisions in a way that is detrimental to an
      employee.


 833. Paragraph 194(e) provides that a term of an enterprise agreement is an
      unlawful term if it is inconsistent with a provision of Part 3-3
      (Industrial action).  For example, a term that purported to authorise
      or allow industrial action prior to the nominal expiry date of the
      agreement would be an unlawful term.


 834. Paragraphs 194(f) and 194(g) provide that certain terms of an
      enterprise agreement dealing with right of entry are unlawful.


 835. Paragraph 194(f) provides that a term of an enterprise agreement is an
      unlawful term if it provides for an entitlement that is inconsistent
      with Part 3-4 in relation to:


 * entry to premises for a purpose referred to in clause 481, which deals
   with investigation of suspected breaches; or


 * entry to premises to hold discussions of a kind mentioned in clause 484.


 836. The right of entry framework provides balanced and appropriate
      processes and requirements for entry for these purposes that must be
      complied with.


 837. Paragraph 194(g) provides that a term of an enterprise agreement is an
      unlawful term if it provides for the exercise of a State or Territory
      OHS right (as defined in clause 494) otherwise than in accordance with
      the right of entry provisions in Part 3-4.


 838. It is intended that agreements can include terms allowing for union
      officials to enter the employer's premises for purposes other than
      those set out in paragraphs 194(f) and (g).  An agreement might, for
      example, provide an entitlement to enter the employer's premises for a
      range of reasons connected to the terms of the agreement, such as:


     . to assist with representing an employee under a term dealing with
       the resolution of disputes or consultation over workplace change; or




     . to attend induction meetings of new employees; or


     . to meet with the employer when bargaining for a replacement to the
       current agreement.


Clause 195 - Meaning of discriminatory term


 839. A discriminatory term is defined as a term of an enterprise agreement
      that discriminates against an employee covered by the agreement
      because of, or for reasons including, the employee's race, colour,
      sex, sexual preference, age, physical or mental disability, marital
      status, family or carer's responsibilities, pregnancy, religion,
      political opinion, national extraction or social origin
      (subclause 195(1)).


 840. Subclause 195(2) provides that a term of an enterprise agreement does
      not discriminate against an employee in the following circumstances:


     . if the reason for the discrimination is the inherent requirements of
       the particular position concerned (paragraph 195(2)(a));


     . merely because it discriminates, in relation to employment of the
       employee as a member of the staff of an institution that is
       conducted in accordance with the doctrines, tenets, beliefs or
       teachings of a particular religion or creed in good faith and to
       avoid injury to the religious susceptibilities of adherents of that
       religion or creed (paragraph 195(2)(b)).


 841. Subclause 195(3) provides that a term of an enterprise agreement does
      not discriminate against an employee merely because it provides for
      wages for:


     . all junior employees, or a class of junior employees; or


     . all employees with a disability, or a class of employees with a
       disability; or


     . all employees to whom training arrangements apply, or a class of
       employees to whom training arrangements apply (including apprentices
       and school-based apprentices).


Subdivision E - Approval requirements relating to particular kinds of
employees


Clause 196 - Shiftworkers


 842. This clause sets out an additional requirement for FWA approval of an
      enterprise agreement in relation to shiftworkers.


 843. Subclause 196(1) provides that this clause applies where an employee
      is covered by an enterprise agreement and a modern award that is in
      operation and covers the employee defines or describes the employee as
      a shiftworker for the purposes of the NES.


 844. Subclause 196(2) requires FWA to be satisfied that the agreement
      defines or describes the employee as a shiftworker for the purposes of
      clause 87, which deals with annual leave.  This would ensure that a
      shiftworker would receive five weeks annual leave for each year of
      service with his or her employer.  A shift worker would not be able to
      trade away his or her extra week of annual leave under the agreement.




Clause 197 - Pieceworkers - enterprise agreement includes pieceworker term


 845. This clause sets out an additional requirement for FWA approval of an
      enterprise agreement that contains a term defining or describing
      particular employees as pieceworkers where these employees would not
      be defined or described as pieceworkers under a modern award that
      covers them (subclause 197(1)).


 846. Subclause 197(2) provides that FWA must be satisfied, in determining
      whether to approve the agreement, that the effect of including a term
      that defines or describes an employee as a pieceworker is not
      detrimental to the employee in respect of entitlements of the employee
      under the NES.


Clause 198 - Pieceworkers - enterprise agreement does not include a
pieceworker term


 847. This clause sets out an additional approval requirement for enterprise
      agreements that do not define employees as pieceworkers where they are
      defined as such under a modern award that covers them (subclause
      198(1)).


 848. Subclause 198(2) provides that FWA must be satisfied, in determining
      whether to approve the agreement, that the effect of not including a
      term that defines or describes an employee as a pieceworker is not
      detrimental to the employee in respect of entitlements of the employee
      under the NES.


Illustrative example


Gita is employed as a grape harvester.  Under the relevant modern award,
Gita would be defined as a pieceworker.  If the award applied to determine
Gita's terms and conditions of employment, subclause 16(2) would have the
effect that Gita's base rate of pay for the purposes of the NES would be
the rate set out in the relevant modern award.  This would be relevant,
e.g., when calculating the rate at which Gita must be paid during paid
annual leave (subclause 90(1)).


Under the enterprise agreement that applies to Gita, she is not defined as
a pieceworker.  Instead, she has an hourly rate of pay.  FWA would need to
be satisfied that not defining Gita as a pieceworker under the agreement
for the purposes of the NES would not be detrimental to her.  For example,
it would be detrimental to her if the base rate of pay under the agreement,
which she would be paid at when taking paid annual leave under the NES, was
less than the base rate of pay set out for pieceworkers in her
classification under the relevant modern award.


Clause 199 - School-based apprentices and school-based trainees


 849. This clause sets out an additional requirement for FWA approval of an
      enterprise agreement in relation to school-based apprentices and
      school-based trainees covered by the agreement.


 850. Subclause 199(1) provides when this clause applies.  This clause
      applies where an employee who is a school-based apprentice or a school-
      based trainee is covered by an enterprise agreement and the agreement
      provides for the employee to be paid loadings in lieu of paid annual
      leave, paid personal/carer's leave or paid absence under Division 10
      of Part 2-2 (Public holidays).  The employee must also be covered by a
      modern award that is in operation and provides for school-based
      apprentices and school-based trainees to be paid loadings in lieu of
      paid annual leave, paid personal/carer's leave or paid absence under
      the public holiday entitlements of the NES.


 851. Subclause 199(2) requires FWA to be satisfied that the amount or rate
      of the loadings provided for in the agreement is not detrimental to
      the employee when compared to the amount or rate of annual leave,
      personal/carer's leave or absence on account of public holidays under
      the award.


Clause 200 - Outworkers


 852. This clause provides an additional requirement for FWA approval of an
      enterprise agreement in relation to outworkers.


 853. Subclause 200(1) provides that this clause applies if an employee is
      an outworker and the employee is covered by:


     . an enterprise agreement; and


     . a modern award that is in operation and includes outworker terms
       (clause 140).


 854. The definition of outworker terms in clause 140 is intended to cover
      only those terms that are specifically directed at outworkers.


 855. Subclause 200(2) requires FWA to be satisfied that the agreement
      includes outworker terms and that those terms are not detrimental to
      the employee when compared to the outworker terms of the modern award.
       If FWA considers that the outworker terms in the agreement are
      detrimental to the employee when compared to the outworker terms of
      the modern award, FWA would not be able to approve the agreement.


Subdivision F - Other matters


Clause 201 - Approval decision to note certain matters


 856. This clause sets out the matters that FWA must note in its decision to
      approve an enterprise agreement.  It is intended that FWA will publish
      approved enterprise agreements and the decisions approving them
      together.  Providing that these matters be noted in the decision will
      ensure that an employee who accesses a copy of the agreement and
      decision on the FWA website will be able to find a comprehensive
      record of the terms and conditions that apply.


 857. Subclause 201(1) provides that FWA must note in its decision to
      approve an agreement that the agreement includes either or both of the
      following;


     . the model flexibility term (subclause 202(4));


     . the model consultation term (subclause 205(2)).


It is intended that these model terms will be set out in the regulations.


 858. Subclause 201(2) provides when FWA must note in its decision to
      approve an agreement that the agreement covers an employee
      organisation.  If an employee organisation has given a notification
      under subclause 183(1) that the organisation wants the enterprise
      agreement to cover it and FWA approves the agreement, FWA must note in
      its decision to approve the agreement that it covers the organisation.


 859. Subclause 201(3) provides when FWA must note in its decision to
      approve an agreement that it has accepted an undertaking under
      subclause 190(3) and that the undertaking that is taken to be a term
      of the agreement.  Clause 191 provides that an undertaking is taken to
      be a term of the agreement, as the agreement applies to:


     . a single employer (subclause 191(1)); or


     . if the agreement covers two or more employers - each employer that
       gave the undertaking (subclause 191(2)).


Division 5 - Mandatory terms of enterprise agreements


Clause 202 - Enterprise agreements to include a flexibility term, etc.


 860. Subclause 202(1) requires an enterprise agreement to include a
      flexibility term which:


     . enables an employee and his or her employer to agree to an
       arrangement (an individual flexibility arrangement) varying the
       effect of the agreement in relation to the employee and the employer
       in order to meet the genuine needs of the employee and employer; and


     . complies with the requirements of clause 203.  The flexibility term
       must specify which terms of the enterprise agreement can be varied
       by an individual flexibility arrangement.











Illustrative example

Danae is employed full time as a graphic designer at Pax Designs Pty Ltd.
The Pax Designs Pty Ltd Enterprise Agreement 2010 enables an individual
flexibility arrangement to be made between the employer and its employees
in relation to the span of ordinary hours to be worked.


Danae has school aged children that she wishes to pick up from school two
days per week.  She negotiates an individual flexibility arrangement with
her employer that she will work longer hours three days per week, so that
she can leave at 3pm on the other two days to pick up her children.  Danae
will still work the equivalent of full time hours.


 861. Where there is an individual flexibility arrangement under a
      flexibility term in an enterprise agreement, the agreement has effect
      in relation to the employee and the employer as if it were varied by
      the flexibility arrangement and the arrangement is taken to be a term
      of the agreement.  This means, for example, that if an employer
      contravened a term of an individual flexibility arrangement the
      employer would contravene a term of the agreement - so the individual
      flexibility arrangement can be enforced as a term of the agreement.


 862. The individual flexibility arrangement does not change the effect the
      agreement has in relation to the employer and any other employee and
      does not have any other effect other than as a term of the agreement
      (subclause 202(3)).  For example, an individual flexibility
      arrangement would not have any effect as a contract in its own right
      or as a variation to an employee's contract of employment.


 863. The model flexibility term that is prescribed by the regulations will
      be taken to be a term of the agreement where an enterprise agreement
      does not include a flexibility term that complies with the
      requirements under clause 203 (subclause 202(4)).


 864. It is intended that the model term to be prescribed will be based upon
      the model flexibility term developed by the AIRC for inclusion in
      modern awards.  If FWA approves an enterprise agreement and the model
      flexibility term is taken to be a term of the agreement, FWA must note
      in its decision to approve the agreement that the model flexibility
      term is included in the agreement (subclause 201(1)).


Clause 203 - Requirements to be met by a flexibility term


 865. This clause provides the requirements that are to be met by a
      flexibility term.  Subclause 203(1) provides that a flexibility term
      must meet the requirements of the clause.


 866. Subclause 203(2) provides a content requirement for a flexibility
      term.  The flexibility term must set out the terms of the enterprise
      agreement which may be varied by an individual flexibility
      arrangement.  Which particular terms of the enterprise agreement may
      be varied will be a matter for bargaining.  The employer is required
      to ensure that an individual flexibility arrangement must only be
      about matters that would be permitted matters if the arrangement were
      an enterprise agreement.  Permitted matters are defined in
      subclause 172(1).  An individual flexibility arrangement must not
      include a term that would be an unlawful term as defined in
      clause 194.


 867. The flexibility term must require that the employee and the employer
      genuinely agree to any individual flexibility arrangement
      (subclause 203(3)).  Genuinely agree is not defined here and bears its
      ordinary meaning.  It must also  require the employer to ensure that
      any individual flexibility arrangement must result in the employee
      being better off overall than if there was no individual flexibility
      arrangement.  It is the employer's responsibility to ensure that this
      is the case (subclause 203(4)).


Illustrative example

Josh works as a membership consultant at a gymnasium.  Under the enterprise
agreement applying to his employment, the ordinary hours of work are 37 ½
hours each week to be performed in a span between 8am and 6pm each day.
Hours worked outside this span attract penalty rates.  Josh's employer
usually requires membership consultants to work from 9am to 5.30pm.


In his spare time, Josh coaches an under-12s footy team.  To do this, he
needs to be able to leave work at 4pm on Tuesdays and Thursdays each week.
He wants to start work at 7.30am on these days, but usually this would
attract a penalty under the terms of the agreement.  The agreement allows
the employer and an employee to make an individual flexibility arrangement
that varies the terms of the agreement dealing with hours of work and
penalty rates.


Josh approaches his employer and asks whether the employer will make an
individual flexibility arrangement with him under which the employer agrees
that Josh can work from 7.30am to 4pm on Tuesdays and Thursdays.  Josh
agrees that he will not be paid a penalty on these days, even though he
starts work at 7.30am.  Josh is genuinely happy to agree to this
arrangement because it enables him to balance his work and personal
commitments.  The employer agrees to this arrangement.


The employer must ensure that Josh is better off overall under the
individual flexibility arrangement than under the agreement.  Often this
will require the employer to make a comparison of the relevant financial
benefits that the employee would receive under the agreement, and the
agreement as varied by the individual flexibility arrangement.  In Josh's
case, however, he has agreed under the individual flexibility arrangement
to give up a financial benefit (penalty rates) in return for a non-
financial benefit (leaving work early).  It is intended that, in
appropriate circumstances, such an arrangement would pass the better off
overall test.  Because the better off overall test is being applied here to
an individual arrangement, it is possible to take into account an
employee's personal circumstances in assessing whether the employee is
better off overall.  Relevant factors in Josh's case that suggest the
individual flexibility arrangement is likely to pass the better off overall
test are:


      .     Josh initiated the request for the individual flexibility
arrangement, suggesting that he places significant value on being able to
leave work early to coach the footy team;


      .     Josh genuinely agreed to the arrangement;


      .     the period of time falling outside the span of hours is
relatively insignificant.  It is only one hour out of the 37 ½ hour
ordinary week that Josh works.


 868. Because the value that a particular employee may place on a non-
      monetary benefit is important, it is less likely that an employee
      would be better off overall where the employer has initiated a request
      to agree an individual flexibility arrangement under which the
      employee gives up a monetary benefit in exchange for a non-monetary
      benefit.  Similarly, it is less likely that an individual flexibility
      arrangement would result in an employee being better off overall where
      the monetary benefit given up by the employee had a substantial value,
      or if the value of the monetary benefit was, in the view of a
      reasonable person, disproportionate to the non-monetary benefit for
      which it was exchanged.


 869. Subclause 203(5) requires the employer to ensure that the flexibility
      term does not require that an individual flexibility arrangement must
      be consented to, or approved, by any other person.  For example, a
      flexibility term could not require that an individual flexibility
      arrangement only be made where a union or a majority of employees in
      an enterprise agree.  The only exception is where the employee is
      under 18 and a parent or guardian must sign the individual flexibility
      arrangement (subparagraph 203(7)(a)(ii)).


 870. The flexibility term must require the employer to ensure that any
      individual flexibility arrangement must be able to be terminated by
      either the employee or employer by giving written notice of not more
      than 28 days (paragraph 203(6)(a)).  Where both the employee and
      employer agree in writing to the termination of the individual
      flexibility arrangement, there is no requirement that 28 days' notice
      must be given and a termination can be made at any time
      (paragraph 203(6)(b)).  This provides protection for the employer and
      employee so that either is able to terminate an individual flexibility
      arrangement at any time, whether the other agrees or not.


 871. The flexibility term must require the employer to ensure that any
      individual flexibility arrangement must be in writing and signed by
      the employee and the employer (subparagraph 203(7)(a)(i)).  Where the
      employee is under 18 years the individual flexibility arrangement must
      be signed by a parent or guardian (subparagraph 203(7)(a)(ii)).  A
      copy of an individual flexibility arrangement must be given to the
      employee within 14 days after it is agreed (paragraph 203(7)(b)).


Clause 204 - Effect of arrangement that does not meet requirements of
flexibility term


 872. This clause provides for what happens when an employer and employee
      agree what they intend to be an individual flexibility arrangement,
      but the arrangement does not meet the requirements set out in
      clause 203.  The clause makes clear that the arrangement has effect as
      if it were an individual flexibility arrangement.


 873. This ensures that an employee retains any benefits that she or he is
      receiving under the arrangement.  If an employee believes she or he is
      being disadvantaged by the arrangement, the employee can unilaterally
      terminate the agreement with 28 days notice and bring action in a
      court for compensation and penalties for breach of the terms of the
      enterprise agreement.


 874. The legislative note under subclause 204(1) makes clear that certain
      failures to comply with clause 203 may contravene the general
      protections in Part 3-1.


     . For example, if an employer applied coercion to an employee to make
       an individual flexibility arrangement, the employee is unlikely to
       have genuinely agreed to the individual flexibility arrangement
       ((subclause 203(3)).


     . In addition, the employer may contravene clauses 343 and 344.
       Clause 343 prohibits the application of coercion to induce an
       employee not to exercise a workplace right (relevantly, the right to
       the benefit of the enterprise agreement).  Clause 344 relevantly
       prohibits the application of undue influence or undue pressure on an
       employee to compel them to enter into an individual flexibility
       arrangement.


Clause 205 - Enterprise agreements to include a consultation term, etc.


 875. This clause provides that an enterprise agreement must include a
      consultation term.


 876. A consultation term must require the employer(s) to which the
      agreement applies to consult the employees to whom the agreement
      applies about major workplace changes that are likely to have a
      significant effect on those employees.  The term must also allow for
      the representation of those employees during consultation
      (subclause 205(1)).  A person representing the employees could be an
      elected employee or a representative from an employee organisation.


 877. Where an enterprise agreement does not include such a consultation
      term, the model consultation term will be taken to be a term of the
      agreement.  If FWA approves an enterprise agreement and the model
      consultation term is taken to be a term of the agreement, FWA must
      note in its decision to approve the agreement that the model
      consultation term is included in the agreement (subclause 201(1)).


 878. The regulations may set out the model consultation term for enterprise
      agreements.  It is intended that this clause will be based on the
      consultation term developed by the AIRC for inclusion in modern
      awards.


Division 6 - Base rate of pay under enterprise agreements


Clause 206 - Base rate of pay under an enterprise agreement must not be
less than the modern award rate or the national minimum wage order rate
etc.


 879. This clause will ensure that the base rate of pay under an enterprise
      agreement cannot be less than the base rate of pay under either the
      modern award (the award rate) or a national minimum wage order (the
      employee's order rate) at any time during the life of the agreement.


 880. This clause protects an employee's minimum wage entitlement after FWA
      approves an enterprise agreement and the agreement commences
      operation, thus ensuring the integrity of the safety net.  In deciding
      whether or not to approve an enterprise agreement, FWA will consider
      the base rate of pay provided for by the agreement (the agreement
      rate) as part of the better off overall test.
      Subclauses 206(2) and (4) deal with the situation where the agreement
      rate falls below the award rate or the employee's order rate while the
      agreement is in operation.


 881. If FWA approves an enterprise agreement (under clause 186 or
      clause 190) that provides for a base rate of pay that is less than the
      award rate or employee's order rate, the employee would be entitled to
      a base rate of pay that is equal to the award rate or the employee's
      order rate on the day that the agreement commences operation.


 882. Subclauses 206(1) and 206(2) operate where an employee is covered by a
      modern award that is in operation.  If an enterprise agreement applies
      to the employee and the agreement rate is less than the award rate,
      the employee is entitled to be paid under the agreement at a rate
      equal to the award rate.


 883. Subclauses 206(3) and 206(4) operate where an enterprise agreement
      applies to an employee who is not covered by a modern award, and
      consequently, a national minimum wage order would determine the
      employee's base rate of pay if the agreement did not apply to the
      employee.  For those employees, if the agreement rate is less than the
      order rate, the employee is entitled to be paid under the agreement at
      a rate equal to the order rate.


 884. In these circumstances, the award or order rate is taken to be a term
      of the agreement and can be enforced as such.


Illustrative example


Min works in the hospitality industry as an assistant in a sandwich shop.
She is covered by the modern award for the hospitality industry.  In
negotiations for a proposed enterprise agreement, Min is told that she will
be entitled to $798.00 per week under the agreement but there will be no
annual wage increases.  At that time, Min is entitled to $744.80 per week
under the hospitality award.  The proposed enterprise agreement is approved
by a valid majority of employees at the sandwich shop and Min's employer
applies to have the agreement approved by FWA.  At the time that the
employer applied for approval of the agreement by FWA, Min would be better
off under the agreement than under the hospitality award.  Therefore, the
agreement would pass the better off overall test.  FWA approves the
agreement and it commences operation on 24 February 2010.  However, on
1 October 2012 the award rate is adjusted to $802.00 per week, and
therefore, the agreement rate falls below the award rate.  At this time,
Min would be entitled to $802.00 per week under the agreement.


Division 7-Variation and termination of enterprise agreements


Subdivision A - Variation of enterprise agreements by employers and
employees


Clause 207 - Variation of an enterprise agreement may be made by employers
and employees


 885. In general, the process for varying an enterprise agreement is the
      same as the process for making an enterprise agreement, with some
      minor modifications.


 886. The employees affected by a variation are:


     . the employees employed at the time when a proposed variation is made
       and who are covered by the agreement; and


     . the employees employed at the time who will be covered by the
       agreement if the proposed variation is approved by FWA.


 887. These employees are referred to as affected employees - see
      subclause 207(2).  In many instances, these two groups of employees
      will be the same.  However, this clause ensures that where the scope
      of the agreement changes as a result of the variation, all of the
      employees affected by the change decide whether to make the variation.


 888. Subclause 207(1) provides that an employer, if the agreement covers a
      single employer, or all of the employers, if the agreement covers two
      or more employers, can make a variation with affected employees.


 889. A variation to an agreement has no effect unless approved by FWA in
      accordance with clause 211 which sets out when FWA must approve a
      variation (subclause 207(3)).  A variation to a greenfields agreement
      can only be made if one or more of the employees necessary for the
      normal conduct of the enterprise concerned have been employed
      (subclause 207(4)).


 890. An agreement which did not pass the better off overall test, but which
      FWA approved under clause 189, cannot be varied by employers and
      employees under subclause 207(1).


Clause 208 - Employers may request employees to approve a proposed
variation of an enterprise agreement


 891. Subclause 208(1) provides that an employer covered by an enterprise
      agreement may request the affected employees to approve the proposed
      variation by voting for it.


 892. Subclause 208(2) makes clear that, among other methods of voting, the
      employer may request that the employees vote by ballot (secret or not)
      or by an electronic method.  The vote may also be conducted by a show
      of hands or by another method that demonstrates the employees' genuine
      agreement.


Clause 209 - When a variation of an enterprise agreement is made


 893. This clause states the point in time at which a variation is made.


 894. Subclause 209(1) provides that a variation to a single-enterprise
      agreement is made when the proposed variation is approved by a
      majority of the affected employees of an employer, or each employer
      covered by the agreement, who cast a valid vote for the proposed
      variation.


 895. Subclause 209(2) provides that a variation to a multi-enterprise
      agreement is made when the proposed variation is approved by a
      majority of the affected employees of each individual employer who
      cast a valid vote for the proposed variation.  The variation must be
      approved by the affected employees of each of the employers.  A
      variation of a multi-enterprise agreement is not made on an enterprise
      by enterprise basis (in contrast to the making of a multi-enterprise
      agreement - subclause 182(2)).


Clause 210 - Application for FWA approval of a variation of an enterprise
agreement


 896. If a variation of an enterprise agreement (whether single or multi-
      enterprise) is made, a person covered by the agreement must apply to
      FWA for approval of the variation (subclause 210(1)).  This could be
      an employer, employee or employee organisation covered by the
      agreement.


 897. The application must be accompanied by a signed copy of the variation
      and a copy of the agreement consolidated to include the variation and
      any declarations that are required by the procedural rules to
      accompany the application (subclause 210(2)).


 898. The application to FWA by the employer or employers must be made
      within 14 days after the variation is made (paragraph 210(3)(a)).  FWA
      would have discretion to extend this period if it considers that, in
      all the circumstances, it would be fair to do so
      (paragraph 210(3)(b)).


 899. The regulations may prescribe requirements relating to the signing of
      variations of agreements (subclause 210(4)).


Clause 211 - When FWA must approve a variation of an enterprise agreement


 900. This clause provides for when FWA must approve a variation of an
      enterprise agreement.  In general, the rules that apply to the
      approval of agreements apply equally to variations.  This clause
      applies those rules by reference, but makes some modifications to
      ensure that the rules work correctly when applied to the approval of
      variations.


 901. Subclause 211(1) provides that FWA must approve a variation if the
      following requirements in relation to the agreement as proposed to be
      varied are met:


     . FWA is satisfied that had an application been made under clause 185
       for the approval of the agreement as proposed to be varied, FWA
       would have been required to approve the agreement under clause 186.
       This would require FWA to be satisfied that the agreement was
       genuinely agreed to by the employees, the terms of the agreement did
       not contravene the NES (see clause 55) and the agreement passes the
       better off overall test.


     . FWA is satisfied that the group of employees covered by the
       agreement is fairly chosen, the agreement does not contain any
       unlawful terms, the agreement includes a term that provides a
       procedure for settling disputes and the provisions of Subdivision E,
       dealing with approval requirements relating to particular employees,
       are complied with.


     . FWA is satisfied that the agreement as varied does not specify a
       nominal expiry date of more than four years after the day on which
       FWA initially approved the agreement.


     . FWA considers it appropriate to approve the variation taking into
       account the views of the employee organisation, or organisations (if
       any), covered by the agreement.  For example, FWA may not approve a
       proposed variation if it imposes additional obligations on an
       employee organisation and the organisation did not want to agree to
       them.


 902. The legislative note under subclause 211(1) makes clear that a
      variation may be approved under this clause if a written undertaking
      has been provided to address FWA's concern that the variation does not
      meet the approval requirements.


 903. Subclause 211(2) provides that in deciding whether it is satisfied of
      the necessary requirements in order to approve a proposed variation,
      FWA is to take account of subclauses 211(3) and (4), which set out how
      the requirements for FWA approval would apply in relation to a
      variation.


 904. Subclause 211(3) modifies the requirements for FWA approval of a new
      enterprise agreement to ensure that FWA takes into account these
      provisions when deciding whether to approve a proposed variation.


 905. Subclause 211(4) modifies the requirements in clause 193 (which deals
      with the better off overall test).  The effect of these modifications
      is that a greenfields agreement as proposed to be varied (where
      employees have been employed) is assessed as if it were a non-
      greenfields agreement.


 906. Individual flexibility arrangements that have been agreed to under the
      terms of the agreement are to be disregarded by FWA in assessing
      whether the enterprise agreement as proposed to be varied passes the
      better off overall test (subclause 211(5)).


 907. Subclause 211(6) permits regulations to be made to ensure that further
      modifications can be made if subclauses 211(3) and (4) do not make all
      of the changes necessary to properly apply the approval requirements
      for a new agreement to the approval of an agreement as varied.


Clause 212 - FWA may approve an enterprise agreement with undertakings


 908. This clause provides that FWA may approve a variation of an enterprise
      agreement with undertakings.  It is of similar effect to clause 190.


Clause 213 - Effect of undertakings


 909. Subclause 213(1) provides that where FWA accepts an undertaking in
      relation to the variation, it is taken to be a term of the agreement,
      as it applies to the employer.


 910. Where an agreement covers two or more employers, subclause 213(2)
      provides that the undertaking is taken to be a term of the agreement,
      as it applies to each employer that gave the undertaking.


Clause 214 - When FWA may refuse to approve a variation of an enterprise
agreement


 911. Subclause 214(1) provides that FWA may refuse to approve a variation
      of an agreement if it considers that compliance with the terms of the
      agreement may result in:


     . a person committing an offence against a law of the Commonwealth; or


     . result in the imposition of a pecuniary penalty on a person for a
       contravention of a Commonwealth law.


 912. Subclause 214(2) makes it clear that FWA may refuse to approve an
      agreement as varied on this basis even if it would otherwise be
      required to do so under clause 211.


 913. Subclause 214(3) enables FWA to refer an agreement a proposed to be
      varied to any person or body it considers appropriate where it refuses
      to approve a variation of an agreement under this clause.


Clause 215 - Approval decision to note undertakings


 914. Clause 215 provides when FWA must note in its decision to approve a
      variation of an agreement that it has accepted an undertaking under
      subclause 212(3) and that the undertaking is taken to be a term of the
      agreement.  Clause 213  provides that an undertaking is taken to be a
      term of the agreement, as the agreement applies to:


     . a single employer (subclause 213(1)); or


     . if the agreement covers two or more employers - each employer that
       gave the undertaking (subclause 213(2)).


Clause 216 - When variation comes into operation


 915. This clause provides for when a variation of an enterprise agreement
      comes into operation.  If a variation is approved it operates from the
      day specified in the decision to approve the variation.


Subdivision B - Variations of enterprise agreements where there is
ambiguity, uncertainty or discrimination


Clause 217 - Variation of an enterprise agreement to remove ambiguity or
uncertainty.


 916. This clause provides for variations of enterprise agreements to remove
      ambiguity or uncertainty.

FWA can vary an enterprise agreement to remove an ambiguity or uncertainty
in the agreement.  An application may be made by one or more of the
employers covered by the agreement, an employee covered by the agreement or
an employee organisation covered by the agreement (subclause 217(1)).

 917. FWA would need to be satisfied that the agreement contains an
      ambiguity or uncertainty and then decide whether the ambiguity or
      uncertainty should be removed and, if so, how.


 918. If FWA varies the agreement, the variation operates from the day
      specified in the decision to approve the variation (subclause 217(2)).




Clause 218 - Variation of an enterprise agreement on referral by HREOC


 919. This clause provides that an enterprise agreement can be varied on
      referral by the HREOC.


 920. Subclause 218(1) provides that if an agreement is referred to FWA
      under section 46PW of the Human Rights and Equal Opportunity
      Commission Act 1986, it must review the agreement.  Section 46PW
      allows a person or a trade union to lodge a complaint with the HREOC
      alleging that a person has done a discriminatory act under an
      industrial instrument.


 921. The Sex Discrimination Commissioner is entitled to make submissions to
      FWA for consideration in the review (subclause 218(2)).


 922. If FWA considers that the agreement reviewed requires a person to do
      an act that would be unlawful under Part II of the Sex Discrimination
      Act 1984, but for the fact that the act would be done in direct
      compliance with the agreement, FWA must vary the agreement so that it
      no longer requires the person to do an act that would be unlawful
      (subclause 218(3)).  Part II of the Sex Discrimination Act 1984 sets
      out what is sex discrimination in work and in other areas and deals
      with sexual harassment.


 923. If the agreement is varied, the variation operates from the day
      specified in FWA's decision to vary the agreement (subclause 218(4)).




Subdivision C - Termination of enterprise agreements by employers and
employees


Clause 219 - Employers and employees may agree to terminate an enterprise
agreement


 924. This clause provides that employers and employees may agree to
      terminate an enterprise agreement at any time while the agreement is
      in operation.


 925. The employer, if the agreement covers a single employer, or all of the
      employers, if the agreement covers two or more employers (whether
      single interest employers covered by a single enterprise agreement, or
      employers covered by a multi-enterprise agreement), and the employees
      covered by the agreement may jointly agree to terminate an agreement.




 926. The legislative note under subclause 219(1) explains that a
      termination is agreed to when a majority of employees who cast a valid
      vote approve the termination.


 927. A termination of an agreement has no effect unless it is approved by
      FWA under clause 223, which sets out the requirements that FWA must be
      satisfied of in order to approve a termination (subclause 219(2)).


 928. Subclause 219(3) provides that the employer or employers and the
      employees are covered by an agreement can agree to terminate a
      greenfields agreement only if one or more of the persons who will be
      necessary for the normal conduct of the enterprise concerned have been
      employed.


Clause 220 - Employers may request employees to approve a proposed
termination of an enterprise agreement


 929. This clause provides that an employer may request employees to approve
      a proposed termination of an enterprise agreement.


 930. An employer covered by an agreement may request the employees covered
      by the agreement to approve the proposed termination by voting for it.


 931. Subclause 220(2) requires the employer, before making the request, to
      take all reasonable steps to notify the employees of:


     . the time and place at which the vote will occur; and


     . the voting method that will be used.


 932. The employer must also give the employees a reasonable opportunity to
      decide whether they want to approve the proposed termination
      (paragraph 220(2)(b)).  This may, for example, involve the employer
      allowing employees sufficient time between making the request and the
      time of the vote to consider the effect of the termination on their
      terms and conditions.


 933. Subclause 220(3) provides examples of the voting method that may be
      used.  Without limiting subclause 220(1), the employer may request
      that the employees vote by ballot (secret or not) or by an electronic
      method.


Clause 221 - When termination of an enterprise agreement is agreed to


 934. This clause provides for when a termination of an enterprise agreement
      is agreed to.


 935. Subclause 221(1) provides that in the case of a single-enterprise
      agreement, the termination is agreed to when a majority of the
      employees (taken as a group) who are covered by the agreement and who
      cast a valid vote approve the termination.


 936. Subclause 221(2) provides that in the case of a multi-enterprise
      agreement, the termination is agreed to when the employees covered by
      the agreement are asked to approve a proposed termination and a
      majority of the employees of each individual employer who cast a valid
      vote have approved the termination.


 937. If the termination is only approved by a majority of employees of
      some, but not all, the employers, FWA cannot approve the termination.
      It would be open to the employees and employer to negotiate a new
      single-enterprise agreement which would replace the multi-enterprise
      agreement (clause 58(3)).  The special rule in clause 58(3) provides
      that where a multi-enterprise agreement is replaced by a single
      enterprise agreement in relation to the same employment, the multi-
      enterprise agreement ceases to apply to the employee in relation to
      that employment.


Clause 222 - Application for FWA approval of a termination of an enterprise
agreement


 938. If a termination of an enterprise agreement has been agreed to, a
      person covered by the agreement must apply to FWA for approval of the
      termination (subclause 222(1)).  This would allow any employee,
      employer or employee organisation who is covered by the agreement to
      apply for FWA approval of the termination.


 939. The application to FWA must be accompanied by any declarations that
      are required by the procedural rules (subclause 222(2)).  The
      application must be made within 14 days after the termination is
      agreed to (paragraph 222(3)(a)).  FWA would have discretion to extend
      this period if it considers that, if in all the circumstances, it
      would be fair to do so (paragraph 222(3)(b)).


Clause 223 - When FWA must terminate an enterprise agreement


 940. This clause provides when FWA must terminate an enterprise agreement.
      If an application under clause 222 is made, FWA must approve the
      termination if it is satisfied that:


     . each employer complied with the requirement to take all reasonable
       steps to notify the employees of the time and place at which the
       vote for the termination would occur and the voting method that
       would be used, and each employer gave the employees a reasonable
       opportunity to decide whether they wanted to approve the proposed
       termination;


     . a majority of the employees (in the case of a single-enterprise
       agreement) and the majority of the employees of each individual
       employer (in the case of a multi-enterprise agreement) approved the
       proposed termination;


     . there are no other reasonable grounds for believing that the
       employees have not agreed to the termination; and


     . it is appropriate to approve the termination taking into account the
       views of the employee organisation or employee organisations covered
       by the agreement.


Clause 224 - When termination comes into operation


 941. This clause provides that if a termination of an enterprise agreement
      is approved by FWA under clause 223, the termination will operate from
      the date specified in the decision to approve the termination.


Subdivision D - Termination of enterprise agreements after nominal expiry
date


Clause 225 - Application for termination of an enterprise agreement after
its nominal expiry date


 942. This clause provides that if an enterprise agreement has passed its
      nominal expiry date, one or more of the employers, an employee or an
      employee organisation covered by the agreement may apply to FWA for
      termination of the agreement.


Clause 226 - When FWA must terminate an enterprise agreement


 943. This clause requires FWA to terminate an agreement if an application
      has been made under clause 225, if it:


     . is satisfied that it is not contrary to the public interest to do
       so; and


     . considers it appropriate to do so taking into account all the
       circumstances including the views of the employees, each employer,
       any employee organisations covered by the agreement and the
       circumstances of those employees, employers and organisations
       including the likely effect that the termination will have on them.


Clause 227 - When termination comes into operation


 944. This clause provides that if an agreement is terminated under
      clause 226, the termination operates from the day specified in the
      decision of FWA to terminate the agreement.


Division 8 - FWA's general role in facilitating bargaining


 945. Division 8 sets out FWA's role in facilitating the bargaining process.
       It lists the good faith bargaining requirements which bargaining
      representatives are required to meet when bargaining for a proposed
      single enterprise agreement or a multi-enterprise agreement in respect
      of which a low-paid authorisation is in operation.


 946. It is anticipated that most bargaining representatives will bargain
      voluntarily and cooperatively without the need for assistance or
      intervention from FWA.  In the occasional cases where this is not
      occurring, the Bill provides mechanisms for FWA to facilitate
      bargaining and, where necessary, make orders to ensure the integrity
      of the bargaining process.


 947. If a representative does not meet the good faith bargaining
      requirements, another bargaining representative may apply to FWA for a
      bargaining order.  A bargaining representative who fails to comply
      with a bargaining order may contravene a civil remedy provision
      exposing the bargaining representative to pecuniary penalties and
      other court orders.  If the non-compliance with the bargaining orders
      is serious and sustained, another bargaining representative may also
      apply for a serious breach declaration (see clause 235).  The
      consequence of a serious breach declaration is that FWA may make a
      bargaining-related workplace determination under clause 269.


 948. If an employer has not agreed to bargain with its employees, an
      employee bargaining representative may apply for a majority support
      determination.  If FWA determines that there is majority support for
      collective bargaining and an employer continues to not participate in
      bargaining, a bargaining representative for the employees may seek a
      bargaining order.  Where the agreement is a single-enterprise
      agreement not subject to a single interest employer authorisation, a
      bargaining representative may apply to FWA for a scope order to
      determine which classes or groups of employees are to be covered by a
      proposed enterprise agreement.


 949. Bargaining representatives may also apply to FWA for assistance in
      dealing with bargaining disputes under clause 240.  Where a low-paid
      authorisation is in operation in relation to the agreement, FWA may
      provide assistance on its own initiative under clause 246.


Subdivision A - Bargaining orders


Clause 228 - Bargaining representatives must meet the good faith bargaining
requirements


 950. Subclause 228(1) lists the good faith bargaining requirements that
      bargaining representatives are required to meet.  If a bargaining
      representative is not meeting the good faith bargaining requirements,
      another bargaining representative may seek an order from FWA to
      enforce compliance with the requirements.  The good faith bargaining
      requirements are:


     . attending, and participating in, meetings at reasonable times;


     . disclosing relevant information (other than confidential or
       commercially sensitive information) in a timely manner;


     . responding to proposals made by other bargaining representatives for
       the agreement in a timely manner;


     . giving genuine consideration to the proposals of other bargaining
       representatives for the agreement, and giving reasons for the
       bargaining representative's responses to those proposals; and


     . refraining from capricious or unfair conduct that undermines freedom
       of association or collective bargaining.


 951. The good faith bargaining requirements are generally self-explanatory.
       The last requirement, 'refraining from capricious or unfair
      conduct...' is intended to cover a broad range of conduct.  For
      example, conduct may be capricious or unfair conduct if an employer:


     . fails to recognise a bargaining representative;


     . does not permit an employee who is a bargaining representative to
       attend meetings or discuss matters relating to the terms of the
       proposed agreement with fellow employees;


     . dismisses or engages in detrimental conduct towards an employee
       because the employee is a bargaining representative or is
       participating in bargaining; or


     . prevents an employee from appointing his or her own representative.




 952. Subclause 228(2) makes it clear that the good faith bargaining
      requirements do not require a bargaining representative to make
      concessions during bargaining for the agreement or to enter into an
      agreement if they do not agree to its terms.  Paragraph 255(1)(a) also
      provides that FWA may not make an order requiring any particular
      content to be included or not included in a proposed enterprise
      agreement.


 953. The good faith bargaining requirements do not apply to the process of
      varying or terminating an enterprise agreement.


Clause 229 - Applications for bargaining orders


 954. Subclause 229(1) provides that only a bargaining representative may
      apply to FWA for a bargaining order in relation to a proposed
      enterprise agreement.  Bargaining orders are not available in relation
      to a proposed multi-enterprise agreement unless a low-paid
      authorisation is in operation in relation to the agreement
      (subclause 229(2)).


 955. Subclause 229(3) imposes conditions on the time when applications may
      be made for bargaining orders.  While bargaining for an enterprise
      agreement may occur at any time, this subclause ensures that if an
      existing enterprise agreement is in operation, no bargaining
      representative can be required to comply with the good faith
      bargaining requirements if it is more than 90 days before the nominal
      expiry date of the enterprise agreement, unless it is after an
      employer has requested the employees to approve the proposed
      agreement.  If there is no existing enterprise agreement in operation,
      an application may be made at any time.


 956. A bargaining representative may only apply for a bargaining order if
      the representative:


     . has concerns that the good faith bargaining requirements are not
       being met or if the bargaining process is not proceeding efficiently
       or fairly because there are multiple bargaining representatives for
       the agreement;


     . has given a written notice setting out those concerns to the
       relevant bargaining representatives; and


     . after giving them a reasonable time within which to respond,
       considers that the relevant bargaining representatives have not
       responded appropriately to those concerns (subclause 229(4)).


 957. In some instances, FWA may allow a bargaining order application even
      though the written notice of concerns has not been issued, if FWA is
      satisfied it is appropriate given all the circumstances
      (subclause 229(5)).  For example, if there is an application for a
      scope order before FWA, FWA may consider it appropriate in the
      particular circumstances to consider bargaining order applications at
      the same time and so not require the written notice of concerns to be
      issued.  FWA may also consider it appropriate to waive this
      requirement in a case where failure to urgently consider the matter
      may result in detriment or disadvantage to the application, e.g.,
      where an application for a bargaining order is made on the ground that
      an employee has been threatened with dismissal in breach of the good
      faith bargaining requirement in paragraph 228(1)(e) (refraining from
      capricious or unfair conduct that undermines freedom of association or
      collective bargaining).


Clause 230 - When FWA may make a bargaining order


 958. FWA may make a bargaining order in relation to a proposed enterprise
      agreement: if an application for a bargaining order has been made; the
      requirements under this clause are met; and FWA is satisfied that it
      is reasonable in all the circumstances to make the order.


 959. Prior to making a bargaining order, subclause 230(2) requires FWA to
      be satisfied that the employer or employers have agreed to bargain, or
      have initiated bargaining, for the proposed enterprise agreement.
      Alternatively, FWA must be satisfied that one of the following
      instruments is in operation in relation to the agreement
      (subclause 230(1)):


     . a majority support determination;


     . a scope order; or


     . a low-paid authorisation.


 960. To make a bargaining order, subclause 230(3) requires FWA to be
      satisfied either that a bargaining representative has not met the good
      faith bargaining requirements or that the bargaining process is not
      proceeding efficiently and fairly because there are too many
      bargaining representatives.


 961. In addition, FWA must be satisfied that the applicant has complied
      with the requirements to notify bargaining representatives in writing
      of their concerns (see subclause 229(4)), unless FWA had previously
      been satisfied that no notice was necessary.


Clause 231 - What a bargaining order must specify


 962. This clause makes clear what must be specified in a bargaining order
      and describes the kind of bargaining orders FWA may make in relation
      to a proposed enterprise agreement.  Effectively, a bargaining order
      must specify the actions to be taken by, and the requirements imposed
      upon, bargaining representatives for the purpose of any or all of the
      three categories described below.  FWA is granted the discretion as to
      the kinds of bargaining orders it may make so it can tailor the order
      appropriately to rectify any failure to meet the good faith bargaining
      requirements.


 963. First, the bargaining order can specify the actions required to ensure
      that the bargaining representatives meet the good faith bargaining
      requirements (see subparagraph 231(1)(a)).  For example, the order may
      specify the times and dates when the representatives must attend and
      participate in meetings.


 964. Secondly, it can specify the actions required to ensure the
      representatives specifically meet the good faith bargaining
      requirement of refraining from capricious or unfair conduct that
      undermines freedom of association or collective bargaining (see
      paragraphs 231(1)(b) and (c)).  For example, the order may specify
      that the employer must not terminate the employment of an employee if
      the termination would constitute capricious or unfair conduct
      undermining freedom of association (see paragraph 231(2)(c)).  Another
      example is that the order may require the reinstatement of an employee
      whose employment has been terminated if the termination constitutes,
      or relates to, a failure by a bargaining representative to meet this
      particular good faith bargaining requirement (see
      paragraph 231(2)(d)).  The order could also require an employer to pay
      an amount of compensation to the reinstated employee.  In such
      circumstances, clause 726 would prevent an employee seeking a remedy
      for the termination under another part of the Bill or under a State or
      Territory law.


 965. Thirdly, it can specify appropriate matters, actions or requirements
      to promote the efficient or fair conduct of bargaining in the event of
      their being multiple bargaining representatives (see
      paragraph 231(1)(d)).  For example, FWA may exclude a bargaining
      representative who is hindering or disrupting bargaining from
      participating in the process.  If the bargaining process is not
      proceeding efficiently because there are too many employee bargaining
      representatives, FWA may require the bargaining representatives for
      the proposed agreement to meet and appoint one of them to represent
      the others in bargaining (see paragraphs 231(2)(a) and (b)).


 966. Subclause 231(3) enables regulations to both prescribe the factors FWA
      may or must take into account in deciding whether or not to make a
      bargaining order for reinstatement of an employee and provide for FWA
      to take action and make orders in connection with, and to deal with
      matters relating to, a bargaining order of that kind.  It is proposed
      that regulations be made to make clear that FWA can make orders to
      require the repayment of lost wages to the employee and to ensure
      continuity of service for accrued entitlements.


Clause 232 - Operation of a bargaining order


 967. Clause 232 provides that a bargaining order comes into operation on
      the day on which it is made.  The order ceases to be in operation at
      the earliest to occur of the circumstances described in
      paragraph 232(b), namely: revocation, approval of an enterprise
      agreement by FWA, the making of a workplace determination by FWA or
      when the bargaining representatives agree that bargaining has ceased.


Clause 233 - Contravening a bargaining order


 968. A person to whom a bargaining order applies must not contravene a term
      of the order.


 969. This is clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Subdivision B - Serious breach declarations


Clause 234 - Applications for serious breach declarations


 970. This clause allows a bargaining representative for a proposed
      enterprise agreement to apply for a serious breach declaration.  The
      consequence of a serious breach declaration is that FWA may, in
      certain circumstances, make a bargaining-related workplace
      determination (see clause 269).


 971. It is intended that serious breach declarations would be made rarely
      and only as a last resort in the event that a bargaining
      representative has behaved in a manner that shows disregard for the
      bargaining obligations and that significantly undermines bargaining
      and where the framework of good faith bargaining orders has been
      demonstrated to have failed to bring about good faith bargaining.


Clause 235 - When FWA may make a serious breach declaration


 972. FWA may make a serious breach declaration in relation to a proposed
      enterprise agreement if an application is made and FWA is satisfied
      that:


     . a bargaining representative has contravened one or more bargaining
       orders in relation to the agreement;


     . the contravention(s) is serious and sustained and has significantly
       undermined bargaining for the agreement;


     . the other bargaining representatives have exhausted all other
       reasonable alternatives to reach agreement on the terms for the
       agreement;


     . agreement on the terms for the agreement will not be reached in the
       foreseeable future; and


     . it is reasonable in all the circumstances to make the declaration,
       taking into account the views of all the bargaining representatives
       for the agreement.


 973. Subclause 235(3) specifies the factors FWA must take into account when
      considering whether the representatives have exhausted all other
      reasonable alternatives to reach agreement on the terms for the
      proposed enterprise agreement.  These factors include:


     . whether FWA has provided assistance under clause 240 in relation to
       the agreement;


     . whether a bargaining representative has applied to a court for an
       order in relation to the contravention(s) of the bargaining order;
       and if so,


     . any findings or orders made by the court as a result.


 974. Subclause 235(4) sets out the form requirements for the serious breach
      declaration.  The declaration comes into operation on the day on which
      it is made and ceases when each employer specified in the declaration
      is covered by an enterprise agreement or a workplace determination
      (subclause 235(5)).


Subdivision C - Majority support determinations and scope orders


Clause 236 - Majority support determinations


 975. This clause allows a bargaining representative of an employee to apply
      to FWA for a determination that a majority of the employees who will
      be covered by the proposed enterprise agreement want to bargain with
      the employer - a majority support determination.  These determinations
      are only available in relation to proposed single-enterprise
      agreements.


 976. There is no penalty for contravening a majority support determination.
       If FWA determines that there is majority support for collective
      bargaining and an employer still refuses to bargain, the employee
      bargaining representative may seek a bargaining order to require the
      employer to bargain.


 977. The application for a majority support determination must specify the
      employers and the group of employees that will be covered by the
      proposed agreement (subclause 236(2)).


Clause 237 - When FWA must make a majority support determination


 978. This clause requires FWA to make a majority support determination if
      an application for the determination has been made and FWA is
      satisfied that:


     . a majority of the employees (employed at a time determined by FWA)
       who will be covered by the proposed agreement want to bargain
       (paragraph 237(2)(a));


     . the employer has not yet agreed to bargain, or initiated bargaining,
       for the agreement  (paragraph 237(2)(b)).  If bargaining has
       commenced in relation to a proposed enterprise agreement, the
       appropriate tool to resolve issues surrounding coverage are scope
       orders (or bargaining orders) and not majority support
       determinations.  This does not prevent employees of the employer who
       are not covered by the proposed agreement from applying for a
       majority support determination in relation to an agreement that will
       cover them;


     . if the agreement will not cover all the employees of the employer
       and the group of employees that will be covered by the agreement is
       not geographically, operationally or organisationally distinct, the
       group of employees was fairly chosen (paragraph 237(2)(c)); and


     . it is reasonable in all the circumstances to make the majority
       support determination (paragraph 237(2)(d)).


 979. It is at the discretion of FWA what method it uses to work out whether
      a majority of the employees want to bargain (subclause 237(3)).
      Methods might include a secret ballot, survey, written statements or a
      petition.  A majority support determination comes into operation on
      the day on which it is made (subclause 237(4)).


Clause 238 - Scope orders


 980. Subclause 238(1) allows a bargaining representative for a single
      enterprise agreement to apply for a scope order if the representative
      has concerns that bargaining for the proposed enterprise agreement is
      not proceeding efficiently or fairly because the agreement will not
      cover the appropriate employees, or will cover employees that is not
      appropriate for the agreement to cover.


 981. Subclause 238(2) prohibits a bargaining representative applying for a
      scope order in respect of: a multi-enterprise agreement (including one
      for which a low-paid authorisation is in operation) or a single
      enterprise agreement in respect of which a single-interest
      authorisation is in operation.


 982. A bargaining representative may only apply for a scope order if the
      representative:


     . has given a written notice to the relevant bargaining
       representatives setting out the concerns mentioned in
       subclause 238(1); and


     . has provided a reasonable time within which to respond to the
       concerns, and considers that the relevant bargaining representatives
       have not responded appropriately to the concerns.


 983. These same preconditions apply for bargaining orders (except that for
      bargaining orders, FWA has the ability to waive the requirement to
      give the written notice of concerns).  This requirement is included to
      encourage bargaining representatives to consider resolving issues
      surrounding the scope of a proposed enterprise agreement through the
      good faith bargaining process.  It also ensures that it is no more
      expedient to obtain a scope order rather than a bargaining order.


 984. Subclause 238(4) provides that FWA may make a scope order only if FWA
      is satisfied that:


     . the applicant bargaining representative has met or is meeting the
       good faith bargaining requirements;


     . making the order will promote the fair and efficient conduct of
       bargaining;


     . if the agreement will not cover all the employees of the employer
       and the group of employees that will be covered by the agreement is
       not geographically, operationally or organisationally distinct, the
       group of employees was fairly chosen; and


     . it is reasonable in all the circumstances to make the order.


 985. A scope order must specify the employer(s) and the employees or
      classes or group of employees that will be covered by the proposed
      enterprise agreement.  For example, a scope order may require an
      employer to include a class of employees in bargaining for a proposed
      agreement or exclude a class of employees from bargaining for an
      agreement.  Alternatively, a scope order may require an employer to
      bargain collectively with different classes of employees in relation
      to separate agreements.


 986. Subclause 238(7) provides that when FWA makes a scope order, it may
      also amend existing bargaining orders and make or vary other orders,
      determinations or other instruments made by FWA, or take other actions
      as it considers appropriate.  This ensures that FWA may vary a
      majority support determination rather than allow it to be inconsistent
      with a scope order.  Equally, FWA may extend the application of
      earlier bargaining orders issued in relation to bargaining for a
      proposed enterprise agreement, so that they continue to apply to the
      new proposed enterprise agreements as detailed in the scope orders.


Illustrative example


David's Debt Services (DDS) is refusing to bargain collectively with its
employees, who are in two Divisions - the Loans Division, and the Debt
Recovery Division.  Justine, a bargaining representative for the Debt
Recovery employees, obtains a majority support determination that a
majority of the employees at DDS want to bargain with the employer for a
proposed enterprise agreement.


DDS, Justine and the bargaining representative for the Loans Division
employees, Cath, commence negotiations.  However, the different interests
of the employees of the two Divisions mean that Justine and Cath cannot
agree on their negotiating strategy.


Two months after the determination is made DDS applies for a scope order
because it believes bargaining is not proceeding efficiently on the basis
it is more appropriate for it to bargain separately with the employees of
each Division.


FWA is satisfied that: DDS is meeting the good faith bargaining
requirements; making the order will promote the fair and efficient conduct
of bargaining; the two groups of employees are operationally distinct; and
it is reasonable in the circumstances to make the order.  FWA makes the
scope order specifying DDS and the Debt Recovery Division employees in one
proposed enterprise agreement, and DDS and the Loans Division employees in
another proposed enterprise agreement.  At the same time, FWA varies the
majority support determination so that it applies to what are now the two
proposed agreements.


Clause 239 - Operation of a scope order


 987. Clause 239 provides that a scope order comes into operation on the day
      on which it is made and ceases to be in operation at the earliest of
      the circumstances provided in paragraph 239(b).


 988. There is no civil remedy provision for contravention of a scope order.
       Instead, the consequence of contravening a scope order is that a
      bargaining representative risks having a bargaining order issued
      against it (contravening a bargaining order is a civil remedy
      provision).  Also, subclause 187(2) makes clear that prior to
      approving an enterprise agreement, FWA must be satisfied that the
      agreement would not be inconsistent with or undermine good faith
      bargaining for a proposed enterprise agreement in respect of which
      there is a scope order in operation.


Subdivision D - FWA may deal with a bargaining dispute on request


Clause 240 - Application for FWA to deal with a bargaining dispute


 989. A bargaining representative for a proposed enterprise agreement may
      apply to FWA for assistance if there is a dispute about the making of
      an enterprise agreement and it cannot be resolved by the bargaining
      representatives (subclause 240(1)).


 990. If the proposed enterprise agreement is a single-enterprise agreement
      or a multi-enterprise agreement in relation to which a low-paid
      authorisation is in operation, the application can be made by one
      bargaining representative without the agreement of the other
      bargaining representatives (subclause 240(2)).


 991. If the agreement is a multi-enterprise agreement for which a low-paid
      authorisation is not in operation, a bargaining representative may
      only make the application for assistance if all of the bargaining
      representatives for the agreement have agreed to the making of it
      (subclause 240(3)).

FWA may deal with the dispute by mediation or conciliation or by making a
recommendation or expressing an opinion (see clause 595).  FWA may
arbitrate the dispute only if the bargaining representatives have agreed to
it doing so (subclause 240(4)).

Division 9 - Low-paid bargaining


 992. Division 9 provides a framework to facilitate bargaining for multi-
      enterprise agreements for certain types of employees, being low-paid
      employees who either have not historically had access to collective
      bargaining or who face substantial difficulties in bargaining at the
      enterprise level.  These employees include, e.g., certain employees in
      the community services sector and the cleaning and child care
      industries.


 993. The Bill does not define low-paid employees.  Whether employees are
      'low-paid' will be a matter that FWA must consider having regard to
      all relevant circumstances when deciding whether to make a low-paid
      authorisation under clause 243.


 994. Access to the low-paid multi-enterprise bargaining stream will be
      limited to those employers and employees covered by a low-paid
      authorisation obtained from FWA.


 995. There are a number of matters that differentiate bargaining for a
      proposed multi-enterprise agreement in the low-paid bargaining stream
      from bargaining for a multi-enterprise agreement outside that stream.




 996. First, the good faith bargaining requirements apply to bargaining
      representatives in the low-paid stream and bargaining orders are
      available.  Secondly, FWA may act on its own initiative in order to
      facilitate bargaining in the low-paid stream.  Thirdly, where the
      bargaining representatives for an agreement in the low-paid stream are
      genuinely unable to reach agreement on some or all of the issues
      arising in bargaining, FWA may in certain circumstances make a low-
      paid workplace determination.


 997. The availability of this special stream of bargaining for a multi-
      enterprise agreement recognises the particular difficulties facing low-
      paid employees.  These difficulties are often particularly acute when
      the employees are trying to bargain collectively for the first time.
      The purpose of the low-paid authorisation is to limit access to the
      stream, and to the additional benefits associated with it, to those
      employers and employees who meet the criteria in clause 243.


 998. Although parties who are covered by an authorisation will be required
      to bargain in good faith, scope orders (under Division 8 of Part 2-4
      of this Bill) will not apply and parties will not be permitted to take
      protected industrial action in support of bargaining claims.


Clause 241 - Objects of this Division


 999. The objects of Division 8 are set out in clause 241.  They are:


     . to assist and encourage low-paid employees and employers, who have
       not historically had the benefits of collective bargaining, to make
       an enterprise agreement that meets their needs;


     . to assist low-paid employees and their employers to identify
       improvements to productivity and service delivery through bargaining
       for an enterprise agreement that covers two or more employers, while
       taking into account the specific needs of individual enterprises;


     . to address constraints on the ability of low-paid employees and
       their employers to bargain at the enterprise level, including
       constraints relating to a lack of skills, resources, bargaining
       strength or previous bargaining experience; and


     . to enable FWA to provide assistance to low-paid employees and their
       employers to facilitate bargaining for agreements.


1000. A legislative note indicates that a low-paid workplace determination
      may be made under Part 2-5 of this Act if a low-paid authorisation is
      in operation and the bargaining representatives for a proposed
      enterprise agreement are unable to reach agreement.


Clause 242 - Low-paid authorisations


1001. Clause 242 sets out the process for employers and employees to enter
      the low-paid bargaining stream.  The first requirement to enter the
      stream will be for applicants to obtain a low-paid authorisation from
      FWA.


1002. An application to FWA for a low-paid authorisation in relation to a
      proposed multi-enterprise agreement may be made by:


     . a bargaining representative for the agreement;


     . an employee organisation that is entitled to the represent the
       industrial interests of an employee in relation to work to be
       performed under the agreement.


1003. Bargaining representative is defined in clauses 176 and 177.


1004. A legislative note under paragraph 242(1)(b) indicates that employers
      who are covered by a low-paid authorisation are subject to certain
      rules in relation to a proposed enterprise agreement that would not
      otherwise apply.  This contemplates that, unlike multi-enterprise
      agreement making generally, employers specified in a low-paid
      authorisation will be obliged to bargain in good faith and will be
      required to give employees a notice of employee representational
      rights.


1005. Subclause 242(2) provides that an application made to FWA for a low-
      paid authorisation must specify:


     . the employers that will be covered by the agreement; and


     . the employees who will be covered by the agreement.


1006. An application would need to specify the names of each of the
      proposed employers.


1007. An application under clause 242 must not be made in relation to a
      proposed greenfields agreement (subclause 242(3)).


Clause 243 - When FWA must make a low-paid authorisation


1008. Clause 243 sets out the circumstances in which FWA must make a low-
      paid authorisation.


1009. FWA must make a low-paid authorisation in relation to a proposed
      multi-enterprise agreement if:


     . an application for the authorisation has been made; and


     . it is satisfied that it is in the public interest to make the
       authorisation, taking into account the matters in subclauses 243(2)
       and 243(3).


1010. Subclause 243(2) provides a number of matters that FWA must take into
      account when deciding whether to make a low-paid authorisation.  These
      matters relate to the historical and contemporary collective
      bargaining practices in the particular industry in which the
      authorisation is being sought.


1011. In assessing these matters, and whether to make an authorisation, FWA
      must be satisfied that the employees who will be covered by the
      authorisation are low-paid paid employees who either have not had
      access to collective bargaining or who face substantial difficulty
      bargaining at the enterprise level.


1012. The second limb of this test recognises that the low-paid stream is
      not confined to employees who have never been covered by a collective
      agreement or instrument before, although the applicant for the
      authorisation will need to show that such employees face substantial
      difficulty in bargaining at the enterprise level.

FWA will also be required to take into account the degree of commonality in
the nature of the enterprises to which the proposed agreement relates.  It
is more likely that bargaining in the low-paid stream will be in the public
interest where the enterprises concerned have a significant commonality of
issues - e.g., they are all employers providing similar services and
operating under a common funding arrangement with a government or are all
contracted to provide similar services to a single business..


1013. Subclause 243(3) provides a number of additional matters that FWA
      must have regard to in deciding whether to make a low-paid
      authorisation.  These matters relate to the likely success of the
      parties agreeing to an enterprise agreement if the authorisation is
      granted.  The matters that FWA is required to consider include:


        a) whether granting the authorisation would assist in identifying
           improvements to productivity and service delivery at the
           enterprises to which the agreement relates;


        b) the extent to which the likely number of bargaining
           representatives for the agreement would be consistent with a
           manageable collective bargaining process.  Although good faith
           bargaining orders can regulate the conduct of bargaining
           representatives, FWA may take the view that a large number of
           bargaining representatives will not facilitate fair and
           effective bargaining;


        c) the views of the employers and employees who would be covered by
           the authorisation;


        d) the extent to which the terms and conditions of employment of
           the employees who would be covered by the agreement is
           controlled, directed or influenced by a person other than the
           employer or employers that will be covered by the agreement;


        e) the extent to which the applicant for the authorisation is
           prepared to consider and respond reasonably to claims, or
           responses to claims, that may be made by a particular employer
           named in the application, if that employer later proposes to
           bargain for an agreement that:


            i) would cover that employer; and


           ii) would not cover the other employers specified in the
               application.


1014. Paragraph 243(3)(c) enables FWA to hear, for example, objections from
      individual employers and exclude them from the application before
      making a low-paid authorisation.  An employer could object to being
      covered by an authorisation, for example, on the basis that it has a
      history of successful collective bargaining arrangements (whether in
      the form of a certified agreement or informal above-award
      arrangements) or that the employer has been bargaining or is prepared
      to bargain for a single-enterprise agreement.


1015. Paragraph 243(3)(d) contemplates that, in some circumstances, FWA
      will be required to consider the level of control that a third party
      such as a head contractor or a government agency has, e.g., through
      funding or procurement, in determining the terms and conditions that
      can be offered under an agreement.


1016. The intention of paragraph 243(3)(e) is to prevent applicants from
      obtaining an authorisation where they are engaging in pattern
      bargaining, that is, they are insistent upon a common outcome and are
      not prepared to consider the needs and responses of each individual
      employer.  However, where, e.g., it can be demonstrated that an
      applicant is willing to consider claims or responses to claims made by
      an individual employer, the making of a common claim for multi-
      employer agreement that would not of themselves prevent an applicant
      from obtaining an authorisation.


1017. Subclause 243(4) sets out the information that FWA must specify in a
      low-paid authorisation.  This includes:


     . the employers that will be covered by the agreement.  This may be
       some or all of the employers specified in the application, as
       determined by FWA;


     . the employees that will be covered by the agreement.  This may be
       some or all of the employees specified in the application, as
       determined by FWA; and


     . any other matter prescribed by the FWA's procedural rules.


1018. Subclause 243(5) provides that a low-paid authorisation will come
      into operation on the day it is made.


Clause 244 - Variation of low-paid authorisations - general


1019. This clause enables FWA to vary a low-paid authorisation to remove or
      add an employer's name in certain circumstances.


1020. Subclauses 244(1) and (2) enable an employer who is specified in a
      low-paid authorisation to apply to FWA to have its name removed from
      that authorisation.


1021. FWA must vary the authorisation if it is satisfied that because of a
      change in the employer's circumstances, it is no longer appropriate
      for the employer to be specified in the authorisation.  For example,
      an employer may have made a single enterprise agreement with its
      employees.


1022. Subclauses 244(3) and (4) provide that an application to vary a low-
      paid authorisation to add the name of an employer that is not
      specified in the authorisation may be made by the following:


     . the employer;


     . a bargaining representative of an employee who will be covered by
       the proposed multi-enterprise agreement to which the authorisation
       relates;


     . an employee organisation that is entitled to represent the
       industrial interests of an employee in relation to work to be
       performed under that agreement.


1023. FWA must vary the authorisation to add the employer's name if it is
      satisfied that it is in the public interest to do so, taking into
      account the matters specified in subclauses 243(2) and (3).


Clause 245 - Variation of low-paid authorisations - enterprise agreement
etc.  comes into operation


1024. This clause provides that FWA is taken to have varied a low-paid
      authorisation to remove an employer's name when an enterprise
      agreement, or a workplace determination, that covers the employer
      comes into operation.  This recognises that not all of the employers
      covered by the authorisation may make an agreement or be covered by a
      workplace determination that is made under Part 2-8.  The remaining
      employers and their employees would continue to bargain.


Clause 246 - FWA assistance for the low-paid


1025. Clause 246 outlines the forms of assistance that FWA may provide to
      assist parties covered by an authorisation to bargain for a proposed
      multi-enterprise agreement.  In addition, the bargaining
      representatives for a proposed multi-enterprise agreement may ask FWA
      for assistance under clause 240.


1026. Subclause 246(1) provides that clause 246 applies when a low-paid
      authorisation is in operation in relation to a proposed multi-
      enterprise agreement.


1027. Subclause 246(2) provides that FWA may provide such assistance to the
      bargaining representatives as it considers appropriate in order to
      facilitate bargaining for an agreement.  FWA may provide this
      assistance on its own initiative.


1028. The type of assistance FWA may provide is limited to that it could
      provide if it were dealing with a dispute - e.g., mediation or
      conciliation (clause 595).  This assistance may include for example,
      convening conferences, helping to identify productivity improvements
      to underpin an agreement and generally guiding the parties through the
      negotiating process.  A legislative note under subclause 246(2) makes
      clear that FWA is not permitted to provide assistance under this
      clause in the form of arbitration.


1029. Subclause 246(3) makes clear that one form of assistance which FWA
      may provide under subclause 246(2) is to direct a person who is not an
      employer specified in an authorisation to attend a conference if FWA
      is satisfied that the participation of the person in bargaining is
      necessary for the agreement to be made.  This may be appropriate where
      a third party, such as a head contractor or a government agency, has
      control (either directly or indirectly) over the terms and conditions
      that can be offered under an agreement.


1030. Subclause 246(4) provides that subclause 246(3) does not limit FWA's
      powers under Part 5-1 (Fair Work Australia).


Division 10 - Single interest employer authorisations


1031. Single-enterprise agreements can be made by a single employer, or two
      or more employers all of which are single interest employers.  Where
      employers are related bodies corporate, or they are engaged in a joint
      venture or common enterprise, they will be single interest employers
      without the need to obtain an authorisation (see paragraph 172(5)).
      Other employers having a close connection with one another may be
      permitted to bargain for a single-enterprise agreement.  These
      employers must obtain a single interest employer authorisation, which
      FWA will only make if it is satisfied that the employers have the
      requisite close connection.  FWA may only make a single interest
      employer authorisation in limited circumstances.


1032. The types of employers that may apply for a single interest employer
      authorisation are franchisees, and, where approved by a Ministerial
      declaration, employers such as schools in a common education system
      and public entities providing health services.


1033. The employers specified in a single interest employer authorisation
      are each single interest employers.  Each employer is treated as
      separate employer in Part 2-4 (e.g., for the purposes of the pre-
      approval steps in clause 180).  For example, each employer is required
      to take reasonable steps to ensure that employees are given a copy,
      and have access to, the agreement during the access period (see
      subclause 180(2)).


Subdivision A - Declaration that employers may bargain together for a
proposed enterprise agreement


Clause 247 - Ministerial declaration that employers may bargain together
for a proposed enterprise agreement


1034. This clause enables the Minister to make a declaration that two or
      more employers may bargain together for a proposed enterprise
      agreement.  The employers specified in the declaration may apply to
      FWA for a single interest authorisation under clause 248.  FWA must
      make a single interest employer authorisation under subclause 249(3)
      if the Minister has issued a declaration under this clause in relation
      to a proposed enterprise agreement that specifies those employers.


1035. Subclause 247(1) enables two or more employers that will be covered
      by a proposed enterprise agreement to apply to the Minister for a
      declaration under subclause 247(3) that they may bargain together for
      the agreement.


1036. The legislative note following subclause 247(1) makes it clear that
      the employers named in a declaration may apply to FWA for a single
      interest employer authorisation.


1037. Subclause 247(2) provides that the application for a declaration
      under subclause 247(3) must specify the employers that will be covered
      by the agreement.  The term relevant employer is used to describe the
      employers that will be covered by the agreement.


1038. Subclause 247(3) gives the Minister the discretion to make a
      declaration that the relevant employers may bargain together for a
      proposed enterprise agreement, after considering specified criteria.
      However, the Minister may only make a declaration upon application by
      the relevant employers.  The declaration must be in writing.


1039. Subclause 247(4) sets out the matters that the Minister must take
      into account in deciding whether or not to make a declaration that two
      or more employers may bargain together for a proposed enterprise
      agreement.


1040. The matters that the Minister must take into account are:


     . the history of bargaining of each of the relevant employers,
       including whether they have previously bargained together;


     . the interests that the relevant employers have in common, and the
       extent to which those interests are relevant to whether they should
       be permitted to bargain together;


     . whether the relevant employers and their employees are governed by a
       common regulatory regime;


     . whether it would be more appropriate for each of the relevant
       employers to make a separate enterprise agreement with its
       employees;


     . the extent to which the relevant employees operate collaboratively
       rather than competitively;


     . whether the relevant employers are substantially funded, directly or
       indirectly, by the Commonwealth or a State or Territory; and


     . any other matter the Minister considers relevant.


1041. The categories of employers that might potentially be the subject of
      a declaration are those which receive a common source of funding, do
      not compete with each other and which conduct their workplace
      relations activities through a central body.  Categories of employers
      that may be considered in this context include:


     . public hospitals that are technically distinct employers, but have a
       high degree of coordination and common employment arrangements;


     . schools which share common employment arrangements and a common
       funding source and arrangements; and


     . school councils or parents and friends associations that are
       technically separate employers but who may employ additional staff
       to work within a single public school system.


1042. If the Minister decides to make a declaration, it must specify the
      relevant employers (i.e., the employers that will be covered by the
      agreement) (subclause 247(5)).  A Ministerial declaration made under
      subclause 247(3) is not a legislative instrument for the purposes of
      the Legislative Instruments Act 2003.


Subdivision B - Single interest employer authorisations


Clause 248 - Single interest employer authorisations


1043. This clause enables two or more employers to apply to FWA for a
      single interest employer authorisation in relation to a proposed
      enterprise agreement.

The legislative note at the end of subclause 248(1) explains the effect of
a single interest employer authorisation.  The note makes it clear that the
employers specified in a single interest employer authorisation are single
interest employers as mentioned in paragraph 172(5)(c).

1044. The application for a single interest employer authorisation must
      specify the employers and employees that will be covered by the
      agreement and, if applicable, the person that the employers nominate
      to make applications on behalf of the employers if the authorisation
      is made (see clause 254).


Clause 249 - When FWA must make a single interest employer authorisation


1045. This clause provides when FWA must make a single interest employer
      authorisation.

FWA must make a single interest employer authorisation if:

     . an application for the authorisation has been made (clause 248); and


     . FWA is satisfied that the employers that will be covered by the
       agreement have agreed to bargain together without being coerced by
       any person; and


     . the requirements of either subclause 249(2) or subclause 249(3) are
       met.


1046. Subclause 249(2) enables FWA to make a single interest employer
      authorisation in respect of two or more employers that are
      franchisees.  The employers must carry on similar business activities
      under the same franchise as franchisees of the same franchisor, or
      related bodies corporate of the same franchisor, or any combination
      the two.


1047. Franchisees specified in a single interest employer authorisation
      will be single interest employers for the purpose of making a single-
      enterprise agreement.  This is intended to clarify any uncertainty
      arising from the jurisprudence about whether franchisees are engaged
      in a 'common enterprise'.  The AIRC has previously found some
      franchisees to be engaged in a common enterprise (see, e.g.,
      McDonald's Australia Ltd v Shop, Distributive and Allied Employees
      Association (2004) 132 IR 165) and others not to be, in apparently
      similar circumstances (see, e.g., Re Bakers Delight Holdings Ltd
      (2002) 119 IR 20).


1048. Subclause 249(3) enables FWA to make a single interest employer
      authorisation if all of the employers specified in the application
      made under clause 248 are also specified in a Ministerial declaration
      made under clause 247 in relation to the agreement.  FWA is not
      required to assess whether or not the employers should be able to
      bargain together as single interest employers, as this decision will
      have been made by the Minister taking into account the matters set out
      in subclause 247(4).


1049. Subclause 249(4) provides for the operation of a single interest
      employer authorisation.  A single interest employer authorisation
      comes into operation on the day on which it is made.  It ceases to
      operate on the earlier of the following:


     . the day on which the enterprise agreement to which the authorisation
       relates is made;


     . 12 months after the day on which the authorisation is made, or if
       the period is extended under clause 251, at the end of that period.


1050. If a single-enterprise agreement is not made within 12 months after
      the day on which FWA made a single interest employer authorisation in
      relation to the agreement, the authorisation will cease to operate.
      This is intended to ensure that the authorisation only operates in
      relation to the proposed enterprise agreement for which it is made.
      Clause 251 enables a bargaining representative for the proposed
      agreement to apply to FWA to extend the period for which the
      authorisation is in operation.


Clause 250 - What a single interest employer authorisation must specify


1051. This clause provides the information that must be included in a
      single interest employer authorisation made by FWA in relation to a
      proposed enterprise agreement.


1052. Subclause 250(1) provides that a single interest employer
      authorisation must specify the employers and employees that will be
      covered by the agreement and, if applicable, the person that the
      employers nominate to make applications on behalf of the employers if
      the authorisation is made (see clause 254), and any other matter
      prescribed by the procedural rules.


1053. Subclause 250(2) makes it clear that the single interest employer
      authorisation need not specify all the employers set out in the
      application for the authorisation made under clause 248.  If FWA is
      satisfied that the matters referred to in subclauses 249(2) and (3)
      are met in relation some of the employers set out in the application,
      FWA may make a single interest authorisation specifying those
      employers and their employees only.


1054. For example, a mix of 30 wholly owned employers and franchisees of
      the same franchisor apply to FWA for a single interest employer
      authorisation.  If FWA is satisfied that the requirements of subclause
      249(2) (which deals with franchisees) are met only in relation to 28
      of those employers, the single interest employer authorisation would
      specify those 28 employers and their employees.


Clause 251 - Variation of single interest employer authorisations


1055. This clause provides for the variation of a single interest employer
      authorisation to add and remove employer names.


1056. Subclause 251(1) allows an employer specified in a single interest
      employer authorisation to apply to FWA to remove the employer's name
      from the authorisation.


1057.  FWA must vary the single interest employer authorisation to remove
      the employer's name if it is satisfied that, because of a change in
      the employer's circumstances, it is no longer appropriate for the
      employer to be specified in the authorisation (subclause 251(2)).


1058. Subclause 251(3) provides that an employer that is not specified in a
      single interest employer authorisation may apply to FWA for a
      variation of the authorisation to add the employer's name to the
      authorisation.


1059. FWA must vary a single interest employer authorisation to add an
      employer's name if it is satisfied that:


     . each employer specified in the authorisation has agreed to the
       variation;


     . no person coerced, or threatened to coerce, the employer to make the
       application to be specified to the authorisation; and


     . the requirements of subclause 249(2) and (3) are met (i.e., the
       employers satisfy the requirements in relation to franchisees or the
       Minister has made a declaration that the employers may bargain
       together for a proposed enterprise agreement).


Clause 252 - Variation to extend period single interest authorisation is in
operation


1060. This clause provides for the variation of a single interest employer
      authorisation to extend the 12 month period for which the
      authorisation is in operation (see subclause 250(2)).


1061. A bargaining representative for a proposed enterprise agreement to
      which a single interest employer authorisation relates may apply to
      FWA to vary the authorisation to extend the 12 month period for which
      the authorisation is in operation (subclause 252(1)).


1062. FWA may vary the authorisation to extend the period if FWA is
      satisfied that there are reasonable prospects that the agreement will
      be made if the authorisation is in operation for a longer period and
      it is appropriate in all the circumstances to extend the period
      (subclause 252(2)).


Division 11 - Other matters


Clause 253 - Terms of an enterprise agreement that are of no effect


1063. This clause provides that a term of an enterprise agreement has no
      effect to the extent that:


     . it is not a term about a permitted matter (see 172(1)); or


     . it is an unlawful matter.


1064. The legislative notes following subclause 253(1) refer to other
      clauses in the Bill which provide that a term of an enterprise
      agreement has no effect.  The notes make it clear that a term of an
      enterprise agreement has no effect if:


     . it contravenes clause 55 - see also clause 56; or


     . it permits or requires deductions or payments to be made, if those
       deductions or payments benefit the employer and are unreasonable in
       the circumstances - see clause 326.


1065. Subclause 253(2) makes it clear that the inclusion of a term has no
      effect because of subclause 253(1), clause 56 or clause 326, does not
      affect the validity of an enterprise agreement.


This clause is intended to clarify any uncertainty about the operation of
an enterprise agreement containing such terms as a result of the High Court
decision in Electrolux Home Products Pty Ltd v Australian Workers' Union
and others (2004) 221 CLR 239 (Electrolux) (see the discussion of this case
at the beginning of the Explanatory Memorandum relating to Part 2-4).


Clause 254 - Applications by bargaining representatives


1066. This clause provides who may make an application where a proposed
      enterprise agreement will cover two or more employers and this Part
      permits an application to be made by a bargaining representative of an
      employer for the agreement.  The persons who may make the application
      are set out in clause 254.


1067. Paragraph 254(2)(a) provides that if the agreement is a proposed
      single-enterprise agreement in relation to which a single interest
      employer authorisation is in operation, the application may be made by
      the person (if any) specified in the authorisation as the person who
      may make applications under this Bill (see subclause 250(1)).


1068. In any other case where an a proposed agreement will cover two or
      more employers, paragraph 254(2)(b) provides that a bargaining
      representative of an employer that will be covered by the agreement
      may make the application on behalf of the other bargaining
      representatives for the agreement if those bargaining representatives
      agree.


Clause 255 - Part does not empower FWA to make certain orders


1069. This clause provides that FWA is not empowered under this Part to
      make an order that requires, or has the effect of requiring:


     . particular content to be included or not included in a proposed
       enterprise agreement; or


     . an employer to request employees to approve a proposed enterprise
       agreement (see clause 181(1)); or


     . an employee to approve or not approve a proposed enterprise
       agreement.


1070. For example, FWA could not make an order that has the effect of
      requiring: 


     . a bargaining representative to make concessions in relation to a
       proposed enterprise agreement;


     . an employer to request employees to vote on a proposed agreement on
       or by a particular day; or


     . an employee to vote in favour of a proposed agreement (see also Part
       3-1 - General Protections).


1071. Subclause 255(2) provides that, despite paragraph 255(1)(a), FWA may
      make an order that particular content be included or not included in a
      proposed enterprise agreement if the order is made in the course of
      arbitration undertaken when dealing with a dispute under clause 240.
      The legislative note following subclause 255(2) reiterates that FWA
      may only arbitrate a dispute under clause 240 if arbitration has been
      agreed to by the bargaining representatives for the agreement.


Clause 256 - Prospective employers and employees


1072. This clause makes clear that a reference to an employer, or an
      employee, in relation to a greenfields agreement also refers to a
      person who may become an employer or an employee.


Clause 257 - Enterprise agreements may incorporate material in force from
time to time etc.


1073. This clause provides that an enterprise agreement may incorporate
      material contained in an instrument or other writing as in force at a
      particular time or as in force from time to time.


1074. An enterprise agreement may incorporate material contained in
      instruments or other writing such as modern awards or enterprise
      awards, State or Territory laws and workplace policies.


1075. This clause enables an agreement to incorporate, e.g., a workplace
      policy as in force on the day the agreement was made.  It also enables
      an agreement to incorporate material as in force from time to time so
      that if, for example, an agreement incorporates the terms of a modern
      award that is amended six months after the agreement commences
      operation the agreement will incorporate the amended award terms.




                     Part 2-5 - Workplace determinations


Overview


1076. The expectation is that in the overwhelming majority of cases
      bargaining will result in an enterprise agreement being submitted to
      FWA for approval.  However, in special or unusual cases, there will be
      capacity for FWA to determine terms and conditions, but only after
      specific requirements are met.  A workplace determination can only be
      made by a Full Bench of FWA.


1077. This Part provides for three kinds of workplace determinations.


1078. The first is a low-paid workplace determination, which is only
      available if there is a low-paid authorisation in operation in
      relation to a proposed multi-enterprise agreement and one or more of
      the bargaining representatives are unable to reach agreement on the
      terms of the proposed agreement.  Within this kind of determination,
      there are two categories namely, a consent low-paid workplace
      determination (if the bargaining representatives jointly apply for a
      determination) and a special low-paid workplace determination (for
      which a single bargaining representative may apply but which can only
      be made if additional requirements are met).


1079. The second type of workplace determination is an industrial action
      related workplace determination, which must be made by FWA if:
      protected industrial action has been terminated by FWA (under clause
      423 or 424) or by a Ministerial declaration (clause 431); and the
      representatives have not settled the matters at issue at the end of a
      negotiating period.


1080. The third type of workplace determination is a bargaining-related
      workplace determination, which must be made by FWA if a serious breach
      declaration has been made in relation to a proposed enterprise
      agreement and the representatives have not settled the matters at
      issue at the end of a negotiating period (clause 235).


Division 1 - Introduction


Clause 258 - Guide to this Part


1081. This clause provides a guide to this Part.


Clause 259 - Meanings of employee and employer


1082. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Division 2 - Low-paid workplace determinations


Clause 260 - Applications for low-paid workplace determinations


1083. An application may be made for a low-paid workplace determination
      under this clause if a low-paid authorisation is in operation in
      relation to a proposed multi-enterprise agreement and one or more of
      the bargaining representatives are unable to reach agreement about the
      terms that should be included in the agreement.


1084. There are two categories of low-paid workplace determinations -
      consent low-paid workplace determinations and special low-paid
      workplace determinations.


1085. Subclause 260(2) enables bargaining representatives of one or more of
      the employers that would have been covered by the proposed agreement
      and the bargaining representatives of the employees of those employers
      to jointly apply to FWA for a consent low-paid workplace determination
      to be made under clause 261.


1086. Subclause 260(3) provides that an application for a consent low-paid
      workplace determination must specify:


     . the bargaining representatives making the application;


     . the terms that the bargaining representatives have agreed should be
       included in the agreement;


     . the matters at issue at the time of the application;


     . the employers that have consented to being covered by the workplace
       determination;


     . those employers' employees who will be covered by the determination;
       and


     . each employee organisation (if any) that is a bargaining
       representative of those employees.


1087. Subclause 260(4) enables any bargaining representative for a multi-
      enterprise agreement for which there is a low-paid authorisation in
      operation to apply to FWA for a special low-paid workplace
      determination.  The application must specify the matters listed in
      subclause 260(5) (which are similar to those listed for consent low-
      paid workplace determinations in subclause 260(3)).


Clause 261 - When FWA must make a consent low-paid workplace determination


1088. Clause 261 provides that FWA must make a consent low-paid workplace
      determination if an application has been made and it is satisfied that
      the applicant bargaining representatives have made all reasonable
      efforts to agree on the terms that should be included in the agreement
      and there is no reasonable prospect of agreement being reached.
      Arbitration can only occur as a last resort when all reasonable
      attempts to reach an agreement have failed.





Clause 262 - When FWA must make a special low-paid workplace determination
- general requirements


Clause 263 - When FWA must make a special low-paid workplace determination
- additional requirements


1089. FWA must make a special low-paid workplace determination if an
      application has been made and FWA is satisfied that the general
      requirements set out in clause 262 and the additional requirements set
      out in clause 263 have been met.


1090. The general requirements in clause 262 are that:


     . the bargaining representatives are genuinely unable to reach
       agreement on the terms of the proposed enterprise agreement and
       there is no reasonable prospect of agreement being reached
       (subclause 262(2));


     . at the time of the application, the terms and conditions of the
       employees who will be covered by the determination were
       substantially equivalent to the minimum safety net of terms and
       conditions provided by modern awards together with the NES - in
       other words, the employees are paid at or just above the safety net
       (subclause 262(3));


     . the determination will promote: bargaining in the future for an
       enterprise agreement that will cover the employers and employees who
       will be covered by the determination; and productivity and
       efficiency in the enterprises concerned (subclause 262(4)); and


     .  it is in the public interest to make the workplace determination
       (subclause 262(5)).


1091. The additional requirements in clause 263 are that no employer that
      will be covered by the special low-paid workplace determination is:


     . specified in an application for a consent low-paid workplace
       determination (subclause 263(2));


     . covered (or has previously been covered) by an enterprise agreement,
       or another workplace determination, in relation to the work to be
       performed by the employees who will be covered by this determination
       (subclause 263(3)).


1092. Access to a special low-paid workplace determination is more
      restricted than access to a consent low-paid workplace determination.
      This is because the primary focus of the low paid stream is to
      encourage and assist parties to make their own agreements.  The
      availability of the special low-paid workplace determination
      recognises, however, that in very limited circumstances, where despite
      the best endeavours of the bargaining participants and FWA to conclude
      an agreement, the bargaining has failed.  It is only as a last resort,
      where there is no prospect of an agreement being made, that it may be
      appropriate for FWA to arbitrate an outcome in order to give employees
      access to collective bargaining for the first time and encourage and
      enable future bargaining by these employees.


Clause 264 - Terms etc.  of a low-paid workplace determination


1093. Subclause 264(1) provides that a low-paid workplace determination
      must include the following terms:


     . the core terms set out in clause 272;


     . the mandatory terms set out in clause 273;


     . the agreed terms, which for a low-paid workplace determination, are
       defined in subclause 274(1) to be the terms that the bargaining
       representatives for the proposed enterprise agreement had been able
       to agree should be included in the agreement at the time the
       application for the determination was made (subclause 264(2)); and


     . the terms that FWA considers deal with the matters at issue
       specified in the application for the determination (subclause
       264(3)).


1094. Subclause 264(4) provides that the determination must be expressed to
      cover the employers, employees and employee organisations (if any)
      that were specified in the application for the determination.


Clause 265 - No other terms


1095. This clause provides that a low-paid workplace determination must not
      include any terms other than those required by subclause 264(1).


Division 3 - Industrial action related workplace determinations


1096. The key prerequisite for the making of an industrial action related
      workplace determination is that protected industrial action has been
      terminated either because:


     . FWA was satisfied the action was causing, or threatening to cause,
       significant economic harm to the parties under clause 423;


     . FWA was satisfied the action was endangering life or causing
       significant damage to the Australian economy (among other things)
       under clause 424; or


     . the Minister made a declaration terminating the action under clause
       431.


These three actions are defined in this Division as being termination of
industrial action instruments.


Clause 266 - When FWA must make an industrial action related workplace
determination


1097. Subclause 266(1) provides that FWA must make an industrial action
      related workplace determination as quickly as possible after the end
      of the post-industrial action negotiating period if:


     . a termination of industrial action instrument has been made in
       relation to a proposed enterprise agreement; and


     . the bargaining representatives have not settled all of the matters
       that were at issue during bargaining for the agreement.


1098. Subclause 266(2) defines a termination of industrial action
      instrument as being either an order under clauses 423 or 424 or a
      Ministerial declaration under clause 431, terminating protected
      industrial action for the agreement.


1099. Subclause 266(3) defines the post-industrial action negotiating
      period as being the period that starts on the day on which the
      termination of industrial action instrument is made and ends either 21
      days after that day, or if FWA has extended the period under subclause
      266(4), then 42 days after that day.


1100. Subclause 266(4) requires FWA to extend the post-industrial action
      negotiating period if all of the bargaining representatives jointly
      apply to FWA for the extension within 21 days after the termination of
      industrial action instrument was made and those bargaining
      representatives have not settled all of the matters that were at issue
      during bargaining for the agreement.


Clause 267 - Terms etc.  of an industrial action related workplace
determination


1101. Subclause 267(1) provides that a low-paid workplace determination
      must include the following terms:


     . the core terms set out in clause 272;


     . the mandatory terms set out in clause 273;


     . the agreed terms which, for an industrial action related workplace
       determination, are defined in subclause 274(2) to be the terms that
       the bargaining representatives for the proposed enterprise agreement
       concerned had, at the end of the post-industrial action negotiating
       period, agreed should be included in the agreement (subclause
       267(2));


     . the terms that FWA considers deal with the matters that were still
       at issue at the end of the post-industrial action negotiating period
       (subclause 267(3)).


1102. Subclause 267(4) provides that the determination must be expressed to
      cover each employer and the employees that would be covered by the
      proposed agreement and each employee organisation (if any) that was a
      bargaining representative of those employees.


Clause 268 - No other terms


1103. Clause 268 provides that an industrial action related workplace
      determination must not include any terms other than those required by
      subclause 267(1).


Division 4 - Bargaining related workplace determinations


1104. The key prerequisite for the making of a bargaining related workplace
      determination is that FWA has made a serious breach declaration in
      relation to a proposed enterprise agreement under clause 235.  Subject
      to other criteria being met, FWA may make a serious breach declaration
      when a bargaining representative has contravened a bargaining order
      and the contravention is serious and sustained and has significantly
      undermined bargaining for the agreement.


Clause 269 - When FWA must make a bargaining related workplace
determination


1105. This clause provides that FWA must make a bargaining-related
      workplace determination as quickly as possible after the end of the
      post-declaration negotiating period if:


     . a serious breach declaration has been made in relation to a proposed
       enterprise agreement; and


     . the bargaining representatives have not settled all of the matters
       that were at issue during bargaining for the agreement.


1106. Subclause 269(2) defines the post-declaration negotiating period as
      being the period that starts on the day on which the serious breach
      declaration is made and ends either 21 days after that day, or if FWA
      has extended the period under subclause 269(3), then 42 days after
      that day.


1107. Subclause 269(3) requires FWA to extend the post-declaration
      negotiating period if all of the bargaining representatives jointly
      apply to FWA for the extension within 21 days after the serious breach
      declaration was made and those bargaining representatives have not
      settled all of the matters that were at issue during bargaining for
      the agreement.


Clause 270 - Terms etc.  of a bargaining related workplace determination


1108. Subclause 270(1) provides that a bargaining-related workplace
      determination must include the following terms:


     . the core terms set out in clause 272;


     . the mandatory terms set out in clause 273;


     . the agreed terms which, for a bargaining-related workplace
       determination, are defined in subclause 274(3) to be the terms that
       the bargaining representatives for the proposed enterprise agreement
       concerned had, at the end of the post-declaration negotiating
       period, agreed should be included in the agreement (subclause
       270(2)); and


     . the terms that FWA considers deal with the matters that were still
       at issue at the end of the post-declaration negotiating period
       (subclause 270(3)).


1109. Subclause 270(4) provides that if a serious breach declaration was
      made in relation to a proposed single enterprise agreement, the
      determination must be expressed to cover each employer and the
      employees that would be covered by the proposed agreement and each
      employee organisation (if any) that was a bargaining representative of
      those employees.


1110. Subclause 270(5) provides that if a serious breach declaration was
      made in relation to a proposed multi-enterprise agreement in respect
      of which a low-paid authorisation is in force and the bargaining
      representatives for one or more of the employers contravened the
      bargaining order, then the determination must be expressed to cover
      each of those employers, their employees who would have been covered
      by that agreement and each employee organisation that was a bargaining
      representative for those employees.


1111. Subclause 270(6) provides that if a serious breach declaration was
      made in relation to a proposed multi-enterprise agreement in respect
      of which a low-paid authorisation is in force and the bargaining
      representatives for one or more of the employees contravened the
      bargaining order, then the determination must be expressed to cover
      the employers of those employees if they are employers that would have
      been covered by that agreement, all of their employees and each
      employee organisation that was a bargaining representative for those
      employees.


Clause 271 - No other terms


1112. Clause 271 provides that a bargaining related workplace determination
      must not include any terms other than those required by clause 270.


Division 5 - Core terms, mandatory terms and agreed terms of workplace
determinations etc


Clause 272 - Core terms of workplace determinations


1113. This clause provides that the core terms a workplace determination
      must include are:


     . a term specifying a date as the determination's nominal expiry date,
       which must not be more than four years after the date on which the
       workplace determination comes into operation (subclause 272(2)); and


     . terms such that the determination, if it were an enterprise
       agreement, would pass the better off overall test under clause 193
       (subclause 272(4)).


1114. This clause further provides that a workplace determination must not
      include terms that would:


     . not be about permitted matters if the determination were an
       enterprise agreement (paragraph 272(3)(a));


     . be unlawful in an enterprise agreement (paragraph 272(3)(b)); or


     . if the determination were an enterprise agreement - means that FWA
       could not approve the agreement because either the term would
       contravene clause 55 (which deals with the relationship between the
       NES and enterprise agreements) or because of the approval
       requirements relating to particular kinds of employees set out in
       Subdivision E of Division 4 of Part 2-4 (subclause 272(5)).


Clause 273 - Mandatory terms of workplace determinations


1115. This clause provides that a workplace determination must include the
      following mandatory terms:


     . a term that provides a procedure for settling disputes about any
       matters arising under the determination and in relation to the NES
       (subclause 273(2));


     . the model flexibility term (subclause 273(4)); and


     . the model consultation term (subclause 273(5)).


1116. If FWA is satisfied that an agreed term for the determination would,
      if the determination were an enterprise agreement, deal with the
      mandatory term, then the mandatory term is not required to be included
      in the determination (subclause 273(3)).


Clause 274 - Agreed terms for workplace determinations


1117. This clause defines the agreed terms for each type of workplace
      determination.


Clause 275 - Factors FWA must take into account in deciding terms of a
workplace determination


1118. Clause 275 sets out the factors FWA must take into account in
      deciding which terms to include in a workplace determination.  These
      factors include the following:


     . the merits of the case (paragraph 275(a);


     . if the determination is a low-paid workplace determination, the
       interests of the employers and employees who will be covered by the
       determination, including ensuring that the employers are able to
       remain competitive;


     . for any other type of workplace determination, the interests of the
       employers and employees who will be covered by the determination
       (paragraph 275(c));


     . the public interest (paragraph 275(d));


     . how productivity might be improved in the enterprise(s) that would
       be covered by the determination (paragraph 275(e));


     . the extent to which the conduct of the bargaining representatives
       was reasonable during bargaining for the proposed enterprise
       agreement (paragraph 275(f));


     . the extent to which the bargaining representatives have complied
       with the good faith bargaining requirements (paragraph 275(g)); and


     . incentives to continue to bargain at a later time (paragraph
       275(h)).


Division 6 - Operation, coverage and interaction etc.  of workplace
determinations


1119. This Division contains the rules governing the operation, coverage
      and interaction of workplace determinations.  Workplace determinations
      generally operate and interact with other instruments as if they were
      enterprise agreements (clause 279).  This Division sets out this
      general rule, and some exceptions to it.


Clause 276 - When a workplace determination operates etc.


1120. A workplace determination operates from the day on which it is made
      (subclause 276(1)).


1121. Subclause 276 (2) provides that a workplace determination ceases to
      operate on the earlier of:


     . the day on which a termination of the determination comes into
       operation under clause 224 or clause 227 (which are clauses relating
       to the termination of enterprise agreements) as applied to the
       determination by clause 279; or


     . the day on which clause 278 (which deals with the interaction of a
       workplace determination with enterprise agreements and other
       determinations) first has the effect that the workplace
       determination does not apply to any employee.


1122. If a workplace determination has ceased to operate, it can never
      operate again.


Clause 277 - Employers, employees and employee organisations covered by a
workplace determination


1123. This clause provides that a workplace determination covers an
      employer, employee or employee organisation if the determination is
      expressed to cover them or if a provision of this Bill, an order of
      FWA made under a provision of this Bill or an order of a court
      provides, or has the effect, that the determination covers the
      employer, employee or organisation (subclause 277(2)).  A circumstance
      where the coverage of a workplace determination might be altered by a
      provision of the Bill is in transfer of business (Part 2-8).  A
      workplace determination that covered the old employer and its
      employees will (subject to further FWA order) cover the new employer
      in respect of transferring employees.


1124. However, a workplace determination will not cover an employer,
      employee or employee organisation if another provision of this Bill,
      an order of FWA made under another provision of this Bill or an order
      of a court provides that the determination does not cover the
      employer, employee or employee organisation (subclause 277(3)).
      Equally, a determination will not cover an employer, employee or
      employee organisation if the determination has ceased to operate
      (subclause 277(4)).


1125. Subclause 277(5) provides that a reference in this Bill to a
      workplace determination covering an employee is a reference to the
      determination covering the employee in relation to particular
      employment.


1126. These provisions are similar to the coverage provisions that apply to
      awards and agreements (see Part 2-1).


Clause 278 - Interaction of a workplace determination with enterprise
agreements etc.


1127. Subclause 278(1) provides that a workplace determination will cease
      to apply to an employee if an enterprise agreement that covers the
      employee in relation to the same employment comes into operation.


1128. Subclause 278(2) provides that a workplace determination will cease
      to apply to an employee if another workplace determination that covers
      the employee in relation to the same employment comes into operation.




Clause 279 - Act applies to a workplace determination as if it were an
enterprise agreement


1129. Clause 279 provides that, subject to certain exceptions, this Bill
      applies to a workplace determination as if it were an enterprise
      agreement that is in operation.  This means that other provisions of
      this Bill which affect an enterprise agreement in operation, such as
      the interaction of enterprise agreements with modern awards, also
      apply to workplace determinations.


1130. Subclause 279(2) sets out the following exceptions to the above rule
      in provisions of the Bill that deal with:


     . contraventions of enterprise agreements;


     . the coverage of enterprise agreements;


     . the operation of enterprise agreements;


     . the interaction between enterprise agreements;


     . the entitlement of an employee organisation to be covered by an
       enterprise agreement; and


     . the variation of enterprise agreements.


1131. In addition, subclause 279(3) provides that the provisions of
      Subdivision C of Division 7 of Part 2-4 which deals with the
      termination of enterprise agreements (by employers and employees) only
      apply to a workplace determination once the workplace determination
      has passed its nominal expiry date.


Division 7 - Other matters


Clause 280 - Contravening a workplace determination


1132. Clause 280 provides that a person must not contravene a term of a
      workplace determination.


1133. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Clause 281 - Applications by bargaining representatives


1134. This clause provides that if a provision of this Part permits an
      application to be made by a bargaining representative and the proposed
      enterprise agreement will cover more than one employer, then the
      application may be made by one bargaining representative on behalf of
      the other representatives if they have agreed to the application being
      made on their behalf (paragraph 281(2)(b)).  However, if there is a
      single interest employer authorisation in operation in relation to the
      proposed enterprise agreement, then the application may be made by the
      person (if any) specified in the authorisation as the person who may
      make applications under this Bill (paragraph 281(2)(a)).




                          Part 2-6 - Minimum  wages


Overview


1135. Under Part 2-6, FWA has responsibility for establishing and
      maintaining a safety net of fair minimum wages.  The new minimum wages
      system will comprise a number of key features:


     . Minimum wages will be guaranteed under modern awards and the
       national minimum wage order.


     . A specialist panel of FWA - the Minimum Wage Panel - will undertake
       an annual wage review each financial year, with adjustments in wage
       rates generally taking effect in the first pay period on or after
       1 July.  This timing is designed to ensure certainty and
       predictability for employers and employees.


     . In each annual wage review, FWA will review minimum wages in modern
       awards and the national minimum wage order.


     . As a result of an annual wage review, FWA will make any changes to
       minimum wages in modern awards that it considers necessary to ensure
       that modern awards provide a safety net of fair minimum wages.  FWA
       must also make a new national minimum wage order in each annual wage
       review setting a national minimum wage, special national minimum
       wages and a casual loading for award/agreement free employees.


     . Employees to whom a modern award applies - including junior
       employees, employees to whom a training arrangement applies and
       employees with a disability - will receive the minimum wage rates
       specified in the award.  In exercising its powers to set, vary or
       revoke modern award minimum wages in an annual wage review, FWA will
       be required to take account of the national minimum wage that it
       proposes to set as part of the annual wage review.


     . Employees to whom an enterprise agreement applies will receive the
       rates of pay specified in the agreement.  However, these rates of
       pay must at least be equal to the base rate of pay that they would
       receive under the relevant modern award (where the employee is
       covered by a modern award) or the base rate of pay payable that they
       would receive under the national minimum wage order (where the
       employee is not covered by a modern award).


1136. The annual wage review is the primary means by which wages are set
      and adjusted by FWA.  In addition to its role in maintaining the
      safety net of fair minimum wages under Part 2-6, FWA also has capacity
      to vary minimum wages in modern awards under Part 2-3 (in limited
      circumstances).


1137. However, under Part 2-3, FWA will be able to set new minimum wages in
      awards (where appropriate) and will be able to provide for other
      aspects of employees' remuneration (such as incentive-based payments,
      bonuses, overtime rates, penalty rates, allowances and leave
      loadings).


Division 1 - Introduction


Clause 282 - Guide to this Part.


1138. This clause provides a guide to this Part.


Clause 283 - Meanings of employee and employer


1139. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Division 2 - Overarching provisions


Clause 284 - The minimum wages objective


1140. Clause 284 sets out the minimum wages objective and when it applies.




1141. The minimum wages objective requires FWA to establish and maintain a
      safety net of fair minimum wages, taking into account the following
      factors:


     . the performance and competitiveness of the national economy,
       including productivity, business competitiveness and viability,
       inflation and employment growth;


     . promoting social inclusion through increased workforce
       participation;


     . relative living standards and the needs of the low paid;


     . the principle of equal remuneration for work of equal or comparable
       value; and


     . providing a comprehensive range of fair minimum wages to junior
       employees, employees to whom training arrangements apply and
       employees with a disability.


1142. The minimum wages objective applies to the performance or exercise of
      FWA's functions and powers under this Part (which deals with setting,
      varying or revoking minimum wages in an annual wage review).  The
      minimum wages objective also applies when FWA performs or exercises
      its functions or powers under Part 2-3 (Modern awards) to set, vary or
      revoke modern award minimum wages (subclause 284(2)).  The note to
      this subclause points out that the modern awards objective is also
      relevant when FWA is setting, varying or revoking modern award minimum
      wages.  The modern awards objective is described in clause 134.


1143. Subclause 284(3) defines modern award minimum wages.  Modern award
      minimum wages are the rates of minimum wages in modern awards,
      including:


     . wage rates for junior employees, employees to whom training
       arrangements apply and employees with a disability;


     . casual loadings; and


     . piece rates.


1144. The definition of modern award minimum wages does not include
      incentive-based payments, bonuses, overtime rates, penalty rates,
      allowances and leave loadings.  These components of remuneration can
      be included in modern awards under Part 2-3.


1145. The Bill draws a distinction between setting and varying minimum
      wages.  The distinction ensures that it is clear when FWA may exercise
      its powers to set or vary modern award minimum wages - in particular
      its powers to vary such rates.  The powers of FWA are described
      further later in the notes in relation to this Part.


1146. Subclause 284(4) defines the meaning of setting and varying modern
      award minimum wages.  The setting of modern award minimum wages means
      the initial setting of one or more new modern award minimum wages in a
      modern award, either in the modern award as originally made or by a
      later adjustment of the modern award.  The varying of modern award
      minimum wages means the varying of the current rate of one or more
      existing modern award minimum wages.


Division 3 - Annual wage reviews


1147. This Division provides for the conduct of annual wage reviews.
      Annual wage reviews are conducted by a specialist panel of FWA - the
      Minimum Wage Panel (see clause 617).


1148. The minimum wages objective applies to the conduct of annual wage
      reviews.


Subdivision A - Main provisions


Clause 285 - Annual wage reviews to be conducted


1149. Clause 285 sets out FWA's obligations in conducting annual wage
      reviews.


1150. Subclause 285(1) requires FWA to undertake and complete an annual
      wage review in each financial year.


1151. Subclause 285(2) sets out what FWA must do in undertaking an annual
      wage review:


     . FWA is required to review modern award minimum wages (as defined in
       subclause 284(3)) and may make one or more determinations to set,
       vary or revoke modern award minimum wages.


     . FWA must also review the national minimum wage order and must make a
       new national minimum wage order in each annual wage review.  (The
       national minimum wage order applies to award/agreement free
       employees.)


1152. In exercising its power in an annual wage review to set, vary or
      revoke modern award minimum wages, FWA is required by the minimum wage
      objective to take into account the rate of the national minimum wage
      that it proposes to set in its national minimum wage order
      (subclause 285(3)).


1153. Provisions relevant to the conduct of annual wage reviews are also
      contained in Division 2 of Part 5-1 (Fair Work Australia).  For
      example, clause 617 requires annual wage reviews to be conducted by a
      Minimum Wage Panel and includes provisions in relation to the
      constitution of the Minimum Wage Panel (subclauses 620(1) and (2)).
      Division 2 of Part 5-1 also allows the President of FWA to issue
      directions about the conduct of an annual wage review (see
      clause 582).


Clause 286 - When annual wage review determinations varying modern awards
come into operation


1154. Clause 286 provides that a determination affecting modern award
      minimum wages that is made in an annual wage review comes into
      operation on 1 July in the next financial year, unless FWA is
      satisfied that there are exceptional circumstances that justify
      deferring its operation in relation to a particular situation.  Any
      deferral must be limited to the particular situation to which the
      exceptional circumstances relate.


1155. Changes to modern award minimum wages apply to particular employees
      from the employees' first full pay period after the determination
      comes into operation.  This is designed to ensure the practical
      implementation of wage variations.

The Bill also provides for the operation of determinations made under Part
2-3 (Modern awards) (see clause 166).


Clause 287 - When national minimum wage orders come into operation


1156. Clause 287 provides that a national minimum wage order that is made
      in an annual wage review comes into operation on 1 July in the next
      financial year.  There is no scope provided for deferral of national
      minimum wage orders.


1157. A national minimum wage order determination applies to a particular
      employee from the employee's first full pay period after it comes into
      operation on 1 July.  This is designed to ensure the practical
      implementation of wage variations.


Subdivision B - Provisions about conduct of annual wage reviews


Clause 288 - General


1158. Clause 288 explains that provisions relevant to the conduct of annual
      wage reviews are contained in this Subdivision and Part 5-1 (Fair Work
      Australia).  These provisions include:


     . The President may issue directions about the conduct of the review
       (clause 582).


     . FWA may inform itself in manner it considers appropriate, including
       by conducting or commissioning research (clause 590).





Clause 289 - Everyone to have a reasonable opportunity to make and comment
on submissions


1159. Clause 289 requires FWA to ensure that all persons and bodies have a
      reasonable opportunity to make written submissions for consideration
      in each annual wage review (subclause 289(1)).  FWA must publish all
      submissions and ensure that all persons and bodies have a reasonable
      opportunity to make comments to FWA on those submissions for
      consideration in the annual wage review (subclause 289(2)).
      Publication may occur on FWA's website or by any other appropriate
      means (subclause 289(3)).


1160. Clause 289 is designed to ensure openness and transparency in the
      conduct of annual wage reviews by ensuring that written submissions
      are published and all persons and bodies have a reasonable opportunity
      to comment on those submissions.  This is consistent with the general
      objective of the Bill that FWA perform its functions and exercise its
      powers in an open and transparent manner (see clause 577(c)).


Clause 290 - President may direct investigations and reports


1161. Clause 290 provides that the President of FWA may give a direction
      under clause 582 requiring that a matter be investigated, and that a
      report about the matter be prepared, for consideration in an annual
      wage review.


1162. A direction can be given to the Minimum Wage Panel, a Minimum Wage
      Panel Member, or a Full Bench that includes at least one Minimum Wage
      Panel Member (paragraph 290(2)(a)).  Unless the direction is given to
      the Minimum Wage Panel, the report by a Minimum Wage Panel Member or a
      Full Bench must be given to the Minimum Wage Panel
      (paragraph 290(2)(b)).


1163. This mechanism is designed to provide the President with the
      flexibility to direct a targeted investigation into an award-specific
      issue, or broader wage issues for a specific group of employees - such
      as junior employees or employees in a particular industry - outside
      the main annual wage review process, the outcome of which can then be
      considered in the context of the next annual wage review.


Clause 291 - Research must be published


1164. Clause 291 requires FWA to publish, on its website (or otherwise),
      any research that it undertakes or commissions for the purpose of an
      annual wage review so that submissions can be made addressing issues
      covered by the research.  This provision is designed to ensure an open
      and transparent decision-making process.


Clause 292 - Varied wage rates must be published by 1 July


1165. Where FWA varies modern award minimum wages in an annual wage review,
      clause 292 requires that FWA publish the new rates before 1 July in
      the next financial year (subclause 292(1)).


1166. The publishing may be on FWA's website or by any other means it
      considers appropriate (subclause 292(2)).


1167. An explanatory note reminds readers that, under subclause 168(1), FWA
      is also required to publish the modern award as varied as soon as
      practicable.


1168. These provisions are included to assist compliance with award
      obligations.


Division 4-National minimum wage orders

1169. Division 4 contains provisions about the operation of national
      minimum wage orders.  National minimum wage orders apply to
      award/agreement free employees.


Clause 293 - Contravening a national minimum wage orders


1170. Clause 293 prohibits an employer from contravening a national minimum
      wage order.


1171. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies)


Clause 294 - Content of national minimum wage order - main provisions


1172. Clause 294 sets out the content of a national minimum wage order and
      identifies the employees to whom such an order applies.


1173. Subclause 294(1) provides that the national minimum wage order must
      set:


     . the national minimum wage for award/agreement free employees;


     . special national minimum wages for all award/agreement free
       employees who are junior employees, employees to whom training
       arrangements apply or employees with a disability; and


     . the casual loading for award/agreement free employees.


1174. Subclause 294(2) provides that the national minimum wage order must
      require employers to pay employees at least the applicable base rates
      of pay, and casual loading as applied to base rates of pay.


1175. Subclause 294(3) provides that the national minimum wage applies to
      all award/agreement free employees who are not junior employees, or
      employees to whom training arrangements apply or employees with a
      disability.


1176. Subclause 294(4) provides that a special national minimum wage
      applies to the employees to whom the order is expressed to apply.
      Special national minimum wages can only apply to award/agreement free
      employees who are junior employees, employees to whom training
      arrangements apply or employees with a disability.  A special national
      minimum wage may apply to all such employees or to a class of such
      employees.


1177. The following definitions are relevant to whether a special national
      minimum wage applies to an award/agreement free employee:


     . a junior employee means an employee who is under 21;


     . a training arrangement means a combination of work and training that
       is subject to a training agreement, or a training contract, that
       take effect under a law of a State or Territory relating to the
       training of employees; and


     . an employee with a disability means an employee who is qualified for
       a disability support pension as set out in section 94 or 95 of the
       Social Security Act 1991, or who would be so qualified but for
       paragraph 94(1)(e) or 95(1)(c) of that Act (these paragraphs
       restrict eligibility for disability support pensions according to
       criteria associated with Australian residency).


Clause 295 - Content of national minimum wage order - other matters


1178. Clause 295 requires the national minimum wage and special national
      minimum wages to be expressed in a way that produces a monetary amount
      per hour, and a casual loading to be expressed as a percentage
      (subclause 295(1)).


1179. The order may also include terms about how the order, or any of the
      requirements in it, will apply in particular circumstances (subclause
      295(2)).  For example, the order may include terms about hours that
      count as hours of work for the purposes of the national minimum wage
      order (this may be relevant where an employee is 'on call' and there
      may otherwise be uncertainty about whether the employee is 'at work').




Clause 296 - Variation of national minimum wage order to remove ambiguity
or uncertainty or correct error


1180. Clause 296 prevents a national minimum wage order from being varied
      except to remove ambiguity or uncertainty or to correct an error.  Nor
      can it be revoked.  FWA must publish any such variation as soon as
      practicable, on its website or otherwise.  Clauses 297 and 298 are
      also relevant to variations made under this clause.


Clause 297 - When determinations varying national minimum wage orders come
into operation


1181. Subclause 297(1) provides that a determination varying a national
      minimum wage order to remove ambiguity, uncertainty or to correct an
      error comes into operation on the day specified in the determination.




1182. Subclause 297(2) requires that the day specified in the determination
      must not be earlier than the day on which the determination is made,
      unless FWA is satisfied that there are exceptional circumstances to
      justify specifying an earlier day - e.g., where an ambiguity is
      causing significant confusion about the correct implementation of a
      national minimum wage order.  (Clause 298 makes provision about the
      consequences of variation determinations in such cases.)


1183. Subclause 297(3) provides that a determination starts to apply to a
      particular employee from the start of the employee's next full pay
      period.


Clause 298 - Special rule about retrospective variations of national
minimum wage orders


1184. Clause 298 ensures that a person who has contravened a term of the
      national minimum wage order or an enterprise agreement due to a
      retrospective amendment of a national minimum wage order under
      subclause 297(2) is not liable to pay a pecuniary penalty in respect
      of the contravention.


Clause 299 - When a national minimum wage order is in operation


1185. Clause 299 provides that a national minimum wage order operates until
      replaced by the next national minimum wage order.




                        Part 2-7 - Equal remuneration


1186. This Part allows FWA to make equal remuneration orders to ensure
      equal remuneration for men and women workers for work of equal or
      comparable value.


Division 1 - Introduction


Clause 300 - Guide to this Part


1187. This clause provides a guide to this Part.


Clause 301 - Meanings of employee and employer


1188. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Division 2 - Equal remuneration orders


Clause 302 - FWA may make an order requiring equal remuneration


1189. Clause 302 allows FWA to make any order it considers appropriate to
      ensure that there will be equal remuneration for men and women workers
      for work of equal or comparable value in relation to the employees to
      whom the order will apply (subclauses 302(1) and (2)).


1190. The term remuneration encompasses entitlements in addition to wages
      (i.e., it encompasses wages and other monetary entitlements).


1191. The principle of equal remuneration for men and women workers for
      work of equal or comparable value requires there to be (at a minimum)
      equal remuneration for men and women workers for the same work carried
      out in the same conditions.  However, the principle is intentionally
      broader than this, and also requires equal remuneration for work of
      comparable value.  This allows comparisons to be carried out between
      different but comparable work for the purposes of this Part.
      Evaluating comparable worth (for instance between the work of an
      executive administrative assistant and a research officer) relies on
      job and skill evaluation techniques.


1192. The Bill also removes the current requirement for the applicant to
      demonstrate (as a threshold issue) that there has been some kind of
      discrimination involved in the setting of remuneration.  Instead, an
      applicant must only demonstrate that there is not equal remuneration
      for work of equal or comparable value.


1193. Subclause 302(3) provides that an equal remuneration order may only
      be made upon application by an employee to whom the order will apply;
      an employee organisation entitled to represent the industrial
      interests of an employee to whom the order will apply; or the Sex
      Discrimination Commissioner.


1194. Subclause 302(4) sets out particular matters that FWA must take into
      account in deciding whether to make an equal remuneration order.  This
      subclause requires FWA to take into account orders and determinations
      made by the Minimum Wage Panel in annual wage reviews and the reasons
      for those orders and determinations.


1195. Subclause 302(5) clarifies that an equal remuneration order may only
      be made if FWA is satisfied that there is not equal remuneration for
      work of equal or comparable value in relation to the employees to whom
      the order will apply.


Clause 303 - Equal remuneration order may increase, but must not reduce,
rates of remuneration


1196. Clause 303 ensures that FWA may increase, but not reduce, employees'
      rates of remuneration by an equal remuneration order.  This means, for
      example, that FWA could not reduce the higher rates of remuneration of
      a male (or predominately male) comparator group to bring the rates
      into line with the lower rates of remuneration of female employees
      subject to the application.


Clause 304 - Equal remuneration order may implement equal remuneration in
stages


1197. Clause 304 allows increases to remuneration determined under an equal
      remuneration order to be phased in over an appropriate period of time
      if FWA considers that it is not feasible to implement the whole
      increase when the order comes into operation.


Clause 305 - Contravening an equal remuneration order


1198. Clause 305 provides that an employer must not contravene a term of an
      equal remuneration order.


1199. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Clause 306 - Inconsistency with modern awards, enterprise agreements and
orders of FWA


1200. Clause 306 deals with the relationship between an equal remuneration
      order and modern awards, enterprise agreements and other orders of
      FWA.  Under the provision, a term of one of these instruments has no
      effect to the extent that it is inconsistent with a term of an equal
      remuneration order.




                       Part 2-8 - Transfer of business


Overview


1201. This Part contains the rules that apply when there is a transfer of
      business from one national system employer to another.  Broadly, the
      effect of the rules is to provide that enterprise agreements and
      certain modern awards that covered employees of the old employer
      continue to cover those employees if they are offered and accept
      employment with the new employer.  The rules also provide for the
      effect of a transfer of business on guarantees of annual earnings
      given under Part 2-9 (Other terms and conditions of employment).


1202. Part 2-2 sets out the effect of a transfer of business on employees'
      entitlements under the NES.


1203. This Part applies when there is a particular type of connection
      between two employers (the old employer and new employer), the new
      employer agrees to employ some or all employees of the old employer
      and there has been no significant change to the work performed by
      those employees.  The types of connection between employers which may
      result in there being a transfer of business include the sale and
      purchase of all or part of a business, certain outsourcing and in-
      sourcing arrangements and where the two employers are associated
      entities (as defined in clause 12).


1204. The circumstances in which a transfer of business occurs under Part 2-
      8 are broader than those contemplated by the current transmission of
      business provisions contained in Part 11 of, and Schedule 9 to, the
      WR Act.


1205. The WR Act provisions are based on earlier provisions construed by
      the High Court in PP Consultants Pty Ltd v Finance Sector Union of
      Australia (2000) 201 CLR 648 and Minister for Employment and Workplace
      Relations v Gribbles Radiology Pty Ltd (2005) 222 CLR 194.  In
      deciding whether there has been a transmission of business between
      private sector entities for the purposes of the WR Act, courts and
      tribunals have examined the character of the business (or part) in the
      hands of both the old employer and the new employer - where the
      character of the business is the same, there is likely to be a
      transmission of business.  There must also be a succession, assignment
      or transmission of 'a business' - that is, some assets (tangible or
      intangible) must move between the old employer and the new employer.


1206. Although the provisions of this Part use the term transfer of
      business, they are not intended to require the focus under current
      Part 11 of the WR Act on what the 'business' of the old employer is
      and whether the new employer has in some way taken over that
      'business'.  They instead focus on whether there has been a transfer
      of work between two employers and the reason for the transfer of that
      work or, viewed another way, the connection between the two employers.




1207. FWA is permitted to make certain orders that modify the general
      transfer of business rules.  In particular, FWA is able to make orders
      regarding the coverage of certain instruments and their application to
      transferring and non-transferring employees.


Division 1 - Introduction


Clause 307 - Guide to this Part


1208. This clause provides a guide to this Part.


Clause 308 - Meanings of employee and employer


1209. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


1210. The definition of national system employer (clause 13) includes a
      person who is usually an employer.  The effect of this is that, in
      this Part, a person may be an old employer or new employer even when,
      at a particular point, they do not actually have any employees.  So,
      e.g., a new employer could apply to FWA for an order under Division 3
      prior to the time when the new employer first engages a transferring
      employee.


Clause 309 - Object of this Part


1211. Clause 309 sets out the object of Part 2-8.  It is to provide a
      balance between:


     . protecting employees' terms and conditions of employment under an
       enterprise agreement, certain modern awards or certain other
       instruments; and


     . the interests of employers in running their enterprises efficiently;

      if there is a transfer of business.


Division 2 - Transfer of instruments


Clause 310 - Application of this Division


1212. Clause 310 outlines the circumstances in which Division 2 applies.
      This Division deals with the transfer of rights and obligations under
      enterprise agreements, certain modern awards and certain other
      instruments on a transfer of business.


Clause 311 - When does a transfer of business occur


1213. Subclause 311(1) is the operative provision of Division 2.  It
      provides a definition of transfer of business and provides for the
      circumstances in which a transfer of business can occur.  It also sets
      out the definitions of old employer, new employer and transferring
      work.  These terms are used throughout the Part.


1214. Subclause 311(1) provides that there is a transfer of business from
      an employer (the old employer) to another employer (the new employer)
      if the following requirements are satisfied:


     . the employment of an employee of the old employer has terminated;


     . within 3 months after the termination, the employee becomes employed
       by the new employer;


     . the transferring employee performs the same, or substantially the
       same, work (the transferring work) for the new employer as she or he
       performed for the old employer; and


     . there is a connection between the old employer and the new employer
       as described in any of subclauses 311(3) to (6).


1215. The reference in paragraph 311(1)(a)to an employee's employment
      terminating is intended to capture all of the circumstances in which
      an employee ceases to be employed by an employer, including
      resignation.


1216. Under paragraph 311(1)(b), there can be a period of up to three
      months between the periods of employment with the old employer and new
      employer.  This is intended to reflect that in some transactions,
      e.g., where the old employer has become insolvent and the liquidator
      is trying to sell the business, there may be a period where the
      transferring employees are not employed by either the old or the new
      employer.  The three month period is also intended to ensure that the
      operation of Part 2-8 cannot be avoided by the new employer delaying
      the employment of an employee.


1217. Under paragraph 311(1)(c), the transferring employee must perform the
      same, or substantially the same, work for the new employer as she or
      he performed for the old employer.  It is intended that this provision
      not be construed in a technical manner.  It recognises that, in a
      transfer of business situation, there may well be some minor
      differences between the work performed for the respective employers.
      However, the requirement is satisfied where, overall, the work is the
      same or substantially the same - even if the precise duties of the
      employees, or the manner in which they are performed, have changed.


1218. Further, although paragraph 311(1)(c) is framed in terms of the work
      undertaken by an individual employee, in many instances a transfer of
      business occurs and a group of employees is engaged by the new
      employer.  In this circumstance, it may be possible to categorise the
      work more generally.  For example, if the old employer runs a
      supermarket and sells the supermarket to the new employer, the work
      might be characterised generally as retail work in a supermarket.  The
      fact that an employee may have stacked shelves for the old employer
      but now works on the checkout for the new employer would not stop the
      employee from being a transferring employee.


1219. Subclause 311(2) provides that an employee is a transferring employee
      if the requirements set out in paragraphs 311(1)(a), (b) and (c) are
      satisfied.


1220. Subclauses 311(3) - (6) set out the circumstances in which there is a
      connection between the old and new employer for the purposes of
      paragraph 311(1)(d).


1221. Subclause 311(3) provides that one type of connection between the old
      employer and the new employer for the purposes of paragraph 311(1)(d)
      is where there has been some form of asset transfer between the old
      and the new employer (or their associated entities).  There is a
      connection if there is an arrangement between:


     . the old employer or an associated entity of the old employer; and


     . the new employer or an associated entity of the new employer; and


     . the new employer or an associated entity of the new employer owns,
       or has the beneficial use of, some or all of the assets (whether
       tangible or intangible) that:


          o the old employer, or an associated entity of the old employer
            owned or had the beneficial use of; and


          o relate to or are used in connection with the transferring work.




1222. The word arrangement is intended to be interpreted broadly.


1223. This subclause and those following refer to associated entities of
      the old employer or new employer to recognise the wide variety of ways
      in which transactions may be structured.


Illustrative example


Walsh's Excellent Building Supplies (Walsh) enters into an arrangement with
Carbone DIY Construction (Carbone) under which Carbone agrees to buy part
of Walsh's construction business.  Carbone employs some of the employees of
Walsh who work in the construction business through its subsidiary, Carbone
MYOB (Staffing) Construction (Carbone Staffing).  Carbone Staffing would
be, under subclause 311(3), the 'new employer'.  There would be a transfer
of business, even though the arrangement is between Walsh, the old
employer, and Carbone - because Carbone is an associated entity of the new
employer.


1224. Subclause 311(4) provides that a transfer of business occurs where,
      in addition to the elements in paragraphs 311(1)(a) to (c) being
      satisfied, the old employer or an associated entity of the old
      employer outsources work to the new employer or an associated entity
      of the new employer.  This is intended to cover the situation where an
      employer (the old employer) decides that it no longer wishes to
      perform work of a particular type, or no longer wishes to perform as
      much work of a particular type, and so engages a third party to
      perform that work instead and that third party engages employees of
      the old employer to continue performing that work.  This provision
      applies irrespective of whether there is a transfer of assets between
      the old employer and the new employer.


Illustrative example


Kambo & Partners is a human resources consultancy firm in Victoria.  Kambo
employs four security guards who staff its reception desk and keep the
business's premises secure.  Kambo decides that it no longer wishes to
employ security guards itself, and enters into a contract (an outsourcing
arrangement) with Elvis Security Pty Ltd (Elvis Security) under which Elvis
Security will provide security services to Kambo's premises.  Elvis
Security offers employment to the four security guards employed by Kambo
and they accept the offers.  They perform substantially the same work for
Elvis Security as they performed for Kambo.  This would be a transfer of
business.


1225. Subclause 311(5) sets out another circumstance in which there is a
      connection between the old employer and the new employer for the
      purposes of paragraph 311(1)(d).  It provides that a connection
      between the old employer and the new employer exists where:


     . the transferring employee performed the transferring work as an
       employee of the old employer because the new employer or an
       associated entity of the new employer had outsourced the work to the
       old employer or an associated entity of the old employer; and


     . the transferring employee performs the work as an employee of the
       new employer because the new employer or an associated entity of the
       new employer has ceased to outsource the work to the old employer or
       the associated entity of the old employer.


1226. The intention of this subclause is that a transfer of business occurs
      where a new employer decides to in-source the work previously done by
      the transferring employee of the old employer.


Illustrative example


This example continues the example given at subclause 311(4) above.


After two years, Kambo decides that it no longer wishes to outsource the
security work at its premises and wishes again to engage employees itself
to perform this work.  Kambo terminates the outsourcing contract that it
made with Elvis Security and offers employment to the security guards
employed by Elvis Security.  They accept the offers and perform
substantially the same work as employees of Kambo as they previously
performed as employees of Elvis Security, namely, providing security
services at Kambo's premises.  This would be a transfer of business.


1227. Subclause 311(6) provides that there is a connection between the old
      employer and the new employer for the purposes of paragraph 311(1)(d)
      if the new employer is an associated entity of the old employer at the
      time when the transferring employee becomes employed by the new
      employer.  The definition of 'associated entity' is that used in the
      Corporations Act 2001.  This type of connection is intended to cover
      some corporate restructures.  It also ensures that employers cannot
      intentionally avoid obligations under instruments by 'transferring'
      employees between associated entities (although any attempt to change
      an employee's employer without the employee's consent may be
      ineffective: McCluskey v Karagiozis [2002] FCA 1137; 120 IR 147).


Clause 312 - Instruments that may transfer


1228. Subclause 312(1) provides a definition of transferable instrument for
      the purposes of this Part.  This is defined as:


     . an enterprise agreement that has been approved by FWA (whether or
       not in operation);


     . a workplace determination; and


     . a named employer award.


1229. Subclause 312(2) provides a definition of named employer award.


1230. Modern awards that are not named employer awards are not transferable
      instruments because they continue to cover transferring employees
      according to their terms following a transfer of business.  This is
      because modern awards that are not named employer awards cover a class
      or classes of employees or employers specified in the award (e.g.,
      employees working in retail shops).  Because an employer or an
      employee is covered by an award if the employer or employee is
      included in the specified class, there is no need to include
      provisions providing for the transfer of modern awards that operate on
      an industry basis.


Clause 313 - Transferring employees and new employer covered by
transferable instrument


1231. Clause 313 sets out the default rules that apply to the coverage of
      transferable instruments when a transfer of business occurs.  The
      effect of subclause 313(1) is that a transferable instrument that
      covered an old employer and a transferring employee immediately before
      that employee's employment was terminated covers the new employer and
      the transferring employee in relation to the transferring work:


     . after the time the transferring employee becomes employed by the new
       employer; and


     . any other enterprise agreement or named employer award (that is not
       a transferable instrument) which covers the new employer does not
       cover the transferring employee.


1232. This means, for example, that an enterprise agreement or named
      employer award that already covered the new employer would not cover a
      transferring employee who is covered by a transferable instrument even
      if it is capable of doing so on its terms.


1233. The transfer of business provisions work by reference to the rules on
      coverage (see Part 2-1 (Core provisions for this Chapter)).  They
      therefore preserve the rules that govern the interaction of different
      instruments.  For example, where the old employer is covered by an
      enterprise agreement and a named employer award, the named employer
      award would not apply to the old employer and its employees although
      it would continue to cover them.  This would be the effect of the rule
      governing the interaction of enterprise agreements and modern awards
      (clause 57).  Following a transfer of business, both the enterprise
      agreement and named employer award would cover the new employer, but
      their interaction with each other would be preserved.


Illustrative example


Clarke Electrical Shocking employs 10 electricians at its engineering
workshop.  The employees are covered by the Clarke Electrical Award (a
named employer award).  Clarke sells its business to McKinlay Really Really
White Goods (McKinlay), on condition that it agrees to employ some of
Clarke's electricians.


McKinlay already has an enterprise agreement in place covering its existing
electricians.  On its terms McKinlay's agreement would be capable of
covering the transferring employees.  However, clause 313 has the effect
that the agreement will not cover the transferring employees.


1234. Subclause 313(2) provides that, to avoid doubt, for the purposes of
      subclause 313(1), a transferable instrument that covers a new employer
      and a transferring employee includes any individual flexibility
      arrangement that operates as a term of the transferable instrument.


1235. Subclause 313(3) provides that clause 313 has effect subject to any
      order of FWA under subclause 318(1), which deals with the orders that
      FWA may make in relation to instruments covering new employers and
      transferring employees.


Clause 314 - New non-transferring employees of new employer may be covered
by transferable instrument


1236. This clause has the effect that a transferable instrument covers a
      non-transferring employee of the new employer in certain
      circumstances.  Subclause 314(1) provides that for a transferable
      instrument to cover a new employer and a non-transferring employee,
      the following requirements must be satisfied:


     . the transferable instrument covers the new employer and a
       transferring employee under paragraph 313(1)(a);


     . the new employer employs a non-transferring employee (the new non-
       transferring employee) after the transferable instrument starts to
       cover the new employer;


     . the new non-transferring employee performs the transferring work;
       and


     . no other enterprise agreement or modern award covers the new
       employer and the non-transferring employee at the time the new non-
       transferring employee is employed.


1237. The effect of this clause is that it allows new employees who are not
      transferring employees and to whom no other instrument applies to be
      covered by the same workplace instrument as the transferring
      employees.  It forms an exception to the general rule in clause 313
      that transferable instruments only cover transferring employees.


Illustrative example


Hannah establishes the Cutty Sark Kayak Company (Cutty).  Before hiring any
of its own employees, Cutty buys Titanic Kayaking Expeditions Pty Ltd
(Titanic).  Cutty agrees to employ Titanic's kayaking instructors, who are
covered by the Titanic Enterprise Agreement.  Cutty does not have its own
enterprise agreement and is not covered by a modern award at the time it
purchases Titanic, so Titanic's enterprise agreement will cover Cutty and
the transferring employees.


A month later, Cutty decides to expand its business, so it employs Eleni
and Hussain as kayaking instructors.  Because there is no other enterprise
agreement or modern award that covers these employees at the time they are
employed, the Titanic Enterprise Agreement will also cover Eleni and
Hussain in relation to their work for Cutty.


1238. Subclause 314(2) provides a definition of non-transferring employee.
      This is defined as an employee of the new employer who is not a
      transferring employee.


1239. Subclause 314(3) provides that this section is subject to any order
      of FWA that is made under subclause 319(1), which deals with orders
      that FWA may make in relation to instruments covering new employers
      and non-transferring employees.


Clause 315 - Organisations covered by transferable instrument


1240. Clause 315 outlines the circumstances in which employee and employer
      organisations can be covered by a transferable instrument.


1241. Subclause 315(1) provides that a named employer award covers an
      employer organisation in relation to the new employer where the named
      employer award:


     . covers the new employer because of paragraph 313(1)(a); and


     . covered the organisation in relation to the old employer immediately
       before the termination of a transferring employee's employment with
       the old employer.


1242. Subclause 315(2) enables employee organisations to be covered by a
      named employer award on a transfer of business.  It provides that if:


     . a named employer award covers the new employer and a transferring
       employee because of paragraph 313(1)(a); and


     . the named employer award covered an employee organisation in
       relation to the transferring employee immediately before the
       termination of the employee's employment with the old employer;

then the named employer award covers the employee organisation in relation
to the transferring employee and any non-transferring employee who is
covered by the award because of a provision of this Part or an FWA order
and performs the same work as the transferring employee.


1243. Subclause 315(3) makes clear that, to avoid doubt, an enterprise
      agreement covers an employee organisation where:


     . the enterprise agreement covers a transferring employee or a non-
       transferring employee because of a provision of this Part or an FWA
       order; and


     . an enterprise agreement covered an employee organisation immediately
       before the termination of a transferring employee's employment with
       the old employer.


Clause 316 - Transferring employees who are high income employees


1244. Clause 316 applies where the old employer gave a guarantee of annual
      earnings to a transferring employee who is a high income employee.


1245. Part 2-9 of the Bill contains the operative provisions relating to
      guarantees of annual earnings.  A guarantee of annual earnings only
      applies to high income employees who are covered by a modern award and
      to whom an enterprise agreement does not apply.


1246. Subclause 316(1) provides that the clause applies where:


     . an old employer has given a guarantee of annual earnings for a
       guaranteed period to a transferring employee; and


     . the transferring employee was a high income employee immediately
       before the employee's employment with the old employer was
       terminated; and


     . some of the guaranteed period occurs after the time the transferring
       employee becomes employed by the new employer; and


     . an enterprise agreement does not apply to the transferring employee
       at the time they transfer to the new employer.


1247. Subclause 316(2) provides that a guarantee of annual earnings given
      to an employee by the old employer is treated, if the employee becomes
      a transferring employee, as if it had been given to the employee by
      the new employer.  This rule operates subject to subclauses 316(3),
      (4) and (5).


1248. Subclauses 316(3) and (4) provide that the new employer is not
      required to comply with the guarantee of annual earnings:


     . in relation to the part of the guaranteed period before the
       transferring employee became employed by the new employer; and


     . to the extent that it requires the new employer to pay an amount of
       earnings at a higher rate than the annual rate of the guarantee of
       annual earnings.


1249. The effect of subclause 328(2), which deals with employer obligations
      in relation to guarantees of annual earnings, is that when the
      transferring employee's employment with the old employer ends, the old
      employer must have paid the employee a pro-rated amount of the annual
      rate of guarantee of annual earnings from the start of the guarantee
      period to the day the employment ends.  Subclause 316(3) ensures that
      the new employer is not responsible for any payment in relation to
      that period, despite the fact that under subclause 316(2) the new
      employer is taken to have given the guarantee.


1250. Subclause 316(4) is intended to deal with the situation where the
      guarantee of annual earnings provides for different rates of pay
      throughout the period and the rate of earnings is lower in respect of
      the period when the transferring employee was an employee of the old
      employer.


Illustrative example


Mandy works as a senior engineer for a mining company.  Her employer gives
her a guarantee of annual earnings on 1 January 2010 for a 12 month period.
 The guarantee is to pay Mandy an annual salary of $90,000 and to pay a
guaranteed Christmas bonus of $30,000 on 15 December 2010.


On 30 June 2010, Mandy's employer outsources its engineering function to
Edwards Engineers Pty Ltd (Edwards).  Her employment ceases and she is
employed by Edwards.  The outsourcing satisfies the requirements for it to
be a transfer of business.  Accordingly, Edwards is treated as having given
Mandy the guarantee of earnings.


As at 30 June 2010, Mandy would have been paid $45,000 of the $120,000 that
she was guaranteed under the guarantee of earnings, being her annual salary
from 1 January to 30 June.  The effect of subclause 328(2) is that Mandy's
old employer must pay to her a further $15,000.  This additional payment
reflects the fact that the guarantee was end-loaded.  Subclause 316(3)
makes clear that Edwards would not be responsible for this payment or any
other payment under the guarantee relating to the period of Mandy's
employment with the old employer.


Under the terms of the original guarantee, Mandy would be entitled as an
employee of Edwards to a further $45,000, being her salary from 1 July to
31 December 2010, and the Christmas bonus of $30,000 - a total of $75,000.
However, if Mandy received $75,000 she would be unjustly enriched as it
does not take into account that she has already received an additional
$15,000 from her old employer.  Subclause 316(4) adjusts the guarantee as
it applies to Edwards so that Edwards is only required to pay a further
$60,000 over the remainder of the guaranteed period, from 1 July to 31
December 2010.  The combined effect of these provisions is that Mandy would
still receive $120,000 over the guaranteed period.


1251. Subclause 316(5) applies where it is not practicable for a new
      employer to provide non-monetary benefits to a transferring employee
      and those benefits form part of the guarantee of annual earnings.  In
      those circumstances, the guarantee of annual earnings is taken to be
      varied so that the transferring employee is entitled instead to an
      amount of money equivalent to the agreed money value of the non-
      monetary benefit.


1252. The agreed money value of a non-monetary benefit is the value agreed
      between the old employer and the transferring employee at the time
      when the guarantee of annual earnings was given.


1253. Subclause 316(6) makes clear that clause 316 does not affect the
      rights and obligations of the old employer that arose before the
      transfer time.


Division 3 - Powers of FWA


Clause 317 - FWA may make orders in relation to a transfer of business


1254. Clause 317 describes the application of Division 3.  Division 3
      provides for FWA to make certain orders where there is or is likely to
      be a transfer of business.


Clause 318 - Orders relating to instruments covering new employer and
transferring employees


1255. Subclause 318(1) provides that FWA may make certain orders in
      relation to a new employer and a transferring employee.  The types of
      orders that FWA may make are set out in paragraphs 318(1)(a) and (b).


1256. Paragraph 318(1)(a) enables FWA to make an order that a transferable
      instrument that would or would be likely to cover the new employer and
      the transferring employee under paragraph 313(1)(a) does not cover the
      new employer and the transferring employee.  The effect of this
      paragraph is that it displaces the general rule in paragraph 313(1)(a)
      that a transferable instrument covers the new employer and a
      transferring employee.


1257. Paragraph 318(1)(b) enables FWA to make an order that an enterprise
      agreement or named employer award that covers the new employer covers
      or will cover the transferring employee.  For example, this paragraph
      allows a new employer that is already covered by an existing
      enterprise agreement or named employer award to apply to FWA for an
      order that a transferring employee also be covered by that enterprise
      agreement or named employer award, instead of the transferring
      instrument.


1258. Subclause 318(2) provides that FWA may only make an order under
      subclause 318(1) on application by:


     . the new employer or the likely new employer;


     . a transferring employee or a likely transferring employee;


     . if the application relates to an enterprise agreement - an employee
       organisation that is or is likely to be covered by the agreement;


     . if the application relates to a named employer award - an employee
       organisation that is entitled to represent the industrial interests
       of an transferring employee or a likely transferring employee.


1259. Subclause 318(3) sets out the matters that FWA must take into account
      when deciding whether to make an order under subsection 318(1).  These
      factors, which must be read having regard to the objects of the Part,
      are intended to enable FWA to balance appropriately the protection of
      employees' entitlements under certain instruments with the need for
      some flexibility to depart from the default rules about coverage of
      instruments following a transfer of business.  They recognise that in
      some circumstances, having regard to matters such as the views of the
      persons covered by the instruments and the public interest, there may
      be good reason for an alternative instrument to cover the transferring
      employees.


1260. Subclause 318(4) restricts the commencement of an order made under
      subclause 318(1).  An order must not come into operation in relation
      to a particular transferring employee before the later of:


     . the time when the transferring employee becomes employed by the new
       employer;


     . the day on which the order is made.


Illustrative example


Carlo's Auto Repairs (Carlo) is covered by the CAR Enterprise Agreement
2010.  Mega Motors Limited (Mega) buys Carlo's business.  Mega employs some
of Carlo's employees and a transfer of business occurs.  Mega already has
an enterprise agreement that applies to employees across its chain of auto
repair businesses, the Mega Motors Collective Agreement.


Following an application from Mega, FWA makes an order that the CAR
Enterprise Agreement does not cover the transferring employees and the Mega
Motors Collective Agreement covers the transferring employees instead.


Clause 319 - Orders relating to instruments covering new employer and non-
transferring employees


1261. Subclause 319(1) provides that FWA may make certain orders that apply
      to a new employer and a non-transferring employee.  The types of
      orders that FWA may make are set out in paragraphs 319(1)(a) to (c).


1262. Paragraph 319(1)(a) allows FWA to order that a transferable
      instrument that would cover the new employer and the non-transferring
      employee under subclause 314(1) does not cover the new employer and
      the non-transferring employee.


1263. Under paragraph 319(1)(b), FWA may make an order that a transferable
      instrument that covers the new employer also covers a non-transferring
      employee who performs the transferring work for the new employer.
      This contemplates, for example, that an employer and its non-
      transferring employees who are covered by an instrument can apply to
      FWA for an order to be covered by a transferable instrument.  In
      effect, this paragraph would allow a non-transferring employee to be
      covered by a transferable instrument while performing the transferring
      work without necessarily 'switching off' an instrument which already
      covers them.


1264. Paragraph 319(1)(c) permits FWA to make an order that an enterprise
      agreement or a modern award that covers the new employer no longer
      covers a non-transferring employee who performs, or is likely to
      perform, the transferring work of the new employer.  This paragraph
      allows an existing enterprise agreement or modern award that covers a
      non-transferring employee to be 'switched off', so that the non-
      transferring employee can instead be covered by a transferable
      instrument.


1265. The legislative note under paragraph 319(1)(c) makes clear that FWA
      may make orders under paragraphs 319(1)(b) and (c) irrespective of
      when the non-transferring employee was employed by the new employer.
      In contrast, paragraph 319(1)(a) only applies to a new non-
      transferring employee who is employed after the transferable
      instrument started to cover the new employer.


1266. Subclause 319(2) provides that FWA may only make an order under
      subclause 319(1) on application by:


     . the new employer or the likely new employer;


     . a non-transferring employee who performs, or is likely to perform,
       the transferring work for the new employer;


     . if the application relates to an enterprise agreement - an employee
       organisation that is or is likely to be covered by the agreement;


     . if the application relates to a named employer award - an employee
       organisation that is entitled to represent the industrial interests
       of an transferring employee or a likely transferring employee.


1267. Subclause 319(3) sets out the matters that FWA must take into account
      when deciding whether to make an order under subclause 319(1).


1268. Subclause 319(4) restricts the commencement of an order made under
      subclause 319(1).  An order must not come into operation in relation
      to a particular non-transferring employee before the later of:


     . the time when the non-transferring employee starts to perform the
       transferring work for the new employer; and


     . the day on which the order is made.


Clause 320 - Variation of transferable instruments


1269. Clause 320 applies to a transferable instrument that covers, or is
      likely to cover, a new employer because of a provision of this Part or
      an order of FWA.  A transferable instrument may be varied by FWA as
      provided under subclause 320(2).


1270. Paragraph .320(2)(a) permits FWA to vary a transferable instrument to
      remove terms that, in FWA's opinion, are not or will not be capable of
      meaningful operation because of the transfer of business to the new
      employer.  For example, a term of an enterprise agreement relating to
      participation in an employee share plan of the old employer would not
      be capable of meaningful operation when the agreement applies to the
      new employer.


1271. Paragraph 320(2)(b) permits FWA to vary a transferable instrument to
      remove ambiguity or uncertainty about how a term of the transferable
      instrument operates.  This contemplates, for example, a term of a
      transferable instrument that requires a payment to be made in
      accordance with 'company policy' where it is unclear whether it is the
      old or new employer's policy that is being referred to.


1272. Subclause 320(3) provides that FWA may only vary a transferable
      instrument on application by a person who is or is likely to be
      covered by the transferable instrument.


1273. The matters that FWA must take into account when deciding whether to
      make a variation under subclause 320(1) are set out in subclause
      320(4).  These are:


     . the views of the new employer or a person who is likely to be the
       new employer and the views of the employees who would be affected by
       the transferable instrument as varied;


     . whether any employees would be disadvantaged by the transferable
       instrument as varied in relation to their terms and conditions of
       employment;


     . if the transferable instrument is an enterprise agreement - the
       nominal expiry date of the agreement; and


     . the public interest.


1274. Subclause 320(5) restricts the time at which a variation made under
      subclause 320(2) may commence operation.  It provides that a variation
      of a transferable instrument must not come into operation before the
      later of:


     . the time when the transferable instrument starts to cover the new
       employer; and


     . the day on which the variation is made.


            Part 2 - 9 - Other terms and conditions of employment


Division 1 - Introduction


Clause 321 - Guide to this Part


1275. This clause provides a guide to this Part.


Clause 322 - Meanings of employee and employer


1276. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


 Division 2 - Payment of wages


1277. This Division is about the frequency and methods of payment of
      amounts payable to an employee in relation to the performance of work
      and allowable deductions from such amounts.


1278. Currently, these issues are dealt with primarily by State and
      Territory legislation.  This has led to a patchwork of obligations for
      employers.  The payment of wages provisions in this Division draw upon
      the protections that exist in State and Territory legislation to
      provide a simple, national scheme.


Clause 323 - Method and frequency of payment


1279. Subclause 323(1) requires employers to pay employees any amounts
      payable to the employees in relation to the performance of work:


     . in full (except as permitted by clause 324);


     . in money (i.e.  not 'in kind') by one, or a combination, of the
       methods referred to in subclause 323(2);


     . at least monthly.


1280. A modern award, enterprise agreement or contract of employment may
      provide for more frequent payment.


1281. Subclause 323(1) does not provide an exception from the requirement
      for at least monthly payment to deal with the situation where payment
      of wages falls due on a public holiday.  In such a case, the employer
      would need to ensure that appropriate arrangements are put in place so
      that employees are paid before the public holiday.


1282. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1283. The legislative note after this subclause makes clear that the
      payment rule covers a wide range of payments, where they fall due
      during the relevant payment period - including incentive-based
      payments and bonuses, loadings, monetary allowances, overtime or
      penalty rates and leave payments.  However, the amounts referred to in
      this subclause would not include superannuation contributions or non-
      monetary benefits.


1284. Subclause 323(2) lists the methods by which payments may be made,
      which include cash, direct deposit or cheque.  This would, for
      example,  prohibit payment by store credit vouchers.  Alternatively,
      if a modern award or an enterprise agreement provides a method of
      payment, this must be complied with (subclause 323(3)).


1285. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Clause 324 - Permitted deductions


1286. Clause 324 lists deductions that may be made from payments due to an
      employee.


1287. A deduction may be made if it is authorised by:


     . the employee (in writing), provided that the deduction is
       principally for the employee's benefit;


     . the employee, in accordance with an enterprise agreement;


     . a modern award or an order of FWA; or


     . a law of the Commonwealth, a State or a Territory, or an order of a
       court.


1288. Deductions that may be made under this provision include salary
      sacrifice arrangements (as is made clear by the first legislative note
      after this clause).


1289. The second legislative note after this clause clarifies that certain
      terms of a modern award, enterprise agreement or contract of
      employment relating to deductions may have no effect (see clause 326).
       A deduction purportedly made in accordance with such a term would
      therefore not be authorised for the purposes of this clause.


1290. An authorised deduction does not have the effect of reducing an
      employee's minimum wage (e.g., under an award), but will have the
      effect of reducing the amount that an employer is required to pay to
      the employee.  Other amounts may still be required to be paid by the
      employer to third parties on behalf of the employee; e.g., under a
      salary sacrifice arrangement.


Clause 325 - Unreasonable requirements to spend amount


1291. An employer may not directly or indirectly require an employee to
      spend any part of the amount payable to the employee in a particular
      way, if the requirement is unreasonable in the circumstances
      (subclause 325(1)).


1292. For example, it is likely to be unreasonable for an employer to
      require an employee to donate a proportion of his or her pay to a
      charitable or religious organisation nominated by the employer.  It
      may be reasonable, however, for an employer to require an employee who
      is a tradesperson to purchase tools required to perform his or her
      duties (unless the employer is otherwise required to provide those
      tools).


1293. Any such clause with unreasonable operation is of no effect (see
      subclause 326(3)).


1294. If an employee is required to spend wages in contravention of this
      clause, then the employee may recover the amounts so spent from the
      employer as an underpayment of wages claim (see paragraph 327(b)).


1295. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1296. Subclause 325(2) allows regulations to prescribe circumstances in
      which a requirement on an employee to spend money would be taken to
      be, or not to be, reasonable.


Clause 326 - Certain terms have no effect


1297. Subclause 326(1) provides that a term of a modern award, enterprise
      agreement or contract of employment is of no effect to the extent that
      the term:


     . permits, or has the effect of permitting, an employer to deduct an
       amount from an amount payable to an employee for the performance of
       work; or


     . requires, or has the effect of requiring, an employee to make a
       payment to an employer (e.g., by imposing a fine on the employee for
       lateness) or another person (e.g., requiring the employee to lease
       premises from a person who is related to the employer), if the
       deduction or payment directly or indirectly benefits the employer
       and is unreasonable in the circumstances.


1298. Subclause 326(2) allows regulations to prescribe circumstances in
      which a deduction or payment referred to in subclause 326(1) is or is
      not reasonable.


1299. Subclause 326(3) provides that a term of a modern award, enterprise
      agreement or contract of employment has no effect to the extent that
      the term:


     . permits, or has the effect of permitting, an employer to make a
       requirement that would contravene subclause 325(1); or


     . directly or indirectly requires an employee to spend an amount, if
       the requirement would contravene subclause 325(1) if it had been
       made by the employee's employer.


Clause 327 - Things given or provided, and amounts required to be spent, in
contravention of this Division


1300. The effect of paragraph 327(a) is that anything given or provided by
      the employer contrary to paragraph 323(1)(b) (the requirement to pay
      wages in money) and subclause 323(3) (the requirement to pay wages in
      accordance with a modern award or enterprise agreement) is taken never
      to have been given or provided and cannot, therefore, be used to
      offset an underpayment of wages claim.


1301. For example, if an employer purports to pay an employee 'in kind' by
      providing the employee with goods or services in lieu of wages, the
      value of the goods or services provided by the employer in lieu of
      wages would not discharge the employer's obligation to pay the
      employee wages in money under this Division.


1302. The effect of paragraph 327(b) is that any amount the employee has
      been required to unreasonably spend by the employer (contrary to
      subclause 325(1)), or in accordance with a term to which
      subclause 326(3) applies), is taken to have never been paid to the
      employee.  This means that an employee could seek to be reimbursed by
      the employer for any amount that they were required to spend in
      contravention of a provision of this Division.


Division 3 - Guarantee of annual earnings


1303. Under Part 2-1, a modern award will not apply to an employee while
      the employee is a high income employee (see subclause 47(2)).


1304. A high income employee is an employee who has guaranteed annual
      earnings that are more than the high income threshold.  The amount of
      the high income threshold will be prescribed by regulations.  It is
      intended that the high income threshold will be $100,000 per annum for
      full time employees, indexed from 27 August 2007 and then annually
      from 1 July each year.  The high income threshold for part time or
      casual employees will be determined on a proportionate basis.


1305. This Division deals with:


     . how to determine whether an employee is a high income employee at a
       particular time (clauses 329-331 and 333);


     . what may be included in a guarantee of annual earnings (clause 332);
       and


     . an employer's obligations in relation to a guarantee of annual
       earnings (clause 328).


Clause 328 - Employer obligations in relation to guarantee of annual
earnings


1306. An employer's obligations in relation to a guarantee of annual
      earnings are set out in clause 328.  (The expression guarantee of
      annual earnings is defined in section 330.)


1307. Subclause 328(1) provides that an employer who has given a guarantee
      of annual earnings to an employee must comply with that guarantee
      while the employee is a high income employee and covered by a modern
      award in operation.


1308. The obligation to comply with a guarantee does not affect the
      circumstances in which the employer is entitled or obliged to reduce
      the employee's earnings.  For example, the fact that an employer has
      provided a guarantee of annual earnings would not require the employer
      to pay the employee for periods of unpaid leave (such as parental
      leave) or unauthorised absences.


1309. If an employer terminates the employment of a high income employee
      before the end of the guaranteed period, or if the high income
      employee becomes a transferring employee in relation to a transfer of
      business from the employer to a new employer and the guarantee is
      transferred to the new employer under subclause 316(2), the former
      employer will be required to ensure that for the period before
      termination the employee is paid at the annual rate of the guarantee
      of annual earnings (subclause 328(2)).


1310. The requirement to make up any shortfall in earnings under this
      subclause only applies if the employer terminates the employment of
      the high income employee or where the employee becomes a transferring
      employee.


1311. Subclause 328(2) ensures that where an employer and employee agree to
      guaranteed annual earnings that vary over a guaranteed period, the
      employee is not disadvantaged in the event of early termination of
      employment or by a transfer of business.


Illustrative example


Caleb has a guarantee of annual earnings of $120,000 over a 12 month
period.  The guarantee is structured so that Caleb receives $20,000 for the
first three months and $100,000 for the remaining nine months.  Caleb is a
high income employee for the entire period and the relevant modern award
will not apply to his employment.


If Caleb's employer terminates his employment after three months (or if
there is a transfer of business), he will have only received earnings at
the rate equivalent to annual salary of $80,000.  Subclause 328(2) will
require the employer to ensure that for the period of employment prior to
the termination or transfer of business, Caleb is paid earnings at the
guaranteed annual earnings rate.  This means that Caleb's employer will be
required to pay Caleb a further $10,000.


1312. Subclause 328(3) requires an employer before or at the time of giving
      a guarantee of annual earnings to notify an employee who is covered by
      a modern award of the consequences of giving a guarantee of annual
      earnings.  This notification must be provided in writing.  It must
      state that a modern award will not apply to the employee for any
      period during which the employee is a high income employee.


1313. Subclauses 328(1), (2) and (3) are each civil remedy provisions under
      Part 4-1 (Civil remedies).


Clause 329 - High income employee


1314. This clause defines high income employee.  A high income employee is
      an employee who is guaranteed to earn an annual rate of earnings in
      excess of the high income threshold (the high income threshold is
      dealt with in clause 333).


1315. For employees other than full time employees (e.g., part time or
      casual employees) the annual rate of earnings is treated on a
      proportionate basis.


1316. To avoid doubt, subclause 329(3) provides that an employee does not
      have a guarantee of annual earnings if the guarantee is revoked by
      agreement.


Clause 330 - Guarantee of annual earnings and annual rate of guarantee


1317. Clause 330 defines a guarantee of annual earnings.


1318. A guarantee of annual earnings is a written undertaking given by an
      employer to an employee who is covered by a modern award, which
      guarantees the employee payment of earnings over a period of 12 months
      or more, in return for the performance of work by the employee.


1319. An employee must be covered by a modern award that is in operation in
      order to be employed on the basis of a guarantee of annual earnings,
      but not an enterprise agreement.


1320. The employer and employee must reach agreement about the undertaking
      and the employee's acceptance of the undertaking before it commences
      operation, and no later than 14 days after the employee is employed,
      or the parties agree to vary the employee's terms and conditions of
      employment.


1321. A guarantee of annual earnings may be given for less than 12 months
      in the case of a fixed term employment of less than 12 months, or
      where an employee is temporarily performing particular duties for a
      period of less than 12 months (e.g., doing a different job for a
      period while another employee is on leave) (subclause 330(2)).


1322. A guarantee may be given as a condition of accepting employment but
      an employer must not apply pressure to an employee in connection with
      the offer or acceptance of a guarantee of annual earnings.  Applying
      undue influence or pressure is dealt with in the general protections
      in Part 3-1 (see clause 344).


Clause 331 - Guaranteed period


1323. Clause 331 defines the meaning of guaranteed period.  A guaranteed
      period is a period starting when the undertaking regarding guaranteed
      annual earnings commences and ending at the earliest of the following:


     . at the end of the period specified in the undertaking; or


     . when an enterprise agreement starts to apply to the employment of
       the employee; or


     . when the employer revokes a guarantee of annual earnings with the
       employee's agreement.


Clause 332 - Earnings


1324. The meaning of earnings is set out in clause 332.


1325. Earnings include: wages, amounts paid on behalf of the employee or at
      the employee's direction and the agreed value of non-monetary
      benefits.


1326. Non-monetary benefits are defined to mean benefits provided to an
      employee in a form other than money in return for the performance of
      work.  Non-monetary benefits must have an agreed, reasonable monetary
      value.  Benefits provided to an employee which are not related to the
      employee's work or which are provided without the parties reaching
      agreement as to a reasonable money value are not included in the
      definition.


1327. An employee's earnings do not include payments for which a value is
      not ascertainable in advance (such as variable performance bonuses).
      This means that payments made, but which were not anticipated or
      agreed to in advance (either because the type of payment was not
      anticipated, or the value of the payment was not agreed), will not be
      included.  A legislative note provides examples of payments that
      cannot be determined in advance.  These payments include overtime
      (unless the overtime is guaranteed), commissions and incentive-based
      payments and bonuses.


1328. Other payments that are excluded from the definition of earnings are
      reimbursements for expenses incurred on behalf of the employer and
      statutory superannuation contributions.


1329. The statutory superannuation contributions that are excluded are:


     . contributions which would attract a superannuation guarantee charge
       under the Superannuation Guarantee Charge Act 1992 if they are not
       paid by an employer in respect of an employee;


     . payments in relation to a defined benefit interest (as defined in
       section 292-175 of the Income Tax Assessment Act 1997); and


     . payments under a Commonwealth, a State or a Territory law that
       requires an employer to contribute to a superannuation fund for the
       employee's benefit.


1330. The regulations may prescribe additional amounts or benefits that are
      included in, or excluded from, the definition of earnings.


Clause 333 - High income threshold


1331. This clause provides for the regulations to prescribe the amount of
      the high income threshold.


1332. It is intended that the high income threshold will be $100,000 per
      annum for full time employees, indexed from 27 August 2007 (the date
      this policy was announced) and then annually from 1 July each year.




      Chapter 3 - Rights and responsibilities of employees, employers,
                             organisations etc.


                       Part 3-1 - General Protections


1333. Part 3-1 sets out a range of workplace protections.  This is a key
      part of this Bill that ensures fairness and representation at the
      workplace by recognising the right to freedom of association and
      preventing discrimination and other unfair treatment.


1334. The Part provides protections for national system employers and
      national system employees, organisations and other associations of
      national system employers or employees.  It also provides protections
      in some circumstances for other persons, including employers and
      employees in State industrial relations systems, independent
      contractors and the persons who engage them (principals), State
      registered industrial associations, and other associations of State
      employers or employees (the application of Part 3-1 is explained in
      detail under Division 2 below).


1335. Part 3-1 incorporates and streamlines the following WR Act
      protections:


     . unlawful termination;


     . freedom of association;


     . sham arrangements in relation to independent contractors; and


     . various other specific protections (such as the protection from
       coercion in relation to making a collective agreement in
       subsection 400(1) of the WR Act).


1336. The consolidated protections in Part 3-1 are intended to rationalise,
      but not diminish, existing protections.  In some cases, providing
      general, more rationalised protections has expanded their scope.


1337. Key concepts that underpin Part 3-1 are:


     . workplace rights (see clause 341);


     . engaging in industrial activities (see clause 347); and


     . adverse action (see clause 342).


1338. The principal protections in Part 3-1 have been divided into
      protections relating to workplace rights (which can be broadly
      described as employment entitlements and the freedom to exercise and
      enforce those entitlements) and engaging in industrial activities
      (which encompasses the freedom to be or not be a member or officer of
      an industrial association and to participate in lawful activities,
      including those of an industrial association).


1339. Certain persons, including employers, employees and industrial
      associations, are prohibited from taking adverse action against
      certain other persons because the other person has, or exercises a
      workplace right, or engages in industrial activity.  Adverse action
      includes dismissal of an employee but also includes a range of other
      action such as prejudicing an employee or independent contractor and
      organising industrial action against another person.  Coercion and
      misrepresentations in relation to workplace rights and industrial
      activities are also prohibited.


1340. The other protections included in Part 3-1 ensure that existing
      protections in the WR Act that do not fall into the categories of
      protecting workplace rights or engaging in industrial activities are
      also protected by the Part.


1341. All of the prohibitions in Part 3-1 are civil remedy provisions under
      Part 4-1(Civil remedies).


1342. Part 3-1 does not rely on the external affairs power in the
      Constitution in the same way as the existing unlawful termination
      protections (which apply to all employees in Australia).  To maintain
      existing protections, Division 2 of Part 6-4 provides for unlawful
      termination protections for employees who do not have a remedy under
      this Part.  This ensures that every employee in Australia has a remedy
      for unlawful termination.


Division 1 - Introduction


Clause 334 - Guide to this Part


1343. This clause provides a guide to this Part.


Clause 335 - Meanings of employee and employer


1344. In this Part, the terms employer and employee have their ordinary
      meaning because references to these terms are not limited to national
      system employers and employees (see clause 13 and clause 14).  Part 3-
      1 regulates the conduct of all employers and employees and a range of
      other persons but only where the conduct is connected to (principally)
      the constitutional powers that support the main provisions of this
      Bill (e.g., the corporations power).


Clause 336 - Objects of this Part


1345. Clause 336 sets out the objects of Part 3-1, which include:


     . protection of workplace rights and freedom of association;


     . providing protection from workplace discrimination; and


     . providing effective remedies for persons who have been adversely
       affected as a result of a contravention of Part 3-1.


Division 2 - Application of this Part


1346. Part 3-1 does not rely on the terms national system employer and
      national system employee as defined in clauses 13 and 14.  Instead,
      Division 2 sets out how the Part applies to action taken by a person.
       It does not apply on the same basis as the main provisions of this
      Bill, which regulate the rights and obligations of national system
      employers and employees in relation to each other and the rights and
      obligations of organisations in relation to those employment
      relationships.


1347. On the face of the provisions of Part 3-1, the Part regulates the
      conduct of all employers, employees, principals, independent
      contractors, industrial associations and, in some cases, all persons.
      However, the Part only applies to the extent provided for in this
      Division.


Clause 337 - Application


1348. Clause 337 applies Part 3-1 only to the extent set out in clauses 338
      and 339.  Those provisions connect the conduct regulated by the Part
      to the constitutional powers that support the main provisions of this
      Bill (such as the corporations power and the Territories power) and to
      the Commonwealth's power to make laws with respect to Commonwealth
      places.


Clause 338 - Action to which the Part applies


1349. Subclause 338(1) provides that the Part applies to action:


     . taken by national system employers against national system employees
       (paragraphs 338(1)(a) and 338(1)(e));


     . taken by national system employees which affects the activities,
       functions, relationships or business of national system employers
       (paragraphs 338(1)(b) and 338(1)(f)),

whether the national system employer is classified, for the purposes of
these provisions, as a constitutionally-covered entity, a trade and
commerce employer or a Territory employer.  (Constitutionally-covered
entity, trade and commerce employer and Territory employer are defined in
subclauses 338(2), (3) and (4) respectively and cover all types of national
system employers.)

1350. Subclause 338(1) also applies the Part to:


     . action taken by a constitutionally-covered entity against any
       person, even if the action is not taken against one of its employees
       (paragraph 338(1)(a));


     . action taken by any person which affects the activities, functions,
       relationships or business of a constitutionally-covered entity,
       whether or not that person is one of its employees (paragraph
       338(1)(b)); and


     . action taken by any person to advise, incite, encourage or coerce a
       constitutionally-covered entity to take action, whether or not the
       person who advises etc., or the person against whom the action would
       be taken, is one of its employees (paragraph 338(1)(c)).


1351. Paragraph 338(2)(e) also applies the Part to all action by, affecting
      or advising etc.  an organisation.


1352. Paragraph 338(1)(d) also applies the Part to any action taken in a
      Territory or in a Commonwealth place.  (Some of this action would also
      be covered by other provisions of subclause 338(1).)


1353. Subclause 338(1) largely applies the Part to national system
      employers and employees and organisations.  However, extension of the
      Part to actions by and affecting national system employers (even if
      not in their capacity as employers) and organisations, and to all
      action in Territories and Commonwealth places, means that the Part may
      in some circumstances also apply to actions by:


     . State employers and State employees;


     . principals and independent contractors;


     . unregistered federal industrial associations;


     . registered and unregistered State industrial associations; and


     . other persons.


Illustrative examples


If an unincorporated principal took adverse action against one of its
contractors (e.g., terminated the contractor's contract) because the
contractor was a member of a State industrial association or had given
evidence in a proceeding before a State industrial body, the action would
be prohibited by Part 3-1 if the termination of the contract affected the
business of a constitutional corporation (e.g., a constitutional
corporation for which the contractor's work was ultimately done) or if it
took place in a Territory or a Commonwealth place.


If a State industrial association, or any other person, coerced an
unincorporated contractor to refuse to engage an unincorporated
subcontractor because the subcontractor had refused to join the
association, the coercion action would be prohibited by Part 3-1 if the
refusal to engage the subcontractor affected the business of a
constitutional corporation (e.g., a constitutional corporation for which
the sub-contractor's work would ultimately have been done) or if it took
place in a Territory or a Commonwealth place.


Clause 339 - Additional effect of this Part


1354. Clause 339 applies Part 3-1 by giving the Part effect as if a
      reference to employer, employee, industrial association, officer of an
      industrial association, workplace law, workplace instrument or
      industrial body were a reference to the federal manifestation of one
      of those entities.


1355. For example, the Part has effect as if, in any particular instance,
      employer were read as national system employer, industrial association
      were read as federal organisation or unregistered federal industrial
      association and workplace law were read as Commonwealth workplace law.
       The Commonwealth has legislative power to regulate all of the action
      in the Part if restricted in one of these ways to the relevant federal
      manifestation.


1356. Clause 339 also applies Part 3-1 by giving the Part effect as if a
      reference to a person were a reference to a constitutionally-covered
      entity.


1357. The effect of clause 339 overlaps significantly with the effect of
      clause 338.  Clause 339 ensures that, at a minimum, the Part applies
      in circumstances where a direct federal connection exists.


Division 3 - Workplace rights


1358. Division 3 provides protections in relation to a person's workplace
      rights.


Clause 341 - Meaning of workplace right


1359. Clause 341 defines workplace right.  There are three elements to the
      definition:


     . entitlements, roles and responsibilities (paragraph 341(1)(a));


     . processes and proceedings under workplace laws and instruments
       (paragraph 341(1)(b)); and


     . complaints or inquiries (paragraph 341(1)(c)).


1360. Paragraph 341(1)(a) provides that a person has a workplace right if
      the person is entitled to the benefit of, or has a role or
      responsibility under, a workplace law, workplace instrument or order
      made by an industrial body.  Workplace law, workplace instrument and
      industrial body are defined in clause 12 in a way that is intended to
      ensure that this Division protects entitlements, roles and
      responsibilities under Commonwealth, State and Territory laws, and
      instruments made under those laws, that regulate employment and
      similar relationships and industrial associations.


1361. Clause 341 is intended to cover a broad range of benefits, roles and
      responsibilities including:


     . an employee's right under clause 186 to have an enterprise agreement
       apply to the employee only if it satisfies the better off overall
       test;


     . an employee's right to be absent from work during parental leave;


     . an employee's right to be absent from work because of voluntary
       emergency management activity; and


     . an employee's entitlement to the benefit of an enterprise agreement
       or an order of FWA.


1362. The use of the phrase 'entitled to the benefit of' in paragraph
      341(1)(a) is intended to capture both the fact that a workplace law or
      instrument applies to a person, as well as the individual entitlements
      under the workplace law or instrument.


1363. A benefit under a workplace law or workplace instrument is also
      intended to include benefits that are contingent or accruing (e.g.,
      long service leave).


1364. The inclusion of 'role or responsibility' in paragraph 341(1)(a) is
      intended to provide protection for persons who perform a
      representative function in the workplace that is recognised under a
      workplace law, workplace instrument or order of an industrial body.


Illustrative examples


A workplace has an enterprise agreement in place that provides for the
appointment of a harassment officer.  An employee performing this role is
protected against adverse action in relation to carrying out that role.


The Workplace Health and Safety Act 1995 (Qld) makes provision for the
appointment of workplace health and safety representatives in the
workplace.  An employee performing this role is protected against adverse
action for fulfilling that role.


1365. The second element of the definition of workplace right is in
      paragraph 341(1)(b).  It provides that a person has a workplace right
      if the person is able to initiate, or participate in, a process or
      proceedings under a workplace law or workplace instrument.


1366. What is a process or proceedings under a workplace law or workplace
      instrument is defined in detail in subclause 341(2).  It provides a
      number of examples of what is a process or proceedings under a
      workplace law or workplace instrument within the meaning of paragraph
      341(1)(b).  These are provided to assist the reader, particularly as
      the existing law has tended to deal with these sorts of protections
      via subject specific rules rather than the streamlined general
      approach taken in these provisions.


1367. The inclusion of paragraph 341(2)(k) makes it clear that the
      definition is not intended to be a comprehensive list of all of the
      matters that would constitute a process or proceedings under a
      workplace law or workplace instrument.  In particular, the nature of
      the examples is not intended in any way to limit the meaning of what
      is a process or proceedings.


1368. Other examples of what amounts to participation in a process or
      proceedings under a workplace law or instrument which are not referred
      to in subclause 341(2) include:


     . accepting a guarantee of annual earnings (see clause 330); or


     . agreeing to substitute another day for a 'public holiday' (see
       clause 115).


1369. The third element of the definition of workplace right is in
      paragraph 341(1)(c).  It provides that a person has a workplace right
      if the person is able to make a complaint or inquiry:


     . to a person or body having the capacity under a workplace law to
       seek compliance with that law or a workplace instrument (e.g.
       Workplace Ombudsman); or


     . if the person is an employee, in relation to their employment.


1370. Subparagraph 341(1)(c)(ii) specifically protects an employee who
      makes any inquiry or complaint in relation to his or her employment.
      Unlike existing paragraph 659(2)(e) of the WR Act, it is not a pre-
      requisite for the protection to apply that the employee has 'recourse
      to a competent administrative authority'.  It would include situations
      where an employee makes an inquiry or complaint to his or her
      employer.


Illustrative examples


Rachel is employed in a night fill position.  The ladder that she uses at
work to stock the shelves is missing a rung which makes it dangerous for
her to climb.  Rachel raises this issue with her employer.  Under
subparagraph 341(1)(c)(ii) Rachel has a workplace right because she has
made a complaint/inquiry to her employer in relation to her safety concerns
regarding the ladder.


Paul is employed as a shop assistant.  To cope with the busy holiday trade,
his employer has asked him to work overtime hours.  However, Paul's take
home pay does not appear to reflect the appropriate penalty rates under the
award for the extra hours he has worked.  His employer has ignored repeated
requests to provide an explanation of how his pay has been calculated.
Paul approaches his union and asks for their assistance to work out whether
he is being paid the correct amount.    Paul's union is a registered
organisation and is entitled to represent his industrial interests.  Under
clause 539 of the Bill, the union is therefore able to bring an action in
relation to the alleged breach.  The employer finds out that he has sought
the assistance of his union and dismisses him.  Under
subparagraph 341(1)(c)( i) Paul has a workplace right because he has made
an inquiry to the union about his entitlements under the award and the
union is a person or body that can seek compliance with a workplace
instrument (the award) under a workplace law.


Freddy works part-time at a petrol station.  He believes he is not being
paid the correct award rate for a console operator.  He writes a letter of
complaint to the Australian Competition and Consumer Commission (ACCC) as
he mistakenly believes that it is able to investigate wage underpayments.
Freddy tells his manager about the letter.  Following this, his hours for
the next fortnight are cut in half.  While the complaint would not be
covered by paragraph 341(1)(c)(i) as the ACCC does not have capacity under
a workplace law to seek compliance with the applicable award, Freddy would
still have exercised a workplace right because he has made a complaint
regarding his employment (subparagraph 341(1)(c)(ii)).


1371. The categories of workplace rights listed in paragraphs 341(1)(a) -
      (c) are not intended to be mutually exclusive.  There is a degree of
      overlap between the categories so that a number of workplace rights
      may fall within more than one category.


Illustrative example


Clause 456 authorises an employee to vote in a protected action ballot
provided the employee's name is on the roll of voters for the ballot.  The
workplace right of the employee in these circumstances could be
characterised as:


     . an entitlement to the benefit of a workplace law (i.e., an
       entitlement under clause 456); and


     . the ability to participate in a process under a workplace law (i.e.,
       a protected action ballot).


1372. Subclause 341(3) provides that a prospective employee is taken to
      have the workplace rights they would have if they were employed in the
      prospective employment by the prospective employer.


1373. A legislative note provides an example of how the subclause is
      intended to operate, namely that a prospective employer cannot make an
      offer of employment conditional on the person entering into an
      individual flexibility arrangement.  In this case, the employer would
      be prohibited from refusing to employ the prospective employee because
      she or he would have an entitlement to the benefit of a modern award
      or enterprise agreement not subject to an individual flexibility
      agreement.


1374. There are two exceptions to the prospective employee protection in
      subclause 341(3).  These are dealt with in subclauses 341(4) and (5).


1375. The first exception, in subclause 341(4), provides that an employer
      can make an offer of employment conditional on the person accepting a
      guarantee of annual earnings (see Division 3 of Part 2-9).


1376. The second exception relates to transfer of business.  Subclause
      341(5) provides that despite paragraph 341(1)(a), a prospective
      employer does not contravene subclause 340(1) (which is the protection
      for workplace rights) if that employer refuses to employ a prospective
      employee who would be entitled to the benefit of Part 2-8 (which deals
      with transfer of business).


1377. This subclause is intended to 'switch off' Part 2-8 as a workplace
      right for the period before a prospective employer employs a
      transferring employee.  A prospective employer is entitled to not
      employ the employees of the old employer for a reason that includes
      their entitlement to the benefit of a workplace instrument.  As such,
      employees are not entitled to the benefit of Part 2-8 while they are
      'prospective employees' (that is, they are not entitled to have an
      instrument that covered them with the old employer transfer to a new
      employer).


1378. If a prospective employer decides to employ a prospective employee in
      a transfer of business situation, that employee is no longer a
      'prospective employee' and the employee will have the benefit of Part
      2-8 in addition to the protections in this Division.  Further, the
      prospective employer could not refuse to employ a prospective employee
      in a transfer of business situation for a reason connected with the
      industrial activities protection in Division 4 (e.g., because the
      employee was a union member).


Clause 340 - Adverse action protection


1379. This clause prohibits a person taking adverse action (defined in
      clause 342) against another person in relation to that person's
      workplace rights.  The protection has two basic limbs:


     . protection from adverse action because a person has a workplace
       right (subparagraph 340(1)(a)(i)); and


     . protection from adverse action because a person exercises (or does
       not exercise) a workplace right (subparagraphs 340(1)(a)(ii) to
       (iii)).


1380. For example, in the context of the workplace right that is contained
      in clause 114, being an entitlement to be absent from employment on a
      public holiday, the protections work in the following way:


     . a person is protected from adverse action because she or he has the
       right to reasonably refuse to work on a public holiday (covered by
       subparagraph 340(1)(a)(i));


     . a person is similarly protected from adverse action because she or
       he does in fact exercise the right to reasonably refuse to work on a
       public holiday (covered by subparagraph 340(1)(a)(ii)).


1381. Paragraph 340(1)(b) prohibits a person from taking adverse action
      against another person to prevent them exercising a workplace right.


1382. Subclause 340(2) prohibits a person from taking adverse action
      against another person (the second person) because a third person
      exercises a workplace right for the second person's benefit, or for
      the benefit of a class of persons to which the second person belongs.




Illustrative example


Clause 302 authorises an employee organisation to apply to FWA for an equal
remuneration order.  Subclause 340(2) protects an employee (to whom an
equal remuneration order would apply once made) from adverse action during
the period after which the application is made but before FWA makes the
order.  This is because the employee organisation has made the application
for the equal remuneration order for the benefit of the relevant employee
(or class of relevant employees).  Once the order is made, the employee is
protected from adverse action under subparagraph 340(1)(a)(i) because an
equal remuneration order is an order made by an industrial body (see
paragraph 341(1)(a)).

Clause 342 - Meaning of adverse action

1383. Adverse action is a key definition that intersects with a number of
      the substantive protections in the Part.


1384. On its face, the workplace rights protections apply to a very broad
      range of persons.  However, the definition of adverse action in
      subclause 342(1) limits the action that will give rise to liability in
      relation to workplace rights to specified action taken by specified
      persons against other specified persons.  What is adverse action in
      any particular case depends on the nature of the relationship between
      the relevant persons.  The scope of the conduct captured by the
      concept of adverse action is based on conduct that is prohibited by
      the freedom of association, unlawful termination and other provisions
      in the WR Act that have been incorporated into the General
      Protections.


1385. Subclause 342(1) contains a table that sets out the circumstances in
      which a person takes adverse action against another person for the
      purposes of the protections in Division 3 (Workplace rights).  It also
      applies in relation to the protections in Division 4 (Industrial
      activities) and clause 351 which deals with discrimination in
      employment, both of which are discussed in detail further below.


1386. The consolidation of the existing specific WR Act provisions into
      generally applicable prohibitions means that the new provisions
      protect persons against a broader range of adverse action.


Illustrative example


The unlawful termination ground in paragraph 659(2)(e) of the WR Act
provides that an employer must not dismiss an employee because the employee
has participated in proceedings against an employer involving alleged
violation of laws.  Under the new protections, an employee is protected
from the full range of adverse action (e.g., dismissal, refusal to employ
or injury to the employee in his or her employment) for this reason (see
the protection in subparagraph 340(1)(a)(iii) discussed above in relation
to the exercise of workplace rights).


1387. Subclause 342(2) defines adverse action to include threatening to
      take any action covered by the table in subclause 342(1) and
      organising such action.


1388. Subclause 342(3) provides that action is not adverse action if it is
      authorised by or under this Bill, any law of the Commonwealth or State
      or Territory law prescribed by the regulations.


Illustrative example


Paragraph 524(1)(c) authorises an employer to stand down an employee during
a period in which the employee cannot usefully be employed because of a
stoppage of work for any cause for which the employer cannot reasonably be
held responsible.  An employer who stands down an employee in these
circumstances will not have taken adverse action against the employee
because the stand down was authorised by law.


1389. Without limiting the exclusion to adverse action in subclause 342(3),
      subclause 342(4) provides that adverse action does not include an
      employer standing down an employee who is engaged in protected
      industrial action and employed under a contract of employment that
      provides for the employer to stand down the employee in the
      circumstances.  An employer could also stand down an employee in
      accordance with the terms of an enterprise agreement without such
      action being adverse action, because the action would be authorised by
      this Bill and would therefore fall within the exception in subclause
      342(3).


Clause 343 - Coercion


1390. Subclause 343(1) prohibits a person from organising or taking, or
      threatening to organise or take, any action against another person
      with intent to coerce that person or a third person to:


     . exercise or not exercise, or propose to exercise or not exercise, a
       workplace right; or


     . exercise or not exercise, a workplace right in a particular way.


1391. This clause is intended to prohibit any action (i.e., not limited to
      adverse action) taken with intent to coerce another person, or a third
      person, in relation to the exercise (or not) of their workplace
      rights.  The prohibition applies irrespective of whether the action
      taken to coerce the other person is effective or not.


1392. Subclause 343(1) is intended to cover section 400 of the WR Act which
      broadly dealt with coercion in agreement-making.  However, the
      protection in subclause 343(1) is broader because it protects all
      workplace rights.


Illustrative examples


Paragraph 343(1)(b) operates to prohibit an employee organisation that is a
bargaining representative for a proposed enterprise agreement from taking
unprotected industrial action against an employer with intent to coerce the
employer to make concessions in relation to the agreement.  Engaging in
action that is not protected may be a breach of clause 343 and may also
expose the employee organisation to sanctions under Part 3-3 or under tort
law.


Paragraph 343(1)(b) similarly operates to prohibit an employee organisation
from taking industrial action against an employer with intent to coerce the
employer to enter into a multi-enterprise agreement within the meaning of
subclause 172(3).  (Note that if a bargaining representative applied for
FWA approval of the agreement in this example, FWA would not be able to
approve the agreement because subparagraph 186(2)(b)(ii) provides that FWA
must be satisfied in approving a multi-enterprise agreement that no person
coerced, or threatened to coerce, an employer to make the agreement.)


In these examples, the workplace right that is being protected is the
employer's participation in a process under a workplace law (see paragraph
341(1)(b)).


Paragraph 343(1)(a) operates to prohibit an employer from reducing an
employee's overtime with intent to coerce the employee not to make a
complaint to a relevant workplace health and safety authority in relation
to occupational health and safety concerns in the workplace.


1393. Subclause 343(2) provides that the prohibition in subclause 343(1)
      does not apply to protected industrial action.  This means that
      protected industrial action will continue to not amount to coercive
      conduct.


Clause 344 - Undue influence or pressure


1394. Clause 344 prohibits an employer from exerting undue influence or
      undue pressure on an employee in relation to a decision by the
      employee to:


     . make or not make an arrangement under the NES;


     . make or not make an agreement or arrangement under a term of a
       modern award or enterprise agreement permitted to be included in the
       award or agreement by subclause 55(2);


     . agree to or terminate an individual flexibility arrangement;


     . accept a guarantee of annual earnings; and


     . agree, or not agree, to a deduction from amounts payable to the
       employee in relation to the performance of work.


1395. The prohibition applies in circumstances where an employer makes an
      agreement with an individual employee (not employees acting
      collectively) and where the employer should be expected to take care
      not to exert significant and inappropriate pressure on an employee to
      make the agreement.


1396. Under influence or pressure is a lower threshold than coercion.  This
      is deliberate as it recognises there should be higher obligations on
      an employer when they are entering into arrangements with employees
      that effectively modify or alter their conditions under the safety
      net.


Illustrative examples


David is 18 years old and is employed by Sparkles Pty Ltd (Sparkles).  The
manager of Sparkles has approached David about the possibility of cashing
out his annual leave entitlement saying that, because Sparkles is a small
business, if David took leave the business would have to close temporarily
to cover David's absence.  In the circumstances, David feels obliged to
agree to the manager's request.  Depending on the exact way in which this
issue was raised with David, the manager's request may amount to undue
influence or pressure and would be prohibited by paragraph 344(a).  Of
course, if the manager made it clear to David that he was in no way obliged
to cash out his leave and that the manager was merely exploring all
possible business options, the manager's request is unlikely to amount to
undue influence or pressure.


Sam is employed by Happy Café Pty Ltd (Happy Café) as a casual waiter.  The
manager of Happy Café would like Sam to work from 5am - 1pm each day so
that the restaurant can open for the lunch and breakfast trade.  The
manager would like Sam to work these hours at his regular hourly rate of
pay (i.e., no penalty rates) under an individual flexibility arrangement.
The manager tells Sam that if he doesn't agree to the arrangement, he
cannot guarantee Sam a minimum number of hours of work each week.  The
manager's threat of reduced hours convinces Sam that he should agree to the
proposed arrangement.  This would amount to undue influence or pressure and
would be prohibited by subclause 344(a).


Clause 345 - Misrepresentation


1397. Clause 345 prohibits a person from knowingly or recklessly (i.e., not
      caring whether it is true or false) making a false or misleading
      representation about:


     . the workplace rights of another person; or


     . the exercise or the effect of the exercise of a workplace right by
       another person.


1398. Subclause 345(1) is intended to broadly cover existing section 401 of
      the WR Act which deals with false or misleading statements in relation
      to agreement-making.  However, unlike section 401, the protection in
      subclause 345(1) does not have a causal element.  It also extends to
      conduct beyond the making of an agreement to misrepresentations about
      all workplace rights.  This means that liability does not depend on
      evidence that the statement 'caused' the person to whom the
      representation was made to act in a particular way.


Illustrative examples


Madison is a long-term casual employee of Benny J Enterprises Pty Ltd.
Madison is pregnant with her first child and asks her manager about her
parental leave entitlement.  Madison's manager tells her that only full-
time employees are entitled to parental leave knowing that this is not
true.  In doing so, the manager will contravene the prohibition in
paragraph 345(1)(a).


Moon Enterprises Pty Ltd (Moon Enterprises) would like to enter into a new
enterprise agreement with its employees.  The manager of Moon Enterprises
provides the employees with a document that contains false and misleading
statements relating to the terms and effect of the proposed new agreement.
In particular, the document contains false statements in relation to pay
increases, casual loadings and penalty rates.  The misrepresentation made
by the manager is in relation to the effect of approving the enterprise
agreement and is prohibited under paragraph 345(1)(b).


1399. Subclause 345(2) provides that the prohibition in subclause 345(1)
      does not apply if the person to whom the representation was made would
      not be expected to rely on it.


Illustrative example


Peter, Emma, Audrey and Annabelle attend a large end of year party hosted
by their employer, Sunny Up Pty Ltd (Sunny Up).  During the course of the
festivities, the manager of Sunny Up is talking to a group of employees,
including Peter, about the project the company is working on that has to be
completed in a couple of weeks.  Peter says that it's a tight timeframe and
it might not be achievable.  The manager laughs and jokes that everyone's
sick leave entitlement will be suspended until the project is completed.
The exception in subclause 345(2) applies in this case because the
statement it was a joke delivered in a social context, meaning it would not
be expected that Peter or the others would have relied on it as a true
representation of what the employer intended to do.


Division 4 - Industrial activities


1400. Division 4 provides protections in relation to a person's freedom of
      association and participation or non-participation in industrial
      activities.  The protections in the Division revolve around the right
      to engage or not engage in certain industrial activities - namely,
      being a member or officer of an industrial association or engaging in
      activities of industrial associations.  The Division prevents adverse
      action, coercion and misrepresentations in connection with these
      industrial activities.  It also prevents inducements to be, or not be,
      a member of an industrial association.


1401. All of the protections relate to industrial associations.  Industrial
      association is defined in clause 12.  The definition covers unions and
      employer associations (whether or not registered or recognised under a
      law), and also covers employees and/or independent contractors who
      come together informally in the workplace for a purpose which includes
      protecting and promoting their interests in matters concerning their
      employment.


Illustrative example


Andrea works at the Bouncy Bluebell Childcare Centre.  The manager,
Bernadette, has been asking child care workers to put away heavy equipment
at the end of each day while also watching the children.  This requires the
staff to leave the children without supervision.  Andrea is concerned that
this breaches the relevant government regulations.  She suggests to a
number of her co-workers that they meet after work to talk about whether
they should take a collective approach on this issue, including reporting
the issue or contacting the union.  If the other employees agree to the
meeting, they will be an industrial association within the meaning of
clause 12.



Clause 346 - Protection


Clause 347 - Meaning of engages in industrial activity


Clause 348 - Coercion


Clause 349 - Misrepresentation


Clause 350 - Inducements - membership action


1402. The industrial activity provisions protect:


     . being or not being a member or officer of an industrial association;


     . participation or non-participation in other lawful industrial
       activity;


     . non-participation in unlawful industrial activity.


Membership and offices


1403. Division 2 provides comprehensive protection for the key element of
      freedom of association - freedom to join or not join an industrial
      association, and freedom to be or not be an officer of an industrial
      association.


1404. Paragraph 346(a) prohibits a person from taking adverse action
      (defined in detail in clause 342 and explained above) against another
      person because the other person is, or is not, or was or was not, an
      officer or member of an industrial association.


1405. In addition, paragraph 346(b) (read with paragraph 347(a)) prohibits
      a person from taking adverse action against another person because the
      other person becomes, or does not become, or remains or ceases to be,
      an officer or member of an industrial association.


1406. The formulation of the protections in paragraph 346(a) and paragraph
      346(b) (read with paragraph 347(a)) is different to a number of the WR
      Act provisions it is broadly intended to cover.


1407. For example, section 402 of the WR Act prohibits an employer, when
      making an agreement, from discriminating between employees because
      some employees are union members while other employees are not.  In
      contrast, paragraphs 346(a) and 346(b) prohibit discrimination by
      reason of union membership in the agreement-making context, but the
      prohibition also applies in circumstances unconnected with agreement-
      making.


1408. It is intended that the protections in paragraph 346(a) and 346(b)
      (read with paragraph 347(a)) also prohibit a person from taking
      adverse action against another person because of the person's
      membership or non-membership of a particular industrial association -
      i.e., they would operate to protect someone from adverse action
      because they are a member of union A rather than unions B or C.


1409. Clause 348 (read with paragraph 347(a)) prohibits a person from
      organising or taking, or threatening to organise or take, any action
      against another person with intent to coerce that person or a third
      person to become, or not become, or remain or cease to be, an officer
      or member of an industrial association.  This would cover, for
      instance, an industrial association organising industrial action
      against an employer with intent to coerce the employer, or an employee
      of the employer, to become a member of the industrial association.


1410. Subclause 349(1) (read with paragraph 347(a)) prohibits a person from
      knowingly or recklessly (i.e., not caring whether it is true or false)
      making a false or misleading representation about another person's
      obligation to:


     . become, or not become, or remain or cease to be, an officer or
       member of an industrial association;


     . disclose whether she or he, or a third person, is or is not, an
       officer or member of an industrial association; or


     . disclose whether she or he, or a third person, is or is not, an
       officer or member of an industrial association, or is becoming, or
       not becoming, or remaining or ceasing to be, an officer or member of
       an industrial association.


1411. Subclause 349(2) provides that the prohibition in subclause 349(1)
      does not apply if the person to whom the representation is made would
      not be expected to rely on it.


1412. Paragraph 349(1)(a) is intended, for example, to prohibit an
      industrial association from making a representation to a person, on
      which the person would be expected to rely, that the person must be a
      member of the industrial association to work at a particular
      workplace.


1413. Clause 350 prohibits an employer from inducing an employee to be or
      not be a member or officer of an industrial association.  It similarly
      prevents a person who has entered into a contract for services from
      inducing the independent contractor to be or not be a member of an
      industrial association.  Clause 350 is intended to broadly cover
      section 794 of the WR Act.

Participation and non-participation in lawful industrial activities

1414. Clauses 346, 348 and 349 likewise protect persons from adverse
      action, coercion and misrepresentation in relation to participation
      and non-participation in lawful industrial activities (the activities
      set out in paragraph 347(b)).


1415. Subparagraphs 347(b)(i) to (v) provide that a person engages in
      industrial activity if she or he does or does not:


     . become involved in establishing an industrial association
       (subparagraph 347(b)(i));


     . organise or promote a lawful activity for, or on behalf of, an
       industrial association (subparagraph 347(b)(ii));


     . encourage or participate in a lawful activity organised or promoted
       by an industrial association (subparagraph 347(b)(iii));


     . comply with a lawful request made by, or requirement of, an
       industrial association (subparagraph 347(b)(iv)); or


     . represent or advance the views, claims or interests of an industrial
       association (subparagraph 347(b)(v)).


1416. Subparagraphs 347(b)(i) to (v) can broadly be described as
      'participation protections' and cover a broad range of lawful
      participation activities including:


     . carrying out duties or exercising rights as an officer of an
       industrial association; and


     . participating in union discussions at the workplace where a union
       has exercised a right of entry for this purpose.

The protections operate in a wide range of situations.  For example:

     . an employee is protected from adverse action by their employer
       because they are involved in establishing an industrial association;


     . an independent contractor is protected from action taken by an
       industrial association with intent to coerce the contractor to
       comply with a direction given by the industrial association; and


     . a person is protected from a false or misleading representation
       about the obligation to pay a bargaining services fee on which the
       person could be expected to rely.


1417. Subparagraph 347(b)(v) (together with the expansion of the definition
      of industrial association to include informal associations) is
      intended to protect persons exercising a representative function in
      the workplace, even if the person is not a union member, officer or
      workplace delegate.


Illustrative example


A group of employees, informally formed to represent the views of employees
on OHS issues in the workplace, approach their employer regarding their
concerns about the lack of available secure parking for those employees
requested to work overtime at night.  The employees will be an 'industrial
association' and acting in a representative capacity for the purpose of
subparagraph 347(b)(v).  They will be protected from adverse action because
of their involvement in the association, from being coerced not to be
involved in the association and from misrepresentations about their
obligations in relation to being involved in the association.


1418. Subparagraph 347(b)(vi) provides that a person engages in industrial
      activity if she or he does or does not pay a fee (however described)
      to an industrial association.  This clause is intended to cover
      payment (and non-payment) of bargaining and other fees.


1419. Subparagraph 347(b)(vii) provides that a person engages in industrial
      activity if she or he seeks or does not seek to be represented by an
      industrial association.  This is intended to complement the freedom
      that a person has to become or not become an officer or member of an
      industrial association as the ability to be represented by an
      association is a key element of freedom of association (paragraph
      347(a)).


Illustrative example


Kylie is employed by Daffy Duke Pty Ltd (Daffy Duke).  Daffy Duke proposes,
during negotiations for an enterprise agreement, to make a number of
rostering changes at the workplace.  A number of staff are unhappy about
the proposal and the relevant union organises protected industrial action
that includes a strike against Daffy Duke.  Kylie is happy with the
proposed rostering changes and declines to participate in the protected
action ballot to authorise the taking of industrial action or participate
in the protected industrial action.  The union would be prohibited from
taking adverse action against Kylie (e.g., refusing to provide her with
union services) because she refused to participate in the protected action
ballot and any subsequently approved protected industrial action.


Non-participation in unlawful industrial activities

1420. Clauses 346, 348 and 349 further protect persons from adverse action,
      coercion and misrepresentation in relation to not engaging in other
      industrial activities (i.e., the activities set out in paragraphs
      347(c) to (g)).


1421. Paragraph 346(c) provides that a person is only protected from
      adverse action for not engaging in the activities in paragraphs 347(c)
      from (g).  In addition, all of the activities in those paragraphs are
      framed solely in the positive (i.e., they relate only to taking,
      rather than not taking, the action).  This ensures that a person is
      only protected from adverse action, coercion and misrepresentation in
      relation to non-participation.  These protections are limited to non-
      participation as the activities are unlawful activities.


1422. Paragraphs 347(c) to (g) provide that a person engages in industrial
      activity if she or he:


     . organises or promotes an unlawful activity for, or on behalf of, an
       industrial association (paragraph 347(c));


     . encourages, or participates in, an unlawful activity organised or
       promoted by an industrial association (paragraph 347(d));


     . complies with an unlawful request made by, or requirement of, an
       industrial association (paragraph 347(e));


     . takes part in industrial action (paragraph 347(f)); or


     . makes a payment that, because of Division 9 of Part 3-3 (which deals
       with payments in relation to periods of industrial action), the
       person must not pay or makes a payment to which an employee is not
       entitled because of Division 9 of Part 3-3 (paragraph 347(g)).


1423. The protections operate in a wide range of situations.  For example:


     . a member is protected from adverse action by an industrial
       association (e.g., imposition of a penalty) because the member
       refuses to engage in industrial action organised by the industrial
       association during a period in which an enterprise agreement is in
       operation;


     . an employer is protected from action by an industrial association
       with intent to coerce the employer to make a payment to an employee
       in relation to a period of industrial action contrary to the strike
       pay provisions in Part 3-3 (Industrial action); and


     . an employee is protected from a misrepresentation by an industrial
       association to the employee, on which the employee could be expected
       to rely, about whether the employee is obliged to comply with an
       unlawful request of the industrial association.


Division 5 - Other protections


Clause 351 - Discrimination


1424. Clause 351 protects an employee or prospective employee from
      workplace discrimination.  It is intended to broadly cover paragraph
      659(2)(f) of the WR Act, which makes it unlawful to dismiss an
      employee for discriminatory reasons.  However, the protection in
      clause 351 has been expanded to prohibit any adverse action (as
      defined in subclause 342(1)) on discriminatory grounds.


1425. Subclause 351(1) prohibits an employer from taking adverse action
      against an employee or prospective employee of the employer because of
      the person's race, colour, sex, sexual preference, age, physical or
      mental disability, marital status, family or carer's responsibilities,
      pregnancy, religion, political opinion, national extraction or social
      origin.


Illustrative example


Sarita is employed by Dazzle Designers Pty Ltd.  She has recently applied
for a promotion.  She tells her manager that she is pregnant and will be
taking parental leave under the NES in five months time.  Sarita is
unsuccessful in her application.  Although highly qualified for the job,
Sarita's manager advises her that the reason she was not promoted is
because she will only be able to do the job for a short period of time
before going on parental leave.  Denying Sarita the promotion because she
is pregnant would be prohibited under subclause 351(1).


1426. Subclause 351(1) has been expanded to include a person's carer's
      responsibilities as a ground upon which adverse action is prohibited.




1427. Subclause 351(2) provides exceptions to the prohibition in subclause
      351(1).  Adverse action is not taken against an employee or
      prospective employee if the action is:


     . authorised by or under a State or Territory anti-discrimination law
       (paragraph 351(2)(a));


     . taken because of the inherent requirements of the particular
       position concerned (paragraph 351(2)(b)); or


     . taken against certain persons in good faith to avoid injury to the
       religious susceptibilities of adherents of a particular religion or
       creed (paragraph 351(2)(c)).


1428. The exceptions in paragraphs 351(2)(b) and (c) broadly cover the
      existing exceptions in section 659 of the WR Act.


1429. The exception in paragraph 351(2)(a) ensures that action authorised
      by or under a State or Territory anti-discrimination law (defined in
      subclause 351(3)) is not adverse action under subclause 351(1).  This
      would occur, for example, where the action is exempt from being
      discrimination because it was taken to protect the health and safety
      of people at a workplace (see the relevant exemption in section 108 of
      the Anti-Discrimination Act 1991 (Qld)).


1430. The note under subclause 351(2) alerts readers that action authorised
      by or under a law of the Commonwealth is also not adverse action under
      subclause 351(1).  The exception for action authorised by or under a
      law of the Commonwealth is separately provided for in subclause 342(3)
      because it operates across the whole of Part 3-1.


1431. Many similar protections against discriminatory conduct exist in
      other Commonwealth, State and Territory anti-discrimination
      legislation.  Part 6-1, which deals with multiple applications, limits
      a person to a remedy under only one of these laws in relation to the
      same conduct.


Clause 352 - Temporary absence - illness or injury


1432. Clause 352 prohibits an employer from dismissing an employee because
      the employee is temporarily absent from work because of illness or
      injury of a kind prescribed by the regulations.  It is intended to
      broadly cover paragraph 659(2)(a) of the WR Act.  There is some
      overlap between this protection and the workplace rights protection
      for entitlement to personal leave under the NES or a workplace
      instrument.


 Clause 353 - Bargaining services fees


1433. Clause 353 prohibits an industrial association, or an officer or
      member of an industrial association, from demanding a bargaining
      services fee .  It is intended to broadly cover section 801 of the WR
      Act.


1434. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1435. Subclauses 353(2) and (3) define bargaining services fee and
      bargaining services respectively.


1436. Subclause 353(4) provides an exception to subclause 353(1) where a
      bargaining services fee is payable to an industrial association under
      a contract for the provision of bargaining services.  This is designed
      to ensure that industrial associations can continue to offer
      bargaining services on a fee for service basis where an individual
      voluntarily enters into a contract.


Clause 354 - Coverage by particular instruments


1437. Clause 354 prohibits a person from discriminating against an employer
      on the basis that employees of the employer are or are not covered by
      provisions of the NES or are or are not covered or proposed to be
      covered by:


     . a particular type of workplace instrument (including a particular
       kind of workplace instrument within a type of workplace instrument);
       or


     . an enterprise agreement that does, or does not, cover an employee
       organisation, or a particular employee organisation.


1438. It is intended to be broadly equivalent to section 804 of the WR Act.


1439. The clause only applies to discrimination on the basis of the
      particular type of workplace instrument, rather than anything
      contained in that instrument.


1440. The reference to a particular type of workplace instrument (including
      a particular kind of workplace instrument within a type of workplace
      instrument) is intended to ensure that the clause deals with both:


     . particular types of workplace instruments, such as modern awards and
       enterprise agreements; and


     . subsets of those particular types of workplace instruments, such as
       single-enterprise agreements and multi-enterprise agreements.


1441. For example, subclause 354(1) prohibits:


     . A head contractor refusing to engage a subcontractor because the
       subcontractor's employees are not covered by an enterprise
       agreement, but instead a modern award applies to determine their
       entitlements and obligations.  In this example, the person is
       discriminating against an employer because a particular type of
       workplace instrument does not cover the employer's employees.


     . A head contractor refusing to engage a subcontractor because the
       subcontractor's employees are covered by a multi-enterprise
       agreement rather than a single-enterprise agreement.  In this
       example, the person is discriminating against the employer because a
       particular type of enterprise agreement covers the employer's
       employees.


1442. Subclause 354(2) makes clear that the provision does not apply to
      protected industrial action.  This means that protected industrial
      action does not amount to discrimination.


Clause 355 - Coercion - allocation of duties etc.  to a particular person


1443. Clause 355 is intended to prevent persons from being coerced to make
      certain employment or management related decisions.  It prohibits a
      person from organising or taking, or threatening to organise or take,
      any action against another person with intent to coerce that person or
      a third person to:


     . employ, or not employ, a particular person;


     . engage, or not engage, a particular independent contractor;


     . allocate, or not allocate, particular duties or responsibilities to
       a particular employee or independent contractor; or


     . designate a particular employee or independent contractor as having,
       or not having, particular duties or responsibilities.


1444. For example, clause 355 prohibits an industrial association from
      organising industrial action against a head contractor with intent to
      coerce the head contractor to engage a specific employee as a site
      delegate or safety officer.


Clause 356 - Objectionable terms


1445. Clause 356 provides that a term of a workplace instrument, or an
      agreement or arrangement (whether written or unwritten), has no effect
      to the extent that it is an objectionable term.  It is intended to
      broadly cover subsection 811(2) of the WR Act.  Objectionable term is
      defined in clause 12 to mean one that requires or permits (or has the
      effect of requiring or permitting):


     . a contravention of the provisions of the Part; or


     . the payment of a bargaining services fee.


Division 6 - Sham arrangements


1446. Division 6 provides civil penalties for sham arrangements with
      respect to employment and independent contracting relationships.


Clause 357 - Misrepresenting employment as independent contracting
arrangement


1447. Clause 357 prohibits an employer misrepresenting an employment or
      proposed employment relationship as an independent contracting
      relationship.  Although the text of the clause has been simplified, it
      is intended to broadly cover the effect of sections 900 and 901 of the
      WR Act.


1448. Subclause 357(1) prohibits a person who employs (or proposes to
      employ) an individual from representing to the individual that the
      contract under which the individual is (or would be employed) is a
      contract for services under which the individual performs (or would
      perform) work as an independent contractor.


1449. The person contravenes subclause 357(1) unless they can prove the
      matters in subclause 357(2).


1450. Subclause 357(2) provides that a person will not breach subclause
      357(1) if, when they made the representation that there was an
      independent contracting relationship, they did not know and were not
      reckless to the fact that the contract was a contract of employment
      rather than a contract for services.  The burden of proof in relation
      to the defence rests with the person who made the representation.
      This is consistent with the WR Act provisions.


1451. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Clause 358 - Dismissing to engage as an independent contractor


1452. Clause 358 prohibits an employer from dismissing (or threatening to
      dismiss) an employee who performs particular work for the employer, in
      order to engage the individual as an independent contractor to perform
      the same, or substantially the same work under a contract for
      services.


1453. Clause 358 is intended to broadly cover section 902 of the WR Act
      except that clause 358 does not include a 'sole or dominant purpose'
      reason formulation.  Instead, the formulation in clause 360 applies,
      which provides that a person takes action for a particular reason if
      the reasons for the action include that reason.


1454. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Clause 359 - misrepresentation to engage as independent contractor


1455. Clause 359 prohibits a person from knowingly making a false statement
      to a current or former employee with the intention of persuading or
      influencing that worker to become an independent contractor to do the
      same, or substantially the same, work.  It is intended to broadly
      cover section 903 of the WR Act.


1456. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Division 7 - Ancillary rules


Clause 360 - Multiple reasons for action


1457. Clause 360 deals with the extent to which a person's action must be
      motivated by a particular reason to establish a contravention of Part
      3-1.


1458. Clause 360 provides that for the purposes of Part 3-1, a person takes
      action for a particular reason if the reasons for the action include
      that reason.  The formulation of this clause embodies the language in
      existing section 792 which appears in Part 16 of the WR Act (Freedom
      of Association) and includes the related jurisprudence.  This phrase
      has been interpreted to mean that the reason must be an operative or
      immediate reason for the action (see Maritime Union of Australia v CSL
      Australia Pty Limited [2002] FCA 513; 113 IR 326 at [54]-[55]).  The
      'sole or dominant' reason test which applied to some protections in
      the WR Act does not apply in Part 3-1.


Clause 361 - Reason for action to be presumed unless proved otherwise


1459. Clause 361 reverses the onus of proof applicable to civil proceedings
      for a contravention of Part 3-1.  It is intended to broadly cover
      section 809 of the WR Act.


1460. Generally a civil action places the onus on the complainant to
      establish on the balance of probabilities that the action complained
      of was carried out for a particular reason or with a particular
      intent.


1461. However, subclause 361(1) provides that once a complainant has
      alleged that a person's actual or threatened action is motivated by a
      reason or intent that would contravene the relevant provision(s) of
      Part 3-1, that person has to establish, on the balance of
      probabilities, that the conduct was not carried out unlawfully.  This
      has been a long-standing feature of the freedom of association and
      unlawful termination protections and recognises that, in the absence
      of such a clause, it would often be extremely difficult, if not
      impossible, for a complainant to establish that a person acted for an
      unlawful reason.


1462. Subclause 361(2) provides that the reverse onus will not apply to the
      granting of interim injunctions.  This is consistent with section 809
      of the WR Act, and is intended to address the problems that can arise
      from the interaction of the reverse onus with the 'balance of
      convenience' test that applies to interim injunctions.


Clause 362 - Advising, encouraging, inciting or coercing action


1463. This clause is intended to ensure that a person cannot avoid being
      subject to the prohibitions in the Part by getting another person to
      carry out the prohibited conduct.


1464. Subclause 362(1) prohibits a person from, for a particular reason:


     . advising, encouraging or inciting another person; or


     . taking any action with intent to coerce another person to take
       action,

in circumstances where the action if taken for the first person's reason
would breach a provision of Part 3-1.

1465. The drafting of clause 362 makes it clear that it is the reason
      motivating the first person (and not the incited or coerced person)
      that is relevant for the purpose of the prohibition.


1466. Subclause 362(1) captures the conduct of a third party where, for
      example:


     . an industrial association advises an employer to dismiss an employee
       because the employee is not a member of an industrial association;
       or


     . an industrial association encourages a person to refuse to make use
       of the services of an independent contractor because the independent
       contractor (or a person employed by the independent contractor) is
       not a member of an industrial association.


1467. This clause does not limit the general ancillary liability provisions
      contained in clause 551.


Clause 363 - Actions of industrial associations


1468. Subclause 363(1) defines what are taken to be the actions of an
      industrial association for the purposes of Part 3-1.  This recognises
      that there can be difficulty in identifying whether actions taken by
      persons associated with an industrial association (such as members and
      officers) are attributable to the association irrespective of whether
      or not the association is a legal person (e.g., an organisation).
      This clause identifies actions by individuals and groups which are
      taken to be actions of an industrial association and thus give rise to
      liability on the part of the industrial association.


1469. The clause provides a defence in subclause 363(2) which operates
      where all reasonable steps are taken by management, officers or
      authorised members to prevent action by a member or members.


1470. Clause 363 is intended to broadly cover subsection 779(2) of the WR
      Act.  However, the provision has been broadened to include paragraph
      363(1)(e) which deals with unincorporated industrial associations that
      do not have a committee of management.  In such circumstances, action
      taken by a member or group of members of the industrial association is
      deemed to be action of the industrial association.


1471. There can also be difficulty in establishing whether a body corporate
      or unincorporated body (such as an industrial association) has the
      requisite state of mind to be liable for a contravention.  Subclause
      363(3) provides, in effect, that the association's state of mind is
      taken to be the state of mind of the member who took the relevant
      action or of a person in a group which took the action.


1472. Subclause 363(4) ensures that subclauses 363(1) to (3) have effect
      despite subclauses 793(1) and (2), which make similar provision to
      deal with the liabilities of bodies corporate more generally under
      this Bill.


Clause 364 - unincorporated industrial associations


1473. Subclause 364(1) provides that, for the purposes of Part 3-1, a
      reference to a person includes a reference to an unincorporated
      industrial association.  Many of the provisions of Part 3-1 apply to
      persons.  Those provisions clearly apply to incorporated industrial
      associations because they are legal persons.  This provision deems
      unincorporated industrial associations to be persons so that the
      provisions can also apply to them.


1474. However, because an unincorporated industrial association is not a
      legal person, liability for a contravention of a provision of Part 3-1
      cannot be imposed on the association itself.  Subclause 364(2)
      provides that a contravention of Part 3-1 by an unincorporated
      industrial association is taken to have been committed by any member,
      officer or agent of the industrial association who took part in the
      relevant action and did so with the relevant state of mind.


Division 8 - Compliance


1475. This Division sets out the compliance framework for contraventions of
      Part 3-1.  In most cases where there has been a dismissal, the dispute
      will be dealt with at first instance in a conference conducted by FWA.
       If the dispute remains unsettled after the conclusion of the
      conference, the dismissed employee can proceed to court.  In all other
      cases, participation in an FWA conference is voluntary and a person
      can instead elect to proceed directly to court.


1476. Not all procedural matters relating to general protections
      contraventions are contained in Part 3-1.  Relevant clauses are also
      located in:


     . Part 5-1 of this Bill which deals with FWA; and


     . Part 4-1 of this Bill which deals with applications to court for a
       contravention of a civil remedy provision.


1477. Part 6-1, which deals with multiple applications, sets out
      circumstances in which a person is prevented from obtaining more than
      one remedy in relation to the same conduct.


Subdivision A - Contraventions involving dismissal


Clause 365 - Application for FWA to deal with a dispute


1478. Clause 365 provides that a person who alleges that they have been
      dismissed in contravention of Part 3-1, may apply to FWA for a
      conference to attempt to settle the dispute.  An industrial
      association entitled to represent the industrial interests of the
      dismissed employee may also make an application to FWA under clause
      365.


Clause 366 - Time for application


1479. Subclause 366(1) provides that an application must be made within 60
      days of a dismissal taking effect.   However, FWA has discretion to
      extend the timeframe for making an application if it is satisfied that
      there are exceptional circumstances.


1480. Subclause 366(2) provides an exhaustive list of the factors FWA must
      take into account when determining if there are exceptional
      circumstances.  These factors are based on the principles set down by
      the Industrial Relations Court of Australia in Brodie-Hanns v MTV
      Publishing Ltd (1995) 67 IR 298 and are consistent with the approach
      taken to extension of time applications in the WR Act.


Clause 367 - Application fees


1481. Subclause 367(1) requires an application under clause 365 to be
      accompanied by the prescribed fee (if any).


1482. Subparagraphs 367(2)(a), (b) and (c) provide that the application
      fee, the method for indexing the fee and the circumstances in which
      all or part of the fee may be waived or refunded may be prescribed by
      regulation.


Clause 368 - Conferences


1483. Subclause 368(1) provides that if a person makes an application under
      clause 365 in relation to their dismissal, FWA must conduct a
      conference to deal with the dispute.


1484. A legislate note alerts the reader that clause 592 contains
      procedural rules relating to the conduct of conferences by FWA.


1485. A further legislative note alerts the reader to clause 595, which
      sets out FWA's powers when dealing with a dispute.  The effect of this
      provision is that FWA cannot arbitrate the dispute (see subclauses
      595(1) and (5)), but can deal with the dispute by mediation,
      conciliation, making a recommendation or expressing an opinion.  The
      note also makes it clear that where FWA forms the view that the
      dispute is in fact more properly characterised as an unfair dismissal
      claim, FWA can recommend that the dismissed employee make an
      application under Part 3-2 (which deals with unfair dismissal).


1486. Subclause 368(2) provides that FWA must conduct the conference in
      private.  The subclause is a limitation on FWA's discretion in
      subclause 592(3), which would otherwise allow the person conducting
      the conference to direct it be held in public.


Clause 369 - Certificate if matter not resolved


1487. Clause 369 requires FWA, where it is satisfied all reasonable
      attempts to settle the matter have been, or are likely to be
      unsuccessful, to issue a certificate to that effect.


Clause 370 - Advice on general protections court application


1488. If FWA considers, taking into account all of the materials before it,
      that a general protections court application would not have a
      reasonable prospect of success, subclause 370(1) requires FWA to
      advise the parties accordingly.


1489. Subclause 370(2) defines a general protections court application as
      an application to the Federal Court or the Federal Magistrates Court
      under Division 2 of Part 4-1 for orders in relation to a contravention
      of Part 3-1.


Clause 371 - General protections court applications


1490. Subclause 371(1) sets out the two circumstances in which a dismissed
      employee can make a general protections court application in relation
      to the dismissal.  They are:


     . if FWA has issued a certificate under clause 369 in relation to the
       dispute; or


     . if the general protections court application includes an application
       for an interim injunction.  This recognises that a conference may be
       a barrier to obtaining urgent relief in some cases - e.g., where the
       employment of a bargaining representative has been terminated for
       reasons related to this role.


1491. Subclause 371(2) provides that once FWA has issued a certificate
      under clause 369, a person has 14 days to make a general protections
      court application.


Subdivision B - Other Contraventions


Clause 372 - Application for FWA to deal with a dispute


Clause 373 - Application fees


Clause 374 - Conferences


Clause 375 - Advice on general protections court application


1492. Where a person alleges a contravention of Part 3-1 but is not
      entitled to make an application under clause 365, the person has the
      option of applying under clause 372 for FWA to deal with the dispute
      rather than proceeding immediately to a court action.  Applications
      can be made under this clause if, for example, an employee was not
      dismissed, but suffered a reduction in wages because of the alleged
      contravention.


1493. The prescribed fee (if any) must accompany the application (subclause
      373(1)).


1494. In cases where an application is made to FWA, the process is broadly
      the same as for applications under clause 365, except that a
      conference to deal with the dispute can only be convened by FWA if all
      parties to the dispute agree to participate (subclause 374(1)).


1495. Where all the parties to the dispute do not agree to participate in
      an FWA conference, the person alleging a contravention of Part 3-1 can
      still make an application to the Federal Court or the Federal
      Magistrates Court under Division 2 of Part 4-1 for orders in relation
      to the contravention.


1496. An example of where an FWA conference may not be appropriate and
      where the dispute would instead proceed directly to court is where an
      inspector is bringing the action and is seeking the imposition of a
      monetary penalty.


Subdivision C - Conference costs


Clause 376 - Costs orders against lawyers and paid agents


1497. Subclause 376(1) allows FWA to make costs orders against lawyers and
      paid agents who cause costs to be incurred by another party in
      relation to an application under clause 365 or clause 372, because
      they encouraged a person to make the application when it should have
      been reasonably apparent there were no reasonable prospects of
      success, or because an act or omission by them in connection with the
      conduct or continuation of the dispute was unreasonable.


1498. These provisions are designed to deter lawyers and paid agents from
      encouraging others to make speculative applications, or make
      applications they know have no reasonable prospects of success.


1499. Subclause 376(1) operates in addition to subclause 611(2).  Subclause
      611(2) provides FWA with a general power to make costs orders against
      a person in the following circumstances:


     . where a person made an application, or responded to an application,
       vexatiously or without reasonable cause; or


     . where a person made an application, or responded to an application,
       and it should have been reasonably apparent to the person that their
       application, or response to an application, had no reasonable
       prospects of success.


1500. Subclause 376(2) provides that, in order for FWA to make a costs
      order against a lawyer or paid agent, an application by the person
      seeking the costs needs to have been made under clause 376.


1501. Subclause 376(3) clarifies that these provisions are not intended to
      limit FWA's power to order costs under clause 611.


Clause 377 - Applications for costs orders


Clause 378 Contravening costs order


1502. Clause 377 sets a time limit on applications for costs in relation to
      an application under subdivisions A or B of 14 days after FWA has
      finished dealing with the dispute.


1503. Clause 378 provides that a person to whom a costs order applies must
      not contravene a term of the order.


1504. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).




                         Part 3-2 - Unfair Dismissal


Division 1 - Introduction


Clause 379 - Guide to this Part


1505. This clause provides a guide to this Part.


Clause 380 - Meaning of employee and employer


1506. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


Clause 381 - Object of this Part


1507. This clause sets out the object of the unfair dismissal Part.  A
      principal aim of the unfair dismissal framework is balancing the needs
      of businesses and employees, with particular accommodation of the
      needs of small businesses.


1508. The object is also to provide a quick, flexible and informal process
      for the resolution of unfair dismissal claims that addresses the needs
      of both employers and employees.  Paragraph 381(1)(c) highlights that
      reinstatement should be the primary remedy for unfair dismissal.


1509. Subclause 381(2) provides that the unfair dismissal provisions are
      intended to operate in a way that provide a fair go all round to both
      employers and employees.  A legislative note refers to the fact that
      the expression 'a fair go all round' was used by Sheldon J in Loty and
      Holloway v Australian Workers' Union [1971] AR (NSW) 95.


Division 2 - Protection from unfair dismissal


1510. This Division sets out when a person may be entitled to a remedy for
      unfair dismissal.


Clause 382 - When a person is protected from unfair dismissal


1511. This clause outlines the situations when a person may be entitled to
      an unfair dismissal remedy.  It does this by providing a definition of
      when a person is protected from unfair dismissal - this expression is
      subsequently used in clause 390 to set out when FWA may order a remedy
      for unfair dismissal.


1512. Paragraph 382(a) provides that a person must have completed a minimum
      employment period with his or her employer.  A requirement that an
      employee serve a minimum period before having access to an unfair
      dismissal remedy enables an employer to have a period of time to
      assess the capacity and conduct of a new employee without being
      subject to an unfair dismissal claim if they dismiss the employee
      during this period.


1513. Paragraph 382(b) provides that a person will be protected from unfair
      dismissal if they are covered by a modern award or if an enterprise
      agreement applies to their employment.  If neither of these criteria
      applies, a person will only be able to bring an unfair dismissal claim
      if their remuneration is less than the high income threshold.


1514. The high income threshold is defined in clause 333 as an amount
      prescribed by regulations and will be $100,000 as indexed from 27
      August 2007.  A person has remuneration in excess of the high income
      threshold if their annual rate of earnings, plus any other amounts as
      prescribed under the regulations exceed the amount of the threshold.
      The person's earnings will be assessed in accordance with the
      definition in clause 332.


Clause 383 - Minimum employment period


1515. This clause sets out what is the minimum employment period.  It is
      one year for employees of a small business and six months for all
      other employees.  Whether an employee has served the minimum
      employment period is assessed either when the person is given notice
      of dismissal, or when the dismissal actually takes effect, whichever
      happens first.  Clause 383 relies on the definition of small business
      employer in clause 23 when determining the length of the minimum
      employment period applying to employees in a particular business.


1516. Under subclause 23(1), an employer is a small business employer if
      the employer employs fewer than 15 employees.  All employees employed
      by the employer will be counted, including all casual employees who
      have been employed on a regular and systematic basis and employees
      employed by associated entities (as defined in clause 12).


Clause 384 - Period of employment


1517. This clause outlines when an employee's service counts towards the
      minimum employment period.


1518. An employee's period of employment is defined as the period of
      continuous service the employee has completed with the employer.
      Service as a casual employee does not count towards the period of
      employment unless it was on a regular and systematic basis and the
      employee had a reasonable expectation of continuing engagement on a
      regular and systematic basis.


1519. What constitutes continuous service is defined in clause 22.
      According to that definition, the following periods are excluded
      periods and do not count towards the period of employment:


     . any period of unauthorised absence;


     . any period of unpaid leave or unpaid authorised absence other than
       community service leave, a period of stand down under Part 3-5 or a
       period of leave or absence of a kind prescribed in the regulations.


1520. Any excluded period does not break continuous service but does not
      count towards the length of the employee's continuous service.


1521. A period of employment with one employer can include periods of
      employment with another employer in certain circumstances due to the
      definition of service in clause 22.  This occurs where the employee is
      a transferring employee in relation to a transfer of business or where
      the employee transfers between associated entities (as defined in
      clause 12).


1522. Under paragraph 384(2)(b) when a transfer of business occurs, a new
      employer can choose not to recognise service of the employee with the
      old employer for the purposes of the unfair dismissal provisions.
      However, they must inform the employee in writing before the new
      employment starts.  This does not apply if the transfer of business
      was between associated entities.


1523. Consequently, where there is a transfer of employment between
      associated entities, service with the first employer will always count
      towards service with the second employer.  This means that an employee
      can access unfair dismissal remedies without having to serve another
      minimum employment period when they are transferred between employers
      as part of a corporate restructure.


1524. Clause 22 is intended to be able to apply multiple times, so that an
      employee who had been a transferring employee in relation to a
      transfer of business or had been moved between associated entities
      more than once would be able to count service with each employer
      towards their minimum employment period.


Illustrative examples


Marty is dismissed from his job as an IT technician at UberTek Pty Ltd.
His manager told him he was not happy about a recent incident where Marty
was late for work and was therefore dismissing him.  Marty does not think
this is a valid reason for his dismissal, as he had phoned his manager to
tell him he would be late because his car broke down.


Marty has only been employed by UberTek Pty Ltd for three months.  However,
he became an employee of UberTek due to a transfer of business where Marty
was a transferring employee.  Before the transfer of business, Marty was
continuously employed with his old employer (not an associated entity of
UberTek) for three years.  Marty was not notified in writing before his
employment started that his service with his old employer would not be
recognised by UberTek.


Marty's period of continuous service with UberTek is therefore three years
and three months, meaning he has completed the minimum employment period
and is able to bring a claim for unfair dismissal.


Natalie runs a number of Melbourne bars through different corporate
entities.  She creates a new entity, Martini Pty Ltd, with a view to moving
all the employees to this new entity to streamline her employment and
payroll practices.  As Martini Pty Ltd and the other companies are
associated entities, all the employees will retain their continuity of
service, and would not need to serve new minimum employment periods.


Division 3 - What is an unfair dismissal


1525. This Division sets out what will constitute an unfair dismissal,
      including when a person is taken to be dismissed and the factors FWA
      must take into account when determining whether a dismissal is harsh,
      unjust or unreasonable.


Clause 385 - What is an unfair dismissal


1526. This clause sets out when a person has been unfairly dismissed, being
      when FWA is satisfied that:


     . the person has been dismissed;


     . the dismissal was harsh, unjust or unreasonable;


     . the dismissal was not consistent with the Small Business Fair
       Dismissal Code; and


     . the dismissal was not a case of genuine redundancy.


1527. FWA has to be satisfied in relation to each paragraph in 385(a) to
      (d) for a person to have been unfairly dismissed.  However, whether or
      not a dismissal is consistent with the Small Business Fair Dismissal
      Code is only relevant where the person was employed by a small
      business employer as the Code will only apply to small business
      employers.  The note below this clause clarifies this by providing a
      cross reference to the definition of the expression consistent with
      the Small Business Fair Dismissal Code.


Clause 386 - Meaning of dismissed


1528. This clause sets out the circumstances in which a person is taken to
      be dismissed.  A person is dismissed if the person's employment with
      his or her employer was terminated on the employer's initiative.  This
      is intended to capture case law relating to the meaning of
      'termination at the initiative of the employer' (see, e.g., Mohazab v
      Dick Smith Electronics Pty Ltd (1995) 62 IR 200).


1529. Paragraph 386(1)(b) provides that a person has been dismissed if they
      resigned from their employment but were forced to do so because of
      conduct, or a course of conduct, engaged in by their employer.
      Conduct includes both an act and a failure to act (see the definition
      in clause 12).


1530. Paragraph 386(1)(b)  is intended to reflect the common law concept of
      constructive dismissal, and allow for a finding that an employee was
      dismissed in the following situations:


     . where the employee is effectively instructed to resign by the
       employer in the face of a threatened or impending dismissal; or


     . where the employee quits their job in response to conduct by the
       employer which gives them no reasonable choice but to resign.


1531. Subclause 386(2) sets out circumstances in which a person is taken
      not to have been dismissed.  These are where:


     . the person was employed for a specified period of time, for a
       specified task, or for the duration of a specified season, and the
       employment has terminated at the end of the period, task or season;
       or


     . the employment has terminated at the end of a training arrangement
       (as defined in clause 12) that applied to the person and the
       person's employment was for a specified period of time or limited to
       the duration of the training arrangement; or


     . the person was demoted in employment but it did not involve a
       significant reduction in his or her remuneration or duties and she
       or he remains employed with the employer.


1532. Paragraph 386(2)(a) reflects the common law position that termination
      in these circumstances would not be a dismissal.  The fact that an
      employment contract may allow for earlier termination would not alter
      the application of this provision as the employment has terminated at
      the end of the period, task or season.  However, if a person engaged
      on this sort of contract is terminated prior to the end time specified
      in the contract, they may seek an unfair dismissal remedy if they
      satisfy the other requirements.


1533. In relation to employment for a specified task, paragraph 386(2)(a)
      only applies where it was specifically intended at the start of the
      person's employment that the person's employment would be terminated
      on the completion of a specified task.  It is not designed to cover
      persons who were simply engaged in connection with a particular task
      at first instance (e.g., to work on a particular project) but whose
      employment was intended to be ongoing.


1534. Season has its ordinary meaning and covers a range of things, for
      example:


     . the part of a year when a product is best or available;


     . the part of a year characterised by particular conditions of weather
       or temperature; or


     . the part of a year marked by certain conditions, festivities or
       other activities.


1535. The provision that a person is not dismissed when she or he is
      terminated at the end of a specified season is intended to apply in
      situations where employees are gradually reduced in number towards the
      end of a season.  For instance, it will capture a situation where an
      employee is dismissed when the season is winding down and consequently
      the employer only requires half the number of employees they did at
      the start of the season.


1536. Subclause 386(3) is an anti-avoidance rule.  It provides that where a
      substantial purpose of a person's engagement on a contract for a
      specified period of time, task or season is to avoid the employer's
      obligations under the unfair dismissal provisions, then paragraph
      386(2)(a) does not apply.


1537. Paragraph 386(2)(b) provides that a person on a training arrangement
      and whose employment is for a specified time or is otherwise limited
      to the duration of the training arrangement has not been dismissed
      where their employment has terminated at the end of the training
      arrangement.  Training arrangement as defined covers both trainees and
      apprentices.  This paragraph is intended to cover competency-based
      training arrangements that have a nominal end date which can be
      altered in line with the employee's competency but that still limit
      the person's employment to the duration of the training arrangement.


1538. Paragraph 386(2)(b)  does not prevent trainees and apprentices from
      seeking a remedy if they are dismissed during the life of their
      traineeship or apprenticeship.


1539. Trainees and apprentices may also have remedies for a dismissal under
      State or Territory training laws.  However, the provisions dealing
      with multiple applications in Part 6-1 would prevent a trainee or
      apprentice from accessing multiple remedies.


Clause 387 - Criteria for considering harshness etc.


1540. This clause is central to the unfair dismissal provisions as it sets
      out the factors FWA must take into account when considering whether a
      dismissal was harsh, unjust or unreasonable:


     . whether there was a valid reason for the dismissal related to the
       person's capacity or conduct (including its effect on the safety and
       welfare of other employees); and


     . whether the person was notified of that reason; and


     . whether the person was given any opportunity to respond to any
       reason related to the capacity or conduct of the person; and


     . any unreasonable refusal by the employer to allow the person to have
       a support person present to assist at any discussions relating to
       dismissal; and


     . if the dismissal related to unsatisfactory performance by the person
       - whether the person had been warned about that unsatisfactory
       performance before the dismissal; and


     . the degree to which the size of the employer's enterprise (as
       defined in clause 12) would be likely to impact on the procedures
       followed in effecting the dismissal; and


     . the degree to which the absence of dedicated human resource
       management specialists or expertise in the enterprise would be
       likely to impact on the procedures followed in effecting the
       dismissal; and


     . any other matters that FWA considers relevant.


1541. FWA must consider all of the above factors in totality.  It is
      intended that FWA will weigh up all the factors in coming to a
      decision about whether a dismissal was harsh, unjust or unreasonable
      and no factor alone will necessarily be determinative.


1542. These factors are the same as those in subsection 652(3) of the WR
      Act, with the addition of paragraph 387(d).    This factor will only
      be a relevant consideration when an employee asks to have a support
      person present in a discussion relating to dismissal and the employer
      unreasonably refuses.  It does not impose a positive obligation on
      employers to offer an employee the opportunity to have a support
      person present when they are considering dismissing them.  It will be
      one factor FWA must consider when determining whether a dismissal was
      unfair, having regard to all of the circumstances, including the
      capacity of the employee to respond to the allegations put to him or
      her without such a support person being present..


Clause 388 - The Small Business Fair Dismissal Code


1543. Subclause 388(1) enables the Minister to declare a Small Business
      Fair Dismissal Code by legislative instrument.  Subclause 388(2)
      provides that a person's dismissal is consistent with the Small
      Business Fair Dismissal Code if the person's employer was a small
      business employer at the relevant time and complied with the Small
      Business Fair Dismissal Code when dismissing the person.  Small
      business employer is defined in clause 23.


1544. Under subclause 23(1), an employer is a small business employer if
      the employer employs fewer than 15 employees.  All employees employed
      by the employer will be counted, including all casual employees who
      have been employed on a regular and systematic basis and employees
      employed by associated entities (as defined in clause 12).


1545. If a person's dismissal is consistent with the Small Business Fair
      Dismissal Code then the dismissal will be considered fair and the
      other factors relating to unfair dismissal do not need to be
      considered.  This arises because clause 396 provides that whether a
      dismissal is consistent with the Code is an initial matter that FWA
      must consider before considering the merits of the application.  If
      the employer has not complied with the Code, the claim will be treated
      the same way as any other unfair dismissal claim.


Clause 389 - Meaning of genuine redundancy


1546. This clause sets out what will and will not constitute a genuine
      redundancy.  If a dismissal is a genuine redundancy it will not be an
      unfair dismissal.


1547. Paragraph 389(1)(a) provides that a person's dismissal will be a case
      of genuine redundancy if his or her job was no longer required to be
      performed by anyone because of changes in the operational requirements
      of the employer's enterprise.  Enterprise is defined in clause 12 to
      mean a business, activity, project or undertaking.


1548. The following are possible examples of a change in the operational
      requirements of an enterprise:


     . a machine is now available to do the job performed by the employee;


     . the employer's business is experiencing a downturn and therefore the
       employer only needs three people to do a particular task or duty
       instead of five; or


     . the employer is restructuring their business to improve efficiency
       and the tasks done by a particular employee are distributed between
       several other employees and therefore the person's job no longer
       exists.


1549. It is intended that a dismissal will be a case of genuine redundancy
      even if the changes in the employer's operational requirements relate
      only to a part of the employer's enterprise, as this will still
      constitute a change to the employer's enterprise.


1550. Paragraph 389(1)(b) provides that it will not be case of genuine
      redundancy if an employer does not comply with any relevant obligation
      in a modern award or enterprise agreement to consult about the
      redundancy.  This does not impose an absolute obligation on an
      employer to consult about the redundancy but requires the employer to
      fulfil obligations under an award or agreement if the dismissal is to
      be considered a genuine redundancy.


1551. Subclause 389(2) provides that a dismissal is not a case of genuine
      redundancy if it would have been reasonable in all the circumstances
      for the person to be redeployed within the employer's enterprise, or
      within the enterprise of an associated entity of the employer (as
      defined in clause 12).


1552. There may be many reasons why it would not be reasonable for a person
      to be redeployed.  For instance, the employer could be a small
      business employer where there is no opportunity for redeployment or
      there may be no positions available for which the employee has
      suitable qualifications or experience.


1553. Whether a dismissal is a genuine redundancy does not go to the
      process for selecting individual employees for redundancy.  However,
      if the reason a person is selected for redundancy is one of the
      prohibited reasons covered by the general protections in Part 3-1 then
      the person will be able to bring an action under that Part in relation
      to the dismissal.


Illustrative example


Cath is one of four chefs at Kat's Bar and Bistro.  She has been working at
the restaurant for five years.  Six months ago a new restaurant opened up
across the road and business has been steadily declining.  The manager,
Kristy, has made the decision to cut the number of chefs from four to two
as only two chefs are needed to manage the reduced workload.  There are no
redeployment opportunities for either of the chefs as Kat's bar and bistro
only employs a small number of staff and has no associated entities.
Before deciding to make employees redundant, Kristy checks the award that
applies to the chefs and finds that there are no obligations to consult
about the redundancy.  Kristy dismisses Cath and one other chef and
provides them with notice of termination under the NES and pays all amounts
owing on termination (e.g., untaken annual leave).


Based on these facts, Cath's dismissal would be a case of genuine
redundancy and she would not have been unfairly dismissed.


However, Kristy's reason for selecting Cath as one of the employees to be
dismissed was that she had recently complained to her union that she was
not being paid the correct allowances under the award.


While this would not change a finding that it was a genuine redundancy, it
may contravene the general protections as it may involve Kristy taking
adverse action (being the dismissal) against Cath because she exercised a
workplace right to complain to the union about not receiving her
entitlements.


Division 4 - Remedies for unfair dismissal


1554. This Division deals with the remedies that FWA may order for an
      unfair dismissal.


Clause 390 - When FWA may order remedy for unfair dismissal


1555. This clause sets out when FWA may order a remedy for unfair
      dismissal, namely when a person has been unfairly dismissed and they
      were protected from unfair dismissal.  Consistent with reinstatement
      being the primary remedy, FWA may order compensation only if it is
      satisfied that reinstatement is inappropriate and that compensation is
      appropriate.


1556. Subclause 390(2) provides that FWA can order a remedy only if the
      person has made an application under clause 394.  However, FWA will
      not be confined to ordering the remedy the applicant has specifically
      applied for.  Clause 599 provides that FWA does not have to make an
      order in the terms applied for.


Clause 391 - Remedy - reinstatement


1557. This clause provides that an order for reinstatement must be to
      either reappoint the person to the position they had immediately
      before the dismissal or appoint them to another position that has
      terms and conditions no less favourable than the position they
      previously held..


1558. The clause also sets out other orders FWA may make if it orders
      reinstatement.


1559. Under subclause 391(2) FWA can make any other order it considers
      appropriate to maintain the person's continuity of employment and
      period of continuous service.


1560. Under subclause 391(3) FWA can make any other order it considers
      appropriate for an employer to pay an amount for the remuneration lost
      or likely to have been lost because of the dismissal.  In making any
      such order, FWA must take into account any remuneration the person has
      earned or is likely to earn from employment or other work in the time
      between their dismissal and reinstatement.


     . As these orders are only to compensate for lost remuneration, they
       cannot extend to include any component by way of compensation for
       shock, distress or humiliation caused by the manner of the person's
       dismissal.


Clause 392 - Remedy - Compensation


1561. This clause sets out rules in relation to when FWA decides to make an
      order for compensation in lieu of reinstatement.


1562. FWA must take into account all the circumstances of the case in
      determining the amount of compensation, including:


     . the effect of the order on the viability of the employer's
       enterprise; and


     . the length of the person's service with the employer; and


     . the remuneration that the person would have received, or would have
       been likely to receive, if the person had not been dismissed; and


     . the efforts of the person (if any) to mitigate the loss suffered by
       the person because of the dismissal; and


     . the amount of any remuneration earned by the person from employment
       or other work during the period between the dismissal and the making
       of the order for compensation; and


     . the amount of any remuneration reasonably likely to be so earned by
       the person during the period between the making of the order for
       compensation and the actual compensation; and


     . any other matter that FWA considers relevant.


1563. Subclause 392(3) provides that FWA must reduce the amount of
      compensation it would otherwise order if it is satisfied that the
      person's misconduct contributed to the employer's decision to dismiss
      the person.


1564. Under subclause 392(4), any compensation ordered by FWA must not
      include a component by way of compensation for shock, distress or
      humiliation caused by the manner of the person's dismissal.  This
      reflects the common law position that shock, distress or humiliation
      resulting from the dismissal is not compensable (Addis v Gramophone Co
      Ltd [1909] AC 488 and Baltic Shipping Co v Dillon (1993) 176 CLR 344).




1565. Subclause 392(5) provides that there is a cap on the compensation FWA
      can order to a person.  The compensation cap is the lesser of:


     . half the amount of the high income threshold, which is defined in
       clause 333; or


     . the amount of remuneration received by the person, or that they were
       entitled to receive (whichever is higher) in the 26 weeks before the
       dismissal.


1566. The compensation cap will be the same for all employees, regardless
      of what employment instrument there are employed under.


1567. If an employee was on leave without pay or without full pay in the 26
      weeks before the dismissal, their remuneration will be calculated in
      accordance with the regulations.


Clause 393 - Monetary orders may be in instalments


1568. This clause clarifies that FWA can allow an employer to pay an order
      for lost pay or an order for compensation in instalments.


Division 5 - Procedural matters


1569. This Division deals with the process side of an unfair dismissal
      application.  It sets out rules relating to applications for a remedy,
      how FWA will deal with a matter and ancillary matters.


1570. This Division balances the need for a faster, less costly and less
      complex process of resolving unfair dismissal claims with the need to
      provide fairness for both employers and employees.  In addition to the
      rules set out in these provisions, the rules of natural justice will
      apply.


Clause 394 - Application to FWA for unfair dismissal remedy


1571. This clause sets out when a person who has been dismissed may apply
      to FWA for a remedy where the dismissal was harsh, unjust or
      unreasonable.


1572. Subclause 394(2) provides that an application must be made within
      seven days of a dismissal taking effect.  However, FWA has discretion
      to extend the timeframe for making an unfair dismissal application if
      it is satisfied that there are exceptional circumstances.


1573. This discretion must be exercised in accordance with subclause
      394(3), which provides an exhaustive list of the factors FWA must take
      into account when determining if there are exceptional circumstances.
      These factors are based on the principles set down by the Industrial
      Relations Court of Australia in Brodie-Hanns v MTV Publishing Ltd
      (1995) 67 IR 298.


1574. Paragraph 394(3)(b) provides an additional factor which is not one of
      the Brodie-Hanns factors.  This factor is whether the person first
      became aware of the dismissal after it had taken effect.  It is
      intended to address situations where the person fails to lodge an
      application within the seven day time limit because they were unaware
      they had been dismissed until some time after the dismissal occurred.


1575. Not all procedural matters relating to unfair dismissal are contained
      in Part 3-2.


1576. Clauses that are relevant to unfair dismissal applications are also
      located in Part 5-1 (Fair Work Australia), including:


     . clause 585, which has the effect that unfair dismissal applications
       to FWA must be made in accordance with any procedural rules
       determined by FWA;


     . clause 586, which allows FWA to correct or amend an application on
       any terms that FWA considers appropriate; and


     . clause 587, which allows FWA to dismiss an application if it:


          o is not made in accordance with the requirements of the Bill;


          o is frivolous or vexatious; or


          o has no reasonable prospects of success.


1577. Part 6-1 (Multiple processes) sets out circumstances in which a
      person would be prevented from bringing an unfair dismissal claim
      because they have sought a remedy under another part of the Bill or
      another law.


Clause 395 - Application fees


1578. Subclause 395(1) requires unfair dismissal applicants to pay any
      prescribed fee at the time of making their application.


1579. Paragraphs 395(2)(a), (b) and (c) provide that the application fee,
      the method for indexing the fee and the circumstances in which all or
      part of the fee may be waived or refunded may be prescribed by
      regulation.


Clause 396 - Initial matters to be considered before merits


1580. Clause 396 requires FWA to decide certain matters before it considers
      whether a dismissal was harsh, unjust or unreasonable.  These matters
      are whether:


     . the application is made within the time limit required in 394(2);


     . the person is protected from unfair dismissal;


     . the dismissal is consistent with the Small Business Fair Dismissal
       Code (only where the employer is a small business employer as
       defined in clause 23); and


     . the dismissal is a case of genuine redundancy.


1581. How FWA decides an initial matter will be subject to any relevant
      procedural requirements.  For instance, the approach will depend on
      whether or not contested facts are involved.


1582. If there are contested facts in relation to an initial matter, clause
      397 provides that FWA is required to inform itself either by holding a
      conference or by conducting a hearing prior to making a decision.
      Provisions relating to the way in which unfair dismissal conferences
      and hearings are to be held or conducted are contained in clauses 398
      and 399 respectively.


1583. If there are no contested facts, FWA can inform itself in relation to
      the initial matter in any way it considers appropriate using the non-
      exhaustive list of powers available to it in clause 590.  In these
      circumstances, FWA will have discretion whether or not it is necessary
      to hold a conference or conduct a hearing.


1584. FWA's power to make decisions regarding initial matters is
      exercisable by FWA Members and may not be delegated (see clauses 612
      and 625).


1585. The following FWA powers may, however, be delegated by the President
      of FWA to a member of the staff of FWA:


     . FWA's power to inform itself as it considers appropriate, other than
       FWA's power to hold a hearing (see paragraph 625(1)(b)); and


     . FWA's power to hold a conference (see paragraph 625(1)(c)).


1586. If an application fails to meet one or more of the initial matters,
      FWA must dismiss the application.


1587. FWA decisions regarding initial matters may be appealed by the person
      who has been dismissed or the employer, subject to the appeals
      provisions in clauses 400 and 604.


1588. If FWA decides an initial matter in favour of the person who has been
      dismissed, the employer may elect to appeal the decision at this point
      or after the merits of the application have been decided.  Flexibility
      in the timing of an appeal is possible because a decision regarding
      initial matters is an appealable decision and clauses 400 and 604 do
      not require that appeals be lodged within specified timeframes.


Clause 397 - Matters involving contested facts


1589. Clause 397 provides that, where a matter involves contested facts,
      FWA must either hold a conference or conduct a hearing in relation to
      the matter.


1590. However, FWA's ability to conduct a hearing is limited by clause 399.


Clause 398 - Conferences


1591. Subclause 398(1) sets out that this clause only applies where FWA
      holds a conference.


1592. Subclause 398(2) provides that where a conference is held it must be
      undertaken in private.  The subclause acts as an unfair dismissal
      specific limitation on FWA's discretion in subclause 592(3), which
      would otherwise enable the person conducting the conference to direct
      it be held in public.


1593. Subclause 398(3) requires FWA to take into account any differences in
      the circumstances of the parties when considering and informing itself
      in relation to an application.


Illustrative example


Tara is an executive assistant who has been working for Wrenview Pty Ltd
for two years.  Following her dismissal, Tara applies to FWA alleging that
the termination of her employment by Wrenview Pty Ltd was harsh, unjust or
unreasonable.


The presence of contested facts relating to the dismissal between Tara and
Wrenview Pty Ltd has resulted in FWA deciding to hold a conference between
the parties.  Tara is self-represented.  Wrenview Pty Ltd is represented by
Brett, its human resources manager.  Brett has extensive human resources
and workplace relations experience, including advocacy.


In these circumstances, FWA would be required to take Tara's inexperience
into account in its consideration of Tara's application and the way in
which it informed itself in relation to Tara's application.  For instance,
it may need to adopt a more inquisitorial role to ensure that Tara is able
to present her side of the story.


In accordance with its obligations to comply with the rules of natural
justice, FWA must give both parties a reasonable opportunity to put forward
their side of the story and respond to what is put by the other party.


1594. Subclause 398(4) requires FWA to take into account the wishes of the
      parties when considering and informing itself in relation to an
      application in a conference situation.  It relates to how FWA
      considers a matter in a procedural sense, for instance where it holds
      the conference or the method of conducting it.  It does not mean that
      FWA should take into account the circumstances and wishes of the
      parties when making a substantive decision in relation to the matter.


1595. Clauses that are relevant to the holding of unfair dismissal
      conferences are also located in Part 5-1 (Fair Work Australia).


1596. Subclause 592(1) has the effect of empowering FWA to direct people to
      attend an unfair dismissal conference at a time and place specified by
      FWA.


1597. Subclause 592(2) has the effect that responsibility for conducting
      unfair dismissal conferences rests with an FWA Member, or a delegate
      of FWA.


     . Subclause 609(2)(g) also enables the President of FWA to make
       procedural rules for the manner in which conferences are to be
       conducted in relation to applications made under Part 3-1, 3-2 or
       Part 6-4 (which deal with general protections, unfair dismissal and
       unlawful termination).


Clause 399 - Hearings


1598. Subclause 399(1) restricts FWA's discretion to hold a hearing under
      paragraph 590(2)(i).


1599. FWA is only permitted to hold a hearing in relation to a matter
      arising under Part 3-2 if it considers it is appropriate to do so,
      taking into account the views of the parties and whether a hearing
      would be the most effective and efficient way to deal with the matter.


1600. Clauses relevant to unfair dismissal hearings are also contained in
      Part 5-1 (Fair Work Australia).


1601. Clause 593 has the effect that unfair dismissal hearings must be held
      in public, except where evidence is of a confidential nature.


1602. Subclause 399(2) provides FWA with flexibility to hold a hearing in
      relation to all, or only part of, a matter arising under Part 3-2.
      For instance, FWA may decide that one element of an unfair dismissal
      claim is best dealt with in a formal hearing because it involves a
      complex legal issue but that the remaining elements would be better
      dealt with in a more informal conference.


1603. Subclause 399(3) provides FWA has the flexibility to decide to hold a
      hearing in relation to a matter arising under Part 3-2 before, during
      or after a conference.


Clause 400 - Appeal rights


1604. The primary provisions dealing with appeal of decisions are in the
      FWA provisions in Part 5-1 (Fair Work Australia).  The effect of
      clause 400 is to make the process for permitting appeals for unfair
      dismissal decisions different from the general grounds in clause 604
      in two respects.  Firstly, the general provisions do not require
      public interest as a prerequisite for permitting appeals, whereas
      clause 400 provides that only appeals in the public interest can be
      permitted for unfair dismissal matters.


1605. Secondly, subclause 400(2) limits appeals based on an error of fact
      to only allow an appeal where that error is a significant error of
      fact.  This subclause is intended to limit FWA's discretion to permit
      an appeal under 604(1).


1606. Clauses relevant to appeals from, and reviews of, unfair dismissal
      decisions are also contained in Part 5-1 (Fair Work Australia).


1607. Clause 605 has the effect of empowering the Minister to apply to FWA
      for a review of unfair dismissal decisions (other than those made by a
      Full Bench) if, in the Minister's opinion, the decisions are contrary
      to the public interest.


1608. Clause 606 has the effect of allowing FWA to stay the operation of
      the whole or part of a decision made in relation to a matter arising
      under Part 3-2 on any terms that FWA considers are appropriate.


1609. Clause 607 contains details of the processes for appealing or
      reviewing decisions, including those made in relation to a matter
      arising under Part 3-2.


Clause 401 - Costs orders against lawyers and paid agents


1610. Subclause 401(1) allows FWA to make costs orders against lawyers and
      paid agents in two sets of circumstances.  The first is where they
      have caused costs to be incurred by the other party to the matter
      because they encouraged a person to commence or continue a matter when
      it should have been reasonably apparent there were no reasonable
      prospects of success.  The second circumstance is where they have
      caused costs to be incurred by the other party because of an
      unreasonable act or omission in conducting or continuing the matter.


1611. These provisions are designed to deter lawyers and paid agents from
      encouraging others to bring speculative unfair dismissal claims,
      particularly claims they know have no reasonable prospects of success,
      or to unreasonably encourage a party to defend a claim or make a
      jurisdictional argument where there is no prospect of the argument
      succeeding.


1612. Subclause 401(1) operates in addition to sub-clause 611(2).
      Subclause 611(2) provides FWA with a general power to make costs
      orders against a person in the following circumstances:


     . where a person made an application, or responded to an application,
       vexatiously or without reasonable cause; or


     . where a person made an application, or responded to an application,
       and it should have been reasonably apparent to the person that their
       application, or response to an application, had no reasonable
       prospects of success.


1613. Subclause 401(2) provides that, in order for FWA to make a costs
      order against a lawyer or paid agent, an application by the person
      seeking the costs needs to have been made under clause 402.


1614. Subclause 401(3) clarifies that these provisions are not intended to
      limit FWA's power to order costs under clause 611.


1615. Not complying with a costs order would expose a person to a civil
      penalty, by virtue of clause 405 which provides that a person must not
      contravene a term of an order made this Part.


1616. Provisions relating to civil remedy provisions, including who may
      apply for an order and the orders that may be made by particular
      courts, are contained in Part 4-1 (Civil remedies).


Clause 402 - Applications for costs orders


1617. This clause provides that an application for costs, under either the
      general costs provisions in clause 611 or the unfair dismissal
      specific provisions in clause 401, must be made within 14 days after a
      matter is determined by FWA or is discontinued.


1618. Clauses relevant to the discontinuation of matters are contained in
      Part 5-1 (Fair Work Australia).


1619. Clause 588 allows a person who has applied to FWA to discontinue the
      application in accordance with any procedural rules, whether or not
      the matter has been settled.


Clause 403 - Schedule of costs


1620. Subclause 403(1) allows for the prescription of a schedule of costs.
      The term costs is intended to have its ordinary meaning, namely legal
      and professional costs, disbursements and expenses of witnesses (see
      Cachia v Hanes (1994) 179 CLR 403; Re JJT; Ex parte Victoria Legal Aid
      (1998) 195 CLR 184).  The purpose of this subclause is to expand FWA's
      capacity to award legal and professional costs and disbursements to
      include expenses arising from the representation of a party by a
      person or organisation other than on a legal professional basis.


1621. Subclause 403(2) provides that, if a schedule of costs is prescribed,
      FWA is not restricted in its award of costs to the items of
      expenditure listed in the schedule.  However, if an item of
      expenditure appears in the schedule, FWA cannot make an award of costs
      above the rate or amount specified.


Clause 404 - Security for costs


1622. Clause 404 allows FWA to make procedural rules for the furnishing of
      security of costs in respect of matters arising under Part 3-2.


Clause 405 - Compliance with orders made under this Part


1623. Clause 405 provides that, where an order made by FWA under Part 3-2
      applies to a person, that person must not contravene a term of the
      order.


1624. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).





                        Part 3-3 - Industrial action


1625. Part  3-3 deals with industrial action and includes rules about:


     . when industrial action for a proposed enterprise agreement is
       protected industrial action;


     . a prohibition on organising or engaging in industrial action during
       the nominal life of an enterprise agreement and remedies where
       industrial action is taken;


     . orders that can be made by FWA in relation to industrial action that
       is not protected industrial action and the other remedies that are
       available;


     . a prohibition on pattern bargaining and remedies that are available
       if pattern bargaining is occurring;


     . the grounds for FWA to suspend or terminate protected industrial
       action;


     . declarations that can be made by the Minister to terminate protected
       industrial action;


     . a process to allow employees to participate in a secret ballot to
       authorise the taking of protected industrial action; and


     . restrictions on payments to employees during periods of industrial
       action.


Division 1 - Introduction


Clause 406 - Guide to this Part


1626. This clause provides a guide to this Part.


Clause 407 - Meanings of employee and employer


1627. In this Part, the terms employee and employer mean national system
      employee and national system employer respectively (as defined in
      clauses 13 and 14).  The rights and obligations of employers and
      employees set out in this Part generally apply only to the employment
      relationships within the scope of the corporations and other
      constitutional powers that are engaged by clauses 13 and 14.


1628. Under clause 419, FWA may make orders to stop actual or pending
      industrial action by non-national system employees or non-national
      system employers, where that action is likely to have the effect of
      causing substantial loss or damage to the business of a constitutional
      corporation.  In clause 12, references to employer and employee have
      their ordinary meanings in the definition of non-national system
      employer and non-national system employee.  These terms are defined in
      clause 12.



Division 2 - Protected industrial action


Subdivision A - What is protected industrial action?


1629. It is intended that industrial action that is organised or taken in
      the context of legitimate collective bargaining and meets certain
      prerequisites is permissible and therefore protected action.


1630. The current WR Act regulates industrial action and allows for
      protected action to be taken during a bargaining period so long as
      certain requirements are met.  Although the Bill no longer contains
      the concept of a bargaining period, protected industrial action is
      only available during bargaining for an enterprise agreement.


1631. The distinction between protected industrial action and industrial
      action that is not protected is important due to the consequences that
      flow from the classification of the action.  For example, FWA may
      order that industrial action that is not protected stop, not occur or
      not be organised.  Also, only persons who organise or engage in
      protected industrial action are subject to immunity from certain legal
      proceedings.  Industrial action is only protected if it meets all of
      the requirements set out in this Division.


1632. This Division consolidates the provisions that determine when
      industrial action is protected.  In so doing, the Bill has 'common
      requirements' for all types of industrial action and specific
      requirements that relate to industrial action depending on whether it
      is taken by an employer or employees.  These requirements must be met
      for industrial action to be protected, rather than 'exclusions' for
      when action is not protected (which is the framework in the WR Act).


1633. The result of this has been the avoidance of duplication in the new
      provisions.  For example, in the WR Act, the following factors operate
      both as grounds for suspending or terminating a bargaining period as
      well as exclusions for when action is not protected:


     . not genuinely trying to reach an agreement (subsection 430(2) and
       section 444);


     . failing to comply with industrial action orders issued by the AIRC
       (subsection 430(2) and section 443); and


     . pattern bargaining (sections 431 and 439).


1634. Under the Bill, these factors are preconditions for protected
      industrial action and not grounds for suspending or terminating a
      bargaining period (or protected industrial action).


1635. This means that, for industrial action to be protected, a person must
      (among other things) be genuinely trying to reach an agreement,
      complying with any orders of FWA and not engaging in pattern
      bargaining.  Failure to comply with these preconditions immediately
      exposes the person to the possibility of being subject to an FWA order
      to stop the industrial action.


1636. The Division also separately defines the types of protected
      industrial action as: employee claim action, employee response action
      and employer response action.


Clause 408 - Protected industrial action


1637. Protected industrial action is industrial action which is immune to
      legal remedies that otherwise would be available (subclause 415(1)).
      Industrial action that is not protected industrial action may be
      stopped or prevented by FWA orders and those orders may be enforced by
      injunction (clauses 418 to 421).


1638. Industrial action in relation to a proposed greenfields agreement or
      multi-enterprise agreement is never protected action.


1639. Clauses 408 to 410 set out the circumstances in which industrial
      action is protected.  Clause 408 defines protected industrial action.
      Industrial action is protected industrial action for a proposed
      enterprise agreement if it falls within any of the following types of
      industrial action:


     . employee claim action (defined in clause 409);


     . employee response action (defined in clause 410); or


     . employer response action (defined in clause 411).


Clause 409 - Employee claim action


1640. The first element of employee claim action is that it is organised or
      engaged in for the purpose of supporting or advancing claims in
      relation to a proposed enterprise agreement that are about, or are
      reasonably believed to be about, permitted matters (paragraph
      409(1)(a)).


1641. An enterprise agreement may only contain terms that are either
      required under this Bill or that are about permitted matters.  (The
      description of clause 172 discusses relevant case law and lists
      examples of the types of matters are that intended to be permitted
      matters for enterprise agreements).  In most cases, it is clear that
      particular claims are about permitted matters.


1642. In limited cases it is not so clear.  However, industrial action is
      protected if - at the time of the action - the person reasonably
      believes they are pursuing claims about permitted matters (paragraph
      409(1)(a)).  What constitutes a 'reasonable belief' depends on the
      circumstances of the case and the person concerned.  For example, a
      tribunal would expect an official of an employee organisation with
      extensive experience in enterprise bargaining to have a greater
      appreciation of the limits of the permitted matters than a novice
      employee bargaining representative who has been appointed by his or
      her colleagues to represent them in bargaining with the employer.


1643. Another factor that is relevant to the question of reasonable belief
      is whether the employer attempted to advise its employees or its
      bargaining representatives that they were pursuing claims about non-
      permitted matters.  If the employer did so and the industrial action
      proceeded nonetheless, then it is much more likely that it would not
      be found to be protected.


1644. In addition, the pursuit of claims about non-permitted matters during
      bargaining for a proposed enterprise agreement does not necessarily
      prevent a finding that a bargaining representative is genuinely trying
      to reach an agreement (which is also a pre-condition to the taking of
      protected industrial action under subclause 413(3)) e.g., where those
      claims have subsequently been abandoned.


1645. The second element of employee claim action is that it is organised
      or engaged in against an employer (that will be covered by the
      enterprise agreement) by:


     . a bargaining representative of an employee who will be covered by
       the agreement subparagraph 409(1)(b)(i); or


     . an employee who is included in a group or groups of employees on a
       protected action ballot order issued by FWA under Division 8 of this
       Part (subparagraph 409(1)(b)(ii)).


1646. Subclause 409(7) has the effect that a reference to a bargaining
      representative of an employee in subparagraph 409(1)(b)(i) that is an
      employee organisation includes a reference to an officer of that
      organisation.


1647. The third element of employee claim action is that it meets the
      common requirements in Subdivision B and the additional requirements
      contained in this clause.  The additional requirements contained in
      subclauses 409(2) to (6) are:


     . industrial action must be authorised by a protected action ballot
       (Division 8 sets out the requirements for a protected action ballot)
       (subclause 409(2));


     . industrial action cannot be in support of or to advance claims to
       include in an enterprise agreement any unlawful terms (as defined in
       clause 194) (subclause 409(3));


     . industrial action cannot be taken in support of pattern bargaining
       claims (as defined in clause 412) (subclause 409(4));


     . industrial action must not relate to a significant extent to a
       demarcation dispute or contravene an order of FWA that relates to a
       significant extent to a demarcation dispute (subclause 409(5));


     . notice of intended industrial action must be given if an FWA-ordered
       suspension of the industrial action has ended and it is able to
       continue without a further protected action ballot (clause 430 sets
       out the notice requirements in these circumstances and clause 429
       specifies when industrial action may continue without a further
       protected action ballot) (subclause 409(6)).


Clause 410 - Employee response action


1648. Employee response action for a proposed enterprise agreement has
      three elements.


1649. First, it is industrial action that is organised or engaged in by
      employees in response to industrial action (whether protected or not
      protected) taken by an employer (paragraph 410(1)(a)).


1650. Secondly, the action is organised or engaged in against an employer
      by an employee bargaining representative or an employee (who will be
      covered by the proposed enterprise agreement) (paragraph 410(1)(b)).


1651. Thirdly, the action meets the common requirements in Subdivision B
      and the additional requirement contained in subclause 410(2).  This
      requirement is that industrial action must not relate to a significant
      extent to a demarcation dispute or contravene an order of FWA that
      relates to a significant extent to a demarcation dispute.


1652. Subclause 410(3) has the effect that a reference to a bargaining
      representative of an employee in subparagraph 410(1)(b)(i) that is an
      employee organisation includes a reference to an officer of that
      organisation.


Clause 411 - Employer response action


1653. Employer response action for a proposed enterprise agreement has four
      elements.  First, it is industrial action that is organised or engaged
      in as a response to industrial action taken by an employee bargaining
      representative or an employee who will be covered by the proposed
      enterprise agreement (paragraph 411(a)).  This means that industrial
      action by an employer is only protected if it is taken in response to
      industrial action taken by its employees.  For example, a pre-emptive
      employer lockout of employees is never protected industrial action.


1654. Secondly, it is industrial action organised or engaged in by an
      employer against an employee or employees that will be covered by the
      enterprise agreement (paragraph 411(b)).


1655. Thirdly, the action must not affect the continuity of the employees'
      employment for purposes that are prescribed by the regulations
      (paragraph 411(d)).


1656. Fourthly, it must meet the common requirements in Subdivision B
      (paragraph 411(c)).


1657. In addition to the type of industrial action that may be taken by an
      employer, under clause 416 an employer may refuse to make payments to
      employees during a period that the employer engages in employer
      response action.


Clause 412 - Pattern bargaining


1658. Subclause 412(1) provides that pattern bargaining is a course of
      conduct by a bargaining representative for two or more proposed
      enterprise agreements.  That course of conduct must involve the
      bargaining representative seeking the inclusion of common terms in two
      or more proposed enterprise agreements and that course of conduct must
      also extend beyond a single employer.


1659. The meaning of pattern bargaining contained in clause 412 is in
      substance the same as the meaning of pattern bargaining contained in
      the WR Act, but it has been simplified where possible.


1660. Subclause 412(2) makes clear that a bargaining representative does
      not engage in pattern bargaining if the bargaining representative is
      genuinely trying to reach an agreement with an employer.


1661. A list of factors relevant to whether a bargaining representative is
      genuinely trying to reach an agreement with a particular employer is
      set out in subclause 412(3).  The list is not exhaustive and other
      matters may be relevant.  The list includes the following:


     . Whether the bargaining representative is demonstrating a
       preparedness to bargain for an enterprise agreement with the
       employer.  This requires a preparedness to consider the individual
       circumstances of the employer (e.g., including in the proposed
       agreement work reforms or a nominal expiry date which takes into
       account the needs of that employer's enterprise).  This example is
       not intended to limit the circumstances that may be considered and
       other matters may be relevant.


     . Whether the bargaining representative is bargaining in a manner that
       is consistent with the terms of the agreement being determined as
       far as possible by agreement between the particular employer and its
       employees.


     . Whether the bargaining representative is meeting the good faith
       bargaining requirements.


1662. Subclause 412(4) provides that a bargaining representative bears the
      burden of proving that they were genuinely trying to reach an
      agreement.  A reverse onus of proof applies because the bargaining
      representative is in a better position to know and to provide evidence
      of reasons for engaging in particular conduct.


1663. Subclause 412(5) makes clear that clause 412 does not affect and is
      not affected by the meaning of the term genuinely trying to reach
      agreement or any variant of that term used elsewhere in the Bill.  In
      the context of this provision, it is limited to the issue as to
      whether pattern bargaining is occurring.


Subdivision B - Common requirements for industrial action to be protected
industrial action


Clause 413 - Common requirements that apply for industrial action to be
protected industrial action


1664. Clause 413 contains the common requirements that an employee,
      employer or their bargaining representatives must meet in order for
      industrial action to be considered protected industrial action for a
      proposed enterprise agreement.  These common requirements are
      additional to any other requirements that must be met under clauses
      409, 410 or 411, and they are that:


     . The industrial action cannot relate to a proposed greenfields
       agreement or multi-enterprise agreement (subclause 413(2)).


     . Specified persons organising or engaging in industrial action must
       be genuinely trying to reach an agreement (subclause 413(3)).  The
       question whether a person is genuinely trying to reach an agreement
       requires a subjective assessment of the actual intention of the
       person and the overall circumstances.  It is not limited to an
       assessment of whether the person is complying with the good faith
       bargaining requirements.


     . The notice requirements set out in clause 414 must be met (subclause
       413(4)).


     . Specified persons organising or engaging in industrial action must
       not have contravened any orders that apply to them relating to the
       industrial action, the proposed enterprise agreement or a matter
       that arose during bargaining for the proposed enterprise agreement
       (subclause 413(5)).  Examples of orders are bargaining orders made
       by FWA in response to a failure to meet the good faith bargaining
       requirements.


     . Industrial action must not contravene clause 417 (i.e., it must not
       be organised or engaged in before the nominal expiry date specified
       in an enterprise agreement).


1665. In addition, industrial action cannot occur when an order under
      Division 6 suspending or terminating protected industrial action is in
      operation or a Ministerial declaration terminating protected
      industrial action under subclause 431(1) is in operation (subclause
      413(7)).


Clause 414 - Notice requirements for industrial action


1666. Industrial action is protected only if the requisite period of notice
      of the intended action is given before the action starts.  Clause 414
      sets out the notice requirements a person must meet before engaging in
      employee claim action, employee response action or employer response
      action.


1667. Before an employee engages in employee claim action for a proposed
      enterprise agreement, a bargaining representative of the employee must
      provide written notice of the intended industrial action to the
      employer (subclauses 414(1) to (2)).  That notice must be given at
      least three working days prior to any industrial action unless FWA has
      specified a longer period (of up to seven working days) in a protected
      action ballot order.


1668. Working day is defined as a day that is not a Saturday, a Sunday or a
      public holiday (see clause 12).  Three working days is intended to
      mean three clear (full) days which excludes both the day on which the
      notice is given and the day when the action is to occur.


1669. Notice of employee claim action (as required by subclause 414(1))
      cannot be given until after the results of the protected action ballot
      for the action have been declared (subclause 414(3)).


1670. Before an employee engages in employee response action for a proposed
      enterprise agreement, a bargaining representative of an employee must
      provide written notice of the intended industrial action to the
      employer of the employee (subclause 414(4)).


1671. Before an employer engages in employer response action for a proposed
      enterprise agreement, the employer must give written notice of the
      intended industrial action to each bargaining representative of an
      employee and take all reasonable steps to notify its employees of the
      action.  For example, depending on the circumstances, emails to
      individual employees or bulletins on noticeboards in the enterprise
      may constitute reasonable steps (subclause 414(5)).


1672. Subclause 414(6) details the information required to be included in
      the notice of intended employee claim action, employee response action
      or employer response action, as the case may be.  The notice must
      specify the nature of the industrial action to be taken and the day on
      which the intended industrial action will start.  The content
      requirements contained in this subclause substantially replicate the
      requirements in subsection 441(6) of the WR Act.


Subdivision C - Significance of industrial action being protected
industrial action


Clause 415 - Immunity provision


1673. This clause confirms the extent of the immunity that applies to
      protected industrial action.  It is equivalent to section 447 of the
      WR Act.  Where a person is engaged in protected industrial action,
      immunity from civil liability exists in respect of an action under any
      law (whether written or unwritten) in force in a State or Territory.
      This includes common law actions.  The immunity does not apply to
      action involving personal injury, wilful or reckless destruction of,
      or damage to, property or unlawful taking, keeping or use of property
      (subclause 415(1)).


1674. The immunity provision does not prevent an action for defamation
      being brought in relation to anything that occurred during the
      industrial action (subclause 415(2)).


1675. Other safeguards attach to protected industrial action.  For example,
      an employer is prohibited from taking adverse action (as defined by
      clause 342) against an employee (e.g., dismissing or threatening to
      dismiss the employee) because the employee exercises a workplace right
      (as defined by clause 341) (see Part 3.1 (General protections)).


Clause 416 - Employer response action


1676. An employer can refuse to make payments to its employees during a
      period the when the employer engages in employer response action.


1677. The legislative note informs the reader that an employer must not
      make a payment to an employee in relation to certain periods of
      industrial action taken by the employee (see Subdivision A of Division
      9).


Division 3 - No industrial action before nominal expiry date of enterprise
agreement etc.


Clause 417 - Industrial action must not be organised or engaged in before
nominal expiry date of enterprise agreement etc.


1678. A person is prohibited from organising or engaging in industrial
      action before the nominal expiry date of an enterprise agreement or
      workplace determination.  Subclause 417(1) outlines the remedies
      available if industrial action is organised or engaged in before that
      time.  This clause substantially replicates section 494 of the WR Act.




1679. This restriction applies whether or not the industrial action relates
      to a matter dealt with in the enterprise agreement or the workplace
      determination.


1680. Subclause 417(2) sets out the categories of persons who are subject
      to the prohibition.  The prohibition applies to an employer, an
      employee or employee organisation, to whom the enterprise agreement or
      workplace determination applies.  It also applies to an officer of an
      employee organisation to which the agreement or determination applies,
      acting in their capacity as an officer of an employee organisation.


1681. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1682. The court (on application only) may grant an injunction restraining
      industrial action and may impose a pecuniary penalty or make any other
      order the court considers necessary to stop the contravention or
      remedy its effects (subclause 417(3)).


1683. The legislative note at the end of subclause 417(5) alerts the reader
      to the fact that subclause 539(2) deals with applications for orders
      in relation to contraventions of civil remedy provisions.


1684. Subclause 417(5) makes it clear that, despite subclause 545(4) (which
      deals with orders that a court may make if a person has contravened a
      civil remedy provision), the court may only make an order in relation
      to a contravention of clause 417 on application by a specified person.


Division 4 - FWA orders stopping etc.  industrial action


Clause 418 - FWA must order that industrial action by employees or
employers stop etc.


1685. Subclause 418(1) requires FWA to make an order that industrial action
      stop, not occur or not be organised for a specified period if it
      appears to FWA that industrial action that is not protected industrial
      action is happening, threatened, impending or probable or is being
      organised.


1686. This provision largely replicates section 496 of the WR Act and sets
      out the circumstances in which FWA is to make orders in relation to
      industrial action by national system employees or employers that is
      not or would not be protected industrial action.


1687. The legislative note under subclause 418(1) alerts the reader to the
      interim orders that may be made by FWA under clause 420.


1688. An application for an order may be made by a person who is or who is
      likely to be affected (whether directly or indirectly) by the
      industrial action or an organisation of which the person is a member.
      FWA may also make the order on its own initiative (subclause 418(2)).




1689. In making an order to stop or prevent industrial action, FWA does not
      have to specify the particular industrial action (subclause 418(3)).
      This is intended to allow FWA to make effective orders that do not
      require the separate identification of each particular instance of
      industrial action.


1690. Subclause 418(4) allows FWA to specify in an order whether further
      protected industrial action may be engaged in after the end of a stop
      period without another protected action ballot.  FWA may only make
      such an order if the protected action ballot authorised specific types
      of industrial action and at the time the order was made for the
      industrial action to stop, not all the industrial action specified in
      the protected action ballot had been taken.  FWA may also make such an
      order if the industrial action that was specified in the protected
      action ballot was intended to occur for a period beyond the period for
      which the industrial action was ordered to stop.


Clause 419 - FWA must order that industrial action by non-national system
employees or non-national system employers stop etc.


1691. Subclause 419(1) requires FWA to make an order that industrial action
      stop, not occur or not be organised for a specified period if it
      appears to FWA that industrial action by a non-national system
      employee or non-national system employer is happening, threatened,
      impending or probable or is being organised and will or would be
      likely to have the effect of causing substantial loss or damage to the
      business of a constitutional corporation.


1692. The legislative note after the end of subclause 419(1) alerts the
      reader to the interim orders that may be made by FWA under clause 420.




1693. An application for an order may be made by a person who is or who is
      likely to be affected (whether directly or indirectly) by the
      industrial action or an organisation of which the person is a member.
      FWA may also make the order on its own initiative (subclause 419(2)).




1694. As with subclause 418(3), subclause 419(3) makes clear that FWA does
      not have to specify the particular industrial action when making the
      order.


Clause 420 - Interim orders etc.


1695. Subclause 420(1) requires FWA, as far as practicable, to determine an
      application for an order under clause 418 or clause 419 within two
      days after the application is made.


1696. If FWA is unable to determine the application within two days,
      subclause 420(2) requires FWA to make an interim order that the
      industrial action stop, not occur or not be organised, as the case may
      be, unless FWA is satisfied that it would be contrary to the public
      interest to do so (subclause 420(3)).


1697. The interim order operates until the substantive application has been
      determined (subclause 420(5)).


1698. Consistent with subclauses 418(3) and 419(3), subclause 420(4) makes
      clear that FWA does not have to specify the particular industrial
      action in the interim order.


Clause 421 - Contravening an order etc.


1699. Clause 421 expressly states that a person to whom an order or interim
      order applies under clause 418, 419 or 420 must not contravene that
      order.  Subclause 421(2) makes clear that the requirement to comply
      with the order does not apply where the order relates to protected
      industrial action.


1700. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1701. This clause also specifies when the Federal Court or the Federal
      Magistrates Court may grant an injunction in relation to stop orders
      made under clauses 418, 419 and 420.


1702. Subclause 421(3) provides that the Federal Court or the Federal
      Magistrates Court may grant an injunction on application by a person
      who is affected by the contravention of the stop order or an inspector
      if the court is satisfied that the person to whom the order applies
      has contravened or proposes to contravene a term of the order.  The
      court may grant an injunction on whatever terms it considers
      appropriate.


1703. The legislative note after the end of subclause 421(3) alerts the
      reader to the fact that clause 539 deals with applications for orders
      in relation to contraventions of civil remedy provisions.  Clause 545
      (which deals with orders that a court may make if a person has
      contravened a civil remedy provision) does not apply to a
      contravention of an order under this Division (subclause 421(4)).


Division 5 - Injunction against industrial action if pattern bargaining is
being engaged in


Clause 422 - Injunction against industrial action if a bargaining
representative is engaging in pattern bargaining


1704. Subclause 422(1) allows any person to make an application to the
      Federal Court or Federal Magistrates Court for an injunction to
      restrain a bargaining representative who is engaging in pattern
      bargaining.


1705. The court to which the application has been made may grant an
      injunction (on terms that it considers appropriate) if it is satisfied
      that employee claim action for a proposed enterprise agreement is
      being engaged in or is threatened, impending or probable and a
      bargaining representative of an employee is engaging in pattern
      bargaining (subclause 422(2)).


Division 6 - Suspension or termination of protected industrial action by
FWA


1706. Division 6 sets out the grounds upon which FWA may suspend or
      terminate protected industrial action organised, or engaged in, in
      relation to a proposed enterprise agreement.


1707. Suspension or termination of protected industrial action brings to an
      end the right to take protected industrial action.  Protected
      industrial action may be resumed after any period of suspension, but
      will be subject to any requirements for the giving of notice before
      any action may be taken.  A termination of protected industrial action
      may lead to FWA making a workplace determination under Part 2-5.


1708. The Bill recognises that employees have a right to take protected
      industrial action during bargaining.  These measures recognise that,
      while protected industrial action is legitimate during bargaining for
      an enterprise agreement, there may be cases where the impact of that
      action on the parties or on third parties is so severe that it is in
      the public interest, or even potentially the interests of those
      engaging in the action, that the industrial action cease - at least
      temporarily.


1709. It is not intended that these mechanisms be capable of being
      triggered where the industrial action is merely causing an
      inconvenience.  Nor is it intended that these mechanisms be used
      generally to prevent legitimate protected industrial action in the
      course of bargaining.


1710. Under the Bill, FWA:


     . may suspend or terminate protected industrial action if the action
       is causing (or threatening to cause) significant economic harm to
       the employer and/or employees (clause 423);


     . must suspend or terminate protected industrial action if the action
       has threatened, is threatening or would threaten to endanger life,
       personal safety or the health of the population or cause significant
       damage to the economy (clause 424);


     . must suspend protected industrial action to provide for a cooling-
       off period (clause 425); and


     . must suspend protected industrial action if the action is adversely
       affecting the employer and its employees and is threatening to cause
       significant harm to a third party (clause 426).


Clause 423 - FWA may suspend or terminate protected industrial action -
significant economic harm etc


1711. FWA has the discretion to order the suspension or termination of
      protected industrial action on the basis that it is causing
      significant economic harm to employers and/or employees (clause 423),
      when it is satisfied certain requirements have been met.


1712. Subclauses 423(2), (3), (5) and (6) set out the requirements that
      must be met before FWA may make an order suspending or terminating
      protected industrial action.  If the protected industrial action is
      employee claim action, FWA must be satisfied that the action is
      causing or threatening to cause significant economic harm to any
      employer and any employees who will be covered by the agreement
      (subclause 423(2)).


1713. If the protected industrial action is employee response action or
      employer response action, FWA must be satisfied only that the action
      is causing or threatening to cause significant economic harm to any of
      the employees who will be covered by the agreement (subclause 423(3)).
       In other words, if any industrial action is being undertaken by the
      employer (whether protected or not), FWA is only required to consider
      the harm to the employees.  This reflects the fact that an employer
      that has locked out its employees should not then be able to have the
      employees' protected industrial action terminated based on the
      significant harm being caused to it.


1714. If the protected industrial action is threatening to cause
      significant economic harm, FWA must be satisfied that the harm is
      imminent (subclause 423(5)).


1715. Subclause 423(4) sets out the factors that FWA is to take into
      account in deciding whether protected industrial action is causing or
      is threatening to cause significant economic harm.  The list of
      factors is inclusive so FWA may consider additional factors.  The
      factors set out in the subclause are:


     . the source, nature and degree of harm suffered or likely to be
       suffered;


     . the likelihood that the harm will continue to be caused or will be
       caused;


     . the capacity of those persons to bear the harm;


     . the views of those persons and the bargaining representatives for
       the enterprise agreement;


     . whether the bargaining representatives for the enterprise agreement
       have met the good faith bargaining requirements and complied with
       any bargaining orders in relation to the enterprise agreement; and


     . the objective of promoting and facilitating bargaining for the
       enterprise agreement.


1716. In addition, if FWA is considering terminating the protected
      industrial action, it must also consider:


     . whether the bargaining representatives are genuinely unable to reach
       agreement on the terms to be included in the agreement; and


     . whether there is no reasonable prospect of agreement being reached
       (paragraph 423(4)(f)).


1717. FWA must also be satisfied that the protected industrial action has
      been engaged in for a protracted period of time and the dispute will
      not be resolved in the reasonably foreseeable future (subclause
      423(6)).


1718. Subclause 423(7) allows FWA to make the order on its own initiative
      or upon application by a bargaining representative for the proposed
      agreement, the Minister or a person prescribed by the regulations.


Clause 424 - FWA must suspend or terminate protected industrial action -
endangering life etc.


1719. FWA must make an order suspending or terminating protected industrial
      action if it is satisfied that the protected industrial action has
      threatened, is threatening or would threaten to endanger the life, the
      personal safety, health or welfare of the population (or part of it)
      or to cause significant damage to the Australian economy (or an
      important part of it) (subclause 424(1)).


1720. FWA may make the order on its own initiative or upon application by a
      bargaining representative for the proposed agreement, the Minister or
      a person prescribed by the regulations (subclause 424(2)).


1721. FWA is required, as far as practicable, to determine any application
      on this ground within five days, or if FWA cannot do so within that
      time, to make an interim order suspending the protected industrial
      action (subclauses 424(3) and (4)).


1722. Subclause 424(6) makes clear that any interim order continues in
      force until the application is determined by FWA.


Clause 425 - FWA must suspend protected industrial action - cooling off


1723. This clause enables FWA to suspend the taking of protected industrial
      action to provide for a cooling-off period.  Protected industrial
      action cannot be terminated on this ground.


1724. FWA is required to make an order suspending protected industrial
      action if it is satisfied that it would be appropriate to do so taking
      into account the following matters (subclause 425(1)):


     . whether suspension would assist the bargaining representatives to
       resolve the matters at issue;


     . the duration of the protected industrial action;


     . the public interest and the objects of the Act; and


     . any other relevant matters.


1725. FWA may only make an order suspending protected industrial action
      upon application by a bargaining representative for the proposed
      enterprise agreement or a person prescribed by the regulations
      (subclause 425(2)).


Clause 426 - FWA must suspend protected industrial action - significant
harm to a third party


1726. FWA is required to suspend protected industrial action if action is
      being engaged in and it is satisfied that (subclause 426(1)):


     . the industrial action is adversely affecting any employer or any
       employee who will be covered by the proposed enterprise agreement
       (subclause 426(2));


     . the industrial action is threatening to cause significant harm to a
       person other than a bargaining representative for the agreement or
       an employee who will be covered by the agreement (subclause 426(3));
       and


     . it is appropriate to make the order, taking into account whether the
       suspension would be contrary to the public interest as well as any
       other relevant matters (subclause 426(5)).


1727. The factors that FWA may take into account when determining whether
      protected industrial action is threatening to cause significant harm
      to a third person are specified in subclause 426(4).  They are:


     . any potential damage to the ongoing viability of an enterprise
       carried on by the third party;


     . any threatened disruption to the supply of goods or services to an
       enterprise carried on by the third party;


     . any threatened reduction to the third party's capacity to fulfil a
       contractual obligation; or


     . any threatened economic loss to the third party.


1728. FWA may make the order on application by an organisation, person or
      body directly affected by the industrial action, the Minister, or a
      person prescribed by the regulations (subclause 426(6)).  The Bill
      provides employees with right to take protected industrial action in
      support of a proposed single enterprise agreement.  The purpose of
      this clause is to provide FWA with a means to address significantly
      serious impacts that industrial action is having on the welfare of
      third parties.  It allows for a respite from industrial action which
      is causing them significant harm.  The harm to the third party would
      need to be significant, that is a more serious nature than merely
      suffering of a loss, inconvenience or delay.  Therefore, it is
      anticipated that FWA would suspend industrial action on this basis
      only in very rare cases.


1729. Protected industrial action cannot be terminated on this ground.


Clause 427 - FWA must specify the period of suspension


1730. Subclause 427 applies if FWA is required or permitted to make an
      order suspending protected industrial action.  Subclause 427(2)
      requires FWA to specify in any suspension order the period for which
      that industrial action is to be suspended.


1731. Subclause 427(3) permits FWA, in exceptional circumstances, to extend
      the required period of notice for protected industrial action
      (specified in paragraph 430(2)(b)) from three working days to up to
      seven working days following the end of a period of suspension.


Clause 428 - Extension of a period of suspension


1732. The Bill contains uniform provisions for when protected industrial
      action is suspended.  This means that whatever the reason for which
      the action is suspended, there is also a right for the applicant to
      seek an extension of the suspension order.  FWA also has discretion to
      extend the suspension period if the preconditions giving rise to the
      original suspension remain satisfied.


1733. Subclause 428(1) allows FWA to make an order extending the period of
      suspension of protected industrial action in certain circumstances
      upon application by a person who applied or could have applied for the
      original suspension order.


1734. FWA may also extend the period of suspension if:


     . FWA has not previously extended the period of suspension; and


     . FWA is satisfied that it would be appropriate to extend the period
       of suspension after considering the factors specified in the
       provision under which the order suspending the protected industrial
       action was made and any other factors that are relevant.


1735. Subclause 428(2) requires FWA to specify the period of extension in
      its order.  This subclause also permits FWA, in exceptional
      circumstances, to extend the required period of notice of protected
      industrial action (specified in paragraph 430(2)(b)) from three
      working days to up to seven working days following the end of a period
      of suspension.


Clause 429 - Employee claim action without a further protected action
ballot after a period of suspension etc.


1736. If employee claim action has been suspended by FWA, it may be
      possible for employees to resume industrial action after the period of
      suspension without another protected action ballot if the industrial
      action was authorised by a ballot and one of the following
      circumstances applies:


     . some or all of the industrial action authorised by the protected
       action ballot is yet to be taken (paragraph 429(1)(b)(i)); or


     . the industrial action had not ended before the period of suspension
       (paragraph 429(1)(b)(ii)); or


     . the industrial action would have continued beyond the period of
       suspension (paragraph 429(1)(b)(iii)).


1737. Subclause 429(3) states that when determining when the employee claim
      action may be engaged in, the period of suspension must be
      disregarded.


1738. Subclause 429(4) makes clear that this clause does not authorise
      employee claim action that is different in type or duration from the
      industrial action authorised by the protected action ballot.


Clause 430 - Notice of employee claim action engaged in after a period of
suspension etc.


1739. Industrial action taken after a period of suspension will not be
      protected industrial action unless a bargaining representative of an
      employee gives 3 working days written notice of an intention to engage
      in employee claim action to the employer of the employee - or a longer
      period of notice if specified by FWA in the suspension order (clause
      430).  The notice must state the nature of the industrial action and
      the day on which it will commence (subclause 430(3)).


Division 7 - Ministerial declarations


Clause 431 - Ministerial declaration terminating industrial action


1740. This clause provides the Minister with discretion to make a
      declaration terminating protected industrial action for a proposed
      enterprise agreement if she or he is satisfied that industrial action
      is being engaged in or is threatened, impending or probable and:


     . the industrial action is threatening or would threaten to endanger
       the life, the personal safety or health, or the welfare, of the
       population (or a part of it); or


     . the industrial action is threatening or would threaten to cause
       significant damage to the Australian economy (or an important part
       of it).


1741. The declaration is required to be in writing (subclause 431(1)).


1742. The declaration comes into operation on the day it is made (subclause
      431(2)).


1743. Subclause 431(3) provides assistance to readers as the declaration is
      not a legislative instrument within the meaning of the Legislative
      Instruments Act 2003.


Clause 432 - Informing people of declaration


1744. If the Minister makes a declaration terminating protected industrial
      action, the relevant parties must be informed of the declaration
      (clause 432).  The Minister must:


     . inform FWA of the making of the declaration (subclause 432(3));


     . as soon as practicable, take all reasonable steps to ensure that the
       bargaining representatives are made aware of the declaration and the
       effect of Part 2-5 in relation to workplace determinations
       (subclause 432(4)).


1745. The declaration must be published in the Gazette (subclause 432(2)).


Clause 433 - Ministerial directions to remove or reduce threat


1746. As well as making a declaration, subclause 433(1) allows the Minister
      to give written directions requiring specified bargaining
      representatives or employees to take, or refrain from taking,
      specified actions.


1747. The Minister may only give directions that she or he is satisfied are
      reasonably directed to removing or reducing the threat referred to in
      paragraph 431(1)(b).  The directions may, e.g., require employees to
      return to work or an employer to allow employees to return to work
      after a lockout.


1748. Subclause 433(3) provides assistance to readers, as a direction given
      by the Minister is not a legislative instrument within the meaning of
      the Legislative Instruments Act 2003.


Clause 434 - Contravening a Ministerial direction


1749. Clause 434 makes clear that if a direction under subclause 433(1)
      applies to a person, they must not contravene the direction.


1750. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Division 8 - Protected action ballots


1751. Industrial action is only lawful if it is protected industrial action
      under this Part.  Industrial action by employees is not protected
      industrial action unless (among other things) it has been authorised
      in advance by a protected action ballot conducted under this Division
      (except where industrial action is taken in response to industrial
      action by the employer).


1752. There are essentially four stages involved in the protected action
      ballot process, including:


     . an application by a bargaining representative to FWA for a protected
       action ballot order that will authorise a protected action ballot to
       be held;


     . the making of the protected action ballot order by FWA;


     . the conduct of the protected action ballot (including the
       declaration of the ballot results); and


     . the determination of the effect of the protected action ballot.


1753. As a default, protected action ballots are conducted by the AEC
      unless FWA is satisfied that a ballot agent that is not the AEC (a non-
      AEC ballot agent) is capable of conducting the protected action
      ballot.


Subdivision A - Introduction


Clause 435 - Guide to this Division


1754. This clause provides a guide to this Division.


Clause 436 - Object of this Division


1755. Clause 436 states that the object of the Division is to provide
      bargaining representatives with access to a fair, simple and
      democratic secret ballot process in order to determine whether
      employees wish to take certain types of protected industrial action.
      The Division contains facilitative provisions designed to provide a
      means for assessing the level of support for protected industrial
      action.  The process the Division establishes is not intended to delay
      or frustrate the taking of protected industrial action by employees.


Subdivision B - Protected action ballot orders


Clause 437 - Application to FWA for a protected action ballot order


1756. A bargaining representative may apply to FWA for an order (a
      protected action ballot order) requiring a protected action ballot to
      be conducted (clause 437).  The purpose of such a ballot is to
      determine whether certain employees wish to engage in particular
      protected industrial action for a proposed enterprise agreement.


1757. An application may be made by a bargaining representative of an
      employee who will be covered by the proposed enterprise agreement or
      two or more such bargaining representatives acting jointly
      (subclause 437(1)).  For example, an employee organisation that is a
      bargaining representative could apply with another employee
      organisation or another person that is also a bargaining
      representative for the proposed enterprise agreement.


1758. An application for a protected action ballot order cannot be brought
      in relation to a proposed greenfields agreement or a multi-enterprise
      agreement (subclause 437(2)).


1759. An application must specify (subclause 437(3)):


     . the group or groups of employees (represented by the bargaining
       representative) who are to be balloted (paragraph 437(3)(a));


     . the question or questions to be put to the employees, including the
       nature of the proposed industrial action (paragraph 437(3)(b)); and


     . if a non-AEC ballot agent is proposed - the name of that ballot
       agent (subclause 437(4))  (the legislative note after subclause
       437(4) explains that the ballot agent is taken to be the AEC unless
       FWA orders otherwise).


1760. An application is taken to include only the employees who will be
      covered by the proposed enterprise agreement and are represented by a
      bargaining representative who is an applicant for the protected action
      ballot order (subclause 437(5)).


1761. An application must be accompanied by any documents and other
      information prescribed by the regulations (subclause 437(6)).


Clause 438 - Restriction on when application may be made


1762. An application for a protected action ballot may be made from 30 days
      before the nominal expiry date of an existing enterprise agreement
      applying to the employees who will be covered by the proposed
      enterprise agreement (subclause 438(1)).  If two or more enterprise
      agreements apply, then an application cannot be made earlier than 30
      days before the latest of the nominal expiry dates of those agreements
      (subclause 438(1)).


1763. Even if a protected action ballot is conducted before the nominal
      expiry date of an existing agreement, it is unlawful to organise or
      take industrial action pursuant to the ballot before that date (see
      clause 417).  Additionally, such action is not protected industrial
      action (subclause 413(6)).


1764. Subclause 438(2) is an avoidance of doubt provision which makes clear
      that the making of an application under this Division does not
      constitute organising industrial action.


Clause 439 - Joint applications


1765. FWA may prescribe procedural rules dealing with joint applicants for
      a protected action ballot order (e.g., about varying and revoking
      orders) (clause 439).  This power is not intended to limit FWA's
      general power to make procedural rules.


Clause 440 - Notice of application


1766. An applicant for a protected action ballot order must give a copy of
      the application to the employer of the employees to be balloted and
      the proposed protected ballot agent within 24 hours of the application
      being made (clause 440).





Clause 441 - Application to be determined within 2 days after it is made


1767. FWA must, as far as practicable, determine an application for a
      protected action ballot order within two working days after the
      application is made (subclause 441(1)).


1768. However, an application must not be determined unless the applicant
      has notified the affected employer of the application
      (subclause 441(2)).


Clause 442 - Dealing with multiple applications together


1769. In some cases, it may be expedient for FWA to deal with related
      applications together, even in the absence of a joint application.
      FWA may deal with related applications at the same time if the
      applications relate to industrial action by employees of the same
      employer or employees at the same workplace (e.g., a construction
      site) (clause 442).  However, FWA must be satisfied that dealing with
      the applications at the same time would not unreasonably delay the
      determination of any of the applications (paragraph 442(b)).


Clause 443 - When FWA must make a protected action ballot order


1770. FWA must make a protected action ballot order if an application has
      been made in accordance with clause 437 (which deals with content and
      related requirements) and the applicant is and has been genuinely
      trying to reach an agreement with the employer of the employees to be
      balloted (subclause 443(1)).  The 'genuinely trying to reach an
      agreement' requirement only applies in relation to the particular
      employer to which the application for a protected action ballot
      relates.


1771. For joint applications, each applicant must be and must have been,
      genuinely trying to reach an agreement with the relevant employer.  A
      finding by FWA that there is no majority support for collective
      bargaining is not of itself intended to be determinative of the
      question of whether the applicant is genuinely trying to reach an
      agreement with the employer.


1772. It could be the case that an applicant engaged in pattern bargaining
      (as defined in clause 412) in relation to the relevant employer would
      not be genuinely trying to reach an agreement, based on the indicia
      listed in subclause 412(3) (e.g., the applicant may not have been
      prepared to take into account the individual circumstances of the
      employer in bargaining for the agreement).


1773. FWA cannot make a protected action order if these prerequisites
      (including the genuinely trying to reach an agreement requirement)
      have not been met (subclause 443(2)), or if the applicant has failed
      to notify the affected employer of the application being made, as
      required by subclause 441(2)).


1774. A protected action ballot order must specify the matters listed in
      subclause 443(3), including: the name of each applicant for the order;
      the group or groups of employees who are to be balloted; the date by
      which voting in the protected action ballot closes; and the question
      or questions to be put to the employees who are to be balloted,
      including the nature of the proposed industrial action.


1775. If FWA decides on a non-AEC ballot agent, then that person and also
      the independent advisor (if any), must be named in the order
      (subclause 443(4)).


1776. FWA could also specify in a protected action ballot a longer period
      for notice of the intention to take industrial action required by
      clause 414.  Under that clause, at least three working days' notice
      must be provided of any employee claim action for a proposed
      enterprise agreement.  Subclause 443(5) allows FWA to extend that
      period to a period of up to seven working days if exceptional
      circumstances justify the extension.


Clause 444 - FWA may decide on ballot agent other than the Australian
Electoral Commission and independent advisor


1777. An application for a protected action ballot order may nominate a non-
      AEC ballot agent (subclause 437(4)).  FWA may decide that the
      nominated person is to be the ballot agent if satisfied the person is
      a fit and proper person to conduct the protected action ballot and
      providing any other requirements prescribed by the regulations are met
      (subclause 444(1)).


1778. The regulations may prescribe conditions a person must meet to be
      considered a fit and proper person and also any other factors that FWA
      must consider in determining whether a person is a fit and proper
      person for this purpose (subclause 444(2)).


1779. If FWA decides on a non-AEC ballot agent, then it must also consider
      whether it is appropriate to appoint an independent advisor for the
      ballot (subclause 444(3)).  An independent advisor must be
      sufficiently independent of the applicant (or each applicant) for the
      protected action ballot order and must also meet any other
      requirements prescribed by the regulations (paragraph 444(3)(c)).


Clause 445 - Notice of protected action ballot order


1780. This clause requires FWA to give a copy of a protected action ballot
      order to each applicant for the order, the affected employer and the
      protected action ballot agent, as soon as practicable after making the
      order.


Clause 446 - Protected action ballot order may require 2 or more protected
action ballots to be held at the same time


1781. Clause 446 deals with the situation where more than one ballot is
      proposed to be conducted in relation to employees of the same
      employer, or employees at the same workplace.  To minimise disruption,
      FWA may order that the ballots be held at the same time in
      circumstances where one protected action ballot order has already been
      made and another is proposed to be made (subclause 446(2)).  This is
      only possible if FWA is satisfied that requiring the ballots to be
      held at the same time will not unreasonably delay either ballot
      (paragraph 446(2)(b)).


Clause 447 - Variation of protected action ballot order


1782. FWA may vary a protected action ballot order upon application by the
      applicant for the order (subclauses 447(1), (2) and (4)).


1783. FWA may also change the closing date for a protected action ballot
      upon application by the protected action ballot agent
      (subclause 447(2)).  (Under paragraph 443(3)(c), an order must specify
      the date by which voting in the protected action ballot closes.)


1784. In either case, an application to vary the protected action ballot
      order may be made at any time before the day by which voting in the
      protected action ballot closes or after that time if the ballot has
      not been held before that date (providing FWA consents to making the
      variation) (subclause 447(3)).


1785. A protected action ballot order is spent if a ballot has not been
      held within the period specified in the order, subject to variation
      under this provision.


Clause 448 - Revocation of protected action ballot order


1786. FWA must revoke a protected action ballot order upon application by
      an applicant for the order at any time before voting in the protected
      action ballot closes (clause 448).


Subdivision C - Conduct of protected action ballot


1787. Subdivision C establishes a framework for conducting protected action
      ballots, whether by the AEC or a non-AEC ballot agent.  A protected
      action ballot must be conducted in accordance with the protected
      action ballot order, the timetable for the ballot, this Subdivision,
      any directions given by FWA and any procedures prescribed by the
      regulations (subclause 449(2)).


1788. Subdivision C sets out the requirements for protected action ballots
      conducted by the AEC, but allows FWA to determine whether it is
      appropriate for the same requirements to apply to non-AEC ballot
      agents.


1789. In a number of places, the Bill makes a distinction between the
      powers of the AEC to conduct protected action ballots as opposed to
      the powers of non-AEC ballot agents.  For example, the AEC is able to
      direct employers and bargaining representatives to provide it with the
      information necessary to compile the roll of voters (subclause 452(3))
      and the AEC is able to amend the roll of voters on its own initiative
      (subclauses 454(5)).  In contrast, a non-AEC ballot agent may only
      exercise such powers if it has been directed to do so by FWA.


1790. This reflects the fact that the AEC is a Commonwealth body which is
      accountable to the Parliament for its activities and is subject to the
      legal frameworks that apply to Commonwealth agencies.  Also, the AEC
      has the systems and procedures in place to enable it to effectively
      conduct protected action ballots with limited supervision by FWA.


1791. The AEC must meet requirements under this Subdivision about:


     . developing a timetable for the conduct of the protected action
       ballot (paragraph 451(2)(a));


     . determining the voting method, or methods, to be used for the ballot
       (paragraph 451(2)(b));


     . compiling the roll of voters (clause 452); and


     . varying the roll of voters (clause 454).


1792. FWA may also direct a non-AEC ballot agent to meet any of these
      requirements.  Alternatively, FWA may give a non-AEC ballot agent
      directions about these matters, or any other matters in relation to
      the conduct of the ballot that FWA considers appropriate (see clause
      450).


1793. Under this Subdivision, all ballot agents (whether the AEC or a non-
      AEC ballot agent) must also comply with requirements about ballot
      papers (clause 455), who may vote in a protected action ballot (clause
      456), declaring results of a protected action ballot (clause 457) and
      reporting to FWA about the conduct of certain protected action ballots
      (clause 458).


Clause 449 - Protected action ballot to be conducted by Australian
Electoral Commission or other specified ballot agent


1794. For a ballot to be a protected action ballot, it must be conducted by
      the AEC or a non-AEC ballot agent who is specified in the protected
      action ballot order (subclause 449(1)).


1795. A protected action ballot must be conducted in accordance with the
      protected action ballot order, the timetable for the ballot, this
      Subdivision, any directions given by FWA and any procedures prescribed
      by the regulations (subclause 449(2)).


Clause 450 - Directions for conduct of protected action ballot


1796. FWA may direct a non-AEC ballot agent, in writing, in relation to any
      of the matters listed in subclause 450(2) (e.g., relating to the
      development of a timetable; the voting method, or methods to be used;
      and the compilation of the roll of voters).


1797. This allows FWA to determine how much discretion a non-AEC ballot
      agent has in conducting a protected action ballot in relation to these
      matters.


1798. The legislative note after the end of subclause 450(2) explains that
      a non-AEC ballot agent must not contravene a term of a direction given
      by FWA in relation to a protected action ballot (see
      subclause 463(2)).


1799. A non-AEC ballot agent may not have the same powers as the AEC to
      assist it to compile the roll of voters (i.e., because subclause
      452(3) may not apply).  To assist with the compilation of the roll,
      FWA may direct the applicant for the protected action ballot order, or
      the affected employer, to provide certain information to enable the
      roll of voters to be compiled (i.e., by FWA or the non-AEC ballot
      agent) (subclause 450(4)).


Clause 451 - Timetable for protected action ballot


1800. Clause 451 requires the AEC - or a non-AEC ballot agent directed by
      FWA to comply with this clause - to develop a timetable and determine
      the voting method, or methods, to be used for the protected action
      ballot.


1801. This must be done in consultation with each applicant for the order
      and the employer of the employees who are to be balloted, as soon as
      practicable after the ballot agent receives a copy of a protected
      action ballot order (subclause 451(2)).


Clause 452 - Compilation of roll of voters


1802. Clause 452 requires the AEC - or a non-AEC ballot agent directed by
      FWA to comply with this clause - to compile a roll of voters for the
      protected action ballot (subclause 452(1)).  A roll must be compiled
      as soon as practicable after the ballot agent receives a copy of a
      protected action ballot order (subclause 452(2)).


1803. To assist this process, the ballot agent may direct, in writing, the
      employer of the employees to be balloted, or the applicant (or each
      applicant) for the order to provide it with the information necessary
      to compile the roll of voters (subclause 452(3)).


Clause 453 - Who is eligible to be included on the roll of voters


1804. Clause 453 sets out eligibility rules for employees to be included on
      the roll of voters.  An employee is only eligible to be included on
      the roll if:


     . the employee will be covered by the proposed enterprise agreement to
       which the ballot relates (paragraph 453(a)); and


     . on the day the protected action ballot order was made the employee
       was represented by a bargaining representative who was an applicant
       for the order (subparagraph 453(b)(i)).


1805. The employee must also be included in a group of employees specified
      in the protected action ballot order (subparagraph 453(b)(ii)).


Clause 454 - Variation of roll of voters


1806. Clause 454 establishes a procedure for the AEC-or a non-AEC ballot
      agent directed by FWA to comply with this clause-to vary a roll of
      voters after it has been compiled so that it only includes names of
      employees who are eligible to be included on the roll.


1807. A ballot agent must vary a roll for this purpose (i.e., by adding or
      removing a name from the roll), if requested to do so by an applicant
      for the protected action ballot order, an affected employee, or the
      employee's employer (subclauses 454(2) to (3)).  The AEC may also - on
      its own initiative - vary a roll it has compiled to ensure that the
      roll only includes the names of eligible employees (e.g., to correct a
      technical error) (subclause 454(5)).


1808. A ballot agent must also remove a person's name from the roll of
      voters if the person is no longer employed by the relevant employer
      and the ballot agent is requested to do so by an applicant for the
      protected action ballot order, the employee or the employee's employer
      (subclause 454(4)).  The AEC may also - on its own initiative -
      remove a person's name from a roll it has compiled if it becomes aware
      that the person is no longer employed by the relevant employer
      (subclause 454(5)).


1809. The ballot agent is only required to make a variation upon the
      request of a specified person if the request is made before the end of
      the working day before the day on which voting in the ballot starts
      (paragraphs 454(2)(c), (3)(c) and (4)(c)).


Clause 455 - Protected action ballot papers


1810. This clause requires the ballot paper for a protected action ballot
      to be in the form prescribed by the regulations (if any) and include
      the information prescribed by the regulations (if any).


Clause 456 - Who may vote in protected action ballot


1811. Voting in a protected action ballot is restricted to employees whose
      names are on the roll of voters for the ballot (clause 456).


Clause 457 - Results of protected action ballot


1812. Clause 457 deals with the declaration, notification and publication
      of the results of a protected action ballot.


1813. A protected action ballot agent is required to declare, in writing,
      the results of the ballot, as soon as practicable after voting has
      closed and inform the persons specified in paragraph 457(1)(b) of
      those results, including FWA (subclause 457(1)).


1814. FWA is required to publish the results of a protected action ballot
      (e.g., on its website, or by any other means FWA considers
      appropriate) as soon as practicable after being informed of the
      results by the protected action ballot agent (subclause 457(2)).


Clause 458 - Reports about conduct of protected action ballot


1815. Clause 458 establishes a framework for dealing with complaints and
      alleged irregularities in relation to the conduct of a protected
      action ballot.  The reporting procedure is slightly different for
      ballots conducted by the AEC compared to those conducted by a non-AEC
      ballot agent.


1816. In relation to an AEC-run ballot, the AEC must provide FWA with a
      written report about the conduct of any ballot about which it has
      received a complaint, or if it becomes aware of any irregularities in
      relation to the conduct of the ballot (subclause 458(1)).


1817. A report may be required about any aspect of the conduct of the
      ballot, such as (but not limited to) the compilation of the roll of
      voters for the ballot (subclause 458(5)).


1818. Similar obligations apply to a non-AEC ballot agent or the
      independent advisor (if any) for the ballot (subclause 458(2)).
      Additionally, FWA may also direct (in writing) a report to be prepared
      about the conduct of a non-AEC ballot if it receives any complaints
      about the conduct of the ballot or becomes aware of any irregularities
      in relation to the conduct of the ballot (subclause 458(3)).  The
      directions may apply to the non-AEC ballot agent who conducted the
      ballot, or the independent advisor for the ballot, or both.


1819. A report prepared by a non-AEC ballot agent or independent advisor
      must be prepared in accordance with the regulations and (if
      applicable) any directions of FWA (subclause 458(4)).


1820. Subclauses 458(5) and (6) define the terms conduct and irregularity
      for purposes of this clause.  However, these requirements are not
      intended to limit what may be included in the report.


1821. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1822. Subclause 458(3) is not a civil remedy provision, but contravention
      of a direction given by FWA is dealt with under subclause 463(2),
      which is a civil remedy provision.


Subdivision D - Effect of protected action ballot


1823. Subdivision D explains when the results of a protected action ballot
      authorise the taking of industrial action.


1824. This Division also confers limited immunity on persons who act in
      good faith on protected action ballot results, even if it is
      subsequently established that industrial action taken in reliance on
      those results was not in fact authorised by the protected action
      ballot.


Clause 459 - Circumstances in which industrial action is authorised by
protected action ballot


1825. Industrial action is taken to be authorised by a protected action
      ballot if (subclause 459(1)):


     . the action is the subject of the protected action ballot (i.e., the
       action relates to the questions that formed part of the ballot)
       (paragraph 459(1)(a));


     . at least 50 per cent of the employees on the roll of voters for the
       protected action ballot voted in the ballot and more than 50 per
       cent of votes validly cast approved the action (paragraphs 459(1)(b)
       and (c)); and


     . the action commences during the 30 day period starting on the date
       of the declaration of the results of the protected action ballot, or
       a longer period as extended by FWA under subclause 459(3)
       (paragraph 459(1)(d)).


1826. The legislative note following this provision clarifies the effect of
      having industrial action authorised under a protected action ballot.


1827. In some cases, there may be doubt as to whether the protected action
      ballot authorises certain industrial action.  For example, it may not
      be clear whether a ballot that authorises rolling strikes of fixed
      duration (for example, 12 hours) also allows the strike periods to be
      run back-to-back (so that a series of six 12 hour strikes in effect
      equals a continuous 72 hour strike): see City of Wanneroo v
      Automotive, Food, Metals, Engineering, Printing and Kindred Industries
      Union-Western Australian Branch [2008] AIRC 147.


1828. Subclause 459(2) makes clear that only the first (in this case, 12
      hour) strike in a series of rolling strikes run back-to-back would be
      authorised under a protected action ballot unless the ballot expressly
      contemplated otherwise.


1829. FWA may extend the 30 day period allowed to commence industrial
      action once by up to 30 days, upon application by the applicant for
      the protected action ballot order (subclause 459(3).


Clause 460 - Immunity for persons who act in good faith on protected action
ballot results


1830. Industrial action must be (among other things) authorised by a
      protected action ballot for it to be protected industrial action.
      Persons engaging in protected industrial action are immune from
      certain legal action in relation to the action under clause 415.


1831. However, action that is thought at first to be authorised by a
      protected action ballot may turn out to be unauthorised (for example,
      if a protected action ballot order is overturned on appeal).  This
      means that any industrial action taken pursuant to the ballot would
      not be protected industrial action.


1832. In such cases, clause 460 would confer limited immunity on an
      organisation or person who, acting in good faith, relies on declared
      ballot results to organise or engage in industrial action.  Such
      persons would be immune from the kind of legal action specified in
      subclause 460(2), unless the action involved:


     . personal injury; or


     . intentional or reckless destruction of, or damage to, property; or


     . the unlawful taking, keeping or use of property.


1833. The immunity would not cover action for defamation in relation to
      anything that occurred in the course of the industrial action
      (subclause 460(3)).


1834. This immunity is particularly relevant in relation to protected
      action ballot orders that are subject to appeal or review.  Because
      such orders cannot be stayed (subclause 606(3)), a ballot could be
      conducted pursuant to an impugned order and action could subsequently
      be taken based on the ballot results, all before the resolution of the
      appeal or review.  The immunity conferred by this provision would
      protect any employees who had taken action in good faith, in reliance
      on the ballot results, even if the action turned out not to be
      authorised by the ballot (e.g., because the ballot order was
      overturned).


Clause 461 - Validity of protected action ballot etc.  not affected by
technical breaches


1835. Clause 461 provides that the validity of a protected action ballot
      and any of the other related things listed in paragraphs 461(a) to (f)
      is not affected by a technical breach of the Division.


1836. The effect of this clause is to ensure technical breaches of the
      specified provisions of Division 8 will not go to jurisdiction (that
      is, not lead to invalidity).  This is to protect the integrity of the
      conduct of the protected action ballot and ballot results where a
      ballot has been conducted (or purportedly conducted) unless a person
      has contravened - other than in a technical way - a protected action
      ballot order or an order, direction or decision of FWA in relation to
      a ballot, etc.  (see paragraphs 461(a) to (f)).


Subdivision E-Compliance


1837. Subdivision E deals with compliance issues under the Division - in
      particular with irregularities (and related matters) in connection
      with protected action ballots and also non-compliance with orders etc.
       of FWA.


Clause 462 - Interferences etc.  with protected action ballot


1838. Subclause 462(1) prohibits certain conduct that could lead to
      irregularities in the conduct of a protected action ballot (e.g.,
      hindering or obstructing the holding of a ballot, or offering
      inducements to person to persuade them not to vote, or to vote in a
      particular way).


1839. Subclause 462(3) makes it unlawful for a person performing functions
      or exercising powers as part of the ballot process to show another
      person, or permit another person to have access to, a ballot paper
      used in the ballot, except in the course of performing those functions
      or exercising those duties.


1840. Subclauses 462(1) and 462(3) are civil remedy provisions under Part 4-
      1 (Civil remedies).


Clause 463 - Contravening a protected action ballot order etc.


1841. It is unlawful for a person to contravene:


     . a term of a protected action ballot order, or a term of an order
       made by FWA in relation to a protected action ballot order or a
       protected action ballot (subclause 463(1)); or


     . a direction given by FWA, or a protected action ballot agent (under
       this Division), in relation to the protected action ballot order or
       a protected action ballot (subclause 463(2)).


1842. Contravention (other than by the AEC) is subject to a civil remedy
      (subclause 463(3)).


1843. Subclauses 463(1) and 463(2) are civil remedy provisions under Part 4-
      1 (Civil remedies).


Subdivision F - Liability for costs of protected action ballot


1844. Subdivision F deals with costs in relation to a protected action
      ballot, including costs on appeal etc.


Clause 464 - Costs of protected action ballot conducted by the Australian
Electoral Commission


1845. If the protected action ballot was conducted by the AEC, the
      Commonwealth is liable for the costs incurred by the AEC, whether or
      not the ballot is completed (subclause 464(2)).


1846. However, the Commonwealth is not liable for any costs incurred by the
      AEC in relation to legal challenges to matters connected with the
      protected action ballot, except as otherwise provided for by the
      regulations prescribed for this purpose (subclause 464(3)).


Clause 465 - Costs of protected action ballot conducted by protected action
ballot agent other than the Australian Electoral Commission


1847. If the protected action ballot was not conducted by the AEC, the
      applicant for a protected action ballot order is liable for the costs
      of conducting the protected action ballot (as defined in
      subclause 465(4)), whether or not the ballot is completed
      (subclause 465(2)).  If the application for the protected action
      ballot order was made by joint applicants, each applicant is jointly
      and severally liable for those costs (subclause 465(3)).


1848. Subclause 465(4) defines the costs of conducting a protected action
      ballot, which excludes any costs incurred by the protected action
      ballot agent in relation to legal challenges to matters connected with
      the ballot (subclause 465(5)).


Clause 466 - Costs of legal challenges


1849. The regulations may prescribe liability for costs incurred in
      relation to legal challenges to matters connected with a protected
      action ballot.  Any regulations made for this purpose may also make
      provision for a person who is liable for such costs to be indemnified
      by another person for some or all of those costs.


Subdivision G - Miscellaneous


1850. Subdivision G deals with a number of miscellaneous matters, including
      the disclosure of personal information acquired under this Division
      and record-keeping rules for protected action ballots.


Clause 467 - Information about employees on roll of voters not to be
disclosed


1851. Subclause 467(1) prohibits the disclosure of information by a non-AEC
      ballot agent or independent advisor about an employee who is on a roll
      of voters for a protected action ballot, if the information will
      identify whether or not the employee is a member of an employee
      organisation.


1852. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1853. Disclosure is permitted, however, if it is made in the course of
      performing functions or exercising powers for the purposes of the
      protected action ballot, the disclosure is required or authorised by
      or under a law, or the employee has consented, in writing, to the
      disclosure (subclause 467(2)).


1854. The legislative note after subclause 467(2) explains that personal
      information given to FWA, the AEC or a non-AEC ballot agent under this
      Division may be regulated under the Privacy Act 1988.


Clause 468 - Records


1855. This clause requires a ballot agent for a protected action ballot to
      keep specified records relating to the ballot (e.g., the roll of
      voters for the ballot and the ballot papers etc.) for one year after
      the day on which the protected action ballot closed.


1856. The ballot agent must also comply with any requirements prescribed by
      the regulations in relation to how the ballot material is to be kept
      (subclause 468(3)).


Clause 469 - Regulations


1857. This clause provides a regulation-making power that would enable
      regulations to make provision in relation to any of the specified
      matters (e.g., requirements relating to the appointment of a non-AEC
      ballot agent and the form and content of the ballot paper).


Division 9 - Payments relating to periods of industrial action


1858. Division 9 deals with payments for periods of industrial action as
      defined in clause 19 (strike pay).  Different rules apply depending on
      whether or not the action that is taken is protected industrial
      action.  Division 2 of this Part sets out when industrial action for a
      proposed enterprise agreement is protected industrial action.


1859. In general, payment for any period where an employee has failed or
      refused to attend for work, or attended but failed or refused to
      perform any work at all (i.e., strike) is prohibited for the total
      duration of the protected industrial action taken by an employee on a
      day.  Special rules apply in relation to overtime bans and partial
      work bans.


1860. If the action taken by an employee on a day is not protected
      industrial action, payments must be withheld for at least four hours
      or the total duration of the industrial action on the day depending on
      the duration of the industrial action taken.


1861. The general prohibition on strike pay does not apply to partial work
      bans (other than overtime bans) that are protected industrial action.
      In relation to such bans, an employer may elect to accept the partial
      performance and pay an employee in full, issue a partial work notice
      and reduce an employee's payments accordingly or issue a notice
      stating that partial performance will not be accepted and withhold
      payments altogether for the industrial action period, subject to
      certain notice requirements.  Where partial performance of work is
      accepted by the employer, an employee or his or her bargaining
      representative may apply to FWA to vary the proportion by which an
      employee's payments are reduced.  However, FWA cannot review an
      employer's decision not to accept partial performance and to withhold
      all payments for the period of the partial work ban.


1862. Accepting or seeking strike pay is generally unlawful and is subject
      to a civil penalty.


Subdivision A - Protected industrial action


1863. Subdivision A deals with strike pay in relation to periods of
      protected industrial action.


Clause 470 - Payments not to be made relating to certain periods of
industrial action


1864. An employer is prohibited from paying strike pay to an employee who
      engages in protected industrial action on a day, for the total
      duration of the action on that day (subclause 470(1)).  Payments must
      be withheld in relation to the actual period when industrial action
      was taken (e.g., if taken on a public holiday, payment at the
      applicable penalty rate (if any) must be withheld).


1865. Separate rules deal with partial work bans, which generally involve
      an employee attending for work, but failing or refusing to perform
      some of their normal duties (e.g., a ban on the marking of homework)
      (subclause 470(2)).


1866. Subclause 470(3) defines a partial work ban as industrial action that
      falls short of a total stoppage of work (that is, because the employee
      either fails or refuses to attend for work, or the employee attends
      work but fails or refuses to perform any work at all whether for the
      whole of part of a day).


1867. The general prohibition on paying strike pay under subclause 470(1)
      does not apply in relation to a period of overtime, unless the
      employee refuses to work a period of overtime they are requested or
      required to work in contravention of a term of an applicable modern
      award, enterprise agreement or contract of employment
      (subclause 470(4)).  This means that payments cannot be withheld under
      this clause in relation to an overtime period that the employee is
      entitled to refuse to work (e.g., under a relevant instrument or the
      NES) or where the employee was not rostered to work or otherwise
      requested to work.  For example, a term of an enterprise agreement
      might allow an employee to decline a request to work overtime on the
      ground of family responsibilities.  If an employee declines to work
      overtime and complies with that term, the prohibition on the payment
      of strike pay will not apply because the employee has not engaged in
      industrial action.


1868. Subclause 470(5) provides that, for an overtime ban, the duration of
      the action is taken not to extend beyond the period of overtime to
      which the ban relates (subclause 470(4)).  Therefore, payments must
      only be withheld for a period when the employee would otherwise have
      been working overtime (subject to subclause 470(4)).  So, for example,
      if the industrial action is an overtime ban of two hours on a day, the
      total duration of the action is two hours.


1869. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


Clause 471 - Payments relating to partial work bans


1870. This clause deals with payments relating to partial work bans (other
      than overtime bans) that are protected industrial action.  Provided
      certain prerequisites are met, an employer may reduce an employee's
      payments by a specified proportion, or withhold payments altogether
      where the employer refuses to accept partial performance.


1871. Subclauses 471(1) to (3) allow an employer to reduce an employee's
      payments by a proportion specified in a written notice given to the
      employee, in relation to the period of industrial action (the
      industrial action period).


     . Subclause 471(5) defines the industrial action period during which
       deductions may be made if a valid notice has been issued.
       Deductions may be made in respect of any day on which an employee
       implements a partial work ban, providing the employer's notice
       covers that period.  However, a notice cannot take effect
       retrospectively, or earlier than the start of the next day after the
       day on which the notice was given, on which the employee performs
       work.


1872. The notice must state that, as a result of the ban, the employee's
      payments will be reduced by a proportion specified in the notice
      (paragraph 471(1)(c)).  The employee's modern award, enterprise
      agreement or contract of employment (whichever applies) would then
      take effect accordingly (subclause 471(2)).


1873. In the absence of a valid notice, payment must be made in full.  If
      an employer deducts pay without a valid notice, or does not make
      deductions in accordance with the notice, then the affected employee
      could bring proceedings for underpayment of wages under the applicable
      modern award, enterprise agreement or contract of employment.


1874. The proportion specified in the notice must be worked out in
      accordance with the regulations (subclause 471(3)) and may be varied
      by FWA in certain circumstances (clause 472).


1875. An employer may also refuse to accept partial performance of work and
      instead refuse to make any payment to the employee, by giving the
      employee notice of its refusal and non-payment in relation to the
      industrial action period (subclause 471(4)).

Illustrative example
Allison works at the Sandy Shores Private Clinic which operates seven days
a week.  On Friday 13 May 2011, Allison's bargaining representative
provides her employer with three working days' notice of protected
industrial action by employees it represents that will take the form of
partial work bans over a two week period, commencing the following
Thursday.  The bans include refusing to admit new patients before noon on
each day.
On the Monday, Allison's employer decides that the employees' payments will
be reduced by 40 per cent on account of any partial work bans and gives the
bargaining representative and affected employees written notice of the
proposed reductions over the two week period.  The reductions begin on the
Thursday, the first day on which the bans are implemented.
Sandy Shores could have decided to issue notices under the provision at a
later stage, including after the bans have started.  In that case, it could
not have made deductions from employees' pay until the start of the next
day after the day notice was given on which the employee performed work.

1876. Subclause 471(6) allows the regulations to prescribe the form and
      content of a notice referred to under paragraphs 471(1)(c) or
      471(4)(c).


1877. An employer is taken to have given notice to an employee under this
      provision if the employer has taken all reasonable steps to ensure
      that the employee and the employee's bargaining representative
      receives the notice (paragraph 471(7)(a)).  The employer must also
      comply with any requirements relating to the giving of the notice
      prescribed in the regulations (paragraph 471(7)(b)).


1878. If an employer fails to provide valid notice of reduction or non-
      payment under this clause an employee remains entitled to payment in
      full (subclause 471(8)).


Clause 472 - Orders by FWA relating to certain partial work bans


1879. Clause 472 provides that an employee, or his or her bargaining
      representative, may apply to FWA to vary the effect of a notice that
      has been issued under paragraph 471(1)(c), stating that the employee's
      payments will be reduced (subclauses 472(1), (2) and (4)).  Under this
      clause, e.g., FWA could decide to increase or decrease the amount
      employees are entitled to be paid during the partial work bans.  No
      application may be made, however, in relation to a notice issued under
      subclause 471(4) to withhold the employees' pay altogether.


1880. In deciding whether to vary the effect of a notice issued under
      paragraph 471(1)(c), FWA must take into account the reasonableness of
      the proposed reduction, having regard to the nature and extent of the
      relevant partial work ban or bans to which the notice relates
      (paragraph 472(3)(a)).  FWA must also take into account fairness
      between the parties, considering all the circumstances of the case
      (paragraph 472(3)(b)).

Illustrative example
Allison's bargaining representative applies to FWA to reduce the proportion
of Sandy Shores' proposed deduction.  After taking into account whether the
40 per cent deduction was reasonable having regard to the nature and extent
of the partial work bans and fairness between the parties, FWA orders Sandy
Shores to reduce the deduction to 15 per cent and to pay the difference to
the employees.

Clause 473 - Accepting or seeking payments relating to periods of
industrial action


1881. Clause 473 prohibits certain conduct having the effect of encouraging
      contravention of this Subdivision.


1882. An employee is prohibited from accepting strike pay from the employer
      (that is, a payment that would contravene clause 470), or asking the
      employer to make such a payment (subclause 473(1)).  The intention is
      that an employee should not be subject to a pecuniary penalty if the
      employer paid them and they were unaware of the purpose of the
      payment.


1883. This clause does not cover accepting or seeking payments relating to
      partial work bans.  It is intended that the employer should be able to
      elect to pay employees full salary during any period where partial
      work bans are in place.  It is anticipated that many employers will
      prefer to take this option , especially where bans are not overly
      disruptive.  Where the employer elects to issue a partial work notice,
      the relevant parties should be able to resolve any disputes relating
      to the employer's notice through recourse to FWA.


1884. However, the legislative note under subclause 473(1) clarifies that
      acts of coercion, or misrepresentations, relating to payments for
      industrial action may contravene clause 348 or 349.  Clause 348
      prohibits a person taking adverse action against another person for,
      among other matters, refusing to pay strike pay.  Clause 349 prohibits
      misrepresentations about, among other matters, the payment of strike
      pay.  Clause 348 covers the conduct currently covered by sections 508
      and 509 of the WR Act.


1885. An employee organisation, or member of an employee organisation, is
      prohibited from asking an employer to provide strike pay if the
      employer would contravene clause 470 by making the payment (subclause
      473(2)).


1886. The legislative note under subclause 473(2) clarifies that acts of
      coercion, or misrepresentations, relating to payments for industrial
      action may contravene clause 348 or 349.


1887. Subclauses 473(1) and (2) are civil remedy provisions under Part 4-1
      (Civil remedies).


Subdivision B - Industrial action that is not protected industrial action


1888. Subdivision B deals with strike pay in relation to periods of
      industrial action that are not protected industrial action.


1889. Action that does not meet the requirements contained in Division 2 of
      Part 3-3, or that is taken during the life of an enterprise agreement
      (clause 417), cannot be protected industrial action.


1890. Division 2 of Part 3-3 sets out when industrial action (as defined in
      clause 19) for a proposed enterprise agreement is protected industrial
      action.


Clause 474 - Payments not to be made relating to certain periods of
industrial action


1891. An employer is prohibited from providing strike pay to an employee
      who engages in industrial action that is not protected industrial
      action on a day:


     . if industrial action is taken for at least 4 hours - the total
       duration of the industrial action on that day (paragraph 474(1)(a));


     . otherwise - 4 hours of that day (four hour rule)
       (paragraph 474(1)(b)).


1892. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1893. It does not matter whether the industrial action is a partial work
      ban.  However, in relation to an overtime ban, it is intended that the
      duration of the action is taken not to extend beyond the period of
      overtime to which the ban relates.


1894. Payments must be withheld in relation to the actual period when
      industrial action was taken (e.g., if taken on a public holiday,
      payment at the applicable penalty rate (if any) must be withheld).


Illustrative example


Leila participates in industrial action that is not protected by
implementing a ban on working overtime.  Under her enterprise agreement,
Leila would usually have been required to work six hours of rostered
overtime in a week (i.e., two hours each day on Monday, Tuesday and
Thursday).


In Leila's case, the industrial action taken on each of the relevant days
is taken to last two hours (i.e., the period of overtime to which the ban
relates).


However, under the four hour rule, Leila's employer must withhold four
hours' pay in relation to each day that Leila would have worked overtime
but for the bans.  The effect of this is that Leila's employer is required
to withhold two hours of overtime pay, and two hours of ordinary time pay.



1895. The four hour rule does not apply in relation to a period of overtime
      to which an overtime ban applies, unless the employee refuses to work
      a period of overtime they are requested or required to work, in
      contravention of a term of an applicable modern award, enterprise
      agreement or contract of employment.  This means that payments cannot
      be withheld under the provision in relation to an overtime period that
      the employee was entitled to refuse to work under an applicable
      instrument.  An equivalent rule applies in relation to protected
      action involving overtime bans (subclause 470(4)).


1896. The legislative note following subclause 474(2) clarifies that there
      may be other circumstances in which an employee can lawfully refuse to
      work overtime, including under the NES.


1897. Subclause 474(3) clarifies how the four hour rule applies in relation
      to shiftworkers whose industrial action occurs during a shift (or
      other period of work) that spans two days.  In those circumstances,
      the shift is taken to be a day and the remaining parts of the days are
      taken not to be part of that day.  This means that the four hour rule
      cannot apply twice in respect of the one shift.  Subclause 474(4)
      provides that overtime is taken not to be a separate shift for
      purposes of subclause 474(3).


1898. A legislative note following subclause 474(3) provides an example of
      how the provision is intended to work.


Clause 475 - Accepting or seeking payments relating to periods of
industrial action


1899. Clause 475 mirrors clause 473, but in relation to industrial action
      that is not protected.  It prohibits certain conduct having the effect
      of encouraging contravention of this Subdivision.


1900. An employee is prohibited from accepting strike pay from the employer
      (i.e., a payment that would contravene clause 474), or asking the
      employer to make such a payment (subclause 475(1)).


1901. An employee organisation, or member of an employee organisation, is
      prohibited from asking an employer to provide strike pay if the
      employer would contravene clause 474 by making the payment (subclause
      475(2)).


1902. Subclauses 475(1) and (2) are civil remedy provisions under Part 4-1
      (Civil remedies)..


1903. Legislative notes under subclauses 475(1) and (2) clarify that an act
      of coercion, or misrepresentations, relating to payments under this
      clause may contravene clause 348 or 349.


Subdivision C - Miscellaneous


Clause 476 - Other responses to industrial action unaffected


1904. Clause 476 clarifies that this Division does not affect any right of
      the employer, under the Bill or otherwise (e.g., at common law), to do
      anything in response to employee industrial action that does not
      involve payments to the employee (e.g., standing down the employee).


Division 10 - Other matters


Clause 477 - Applications by bargaining representatives


1905. This clause provides that if a provision of this Part permits an
      application to be made by a bargaining representative and the proposed
      enterprise agreement will cover more than one employer, then the
      application may be made by one bargaining representative on behalf of
      the other representatives if they have agreed to the application being
      made on their behalf (paragraph 477(2)(b)).


1906. However, if there is a single interest employer authorisation in
      operation in relation to the proposed enterprise agreement, then the
      application may be made by the person (if any) specified in the
      authorisation as the person who may make applications under this Bill
      (paragraph 477(2)(a)).




                          Part 3-4 - Right of entry


Overview


1907. This Part confers rights on officials of organisations to enter
      premises and exercise certain powers while on those premises.  Permit
      holders may enter premises for the purpose of investigating suspected
      contraventions of the Bill or fair work instruments or to hold
      discussions with members and potential members of the organisation
      while on the premises (see Division 2).  The Part also sets out
      additional requirements officials of organisations must meet when
      exercising rights under State or Territory OHS laws (see Division 3).


1908. Division 4 of the Part prohibits certain conduct by permit holders
      and others with respect to right of entry and provides for civil
      remedies in the event of a contravention.  Division 5 empowers FWA to
      deal with disputes between an occupier of premises and a permit holder
      about the provisions and allows FWA to take action against permit
      holders and organisations that have misused their entry rights.


1909. Machinery provisions necessary for the operation of this Part, such
      as the issuing of entry permits, are included in Division 6.


Division 1 - Introduction


1910. This Division sets out a range of introductory material relevant to
      the Part.  It provides an overview of the way in which the Part works
      and its object.  It also explains the meaning of relevant key terms.


Clause 478 - Guide to this Part


1911. This clause provides a guide to this Part.


Clause 479 - Meanings of employee and employer


1912. In this Part, the terms employer and employee have their ordinary
      meanings.


1913. Subdivision A of Division 2 is incidental to other parts of the Bill
      and could relate to national system employers and their employees, or
      to other employers and their employees, depending on the part of the
      Bill that creates the substantive right or obligation.


     . For example, under Subdivision A permit holders will be able to
       exercise a right of entry to investigate a suspected breach of the
       NES in Part 2-2 involving a national system employer, or a suspected
       breach of the extended NES entitlements in Part 6-3 (which is
       supported by the external affairs power) involving a non-national
       system employer.


1914. Subdivision A is supported by the constitutional powers that support
      the substantive rights and obligations in other parts of the Bill and
      there is no need to limit references to employee and employer to those
      within the national system definitions.


1915. Under Subdivision B, permit holders will be able to exercise a right
      of entry to hold discussions with employees.  Subdivision B is
      supported by the constitutional powers that support the regulation of
      organisations and is not limited to discussions with national system
      employees.


1916. Under Division 3, permit holders are required to meet certain
      requirements in exercising a right of entry under a State or Territory
      OHS law.  Division 3 is supported by the constitutional powers that
      are engaged by subclause 494(2) and there is no need to limit
      references to employee and employer to those within the national
      system definitions.


Clause 480 - Object of this Part


1917. This clause sets out the object of the Part.  The object is to
      establish a framework that allows officials of organisations to enter
      premises that balances:


     . the right of organisations to represent their members, hold
       discussions with potential members, and investigate suspected
       contraventions of the Bill and fair work instruments;


     . the right of employees to receive information from, and be
       represented by, officials of organisations in the workplace; and


     . the right of occupiers of premises and employers to conduct their
       activities in the workplace without undue interference or
       interruption.


Division 2 - Entry rights under this Act


1918. Division 2 sets out when a permit holder may enter premises and the
      rights they may exercise while on those premises.  Subdivision A
      allows a permit holder to enter premises for the purpose of
      investigating a suspected contravention of the Bill or a fair work
      instrument.  Subdivision B allows a permit holder to enter premises
      for the purpose of holding discussions with members, and people
      eligible to be members of the permit holder's organisation.
      Subdivision C sets out the mandatory requirements a permit holder must
      meet when exercising rights under either Subdivision A or B.


1919. This Division gives officials of organisations a statutory right to
      enter premises and exercise powers provided they satisfy various
      conditions.  It is not intended to codify all of the ways in which
      entry can occur or provide an exhaustive list of the powers
      exercisable on the premises.  The Division does not affect the ability
      of an occupier of premises to invite any person onto that premises,
      e.g., to meet with the employer about a particular matter.


Subdivision A - Entry to investigate suspected contravention


1920. Subdivision A authorises a permit holder to enter premises to
      investigate a contravention of the Bill or a fair work instrument.  A
      permit holder must reasonably suspect that the contravention has
      occurred or is occurring.  This Subdivision also details the rights a
      permit holder may exercise while on premises.


Clause 481 - Entry to investigate suspected contravention


1921. This clause provides that a permit holder may enter premises and
      exercise a right conferred by clause 482 or 483 in order to
      investigate a suspected contravention of the Bill or a term of a fair
      work instrument (this term is defined in clause 12 to mean a modern
      award, enterprise agreement, workplace determination or an FWA order).
       However, subclause 481(1) provides that these rights may only be
      exercised if the following entry conditions are met:


     . the suspected contravention relates to or affects a member of the
       permit holder's organisation;


     . the organisation is entitled to represent the industrial interests
       of that member; and


     . that member performs work on the premises.


1922. Subclause 481(2) requires the fair work instrument being investigated
      under this clause to apply or have applied to the member.  This
      subclause allows a permit holder to investigate compliance with a fair
      work instrument that has ceased to apply to the member (e.g., an
      agreement which previously applied to an employee but which has been
      replaced by a new agreement).


1923. Subclause 481(3) makes clear that clause 481 is only intended to
      facilitate a permit holder's ability to verify whether an actual
      suspected contravention is occurring or has occurred.  It is not
      intended to allow a permit holder to enter premises to engage in
      'fishing expeditions' where there is nothing to suggest a
      contravention is occurring or has occurred.  As such, the clause
      provides that the permit holder has the burden of proving that she or
      he was acting on a reasonable suspicion that the contravention has
      occurred or is occurring when she or he entered the premises.  A
      reasonable suspicion could include a suspicion based on complaints by
      members to the permit holder's organisation that suggest
      contraventions of the Bill or a relevant fair work instrument have
      occurred or are occurring.


1924. Notes under subclause 481(1) direct the reader to entry notification
      requirements in other provisions of the Bill.  Note 2 alerts the
      reader that FWA may issue an affected member certificate under
      clause 520 which may assist in resolving disputes about whether a
      permit holder satisfies the requirements in subclause 481(1).


Clause 482 - Rights that may be exercised while on premises


1925. This clause lists the rights a permit holder can exercise while on
      premises to investigate a suspected contravention under clause 481.
      While on premises, a permit holder may do any of the following:


     . inspect work, processes or objects (see paragraph 482(1)(a));


     . interview certain people who agree to be interviewed (see
       paragraph 482(1)(b));


     . require the occupier or an affected employer to allow the inspection
       and copying of any record or document kept on, or accessible from,
       the premises (see paragraph 482(1)(c)).


1926. All rights exercised by a permit holder under this clause must be
      relevant to the investigation of the suspected contravention.  This
      means for example, that if the suspected breach being investigated
      concerned an allegation that an employee had their overtime cut for
      having made a complaint to the Fair Work Ombudsman, the permit holder
      could only inspect and copy overtime records of relevant employees,
      but could not inspect or copy, e.g., records of employees'
      superannuation or managerial employees' salaries.


1927. A note under subclause 482(1) highlights that if personal information
      is collected by a permit holder under this clause, the use, disclosure
      and storage of that information may be regulated by the
      Privacy Act 1988.  A complaint may be made to the Privacy Commissioner
      about an organisation (or a representative of an organisation) that
      uses, discloses or stores personal information in a manner
      inconsistent with the requirements of the Privacy Act 1988.  The note
      also directs the reader to clause 504 which prohibits the unauthorised
      use or disclosure of employee records (as defined in clause 12).


1928. This clause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1929. An occupier of premises or an affected employer who is required by a
      permit holder to allow the inspection and copying of records or
      documents must comply with that requirement (see subclause 482(3)).


1930. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1931. Subclause 482(2) defines the meaning of affected employer in relation
      to the Subdivision.  A person is an affected employer if:


     . she or he employs a member of the permit holder's organisation whose
       industrial interests the organisation is entitled to represent; and


     . that member performs work on the premises; and


     . the suspected contravention relates to or affects the member.


Clause 483 - Later access to record or document


1932. This clause allows a permit holder to require an affected employer to
      give him or her documents or records relevant to the suspected
      contravention at a time after the permit holder has visited the
      premises.  A permit holder can require the production of records or
      documents when on the premises or up to 5 days afterwards (see
      subclause 483(3)).  The request must be made by written notice
      indicating what records or documents are sought and the time by which
      they must be provided (see subclause 483(1)).  Affected employers must
      be given at least 14 days from the day the notice is given in which to
      produce the documents or records (see subclause 483(2)).


1933. This clause allows a permit holder to gain access to records and
      other documents that are not kept on the premises or which are not
      readily available to the permit holder while she or he is on the
      premises.  The documents or records required by the permit holder can
      be provided either at the premises or at another location agreed
      between the permit holder and the affected employer (see
      subclause 483(5)).


1934. An affected employer must provide documents or records that are
      properly required by the permit holder under this clause (see
      subclause 483(4)).


1935. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1936. A note highlights that the same Privacy Act 1988 obligations may
      arise in relation to personal information collected under this clause
      as information collected under clause 482.  The note also highlights
      that clause 504 may apply.


Subdivision B - Entry to hold discussions


1937. This Subdivision sets out the circumstances in which a permit holder
      may enter premises to hold discussions with persons at a workplace.
      The Subdivision also specifies certain types of premises where entry
      is not authorised.


Clause 484 - Entry to hold discussions


1938. This clause authorises a permit holder to enter premises for the
      purpose of holding discussions with persons at the premises if one or
      more of those persons:


     . perform work on the premises;


     . are entitled to be represented by the permit holder's organisation;
       and


     . wish to participate in those discussions.


1939. The Bill limits when discussions can be held to mealtimes or other
      break periods.  Discussions cannot occur during paid work time (see
      subclause 490(2)).


Clause 485 - Conscientious objection certificates


1940. This clause exempts certain premises from the application of this
      Subdivision, meaning a permit holder is not authorised to enter those
      premises.  Entry is not authorised where:


     . up to 20 employees work on the premises;


     . none of the employees is a member of an organisation; and


     . all of the employees are employed by a person who holds a
       conscientious objection certificate that has been endorsed by FWA.


1941. A conscientious objection certificate is a certificate in force under
      section 180 of Schedule 1 to the WR Act.  It may be issued to a person
      whose conscientious beliefs do not allow them to be a member of a
      union or an employer association.


1942. It is important to note that if more than one person employs
      employees at the premises in question, each employer must hold an
      endorsed conscientious objection certificate for entry by a permit
      holder under clause 484 to be excluded by this clause.


1943. When FWA may endorse a conscientious objection certificate is set out
      in subclauses 485(3)-(4).  Endorsement may only occur if:


     . FWA is satisfied that the person who holds the certificate is a
       practising member of a religious society or order, the doctrines or
       beliefs of which preclude membership of any other body (see
       subclause 485(3)); and


     . the person who holds the certificate has applied for endorsement
       (see subclause 485(4)).


1944. While an application for a conscientious objection certificate need
      not be accompanied by an application for endorsement, the two may be
      made at the same time (see subclause 485(5)).


1945. Subclause 485(6) clarifies that endorsement exists only with respect
      to the certificate it accompanies.  When that certificate expires or
      is renewed, the endorsement ceases to exist.  This means that any new
      certificate needs to be re-endorsed for this clause to apply.


1946. The power of FWA under this clause may be delegated to the General
      Manager or FWA staff (see clause 625).  Decisions of delegates under
      this clause are appealable under clause 604.


Subdivision C - Requirements for permit holders


1947. This Subdivision sets out mandatory requirements that a permit holder
      must meet when exercising or attempting to exercise rights under
      Subdivision A or B of this Division.


Clause 486 - Permit holder must not contravene this Subdivision


1948. This clause makes clear that a permit holder who is exercising or
      seeking to exercise a right under Subdivision A or B is not authorised
      to enter or remain on the premises if she or he contravenes any of the
      clauses in Subdivision C or any applicable regulations made under
      clause 521.  A permit holder who attempts to exercise a Subdivision A
      or B right when not authorised to do so may be trespassing on
      property.  FWA may also restrict the rights of a permit holder or an
      organisation under clause 508 if either misuses rights conferred by
      this Part.


Clause 487 - Giving entry notice or exemption certificate


1949. This clause requires a permit holder to give either an entry notice
      or an exemption certificate to the occupier of the premises before
      entry to investigate a suspected contravention or to hold discussions
      with people under this Division.  Where the permit holder is entering
      to investigate a suspected contravention, the entry notice or
      exemption certificate must also be given to any affected employer
      (this term is defined in subclause 482(2)).  This is to address
      situations where the affected employer is not the occupier of the
      premises to ensure the affected employer is given advance notice that
      the permit holder will be entering and may be seeking to interview
      employees, inspect records or exercise other powers conferred by the
      Bill.


1950. Subclause 487(3) provides that an entry notice must be provided to
      the occupier of premises (and any affected employer in relation to
      entry for investigation purposes) at least 24 hours, but not more than
      14 days, before the proposed entry.  This ensures there is an
      appropriate notice of entry.


1951. Subclause 487(2) provides a definition of an entry notice.  It is a
      notice that contains the content requirements set out in clause 518,
      which includes such matters as the date of entry and a declaration
      that the organisation is entitled to represent the industrial
      interests of the relevant employees.


1952. Subclause 487(4) sets out different rules regarding notification of
      intended entry if FWA has granted an exemption certificate under
      clause 519.  An exemption certificate allows a permit holder to enter
      premises for investigation purposes without providing advance notice
      of the entry to the occupier of the premises or an affected employer.
      Exemption certificates will only be issued if FWA is satisfied that
      providing notice of the entry might result in the destruction of
      evidence relevant to the suspected contravention.  The certificate
      must be shown to the occupier of the premises and any affected
      employer (or someone who apparently represents them) before, or as
      soon as practicable after, the permit holder's entry.


1953. A permit holder who does not comply with the notice requirements in
      this clause is not authorised to enter or remain on the premises as a
      result of the operation of clause 486.


Illustrative Example


Tara is an official of an organisation that represents workers employed on
a building site.  She has a valid entry permit.  Tara suspects that one of
the employers who is operating as a subcontractor on the site is not
allowing members of her organisation breaks to which they are entitled
under the modern award which applies to them.  She wishes to enter the site
to investigate this suspected contravention.  Tara prepares an entry notice
that complies with all the requirements of the Part and faxes it to the
head contractor on the site, as the occupier of the premises, 48 hours
prior to her entry.  She also faxes the notice to the employer.  Tara has
complied with the requirements of clause 487 and is able to enter the site
to investigate the suspected contravention of the award.


While on site, Tara is approached by a member of her union working for a
different company on the site who complains about being underpaid.  This
company is another subcontractor.  Clause 487 does not authorise Tara to
investigate the alleged underpayment during this visit because she has not
provided the required notice of entry with respect to this suspected breach
to either the occupier or the affected employer.  Tara would need to
provide a separate entry notice that complies with the requirements of
clause 487 to enter on a later date and investigate this suspected
contravention.


Clause 488 - Contravening entry permit conditions


1954. FWA may impose conditions on a permit at the time of issuing a permit
      (see clause 515) or when taking action against a permit holder under
      Division 5 of this Part.  These conditions could include, for example,
      a requirement that a permit holder provide a longer period of notice
      to a specific employer than that prescribed by clause 487.


1955. This clause requires a permit holder to comply with any such
      condition that has been imposed on his or her entry permit whilst
      exercising or seeking to exercise rights under this Division.  If a
      permit holder fails to do so then she or he is not authorised to enter
      or remain on the premises because of the operation of clause 486.


Clause 489 - Producing authority documents


1956. This clause requires a permit holder to produce his or her authority
      documents in certain circumstances.  A permit holder's authority
      documents are the entry permit and either a copy of the entry notice
      relied on for the entry, or the exemption certificate where one has
      been issued by FWA for the entry (see subclause 498(3)).


1957. When a permit holder enters premises under Subdivision A to
      investigate a suspected contravention, subclause 489(1) requires the
      permit holder to show his or her authority documents when the occupier
      of the premises or an affected employer requests to see them.
      Authority documents must also be shown to the occupier or affected
      employer before requiring access to documents or records under
      clauses 482 or 483.


1958. When a permit holder enters premises to hold discussions under
      Subdivision B, subclause 489(2) requires the permit holder to show his
      or her authority documents to the occupier of the premises on request.




1959. If a permit holder fails to produce his or her authority documents as
      required by this clause, she or he is not authorised to enter or
      remain on the premises because of the operation of clause 486.


Clause 490 - When right may be exercised


1960. This clause specifies the time during which entry rights under this
      Division can be exercised.


1961. Entry to premises to hold discussions or to investigate a suspected
      contravention may only occur during working hours (see
      subclause 490(1)).  Working hours refers to the actual operating hours
      of the premises that the permit holder wishes to enter.  In addition,
      permit holders may only enter on a day specified in the entry notice
      or the exemption certificate for the entry (see subclause 490(3)).


1962. When entering for discussion purposes under Subdivision B, a permit
      holder may only hold the discussions during mealtimes or other breaks
      (subclause 490(2)).  Discussions cannot occur during paid work time.
      An example of other breaks would include holding discussions before or
      after an employee's shift, provided the discussions are held within
      the working hours of the premises.


1963. If a permit holder seeks to hold discussions outside break times, she
      or he would not be authorised to enter or remain on the premises
      because of the operation of clause 486.


Clause 491 - Occupational health and safety requirements


1964. This clause requires a permit holder to comply with a reasonable
      request by an occupier of premises to observe occupational health and
      safety requirements that apply to the premises.  For example, if a
      permit holder seeks to enter a construction site where there is a
      legislative requirement to wear a hard hat, it would be reasonable for
      the occupier to require the permit holder to wear a hard hat.  If the
      permit holder does not comply with this request, then she or he would
      not be authorised to enter or remain on the premises because of the
      operation of clause 486.


1965. A note underneath the clause highlights that if there is a dispute
      about whether a request under this clause is reasonable, FWA can deal
      with that dispute under clause 505.


Clause 492 - Conduct of interviews in particular room etc.


1966. This clause allows an occupier of premises to request that a permit
      holder meet employees in a specific room or area of the premises or to
      take a particular route to that location (see subclause 492(1)).  The
      request must be a reasonable request.  A permit holder must comply
      with a reasonable request or otherwise she or he will not be
      authorised to enter or remain on the premises because of the operation
      of clause 486.


1967. The clause sets out a number of circumstances where a request will be
      considered to be unreasonable.  Paragraph 492(2)(a) provides that a
      request will be unreasonable if the nominated room or area is not fit
      for the purpose.  This is intended to cover situations where the room
      or area is not appropriate for the holding of discussions or
      interviews with employees, e.g., where a bathroom or unsafe area is
      nominated.


1968. Paragraph 492(2)(b) provides that a request will be unreasonable
      where the request is intended to intimidate, discourage or make it
      difficult for people to participate in the discussions.  This is
      intended to ensure that an occupier cannot nominate a particular room
      or location for the purpose of trying to hamper people freely
      attending and participating in the discussions.


1969. Subclause 492(2) is not intended to be an exhaustive list of when a
      request is unreasonable.  If there is a dispute about the
      reasonableness of a request FWA may deal with it under clause 505.  A
      note underneath subclause 492(1) alerts the reader to FWA's powers in
      this respect.


1970. Subclause 492(3) clarifies that a request to meet employees in a
      particular location or to take a particular route to reach that
      location is not unreasonable solely because the location or route is
      not the one the permit holder would have chosen.


1971. Additional circumstances in which a request is or is not reasonable
      may be prescribed by regulations (see subclause 492(4)).








Illustrative Example

Kate is a permit holder whose organisation is entitled to represent miners
at a remote mine site.  Kate wants to enter the site to talk to employees
about a new superannuation scheme bring operated by the union.  She
provides the mine manager, David, with the appropriate notice.  Out of
courtesy, Kate also phones David to inform him that she intends to hold her
discussions during the employees' normal 30 minute lunch break.  David does
not want his employees speaking with Kate.  With this in mind, he requests
that Kate meet the employees in a small donga that is a 20 minute walk (one
way) from where the employees work.  Unbeknown to David, the donga is also
unsafe because its roof has been damaged and may collapse.

As David made the request with the intention of making it difficult for his
employees to attend the discussions during their lunchbreak, his request
would be unreasonable under subparagraph 492(2)(b)(iii).  David's request
would also be unreasonable under paragraph 492(2)(a) because the location
is unsafe and therefore not fit for the purpose of holding discussions.  It
does not matter that David was unaware that the donga was unsafe as there
is no requirement under paragraph 492(2)(a) that the nominated location be
intended to not be fit for the purpose.

Clause 493 - Residential premises


1972. This clause provides that a permit holder must not enter any part of
      premises that is mainly used for residential purposes.  For example,
      permit holder could enter a converted garage where outwork is being
      conducted, but not the living quarters of the residence.


1973. For premises or parts of premises that are used for both residential
      and work purposes, it is intended that a permit holder will only have
      an entry right where the premises are mainly used for work purposes on
      a regular and substantial basis.


1974. If a permit holder enters a part of premises used for residential
      purposes, that permit holder is not authorised to enter or remain on
      the premises because of the operation of clause 486.


Division 3 - State or Territory OHS rights


1975. This Division imposes additional requirements on permit holders
      exercising a right of entry under State or Territory OHS legislation.
      It does not override entry rights under these laws.  These rights are
      expressly saved by clause 27.  State and Territory OHS laws contain
      their own conditions which can be imposed on permit holders exercising
      OHS rights of entry.  These conditions continue to apply.


1976. This Division does not confer additional rights of entry on permit
      holders.


Clause 494 - Official must be permit holder to exercise State or Territory
OHS right


1977. This clause imposes a requirement on officials of organisations
      seeking to enter premises under a State and Territory OHS law (being a
      law of a State or Territory prescribed by the regulations - see
      subclause 494(3)) that they must hold an entry permit issued under
      this Part.


1978. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1979. The scope of these provisions is set out in the definition of State
      or Territory OHS right in subclause 494(2).  They cover rights
      conferred by a State or Territory OHS law that allows or authorises
      entry to premises or inspection or access to employee records on the
      premises.  Employee record is defined in clause 12.  It has, in
      relation to an employee, the meaning given by the Privacy Act 1988.
      Under section 6 of that Act, an employee record is a record of
      personal information relating to the employment of an employee.


1980. Paragraphs 494(2)(a)-(g) set out the constitutional scope of the
      provisions.


Clause 495 - Giving notice of entry


1981. This clause requires permit holders to provide written notice to the
      occupier of the premises and to any affected employer at least 24
      hours before exercising a State or Territory OHS right to inspect or
      access employee records.  The requirement to give written notice only
      applies when the permit holder is exercising a State or Territory OHS
      right in relation to employee records, and not when attending to OHS
      emergencies.  An affected employer in relation to entry onto premises
      under this Division is a person whose employees carry out work on the
      premises (see subclause 495(2)).


1982. This subclause is a civil remedy provision under Part 4-1 (Civil
      remedies).


1983. The written notice must set out the permit holder's intention to
      exercise the right and the reasons for doing so (see
      paragraph 495(1)(a)).  For example, a permit holder seeking access to
      employee timesheets to determine whether time restrictions on the
      performance of certain work have been complied with would need to set
      out this allegation in the notice.


Clause 496 - Contravening entry permit conditions


Clause 497 - Producing entry permit


Clause 498 - When right may be exercised


Clause 499 - Occupational health and safety requirements


1984. These clauses impose a range of requirements on a permit holder
      exercising a State or Territory OHS right.


1985. Clause 496 requires a permit holder to comply with any condition that
      has been imposed on his or her entry permit when exercising a State or
      Territory OHS right.  FWA may impose conditions on a permit when
      taking action against a permit holder under Division 5 of this Part or
      at the time of issuing a permit (see clause 515).


1986. Clause 497 requires a permit holder exercising a State or Territory
      OHS right to show his or her permit to the occupier of premises or an
      affected employer when asked to do so.  An affected employer in
      relation to entry onto premises under this Division is a person whose
      employees carry out work on the premises (see subclause 495(2)).


1987. Clause 498 specifies the time during which a State or Territory OHS
      right may be exercised.  The clause requires that a permit holder only
      exercise a State or Territory OHS right during working hours.  Working
      hours refers to the actual operating hours of the premises which the
      permit holder wishes to enter.


1988. Clause 499 requires a permit holder exercising a State or Territory
      OHS right to comply with a reasonable request by the occupier of the
      premises to observe any occupational health and safety requirements
      that apply to the premises.  While reasonabl