The Fair Work Act and Your Station

1. The Fair Work Act and Your Station CBAA Conference, Brisbane 20 November 2009 Michael Pegg

2. Managers manage Manager

3. Outline • Contracts • State and federal systems • National Employment Standards • Awards & Agreements • Unfair dismissal and other adverse actions

4. Common Law Contract of Employment • Intent • Offer of work • Acceptance • Consideration ($) in exchange for work • Employee vs Volunteer

5. Rights and Responsibilities

6. State and Federal Systems • Historically complex mix of systems • Got more complex in 2006 – “Corporations power” • Non profit community organisations • Trading? Incorporated? • Moving to national system 2010-2011?

7. State Referrals • In 1996, Victoria referred some of its powers to make laws about IR to the federal parliament • Consequence is no state system • Avoid jurisdictional complications because corporation status not relevant • Qld, NSW, Tas, and SA are referring in 2010, subject to Senate passage of federal legislation • WA has decided not to refer

8. State Referrals

9. Key elements of Fair Work • National Employment Standards (NES) • Modern awards • Agreements • Termination of employment & adverse actions

10. The Hierarchy of Conditions HR Policies + Contract of employment + + + + Collective Agreement +/- + Modern award Conditions Modern award Pay NES

11. National Employment Standards (NES) • Basic entitlements • Take effect 1 January 2010 • Enshrined in legislation and override awards and agreements (except some pre-reform agreements)

12. NES – existing federal standards • Max working hours – 38 hour week plus reasonable additional hours • Annual leave • Personal/carer’s & compassionate leave • Parental leave • Plus new provisions…

13. NES – new provisions • Public holidays • Long service leave • Flexible work arrangements for parents of pre-school children • Community service leave (emergency, jury) • Notice of Termination & Redundancy pay (>15 employees) • Fair Work Information Statement

14. NES – Selected issues (1) • Annual leave • Cashing out (if allowed by award/agreement) provided 4 weeks balance maintained • Pro rata accrual after 1 month • Personal/Carer’s leave • 10 days personal/carer’s, plus 2 days per occasion compassionate • Modern awards may provide cashing out provided 15 days balance maintained

15. NES – Selected issues (2) • Parental leave • 12 months plus right to request further 12 months unpaid leave • Flexibility requests • Includes pre-school children & disabled children under 18 yo • Written request • 21 days to respond in writing - reasonable business grounds

16. NES – Selected issues (3) • Community service leave • Emergency management activity • Notice, evidence • Unpaid • Jury service • Based on common award provisions • Paid (less jury pay) • Up to 10 days

17. Award Modernisation • Fewer awards, industry-based and common rule • Operate by common rule from 1 January 2010 • Transitional provisions • Most federal system employees covered by an award (even if previously award free) • Some exceptions eg if paid above $108,300 (indexed)

18. Content of Modern Awards • Build on NES, with industry specific standards, • Plus a range of other items such as: • Wages, allowances and penalty rates • Types of employment • Superannuation • Industry specific arrangements for working hours • Flexibility arrangements on better off basis • Consultation, representation and disputes

19. Which Modern Awards? Determined case by case – Possibilities (Subject to finalisation by end of 2009): • Clerical • Office staff and managers • Broadcasting and Recorded Entertainment?? • Technicians, engineers?? • Commercial Sales?? • Sponsorship?? (note limits on commissions) • Miscellaneous

20. Agreements • “Better Off Overall Test”(BOOT) • Most prohibited content no longer prohibited • Individual flexibility and consultation on change • Notification time - 14 days to advise representational rights, prior to 7 day approval period • Good faith bargaining • Multiple business agreements and “low paid bargaining stream”

21. BOOT • BOOT – Employees better off overall compared to a “reference instrument” • Reference Instrument • Award that applies • Relevant state long service leave legislation • In conjunction with NES

22. Bargaining Options • Rely on award • May be easiest option if limited resources • Modernisation • Recruitment & Retention • Common law contracts or policies for over award conditions • Easier than collective bargaining • Collective Bargaining

23. Unfair Dismissal Remedy for harsh, unjust or unreasonable termination of employment Remedies include: • Reinstatement • Compensation of up to 26 weeks pay Historically, about 90% of claims are settled informally

24. Unfair Dismissal - Exemptions From 1 July 2009, all federal employees able to lodge claims except: • Non-award employees paid >$100,000 (2007 dollars indexed); • Employees with less than 6 months service, provided that for a small employer (fewer than 15 EFT employees until 1 January 2011, then just 15 employees), 12 months service is required; • Other standard exemptions eg short term casuals • Genuine redundancy

25. Genuine Redundancy • Job is no longer required to be done by anyone because of changes in operational requirements • Obligations to consult, under award or enterprise agreement, have been complied with • It was not reasonable to redeploy – positive obligation to explore options

26. Process – Unfair Dismissal • Federal claims need to be lodged within 14 days of dismissal • FWA emphasis on speedy and informal resolution with >80% settled at conciliation • Employer may be represented by employer organisation (eg by Jobs Australia), but private lawyers need to seek leave to appear

27. Natural Justice • State allegations – valid reason • Fair investigation • Opportunity to respond/explain • Consequences made clear if not resolved • Right to representation (particularly if termination considered) • Even if considering summary dismissal – natural justice first

28. Outcomes of Disciplinary Process Not determined until after process • No further action – best case scenario • Informal warning • Written warning (with review period if performance issue) • Termination with notice, or without notice if serious misconduct • worst case scenario • indicator of possible problem with recruitment, selection, training, performance management or organisational culture

29. Alternative Remedies • Unlawful termination - Prohibited reasons such as: • Temporary absence due to illness or injury • Race, sex, political beliefs etc • Failure to provide required notice • Onus on employer to rebut claim • General protection against adverse action, including prior to termination • Also - Anti- discrimination, breach of contract

30. Adverse Actions • Remedy from Fair Work Australia if subject to any adverse action on prohibited (ie discriminatory) grounds • Includes adverse actions such as • Refusal of training opportunities • Changes in hours • Refused promotion • Similar to existing anti-discrimination laws, but potentially faster remedies

31. Managing Change Employer Rights • to determine how job is done and by whom • to decide how to run their organisation Constrained by • Industrial and other legislation • Employee responses • Management strategy

32. Key Elements of Process • Information • Consultation – before finalising decisions about structure • Modern award requirement and • Evidence based decision making • Explore alternatives to termination, such as reduced hours, retraining, redeployment • Fair process for selecting retrenchments • Appropriate support for affected employees

33. Contact Jobs Australia • Michael Pegg • Phone: (03) 9349 3699 • Phone: (1800) 060 098 • Fax: (03) 9349 3655 • Email: mpegg@ja.com.au