Forward without fuss

by 31 Mar 2009

Sarah O’Carroll looks at steps HR can take to make the transition from WorkChoices to the Fair Work Bill as painless as possible

The time for debate is over. The Rudd Government has been successful in delivering its promise to bury the Coali tion government’s WorkChoices reforms. While some employers may complain that the “Forward with Fairness” reforms are not a fair deal for employers, the fact is that the Fair Work Bill has been passed and the pendulum has swung back in favour of employees.

From 1 July the first of the reforms will come into play. And from 1 January 2010 the entire system will be in full swing.

So after these dates, many employers and HR departments may find themselves with a desk full of unprecedented claims, submissions and papers to deal with. It will be a different industrial legislative environment to work in and HR depart ments are being advised to prepare now, to minimise the disruption when the changeover comes.

Of all the changes that are coming into effect, those that are causing employers most concern and confusion are those cov ering workplace flexibility, unfair dismissal, and what the abolition of AWAs means.

Unfair dismissal

Among the most controversial of the Howard government’s WorkChoices amendments were the restrictions placed on access to unfair dismissal. Employees who were employed by a company of less than 100 employees could not make an unfair dismissal claim. This will change from 1 July this year.

Under the new provisions, in any small business (which now means less than 15 employees) new employees can bring an unfair dismissal only if they are employed for more than 12 months. In all other busi nesses workers can make a claim after six months. Larger companies will not be affected by the new unfair dismissal reforms.

“These companies will have to reorient themselves to pre WorkChoices,” says Jane Seymour, director of Justitia Lawyers. “If a company has less than 100 employees and has some under performers and plans to cut staff, it will be in the employer’s interest to work them out now, before 1 July. After that date they could be faced with an unfair dismissal claim.”

HR tips: According to Seymour, performance management will become increasingly important for companies, especially in light of so many recent redundancies.

“There has been a definite increase in discrimination claims, and, while small business employees will not be entitled to an unfair dismissal claim, they can still bring forward an unlaw ful termination claim,” she says.

“So, for example, if you decide to terminate somebody based on their performance, but you have not documented their poor performance or told them about it, the employee could choose another discriminatory reason as to why they think they are being let go,” says Seymour. “And then the onus is on the employer to disprove that.”

Therefore, she says, it is very important for HR departments to emphasise the need for documented performance management.

Seymour outlines a few steps that HR departments should be taking in the run- up to 1 July to be prepared for the unfair dismissal reforms.

• If you have fewer than 15 employees, review the Small Business Fair Dis missal Code

• Review redundancy and termination policies and internal procedures and consider updating to reflect jurisdic tional exclusions

• Review casual employees to assess employees and ascertain whether pattern of employment is “regular and system atic”

• Review performance management/ter mination policies and internal proce dures and educate managers on criteria for considering harshness of dismissal

• Determine who will appear at concil iation hearings at Fair Work Australia and provide any necessary training and support

Australian Workplace Agreement (AWA)

Deputy Prime Minister Julia Gillard for mally requested the Australian Industrial Relations Commission (AIRC) to com mence the award modernisation process. This has not been foremost on the list of employers’ concerns so far, but, accord ing to Seymour, it will become very important as time goes on.

“It’s a bit of a sleeper issue,” says Seymour.

“A lot of employers are obsessed with unfair dismissal but the awards are prob ably the thing that will have the biggest impact in the long term.”

The modernisation process means firstly that Australian Workplace Agree ments (AWAs) have been abolished. Under the old WorkChoices scheme, if an employer did not want to be bound by the provisions of an award (eg to not pay someone overtime or allow them to work excessive hours) they could enter into a one-on-one agreement with the employee – known as an AWA.

This would be lodged with a third body and allow the employer to get out of the award provisions. The unions have always been opposed to AWAs because they were skewed in favour of business and could lead to an employee being forced into signing an agreement because they needed the job. Essentially the employer held all the cards.

Up until now, employees have been covered by more than 3000 awards at fed eral and state level. The modernisation process which began on 1 January 2008 and will finish on 31 December 2009, will see the AIRC cutting these awards from 3000 down to 100.

“This process [of reducing the num ber of awards] is underlying throughout the whole thing,” says Seymour. “It’s a very significant development.

“An example is the broadcasting and enter tainment industry. There are the TV awards, radio awards, striptease workers award, actors award – which all have to be brought down to one media and enter tainment award.”

Employers in each industry will have to keep on top of these groundbreaking changes to their industry awards because they will lead to various workers being covered by new awards.

For example, an employer may have someone under a specific award who was getting paid time and a half for overtime but under the new award they may have to be paid double time.

The first stage of awards has been pub lished. The last ones won’t be finished until November, so industries in the last sector will have little time to adjust.

HR tips: “Well the first thing is to iden tify which finalised Modern Awards will apply to your business, and to which employees and audit compliance with terms and conditions,” says Seymour.

“So you need to work out which is the new award that will apply to your people. For example, if I employ some journal ists, some clerical workers and some man agers I have to look at the award that applies to each sector of employees and assess whether I am paying them in accor dance with the new award.

“With clerical people there will be a national clerical award which has already been finalised, and for managers they may actually be award-free. So there needs to be that analysis of each type of worker within your business, looking at the award that covers them, and see whether you are actually complying with them.”

Employers can go online to the AIRC website to see what industry awards are finalised. If employers then want to make a submission through their employer asso ciation, she says, they must do so soon.

“For example, the awards for Racing Clubs NSW have already been finalised and they made submissions saying they should have their own club award and they were suc cessful,” says Seymour.

The Racing industry successfully made submissions to the effect that there should be separate awards for racing clubs, ground maintenance and horse and greyhound training. Three modern awards have therefore been published for the Racing industry.

The new awards could also mean extra costs for companies with some wages hav ing to be increased by up to 22 per cent.

“HR departments should also be thinking about briefing their board about these possible extra costs,” says Seymour.

NES and flexibility requests

The Coalition’s Australian Fair Pay and Conditions Standard will be replaced in January 2010 by 10 National Employ ment Standards (NES). Of these 10 new standards, employers are most concerned by those covering workplace flexibility and family responsibilities.

Under the new NES, from 2010 employees will be entitled to more gener ous maternity leave arrangements. The NES will extend the minimum entitlement to maternity leave from 12 months of unpaid leave by allowing employees to make a written request for up to a further 12 months of unpaid leave (ie a total of up to 24 months unpaid maternity leave).

An employer must have “reasonable business grounds” for refusing an employee’s request for the additional 12 months and the employee must also be entitled to return to the same position she held prior to commencing leave.

Regarding the right to request flexible working hours, for the first time ever, from 1 January 2010 workers who care for children under school age will have the right to request flexible working arrangements. The employee must make a request in writing and the employer must give a written response within 21 work ing days. If the employer refuses the request they must give the reasons.

HR tips: The question employers may ask themselves is how they are going to deal with requests such as up to two years’ parental leave and how they are going to set up systems inter nally to make sure they are being fair and consistent in how they are granting or declining leave.

“You will have to look at the type of job the individual is doing, but I think it’s about looking at setting up systems,” says Seymour. “What we don’t want are managers making a decision on an individual level. What we want are some principles at a cor porate level that will guide decisions they make. Because if you are making decisions randomly you are always going to run the risk of somebody saying you are discriminating against them.”

Seymour says that unless an employer can point to a docu ment or principle there is the potential for a lot of arguments. Employers need to be very clear, she counsels, and perhaps look at how they currently fill a maternity vacancy.

“It’s quite untested. But the law has made a decision that it should support families in raising their children. It’s non-dis criminatory, because it’s fathers too, so whether you agree with it or not, a decision has been made by our parliament that it is impor tant to support men and women. You need to have some pretty con vincing reasons if you are not going to grant it,” she says.

“A lot of good employers will be doing this anyway, but by January 2010 all companies will have to do it.

“Companies should determine responsibility and procedure for considering and responding to requests and general posi tion in relation to granting and declining requests.”

Seymour suggests, for example, that every request the company receives be allocated to two people, and that these people have responsibility for applying policies or guidelines to each request.

She also recommends that companies make sure managers know that when they receive a request for a flexible work arrangement they must send it promptly to the person respon sible because they have only 21 days to respond.

Note: On 20 March 2009, the Senate passed the Fair Work Bill. Importantly, the definition of ‘small business’ was amended for the purpose of unfair dismissal. Which means:

Unfair Dismissal –For the purpose of the unfair dismissal laws, small business employees with less than 12 months' service and other employees with less than 6 months' service will not be entitled to bring an unfair dismissal claim. ‘Small business’ means an employer with less than 15 employees. The Senate passed the Fair Work Bill on 20 March 2009. There were a number of last minute amendments, including the introduction of a transitional arrangement whereby ‘less than 15 employees’ will be calculated on a 'full time equivalent' basis until January 2011, when it will revert to a ‘headcount’ basis.

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