Australia: Work Choices Up-Date: New Regulations

As highlighted in our Employment Update earlier this week, the Government has released the new regulations that will apply on and from Monday 27 March 2006. This coincides with the commencement of the reforms to the Workplace Relations Act 1996 (the Act). The new regulations repeal and replace the existing regulations.

Set out below is a summary of certain of the more pertinent regulations that may impact on operations at your workplace.

Under the Act, an employer must not lodge with the Employment Advocate a workplace agreement that contains prohibited content. In certain circumstances, penalties may be imposed on an employer who does.

The following matters are prohibited content:

• Any term that deals with the following:

• Any term that directly or indirectly encourages or discourages union membership or that requires a person to indicate support or the lack of support for a member of an industrial association.

• Any term that permits a person to engage in, or organise, industrial action.

• Any term that prohibits or restricts disclosure of details of the workplace agreement by a person bound by the agreement.

• Any term that confers a right or remedy in relation to the termination of an employee for a reason that is harsh, unjust or unreasonable.

• Any term that directly or indirectly restricts the ability of a person bound by the agreement to offer, negotiate or enter into an AWA.

• Any term that discriminates against an employee on the basis of (amongst other things) their race, colour, sex, sexual preference, age, physical or mental disability, marital status, family responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

• Any term that deals with a matter that does not pertain to the employment relationship.

• Any term that prevents the making of an AWA.

Under the Act, an employer can now request that an employee produce a medical certificate where the employee takes a day of sick leave or carer’s leave.

In order to address concerns raised by the Australian Medical Association, the regulations specify that a health practitioner may only issue a medical certificate in relation to an area in which the health practitioner is licensed or registered according to a law of the relevant State or Territory.

It is now clear that health practitioners may not issue medical certificates with respect to an area of practice beyond their competence, as recognised by State or Territory law.

Consistent with the intention to create a unitary system covering all relevant corporations and all employers in Victoria and the Territories, the Act seeks to exclude the operation of most State and Territory industrial and employment laws.

The exceptions are those provisions dealing with matters set out as statutory exceptions in the Act (eg, discrimination, superannuation, workers compensation, etc) and exceptions as listed in the regulations.

Those regulatory exceptions include any matters currently on foot under the previous State or Territory legislation, for example, contested employment terminations, unfair contract claims and transmission of business disputes. If lodged before the reforms commence (ie, before 27 March 2006), they will be dealt with under the old regimes.

Further, specific sections of Queensland, NSW and Northern Territory law are declared to be excluded, for the avoidance of doubt it seems.

So too will the contents of federal awards and agreement prevail over any inconsistent State or Territory enactments unless the Act and the regulations provide otherwise.

The regulations now make it clear that the Minister must receive from the Employment Advocate copies of the agreement and data summarising its content generally within 3 weeks of an agreement being made but the names of the parties must be ‘deleted or obliterated’ to preserve confidentiality.

A radical departure contained in the Act is the need for there to be a secret ballot (and a successful outcome from that secret ballot process) before any industrial action can claim to be protected and so render those who partake in it – unions and employees – immune from legal action by way of an injunction or damages.

The regulations now clarify, with some specificity, a range of requirements with respect to the mechanics of a valid secret ballot, including:

• the content and nature of the declaration envelope

• who may or may not act as an agent in applying for a ballot

• the material which must accompany an application

• information which must be given to employees before a vote is taken

• the form of the ballot paper

• the conduct of the balloting process including access and the issuing of the ballot papers for both postal and non-postal methods

• scrutiny issues and the appointment, qualifications and functions of scrutineers and authorised independent advisers

Strict adherence to the secret ballot protocols set down by the Act and the regulations will represent a significant hurdle to securing protected action status and is a clear deterrent to those initiating, for example, snap or ‘wildcat’ stoppages.

The Act prohibits any type of industrial action, as defined, from taking place before the nominal expiry date of an agreement whether such action is in pursuit of claims dealt with in the agreement or not. This nullifies the effect of the Federal Court’s decision in Emwest.

The regulations give standing in any court application for relief, to any ‘person to whom significant harm is reasonably likely to be caused’ as a result of the action taken. This widens the group of potential anti-industrial-action-litigants considerably beyond the employer or, indeed, the employees.

The Act provides for the preservation of certain award conditions relating to:

• annual leave

• personal and carer’s leave

• parental leave

• long service leave

• termination notice

• jury service

• superannuation (up to 30 June 2008).

The regulations address the interaction between an employee’s entitlement under the preserved award conditions relating to annual leave, personal/carer’s leave and parental leave and the corresponding entitlement in the Australian Fair Pay and Conditions Standard (Standard).

An employee will receive the benefit of a preserved award condition that relates to one of these conditions where it is more generous than the Standard.

A preserved award condition for annual leave, personal/carer’s leave or parental leave shall be considered on the basis of their effect on the individual employee and not in relation to employees as a collective group.

The regulations provide that the more generous test is based on a comparison of the total quantum of corresponding entitlements under the preserved award condition and the Standard.

Where the total quantum of a preserved award condition (for example annual leave of six weeks as applies in some industry awards) is more generous than the Standard, the whole of the award condition applies to the exclusion of the Standard.

The regulations also make specific provision in relation to the treatment of preserved award conditions relating to war service, sick leave, infectious diseases sick leave and any like form of sick leave, special maternity leave and unpaid parental leave.

The pre-reform regulations contained three separate divisions dealing with the making and retention of records relating to employees. These divisions have been consolidated in the new regulations.

The consolidated provisions oblige employers to create and retain records relating to the employment of employees, including ‘transitional employees’, who were bound by an award immediately prior to the commencement of the reforms to the Act. Employers are also required to issue pay slips to employees.

Penalties apply for failure to adhere to these requirements but there is a six month grace period from prosecution in relation to the recording of hours of work (see the first three dot points below).

Similarly to the pre-reform regulations, the new regulations set out the period of time that a record must be retained, depending on the circumstances, it is either seven years after the date an entry was changed or seven years after employee’s employment was terminated (whichever occurs first), or seven years after the date the entry was made.

The content of the employee records is very similar to the pre-reform content. Additional obligations contained in the new regulations include:

• the employee’s daily starting and finishing times

• recording the employee’s nominal hours (as defined in s92AA of the Act: usually 38 hours per week) and any variations to those hours

• the total number of hours worked by the employee during each day

• retaining a copy (if one was made) of the agreement between the employer and employee to average the employee’s hours over a specified period

• recording the basis upon which the employee’s rate of pay is determined, the gross hourly rate of pay, particulars of any incentive-based payments, recording the pay period and the name of the fund or account into which any deductions from the employee’s remuneration were made

• the general requirement under the pre-reform regulations to record leave have been expanded into three different clauses related to annual leave, personal leave and other leave. In all three clauses, there is an additional requirement for an employer to record the amount paid to the employee whilst on annual, personal or other leave

• in relation to annual leave, there is a further requirement to retain the employee’s written decision to have his or her annual leave paid out (if relevant) and to retain a record of the rate at which the annual leave was paid out and the date it was paid. If an employee is a shift worker, the employer must record the dates that the employee was engaged as a shift worker and the date that the shift worker obtained additional annual leave.

These new requirements about recording hours of work and start and finish times will impose challenges for many employers where hours of work are not fixed. They will need to review their processes for capturing the information.

Similar to the pre-reform regulations, an employer must make a copy of a record available to an employee or former employee to whom the record relates, or to a workplace inspector if requested. Note if the record is kept on the premises or the workplace inspector made the request, it must be made available within three business days at the employer’s premises or within 14 days if a copy of the record is posted or faxed.

If an employer becomes a successor, transmittee or assignee of the whole or part of a business of the former employer and employs a ‘transferring employee’ (see meaning contained in new regulations), the old employer must transfer the records related to the transferring employee and the new employer is obliged to retain the transferred records as if the new employer had originally made those records.

Similar to the pre-reform regulations an employer must issue a payslip to an employee within one day of the pay being made to the employee. The contents of the payslip are similar to those contained in the pre-reform regulations, except there is an additional requirement to record any incentive-based payment, bonus, loading or penalty rate.

The regulations contain quite detailed and complex rules as to what is to happen to various part-heard matters, including part-heard appeals to a Full Bench of the Australian Industrial Relations Commission (Full Bench) and partheard dispute notifications currently before the Australian Industrial Relations Commission (Commission).

While particular regard should be had to the relevant regulations to determine what is to happen with your particular part-heard matter, in general terms:

• certain part-heard appeals involving a corporation that relate to the Commission’s dispute settling power (for example, an appeal against the finding of a dispute) will lapse on the commencement of the reforms

• by contrast, certain matters involving transitional employers (that is, noncorporations bound by a federal award) will continue, subject to the provisions of Schedule 6 to the Act

• other appeals continue or lapse depending on the subject matter and in accordance with the conditions set out in the regulations (for example, an appeal against a decision to make an award or order by the Commission or an appeal against a declaration by the Commission to make a common rule award may continue)

• appeals against decisions to or not to certify an agreement continue

• in order to preserve the ability of a party to appeal certain decisions that are made in the period leading up to the reform commencement, the period within which certain appeals can be lodged has been extended. Therefore, appeals may be instituted within 21 days of the award, order or decision that is to be appealed against even if that 21 day period straddles the commencement date of the reforms

• a Full Bench has the discretion to decide that an appeal should not continue if it believes that a decision to uphold the appeal could not effectively be implemented under the Act or that matter has no practical application under the Act

• part-heard appeals that may continue under the regulations will lapse if the appeal has not been finally determined within six months after the commencement of the reforms

• disputes notified to the Commission under section 99 of the Act prior to the reform commencement that have not been finally determined before the reform commencement will lapse to the extent that the dispute relates to a corporation (although if the Commission is in the conciliation stage of a dispute that involves a corporation and which dispute is about the application of awards, meal breaks, public holidays and parental leave, the Commission may continue to deal with the dispute).

This publication is intended as a first point of reference and should not be relied on as a substitute for professional advice. Specialist legal advice should always be sought in relation to any particular circumstances and no liability will be accepted for any losses incurred by those relying solely on this publication.