Fairness test frustrates HR

by 21 Aug 2007

THE RECENTLY introduced fairness test for Australian Workplace Agreements (AWAs) is frustrating many companies and their HR professionals on a number of levels, according to a Sydney-based law firm.

Companies which had recently lodged AWAs and got them operational around the time the fairness test came into force, or which had drafted AWAs and had them ready to go under the pre-fairness test rules, were finding the fairness test most frustrating.

“They’ve prepared their AWAs in accordance with the law that was in place at the time – that is on the basis that they can pretty much do anything they like, as long as they meet the standards,” said Jacquie Seemann, a partner with Cutler Hughes & Harris.

“The rules have changed and they’re having to basically redraft their agreements. So they’re doing double the work, and it is very confusing.”

The fairness test was frustrating on a number of levels, she said. “It’s frustrating on a knowledge level because people were just starting to feel comfortable and understood how the system worked, and all of a sudden it all changes.

“I don’t know if you’ve read the actual fairness test legislation, but it’s not a simple document. The transitional provisions in particular are quite complicated, so it’s not easy to make sense of and I think this has thrown people’s confidence,” she said.

Other employers were simply frustrated about the extra work and expenses involved in complying with the legislation.

In some cases, the fairness test also contributed to some confusion among the workforce of some companies. “They talked up the AWA process with their employees. They’ve had discussions and agreed in principle on what the AWAs will contain,” she said.

“But now they’re having to actually change all that, which is really awkward, I think.”

The fairness test, which is administered by the Federal Government’s recently established Workplace Authority, only applies to employees covered by an AWA earning less than $75,000 per year and employees covered by collective agreements if the agreements change or remove protected award conditions such as penalty rates and leave loadings for employees in jobs or industries where an award usually applies.

As a result of the fairness test’s introduction, some employers were thinking twice about introducing AWAs, Seemann said.

“I think there are a large number of employers out there who were thinking about new AWAs and putting strategies together. Now, between a combination of the fairness test and uncertainty around the upcoming federal election, many of those employers are going to do nothing in the medium-term,” she said.

While some employers felt like this was a missed opportunity, others were unsure whether or not introducing AWAs would bring them sufficient benefit to justify the amount of work involved in making them.

Some staff were also confused about the workplace relations fact sheet, according to Seemann, as it wasn’t entirely relevant to every employee.

“For example, I’ve just been with a large corporate client who has a pre-WorkChoices certified agreement in place, but they’re having to give the fact sheet to their employees. The employees are asking why it’s relevant to them, so the client is saying, ‘Actually it’s not relevant to you, but I have to give it to you anyway’.”

In an attempt to improve understanding of the fairness test, the Workplace Authority recently released a policy guide for employers (available at www.workplaceauthority.gov.au), which is also being used as a reference by the Workplace Authority’s 400 fairness test assessors.

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