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Australia – What Are Your Top Priorities For 2014?

21 January, 2014

 

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

 

 

WHAT YOU NEED TO KNOW

 

  • 2014 is shaping up to be a big year for industrial relations in Australia. Now is the time to start thinking strategically about the year ahead and planning so that you can achieve your desired industrial outcomes.
  • There are a number of things occurring during 2014 that may affect your organisation’s planning,including a number of reviews and inquiries; commencement of new workplace laws; various proposals to review and/or change existing legislation; the likely introduction of new regulatory bodies; the first four yearly review of all modern awards; and a decision from the High Court about whether, in Australian employment contracts, there is to be implied a term imposing on employers a duty of trust and confidence unless this is inconsistent with the express terms of the contract.

 

WHAT YOU NEED TO DO

 

  • Use the questions below and our quick summary of potential issues to assist in identifying your top industrial relations priorities for 2014 and putting in place a plan to achieve them

 

The start of the new year is the perfect time to think strategically about what to expect in 2014 by asking:

 

  • Is your current industrial relations architecture meeting your business needs? If yes, how can you strengthen or consolidate your position? If no, how can it be changed or improved?
  • What industrial objectives does your organisation want to achieve in 2014? What planning, resources and execution will be required to achieve these objectives?

 

The year ahead will be another big year for industrial relations in Australia. In this Alert we summarise the key issues which may affect the answers to the above questions and assist in setting your objectives and priorities for the year ahead.


Review of the Fair Work Act by the Productivity Commission


Despite calls from many employers and employer groups for immediate changes to the Act, the Federal Government remains committed to its election promise to keep the current framework and refer the Act to the Productivity Commission for a thorough review.

 

Draft terms of reference for the review are due to be released in March. The Government maintains that implementation of any recommended changes will not
occur until after the next Federal election. During the course of 2014, employers will no doubt have the opportunity to make submissions to the Productivity Commission on the Act and its impact to date.


Other Reviews and Inquiries


Alongside the Government’s commitment to an overarching review of the Act there are a number of other reviews and inquiries being conducted in 2014 that may impact your organisation.


Review of the Fair Work Commission’s appeals process


Last year the Government announced a review of the Fair Work Commission (FWC) appeals process and called for submissions on the current appeals mechanism, including how it could be improved and possible alternative processes. In its Policy to Improve the Fair Work Laws released in May last year, the Government stated that it was “crucial that our workplace relations system is supported by an efficient and modern tribunal which promptly provides effective and consistent decision-making” and that it would give active consideration to the creation of an independent
appeal jurisdiction.

 

Submissions on this issue closed on 13 December 2013. It is expected that this will be progressed by the Government in early 2014.

 

Australian Law Reform Commission’s review of workplace relations


This year the Attorney-General, George Brandis QC, has charged the Australian Law Reform Commission (ALRC) with reviewing all Commonwealth legislation which encroaches upon traditional rights, freedoms and privileges. The ALRC is tasked with identifying these laws and critically examining whether any such encroachment is “appropriately justified”. The ALRCreview will also cover the Act.

Amongst others, the ALRC is asked to examine laws which reverse or shift the burden of proof or interfere with freedom of association, freedom of speech and freedom of movement. This necessarily includes the Act’s general protections and unlawful termination provisions (and may catch some of the Government’s proposed changes in the building and construction industry which are discussed below). The ALRC is due to report to the Attorney-General by 1 December 2014.

 

Royal commission into union misconduct


It has been reported that the Federal Government will, this year, establish a royal commission into union misconduct and malfeasance. Although we are waiting for full details of the scope and terms of reference of the inquiry, the Government has indicated the royal commission will be launched early in 2014.


Review of the Road Safety Remuneration Tribunal


On 20 November 2013 the Federal Government commenced a review of the Road Safety Remuneration Tribunal to assess “the operation of the system and advise the government on whether it represents an effective and appropriate means of addressing safety concerns in the road transport industry”. The review is due to be completed in the first quarter of 2014.


Four yearly review of modern awards


In addition to the reviews and inquires instigated by the Government, 2014 will see the first four year review of all modern awards in accordance with section 156 of the Act. Employers will have the opportunity to provide submissions on relevant awards and can expect unions to pursue both multi-award and industry specific issues.

The FWC will commence the initial stage of the review on 5 February 2014 with a conference to determine the legislative framework and scope of the review. Employers wanting to pursue variations which affect multiple or all modern awards should identify these issues at this conference. For example, employers may want to address the FWC on the provision of accident pay which, in most modern awards, will operate until 31 December 2014, when a “national standard” will be implemented to apply to all award-covered employees.

 

In addition, employers who made claims during the two year review undertaken under the Fair Work (Transitional and Consequential Amendments) Act 2009 that were considered “beyond the scope” of that review or were unsuccessful may be able to pursue those claims as part of the four yearly review.


Superannuation fund reviews


The MySuper amendments to the Act which were made in 2012 and 2013 took effect on 1 January 2014. This means all modern awards include a term permitting employers to make superannuation contributions to a default superannuation fund.

In 2014 the FWC will review the default fund terms in all modern awards under Division 4A of Part 2-3 of the Act. The review, which will commence early this year, will include involvement of an expert panel on default funds. The expert panel will publish a default superannuation list and a schedule of approved employer MySuper products which will provide the basis for including default funds in modern awards.

 

In changes made to the Act last year, enterprise agreements can only reference a default superannuation fund which offers a Mysuper product, otherwise the term of the enterprise agreement is unlawful under section 194(h) of the Act. From 1 January 2014, FWC will need to have regard to this when considering applications for approval of an enterprise agreement. Employers will have to consider this if drafting such a clause in an enterprise agreement.


Enterprise award modernisation


31 December 2013 was the last day for applications to be made to modernise pre-reform awards, state reference transitional awards, notional agreements preserving State awards and preserved collective state agreements applying to a single enterprise. These instruments terminated on 31 December 2013 unless an employer has made an application to the FWC for amodern enterprise award.

 

Termination of transitional provisions


Wage rate phasing under modern awards will end on 1 July 2014, which for some employers will mean simplified wage calculations.


Workplace anti-bullying


On 1 January 2014 the changes to the Act aimed at preventing workplace bullying commenced. The new provisions allow workers who reasonably believe they have been bullied at work to apply to the FWC for an order to stop the bullying.

 

Employers should expect to see a number of claims brought before the FWC. How the FWC will deal with claims and what sort of issues will induce Commissioners to issue “stop bullying” orders remain areas for speculation. In the meantime, making sure staff have been trained about appropriate workplace behaviour, investigations and managing workplace performance issues may help employers respond to any allegations of bullying that arise and avoid such claims progressing to the FWC.

 

Other Fair Work Act changes that came into effect on 1 January 2014


There are a number of other changes made by the outgoing Labor Government in June last year that took effect on 1 January 2014 including:

 

  • Changes to right of entry. Unions are now allowed to use workplace lunchrooms for meetings and in relation to remote locations, employers must in certain circumstances facilitate permit holders to have access to travel and accommodation.
  • Modern awards and enterprise agreements are now required to include a term obliging employers to consult with employees about changes to regular rosters and ordinary hours. The change is contained in the new model consultation term in Schedule 2.3 of the Fair Work Regulations 2009.
  • The modern award objective was amended to require the FWC to consider the need to provide additional remuneration for employees working overtime; unsocial, irregular or unpredictable hours; weekends or public holidays; or shifts.

 

Although these provisions are currently operating, employers should continue to monitor developments as it is unlikely that many of these changes will survive for long under the current government. As discussed below, the Government is committed to repealing the right of entry changes and has specifically reserved its right to repeal last minute Labor changes “unless it is clear that they have the support of both workers and the business sector”.


Changes to right of entry and to greenfield agreement bargaining


The Federal Government has indicated that, this year, it will introduce laws changing the right of entry and the greenfield agreement bargaining provisions of the Act. If successful, the proposed right of entry changes will only allow unions to access workplaces for discussion purposes, if their attendance is requested by a member or worker and the union is covered by the relevant enterprise agreement or is able to demonstrate it has, or previously had, a lawful representative role in the workplace.

The proposed changes to the greenfield agreement bargaining provisions will:

 

  • allow employers to only have to negotiate with a union that will cover the majority of employees;
  • introduce good faith bargaining obligations;
  • require the agreement to be reached within three months from the start of the bargaining; and
  • give the FWC powers to make and approve an agreement after the three month period expires as long as it provides “fair working conditions that are consistent with prevailing industry standards”.

 

Although the Government has committed to introducing these changes this year they are likely to face strong opposition until the composition of the Senate changes in July.

 
Moratorium lifted on self-insuring under the Comcare scheme


On 2 December 2013 the Government lifted the moratorium imposed by the Rudd Government which prevented employers from applying to self-insure under the Comcare scheme.
With the moratorium lifted, eligible employers operating across several states can apply for a licence that will allow them to have a single national workers’ compensation arrangement under the Safety, Rehabilitation and Compensation Act 1988 potentially reducing compliance costs.


Reintroduction of the Australian Building and Construction Commission


In November 2013 the Federal Government introduced the Building and Construction Industry (Improving Productivity) Bill 2013. If passed, the Bill, which goes before a Senate inquiry in March this year, will see the reestablishment of the Australian Building and Construction Commission (ABCC) with:

 

  • expanded coverage: “building work” will include transport or supply of goods directly to building or resource sites;
  • enhanced coercive powers: the ABCC Commissioner will be able to require people to give information, produce documents or attend interviews;
  • express prohibition of unlawful picket lines with a presumption that action is taken for unlawful reasons unless proven otherwise; and
  • increased penalties and other remedies for unlawful industrial action.

 

Details about the Bill and its key features are set out in a previous article at https://archive.conventuslaw.com/australia-new-watchdog-old-tricks-the-re-instatement-of-the-australian-building-and-construction-commission/


Building and construction procurement


Along with the reestablishment of the ABCC, employers in the building and construction industry can also expect that procurement will continue to be a feature of both State and Federal government policy in 2014.

Last year the NSW and Queensland State Governments introduced implementation guidelines modelled on the Victorian Code of Practice for the Building and Construction Industry (Code) and Implementation Guidelines to the Victorian Code of Practice for the Building and Construction Industry (Guidelines).

The Federal Government is also likely to make changes after it supported the Victorian government in its successful Full Federal Court appeal against two decisions of Justice Bromberg. The two decisions related to allegations that the Victorian Government had taken adverse action in relation to enterprise agreement content under the Victorian Code and Guidelines. See State of Victoria v CFMEU [2013] FCAFC 160.

These changes will no doubt continue to be a topic for discussion in 2014 and affected employers will have to consider carefully their impact.


New Registered Organisations Commission


Also introduced in November 2013 was the Fair Work (Registered Organisations) Amendment Bill 2013. If passed, it will create the Registered Organisations Commission (ROC) to oversee and enforce new requirements on registered organisations including disclosure and reporting obligations and criminal offences for serious breaches of duties by officers similar to those applicable to company directors and officers under the Corporations Act 2001.

Under the proposed legislation the ROC will have investigative and information gathering powers modelled on those of the Australian Securities and Investments Commission. However, prior to 1 July 2014, the Government may have trouble persuading the Senate to pass the proposed legislation.


Other possible changes – parental leave, bargaining, flexibility


There are also other changes that the Government may implement during 2014 before the Productivity Commission review of the Act is complete. These include:

 

  • Introduction of the Coalition’s proposed paid parental leave scheme which would provide mothers with 26 weeks of paid parental leave, at their actual wage or the national minimum wage (whichever is greater), plus superannuation.
  • Changes to the bargaining framework including that:
    • protected industrial action should be the last resort and should only be available if the FWC is satisfied there have been genuine and meaningful negotiations between the parties;
    • productivity improvement must be included in enterprise negotiations.
  • Changes to the Act which will encourage greater usage of individual flexibility arrangements.

 

Implied duty of mutual trust and confidence


In 2014 the High Court will decide whether or not employers have a duty of trust and confidence imposed upon them as an implied term of Australian employment contracts when it considers the appeal from CBA v Barker (2013) 214 FCR 450 (see previous article at https://archive.conventuslaw.com/australia-mutual-duty-of-trust-and-confidence-high-court-to-decide/). In this important decision the High Court will look at

 

  • the nature of the implied term;
  • whether Australian employers are bound, generally, by the implied term;
  • whether the term can be excluded by statutory provisions or express contractual terms; and
  • if the term is implied, whether an employee can recover damages for breach of such a term.

For now, employers should continue to be cautious in their approach to all actions taken in the lead up to the potential termination of an employee’s employment.


Keep an eye out for more case law developments

 

There are also a number of areas and issues which continue to have a real and significant impact in the workplace and where the courts and tribunals are yet to fully crystallise their views.


Adverse Action


2013 saw further clarity about the adverse action provisions post the Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32 decision.
In 2014 employers will continue to see cases that test the scope of the adverse action provisions and in particular, the provisions dealing with discrimination. For example, the Full Federal Court confirmed, in relation to the use of the work “scab” during industrial action, that industrial activity may be closely related to a decision to take action without it being a reason for the action (see previous article at https://archive.conventuslaw.com/australia-scab-decision-overturned-full-federal-court-upholds-termination/). The union has filed an application for special leave to appeal in the High Court.


Social media


In late 2013 the Full Court in Linfox Australia Pty Ltd v Fair Work Commission [2013] FCAFC 157 dismissed an appeal against the reinstatement of an employee who
posted offensive remarks on his Facebook page. However, the dismissal was due to a failure to identify any judicial error in the previous decision. Employees should continue to have regard to the FWC’s Full Bench caution that that online conversations are different in nature to pub conversations.

These issues will not be going away. We expect more cases during the course of 2014 which consider an employer’s ability to take disciplinary action because of an employee’s private use of social media or what the employee has done in their personal time outside of the workplace.


Drug and alcohol testing


Drug and alcohol testing will continue to be an issue for many employers in 2014 with most unions continuing to press for saliva rather than urine testing in many workplaces. This issue has been further complicated by the National Association of Testing Authorities, Australia announcing late last year that it is withdrawing the provision of accreditation for onsite drug testing of oral fluid (see previous article at https://archive.conventuslaw.com/australia-to-pee-or-not-to-pee-drug-testing-is-the-question-again/).


Reasonable redeployment


We also expect a number of cases which will consider whether a dismissal was a “genuine redundancy” and, in particular, the question of potential redeployment opportunities. In particular, we anticipate more cases in 2014 considering what steps employers have taken to redeploy employees to associated entities, whether those steps were reasonable and how far geographically employers have explored other job opportunities for employees being dismissed on the basis of redundancy.


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. Employers should ensure that:

 

  • staff are regularly trained about appropriate workplace behaviour (at least every 18 months);
  • staff are properly trained in conducting investigations and dealing with adverse action and other complaints in a manner which complies with internal policies, is effective, efficient and minimises legal risk; and
  • staff understand and follow performance management practices which are likely to come under scrutiny if bullying claims surface under the new provisions.

 

 

MAKING THE CASE: Insights from Geoff Giudice 


On the legislative front, clearly 2014 will be busy. Although the Federal Government has indicated it will await the outcome of the Productivity Commission inquiry and another election before embarking on major legislative reform, the changes it intends to make or is considering in the meantime are numerous and will have a wide impact. Apart from the main changes, which are referred to in this Alert, the Government also
intends to implement a number of the recommendations made by the Fair Work Review Panel. Given the composition of the Senate, however, nothing can be taken for granted, even after 1 July.

 

At the Fair Work Commission level, the program is already quite busy and an important unknown is how many anti-bullying claims will be received. Employers, unions and representative bodies will be giving attention to the level of resources needed for the various FWC proceedings. The FWC itself will be challenged by the circumstances and there may be an impact on the time taken to list matters and to publish decisions.

 

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For further information, please contact:

 

Vince Rogers, Partner, Ashurst
[email protected]

 

Adrian Morris, Partner, Ashurst
[email protected]

 

Geoffrey Giudice Ashurst
[email protected]


Taboka Finn,  Ashurst
[email protected]

 

Ashurst Labour & Employment Practice Profile in Australia

 

Homegrown Labour & Employment Law Firms in Australia

 



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