Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008 - 2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
SENATE
FAIR WORK (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL AMENDMENTS) BILL 2009
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be Moved on Behalf of the Government
(Circulated by authority of the Minister for Employment and Workplace
Relations, the Honourable Julia Gillard MP)
AMENDMENTS TO THE FAIR WORK (TRANSITIONAL PROVISIONS AND CONSEQUENTIAL
AMENDMENTS) BILL 2009
OUTLINE
The Government will move amendments to the Fair Work (Transitional
Provisions and Consequential Amendments) Bill 2009 (this Bill). The more
significant of the amendments are outlined below:
Protected action ballots
This Bill provides that protected action ballot orders and authorisations
under the Workplace Relations Act 1996 (WR Act) are of no effect from 1
July 2009.
The Government proposes amendments to allow preservation of WR Act
protected action ballot authorisations after 1 July 2009 on application by
a bargaining representative to Fair Work Australia (FWA). Strict criteria
will need to be met before FWA may make such an order.
Unfair dismissal - Transitional definition of small business employer
An amendment is proposed to provide a transitional definition of small
business employer (i.e., less than 15 full-time equivalent employees) until
1 January 2011 for unfair dismissal purposes. This amendment gives effect
to the agreement reached between the Government and Senator Fielding to
secure passage of the now Fair Work Act 2009 (FW Act).
The calculation of the number of full-time equivalent employees is based on
the number of ordinary hours of an employer's employees over the previous 4
weeks. Where an employee has been on leave associated with the birth or
adoption of a child for more than 4 weeks, their hours of leave are
excluded from the calculation.
Registered organisations
The Government proposes a number of amendments to further assist State and
federally registered organisations to rationalise their affairs and
simplify their operations across multiple jurisdictions. The amendments
include changes to:
. the provisions allowing federal organisations to extend their
eligibility rules to reflect the broader rules of an equivalent
State organisation; and
. ensure that settled demarcations are not reopened by allowing FWA to
make a federal representation order that reflects a State order in
situations where a federal organisation has altered its eligibility
rules to reflect those of a State equivalent organisation.
FINANCIAL IMPACT STATEMENT
The measures proposed in this Bill are budget neutral.
.NOTES ON AMENDMENTS
1. In these notes on amendments, the following abbreviations are used:
|AFPC |Australian Fair Pay Commission |
|AFPCS |Australian Fair Pay and Conditions Standard |
|AIRC |Australian Industrial Relations Commission |
|APCS |Australian Pay and Classification Scale |
|AWA |Australian workplace agreement |
|FW Act |Fair Work Act 2009 |
|FWA |Fair Work Australia |
|FWO |Fair Work Ombudsman |
|ITEA |individual transitional employment agreement |
|NES |National Employment Standards |
|NAPSA |notional agreement preserving State awards |
|this Bill |Fair Work (Transitional Provisions and Consequential |
| |Amendments) Bill 2009 |
|WR Act |Workplace Relations Act 1996 |
Amendment 1 - clause 2, page 2 (table item 9, column 1)
Amendment 2 - clause 2, page 2 (after table item 13)
Amendment 3 - clause 2, page 2 (after table item 15)
1. The table in clause 2 sets out when this Bill's provisions
commence. These amendments amend the table to include commencement
provisions for the changes made by this Bill.
Amendment 4 - page 165 (before line 1)
2. Amendment 4 inserts new Schedule 12A which provides for a
transitional definition of small business employer for unfair
dismissal purposes.
Item 1 - Meanings of employee and employer
3. In this Schedule, the terms employer and employee have their
ordinary meanings.
Item 2 - Meaning of small business employer, for unfair dismissal purposes,
prior to 1 January 2011
4. For the purposes of the unfair dismissal provisions in Part 3-2 of
the FW Act, this item provides that a national system employer is a
small business employer if the employer has fewer than 15 full-time
equivalent employees at the relevant time. This definition only
applies to dismissals occurring before 1 January 2011. After this
transitional period, a small business employer will be defined in
accordance with section 23 of the FW Act.
5. The method statement for calculating an employer's number of full-
time equivalent employees is set out in subitem (2). It is
calculated by:
. working out the total number of ordinary hours of all employees in
the 4 weeks immediately before the notice of dismissal or dismissal
(whichever occurs first) (step 1);
. working out the number of hours of leave to which subitem (4)
applies (being hours of leave that a person has taken that they are
entitled to on the birth or adoption of a child provided the
criteria in subitem (4) are met) (step 2);
. subtracting the total number of hours calculated in step 2 from step
1 (step 3), and
. dividing the result from step 3 by 152 (step 4).
6. The number 152 is based on the maximum number of hours that a full-
time employee could work over 4 weeks (being 38 hours per week),
excluding reasonable additional hours. The number 152 will be used
even where the ordinary full-time hours in the particular business
are not 38 hours per week.
7. An employee's ordinary hours are as specified in subitem (3). In
most cases the ordinary hours will be contained in the relevant
industrial instrument. However, for casual employees, paragraph (e)
provides that the ordinary hours for a casual employee are the
hours the person actually worked, to a maximum of 152 hours over
the 4 week period.
8. It is not the actual hours of work that form the basis for the
calculation of ordinary hours, since the ordinary hours of an
employee include hours of leave. However, subitem (4) operates to
exclude any hours of leave whether paid or unpaid, where the
entitlement to take that leave is associated with the birth or
adoption of a child (subject to certain pre-requisites) and the
leave extends for more than 4 weeks at the time of the count. The
entitlement to take that leave may be derived from a variety of
sources, including a Commonwealth, State or Territory law,
industrial instrument or employment contract and it does not matter
if other paid leave (e.g., annual leave) has been taken
concurrently.
9. For the purposes of working out an employer's number of full-time
equivalent employees, associated entities are taken to be one
entity. Associated entity is defined in section 12 of the FW Act.
The hours of any employee working for an associated entity must be
taken into account for the purposes of this provision.
Example 1
Jillian owns a furniture shop in Melbourne. She employs 17 employees and
has given 4 weeks' notice of termination to one of her full-time employees
on 3 March 2010 for continued under performance. Jillian's business has no
associated entities.
As the dismissal will occur before 1 January 2011, the provisions in
Schedule 12A will apply in defining a small business employer.
Jillian looks at her business records for the previous 4 weeks. She employs
13 full-time employees and 4 casuals.
Jillian has one full-time employee who has been working regular overtime,
in excess of her ordinary hours. However, she is treated as working
ordinary hours for the purposes of the small business employer test.
There is an enterprise agreement applying to all of Jillian's employees
that provides for ordinary hours of 38 hours per week for full-time
employees.
The 4 casual employees all work different hours. Jillian consults her
records to work out the hours that each of them have actually worked in the
previous 4 weeks.
The 4 casuals have worked the following hours:
Nadia: 25 hours per week each week;
Fred: 10 hours per week each week;
Marco: 20 hours per week for 2 weeks and no hours for the other 2 weeks;
and
Kate: 40 hours per week each week.
Kate has worked 160 hours in the 4 week period. However, only 152 of her
hours can be included in the calculation in accordance with paragraph
(3)(e). Taking this into account, the total hours worked by all the casual
employees is 332 hours.
Step 1:
. 13 x (4 x 38) = 1976 hours. This is the total number of hours over the
previous 4 week period for full-time employees, ending on 3 March 2010,
being the time that notice of termination was given.
. (25 x 4) + (10 x 4) + (20 x 2) + 152 = 332 hours. This is the total
number of hours for casual employees.
. 1976 + 332 = 2308 hours.
Steps 2 and 3:
No employee is on leave as described in subitem (4), so proceed directly to
Step 4.
Step 4:
2308 ÷ 152 = 15.18 being the number of full-time equivalent employees.
Jillian is therefore not a small business employer at the time she gave the
employee notice of termination.
Example 2
Rachel who owns a restaurant dismisses an employee for continued
underperformance giving 4 weeks' notice of termination on 15 June 2010. She
has the same number of full-time employees that Jillian had (13) and the 4
casuals have all been working the same number of hours as in the example
above. However, one of the full-time employees, Katarnya, has recently
returned from 8 weeks leave following the birth of her child. Looking at
her records for the previous 4 week period, Rachel confirms that Katarnya
has been back at work for the last 2 weeks of the previous 4 week period.
Step 1:
. 13 x (4 x 38) = 1976 hours. This is the total number of hours over the
previous 4 week period for full time employees, ending on 15 June 2010,
being the time that notice of termination was given.
. (25 x 4) + (10 x 4) + (20 x 2) + 152 = 332 hours. This is the total
number of hours for casual employees.
. 1976 + 332 = 2308 hours.
Step 2:
2 x 38 = 76 hours. This is because Katarnya has taken leave as described in
subitem (4).
Step 3:
2308 - 76 = 2232 hours.
Step 4:
2232 ÷ 152 = 14.68 being the number of full-time equivalent employees.
Rachel is therefore a small business employer at the time she gave the
employee notice of termination.
Amendment 5 - Schedule 13, item 13, page 172 (line 16)
10. New Item 14A modifies the effect of subitem 13(1) to allow for the
limited preservation of protected action ballots under the WR Act
after the WR Act repeal day. The amendment to subitem 13(2) is
consequential to item 14A. It makes clear that item 13 is also
subject to new item 14A.
Amendment No. 6 - Schedule 13, page 172 (after line 27)
11. This amendment inserts new item 14A into Schedule 13 of this Bill.
It enables FWA, on application by a bargaining representative for a
proposed enterprise agreement, to order that industrial action
authorised under the WR Act in relation to a proposed collective
agreement is taken to be authorised in relation to the proposed
enterprise agreement by a protected action ballot under the FW Act
if certain conditions are met.
12. First, the bargaining representative for the proposed enterprise
agreement that applies for the order must have been an applicant
specified in the WR Act protected action ballot order in relation
to a proposed collective agreement.
13. Further, the application must be made within 28 days of the WR Act
repeal day. This is to ensure that bargaining representatives do
not seek to indefinitely rely on WR Act ballot authorisations after
the WR Act repeal day.
14. In deciding whether to make an order, FWA must be satisfied the
bargaining representative first organised or engaged in industrial
action in relation to the proposed collective agreement prior to
the WR Act repeal day. Furthermore, industrial action must have
been engaged in or organised on or after 1 March 2009. This ensures
the action is relatively current.
15. FWA must also be satisfied that any industrial action taken was
protected action within the meaning of the WR Act. For example, if
industrial action approved by a WR Act protected action ballot was
subsequently taken in support of claims for prohibited content, the
action will be unprotected under the WR Act and an order under item
14A will not be available.
16. In addition, paragraph (3)(d) of item 14A ensures that an order
under this item will not be available if a collective agreement
covering the employees is approved by those employees prior to the
WR Act repeal day. The proposed enterprise agreement must cover the
employees that would have been covered by the proposed collective
agreement to which the WR Act protected action ballot authorisation
related.
17. FWA must also be satisfied that the applicant for the order is
genuinely trying to reach agreement in relation to the proposed
enterprise agreement.
18. The final requirement for an item 14A order is that FWA must be
satisfied it is reasonable in all the circumstances to make the
order.
19. Subitem 14A(4) makes clear that an order under this item only
authorises action being taken after the WR Act repeal day by the
same group of employees that were authorised to take the action
under the WR Act.
20. An order under item 14A has the effect that the bargaining
representative for a proposed enterprise agreement has met the
requirement in subsection 459(1) of the FW Act of industrial action
being authorised by a protected action ballot. The bargaining
representative must still satisfy other requirements under the FW
Act for the industrial action to be protected action.
21. Subitem 14A(5) has the effect of ensuring the bargaining
representative must issue a fresh notice of intention to take
industrial action after the order under item 14A is made.
Amendment 7 - Schedule 22, page 246 (after line 28)
Amendment 8 - Schedule 22, item 63, page 246 (line 29) to page 247 (line
24)
Amendment 9 - Schedule 22, page 247 (before line 25)
22. These amendments relate to the provisions of this Bill that allow
FWA to consent to an application by an organisation to alter its
eligibility rules.
23. Amendment 8 will remove current item 63 of Schedule 22 to this
Bill. That item will be replaced by item 63A which will be inserted
by amendment 9. The effect of amendment 9 is to insert new section
158A into Schedule 1 to the WR Act. The new section will require
the General Manager to consent to an application by an organisation
to alter its eligibility rules to incorporate any broader
eligibility rules of an equivalent State registered association
where he or she is satisfied of certain matters. These matters are
listed in proposed paragraphs 158A(1)(a)-(e).
24. Applications under new section 158A must not be made before
1 January 2011 or such later day as declared by the Minister (see
subsection 158A(2)). These additional criteria will be prescribed
by regulations made under paragraph 158A(1)(e). The delayed
operation of this section will also assist in ensuring that the
heavy workload of FWA is more evenly distributed over the first few
years of the new institution's existence.
25. A declaration by the Minister under subsection 158A(2) would be a
legislative instrument for the purposes of the Legislative
Instruments Act 2003. However, the declaration would be exempt from
the provisions of that Act concerning disallowance (see
subsection 158A(3)). This exemption will ensure that organisations
cannot make applications under new section 158A until all of the
legislative framework associated with these provisions is in place
(including any necessary regulations). The declaration is akin to a
proclamation commencing provisions of legislation. Proclamations
are also exempt from disallowance under the
Legislative Instruments Act 2003.
26. Amendment 9 also provides for the date that an alteration to an
organisation's eligibility roles becomes effective.
27. Amendment 7 repeals existing subsection 158(1) of Schedule 1 to the
WR Act and replaces it with a new subsection. This amendment
ensures that the changes to this Bill made by amendment 9 do not
disturb the existing framework which allows FWA to consent to
changes in the name or eligibility rules of an organisation.
Amendment 10 - Schedule 22, item 82, page 249 (lines 18 to 21)
Amendment 11 - Schedule 22, item 82, page 249 (line 25)
Amendment 12 - Schedule 22, item 82, page 249 (line 28)
28. These amendments relate to item 82 of Schedule 22 to this Bill
which sets out the time at which a transitionally recognised
association's recognition is taken to end. The amendments provide
that recognition of all transitionally recognised associations will
end on the fifth anniversary of the earliest day on which an
organisation can make an application in accordance with section
158A (this section is inserted by amendment 9). However, if a
transitionally recognised association is granted an extension or
further extension to its recognition by FWA under clause 6 of
Schedule 10 to the WR Act (these provisions are inserted by
item 82A of Schedule 22 to this Bill), these amendments will ensure
that the recognition of those associations does not end until the
sixth or seventh anniversary respectively of the earliest day an
application could have been made under section 158A.
29. These amendments ensure that state associations and federal
organisations continue to have adequate time to rationalise their
affairs in light of the insertion of new section 158A.
Amendment 13 - Schedule 22, item 89, page 257 (line 23)
30. This amendment makes a technical change to item 89 of Schedule 22
to this Bill. It replaces a reference to 'employee organisations'
with a reference to 'organisations of employees'.
Amendment 14 - Schedule 22, item 89, page 258 (after line 12)
31. This amendment alters item 89 of Schedule 22 to this Bill by
amending proposed section 137B. That section sets out the factors
FWA must have regard to when considering whether to make a
representation order. This amendment alters the way in which FWA
must apply those factors in certain circumstances.
32. This amendment provides that if the eligibility rules of a federal
organisation have been altered under section 158A (inserted by
amendment 9) to incorporate the broader rules of an equivalent
State registered association, then a reference to an organisation
in section 137B includes a reference to the equivalent State
registered association. This ensures that the factors to which FWA
must have regard do not operate unfairly against an organisation
that has only recently expanded its eligibility rules. It ensures,
for example, that an organisation that recently extended its rules
resulting in members of a State registered association being
eligible for membership, can rely on the conduct of its equivalent
State association when seeking to show the extent to which it
represented employees in the workplace group (as per
paragraph 137B(1)(c)).
Amendment 15 - Schedule 22, item 89, page 258 (after line 30)
33. This amendment alters item 89 of Schedule 22 to this Bill by
inserting new section 137F. The new section allows FWA to make an
order that is to the same effect, or substantially the same effect,
as a representation order made by a State industrial authority.
34. Orders under this new section can only be made if FWA if:
. a federal organisation had altered its eligibility rules under
proposed section 158A (inserted by amendment 9) resulting in members
of a State registered association becoming eligible to become
members of the organisation (see paragraphs 137F(1)(a) and (b)); and
. immediately before the alteration took effect, a State
representation order made by a State industrial authority was in
effect in relation to the State association the rules of which were
absorbed by the federal organisation under proposed section 158A
(see paragraph 137F(1)(c)).
35. Applications for orders under this new section may be made by the
organisation that altered its rules under proposed section 158A or
a party to the State representation order. Orders will apply to
each organisation that is a federal counterpart to the State
registered association the rules of which have been incorporated
into those of the organisation. The orders will also apply to the
federal counterpart of each association of employees registered
under a State or Territory industrial law to which the State
representation order applied (see subsection 137F(2)).
36. This amendment will ensure that demarcations settled in State
industrial relations systems cannot be reopened when a federal
organisation expands its eligibility rules to incorporate any
broader eligibility rules of an equivalent State registered
association.
Amendment 16 - Schedule 22, item 353, page 285 (lines 24 and 25)
37. This amendment removes item 353 of Schedule 22 from this Bill. The
item would have replaced a reference to the 'Commission' with a
reference to 'FWA'. The removal of this item is the result of the
removal of subsection 158(1) by amendment 7.
Amendment 17 - Schedule 22, page 286 (after line 9)
38. This amendment inserts new item 359A into Schedule 22 of this Bill.
The item replaces a reference to the 'Commission' with a reference
to 'FWA' in subsection 158(5) of Schedule 1. This amendment is
consequential to amendment 8.
Amendment 18 - Schedule 23, page 315, (after item 10),
39. This amendment inserts new items 2A-2E into Schedule 23 of this
Bill.
40. The new items amend section 22 of the FW Act to enable periods to
be excluded from calculation of an employee's 'continuous service'
by regulation - an exclusion might either be general or for
particular purposes. This will enable regulations to address any
areas of uncertainty that might emerge.
41. The concept of continuous service is relevant most particularly in
the context of access to 'service based' entitlements under the NES
- i.e., redundancy, notice of termination, access to parental leave
and the right to request flexible work.
Amendment 19 - Schedule 23, page 316 (after line 26)
42. This amendment amends subsection 371(2) of the FW Act to provide
that once FWA has issued a certificate under section 369, a person
has 14 days (or such longer period as a court would allow) to make
a general protections court application.
43. This amendment also inserts a legislative note at the end of
section 371 of the FW Act that refers the reader to the case of
Brodie-Hanns v MTV Publishing Ltd (1995) 67 IR 298, in which the
Industrial Relations Court of Australia set down principles
relating to the exercise of its discretion under a similarly worded
provision of the Industrial Relations Act 1988.
Amendment 20 - Schedule 23, page 319 (after line 29)
44. Amendment No inserts new items 21A - 21C.
45. Item 21A corrects an incorrect cross reference in the FW Act. The
reference in paragraph 722(a) now correctly refers to Division 3 of
Part 6-4.
46. Items 21B and 21C amend subsection 779(2) of the FW Act to provide
that once FWA has issued a certificate under section 777, a person
has 14 days (or such longer period as a court would allow) to make
an unlawful termination court application.
47. These items also insert a legislative note at the end of section
779 of the FW Act that refers the reader to the case of Brodie-
Hanns v MTV Publishing Ltd (1995) 67 IR 298, in which the
Industrial Relations Court of Australia set down principles
relating to the exercise of its discretion under a similarly worded
provision of the Industrial Relations Act 1988.
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