Jurisdiction - Australia
Labour & Employment
Ashurst

17 January, 2013

 

Legal News & Analysis – Asia Pacific – Australia – Labour & Employment

 

WHAT YOU NEED TO KNOW

 

  • The early part of the year is an opportune time to think strategically about what is ahead in the industrial relations space in 2013 and to consider what planning, resources and execution need to be in place in order to achieve the desired industrial objectives.
  • A number of key events occurring during the year that may affect planning by employers include a Federal election, the expiry of transitional instruments made under previous legislation which will open up the possibility of protected industrial action by employees covered by those instruments, unmodernised enterprise awards terminating on 31 December 2013, and a review of national anti-discrimination laws.

 

WHAT YOU NEED TO DO

 

  • Employers should consider a number of key questions set out below which will assist in identifying their top priorities for 2013, and put in place a plan to achieve them.

 

With 2012 behind us, January and February is an opportune time to think strategically about what is ahead in the industrial relations space for 2013 and beyond and to ask two key questions:

 

1. Is the current industrial relations architecture in place within your business meeting the needs of the company? If yes, how can it be strengthened or consolidated? If not, how can it be changed or improved?

2. What industrial objectives does your company want to achieve in 2013 and what planning, resources and execution will be required to achieve these obligations?

 

Many employers will be renegotiating, or planning to renegotiate, enterprise agreements during the year. In what are challenging economic circumstances in a number of industries, this often needs to be achieved with particular budgetary and other outcomes in mind. Careful planning (including contingency planning) to achieve such outcomes will be essential. Good planning will involve considering a number of questions including:

 

  • Is the current agreement meeting the needs of the company?
  • What operational changes does the company want made and how can these changes be facilitated by appropriate agreement, award, contractual or policy provisions?
  • What likely employee or union claims will be made and what will the company’s position be on each of them?
  • What will be the likely timeline for planning and negotiating an agreement, and how will this affect normal business operations and resources?
  • How can disruption to operations be avoided or minimised?

 

It will undoubtedly be a busy year in industrial relations. For a start, it’s an election year, which means that by the end of this financial year election campaigning will be in full swing (many would say it has been for some time already). The focus on industrial relations has intensified significantly in the past 18 months. It remains to be seen what, if any, major policy initiatives the main political parties will bring to the table in the industrial relations area.

 

There has already been speculation in the media that unions will bring forward or intensify industrial action earlier in the year to avoid the political consequences of heavy industrial conflict during an election.

 

In addition to the election, there are a number of other significant events occurring during the year which may affect the answers to the above questions or the best timing for any employer changes to their industrial framework.

 

Expiry of industrial instruments made under previous legislation will likely result in an increased level of disputation and industrial action

 

After the Federal election in 2007, when the Rudd Labor government took office, it proceeded to implement its “Forward With Fairness” industrial relations policy. This included the removal of Australian Workplace Agreements, employee collective agreements and employer Greenfields agreements from the industrial relations system together with the introduction of new and more complex requirements for the making of collective agreements.

 

As a result many employers moved to enter into new collective agreements prior to the enactment of the Fair Work Act (Act) in 2009. The agreements made could have nominal expiry dates of up to 5 years and became transitional instruments upon the commencement of the Act.

 

As a result many of these transitional instruments will conclude their term in 2013. When that occurs, the employees covered by those instruments will be able to bargain for new enterprise agreements under the Act and, after complying with the necessary legislative requirements to do so, take protected action in support of that.

 

Employers with transitional instruments in place should be planning now how they propose to deal with this situation and ensure they are not caught by surprise.

 

Unmodernised enterprise awards will terminate on 31 December 2013 which requires employers with enterprise awards to consider their future award arrangements

 

At the end of the year all unmodernised enterprise awards will automatically terminate, unless steps to terminate or modernise the award are taken earlier. When an unmodernised award terminates, the employer and employees covered by the award will then be covered by any applicable industry or occupational modern award that has already been made.

 

Employers who are covered by an unmodernised enterprise award and who have not yet considered its future should consider carefully whether falling back onto an industry or occupational award (or potentially a number of such awards) is desirable.

 

The options that can be considered (the prospects of which will be influenced by a number of test case decisions that have been handed down over the last two years) are:

 

  • to apply to terminate an unmodernised award prior to 31 December 2013; or
  • to make an application for a modern enterprise award which will in some respects be different from the otherwise applicable industry or occupational award(s).

 

Given it takes some months to prepare an application, and to have it heard and determined, employers considering the future of their unmodernised enterprise award would ideally do so sooner rather than later.

 

Further legislative changes as a result of the Fair Work Act Review Panel recommendations may occur

 

During 2012 the Government’s Fair Work Act Review Panel made 53 recommendations concerning amendments to the Act.

 

On 28 November 2012 the Federal Parliament passed legislation dealing with recommendations which the Government has described as having broad support. The changes that have been made to the Act include:

 

  • Prohibiting the use of “opt out” clauses in enterprise agreements;
  • Preventing an individual union official being a bargaining representative for employees for whom the official’s union does not have coverage;
  • Changing the name of “Fair Work Australia” to “Fair Work Commission” to more accurately describe its functions.

 

The question now is whether the Government will attempt to implement any of the remaining, and more controversial, recommendations. These recommendations include:

 

  • Amending the good faith bargaining provisions in the Act so that they apply when an agreement is being varied;
  • Amending the individual flexibility arrangement provisions in enterprise agreements (the current IFA provisions are a frequent source of discontent for employers given how easily the content of such agreements can be watered down, and how easily they can be terminated); and 
  • A recommendation to overturn the controversial JJ Richards decision which held that employees can take protected industrial action even prior to bargaining commencing.

 

Given the composition of the current parliament (including the need for the Government to negotiate with independent members and minor parties to secure the passage of legislation) the Government will face serious challenges in implementing any wide ranging and controversial amendments to the Act prior to the election, which is likely to occur sometime between August and October 2013.

 

The review into national anti-discrimination laws will continue

 

In November last year, the Federal Government released an Exposure Draft of the Human Rights and Anti-Discrimination Bill 2012 which proposes to consolidate the five existing Commonwealth anti-discrimination statutes. The proposed legislation retains many of the existing prohibitions against discrimination, but introduces some significant changes, including a reverse onus of proof and a default position that each party is to bear its own costs.

 

The Exposure Draft has attracted considerable commentary and media attention, and over 500 submissions have been made to the Senate Legal and Constitutional Affairs Committee. The deadline for submissions closed on 21 December 2012. Public hearings have been scheduled for 23 and 24 January 2013, and the reporting date for the Senate Committee is 18 February 2013. We anticipate that a Bill will be introduced in Parliament during the early part of this year. Changes to the anti-discrimination regime will necessitate a review of employer policies to ensure that they are consistent with the new laws, and some re-training of managers and employees will also be necessary.

 

Changes to workplace health and safety laws and continued planning

 

On 1 January 2013, new Work Health and Safety (WHS) laws commenced operation in South Australia and Tasmania. All states and territories, excluding Victoria and Western Australia, now have harmonised WHS laws in operation. Many employers have been undertaking comprehensive planning to ensure compliance with the new laws, where applicable. This planning will continue into 2013.

 

The mine safety chapter of the Model WHS Regulations under the harmonisation process has not yet been finalised. Changes to specific mine safety legislation under the national mine safety framework are being developed and are not likely to commence operation in any jurisdiction until mid-2013.

 

These mine related developments need to be monitored for applicability to businesses and need to be factored into general WHS planning and strategies for 2013.

 

Workplace training and ongoing compliance The start of a new year is always a good time to review staff training needs and organisational compliance measures. For example, employers who will be negotiating enterprise agreements this year should ensure that their negotiating teams and human resources advisors are trained to understand the relevant provisions of the Act including those dealing with good faith bargaining, industrial action, right of entry and adverse action.

 

Similarly, employers covered by the new WHS laws, especially in Tasmania and South Australia where the laws have only just come into effect, need to ensure that all their directors and employees, both management and staff, are aware of their obligations and potential personal liability under the new laws.

 

More generally, there have been many legislative and policy changes in recent years (and currently under consideration) which significantly impact the regulation of workplace behaviour. These include the continuing expansion of adverse action claims under the Act (especially on discrimination grounds) and codes of practice dealing with workplace bullying.

 

Employers should ensure that they regularly train their staff about appropriate workplace behaviour (at least every 18 months) and that staff are properly trained in conducting investigations and dealing with adverse action and other complaints in a manner which is effective, efficient, and minimises legal risk.

 

For further information, please contact:

 
Michael Tamvakologos, Partner, Ashurst

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