First IR reforms take effect

by 15 Apr 2008

THE EFFECT of Labor’s Forward with Fairness reform legislation will have been both immediate and significant for some companies, according to an employment law firm.

The first stage of the legislation, which came into effect on 28 March 2008, primarily concentrated on reform in two areas: changes to the framework for making workplace agreements (effective immediately); and the establishment of Labor’s process for award modernisation, with the new awards to come into operation on 1 January 2010.

“It is those companies that are negotiating, or intend to negotiate, workplace agreements with their employees which will be impacted most by the changes made to date,” said Bronwyn Maynard, senior associate, Harmers Workplace Lawyers.

“Such companies in particular need to be aware of the first phase of the changes, and determine the most appropriate form of regulation for their employees going forward.”

For example, she said companies who had been entering into Australian Workplace Agreements (AWAs) with employees, will no longer be able to do so. Alternatively, Maynard said such companies could consider entering into the new “Individual Transitional Employment Agreements” or a collective agreement.

“In either case, such agreements will be tested against a new no-disadvantage test rather than the fairness test applied under WorkChoices,” she said.

Even though some companies may not yet have noticed the impact of the first stage, Maynard said they need to be aware of the legislation that will have an impact later in the transition period (ending on 31 December 2009) to full implementation of the new legislation.

Companies also need to be across the details of the second stage and what that will mean for the regulation of their employees.

For example, she said one aspect of the first stage that will have an impact later in the transition period is the extension of the life of current “Notional Agreements Preserving State Awards” from 27 March 2009 until 31 December 2009.

As part of the second stage, the introduction of the ten National Employment Standards (“NES”) on 1 January 2010 will require all employers to audit their current employment arrangements, policies and contracts, and where appropriate, adapt them to ensure compliance with the NES.

“HR professionals need to be aware of the timetable for the changes so that they are aware of which changes will impact their company and when. They then need to plan for those changes, and incorporate that knowledge into the company’s business plans,” Maynard said.

“For HR professionals who are involved in preparing new workplace agreements under the Forward with Fairness reform legislation, a key issue will be understanding the no-disadvantage test and ensuring that the workplace agreements being negotiated will pass that new test.”

For HR professionals working for companies with employees under existing federal awards, or Notional Agreements Preserving State Awards, she said they need to monitor the award modernisation process.

“Labor’s modern awards are proposed to come into effect on 1 January 2010, and will override such prior existing awards. As such, some companies may wish to be proactively involved in the consultation process for the modernisation of awards applying to their employees – given that the modern awards introduced may impose new or different minimum conditions of employment to which those companies then need to adhere.”

While the substantive legislation is not due to come into effect until 1 January 2010, Labor will be consulting on the proposed legislation during 2008.

“As more information, and details on the proposed legislation are released for consultation and public comment, HR professionals will benefit from keeping up-to-date with those details to ascertain the impact of the proposals for the companies they work with, and if they deem it appropriate provide comment on the proposals to the government,” Maynard said.

In terms of the next couple of months, it is expected that the Australian Industrial Relations Commission will have published the list of industries and occupations that will be prioritised for the first modern awards, a model flexibility clause and more details of the proposed timetable for the award modernisation process.

“On release of that priority list and timetable, HR professionals should ascertain when the review of those awards impacting on employees of the companies with whom they work is proposed and the consultation arrangements [in place] – so that they can input into the review process of those awards,” she said.


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