The Deputy Prime Minister, the Hon Julia Gillard MP yesterday outlined details of the key elements of the Government's workplace relations reforms. In a new development, the Government intends to commence unfair dismissal changes and new bargaining rules on 1 July 2009 brought forward from the previously set start date of 1 January 2010.

Key elements of workplace reform agenda

Unfair dismissal

From 1 July next year unfair dismissal rights will again be given to employees in businesses with less than 100 employees. In place of this exclusion, new qualifying periods will apply, during which an employee cannot make an unfair dismissal claim – 12 months for small business employees and six months for others.

Small businesses (with fewer than 15 employees) will be subject to special arrangements which include the introduction of a Small Business Fair Dismissal Code. This Code has two key requirements to justify a dismissal. Firstly, a warning based on a valid reason relating to conduct or capacity and secondly, a reasonable period of time to improve must be provided to the employee. Other elements include giving the employee an opportunity to respond to the warning, possibly providing training to ensure the employee knows what is expected in the job and enabling the employee to have another person present at discussions if dismissal is possible.

The Government also intends to introduce a more streamlined and arguably less legalistic process for all claims with an emphasis on mediated resolutions.

New bargaining rules and changes to prohibited content rules

From 1 July 2009 the Government hopes to have in place its good faith bargaining regime. This regime introduces compulsory bargaining obligations, where there is majority employee support, together with good faith bargaining obligations. The new rules will not require parties to make concessions or sign up to an agreement when they do not agree with its terms.

The Government also announced that compulsory arbitration by Fair Work Australia (FWA), the new 'independent umpire' to be established to eventually replace the Australian Industrial Relations Commission, will not be a feature of good faith bargaining. However, compulsory arbitration by FWA may occur in limited, exceptional circumstances – where industrial action is causing a threat to safety or health, a threat to the economy, or significant harm to the parties.

Under the new system, the 'matters pertaining' rules would return, with content required to pertain to the relationship between employers and employees or the employer and the unions covered by the agreement. Matters such as salary sacrifice and payroll deduction of union dues would again be allowed.

Fair Work Australia

The Government intends for FWA to be fully operational by 1 January 2010. On the timetable outlined, FWA will start from 1 July 2009 and during the period to 31 December 2009 it will operate alongside the Australian Industrial Relations Commission. During this time FWA will oversee the operation of the new laws and the Commission will complete its award modernisation task. Dual appointments to the two bodies will be made for this period.

The safety net

The safety net that comprises two parts - the National Employment Standards (NES) and new modern awards - will apply to all employees in the federal system from 1 January 2010. To ensure that the NES operate effectively from this date for employees not covered by a modern award or enterprise agreement, 'default rules' will set out how the NES applies to this group of employees.

Next steps

  • The new Act to be known (for the moment, anyway) as the Substantive Bill, that will replace the Workplace Relations Act 1996 (Cth), will be introduced into the Parliament later this year. It will then be considered by a full Senate Committee inquiry.
  • The bargaining framework, unfair dismissal and associated protections are intended to commence on 1 July 2009, following passage of the Substantive Bill.
  • The remaining changes in the Substantive Bill, including the safety net, will commence on 1 January 2010.
  • The new division FWA to replace the Australian Building and Construction Commission will start operating from 1 February 2010.

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