Benefiting from the Fair Work Act

by 11 Jun 2009

Q. I am concerned about the impact the new Fair Work Act may have on our business. It is important that we remain flexible and competitive, so where might the potential opportunities lie in these new arrangements?

A. If you have good employee relations and flexibility at your workplace,there will be lit tle impact in the short term. You will have to en sure you meet the National Employment Stan dards that commence effect from 1 January next year.

There will be no “drop dead” date for pre-Fair Work Act agreements such as AWAs, em ployee collective agreements and EBAs, which operate until terminated.

As always, it is the substance of the work re lationship, not its legal form,which determines whether employees are productive and en gaged. The challenge for leaders is to provide fair remuneration, a safe workplace and an an swer for employees’three basic questions: What am I expected to do? How am I going in my job? What is my future?

If leaders stay focussed on these funda mentals then the company will be in good shape to navigate the new act and the current economic crisis.

For employees covered by modern awards, there is scope for developing individ ual flexibility arrangements governing when work is performed, overtime and penalty rates, allowances and leave loading – subject to the employee being better off overall. The individual agreement operates as part of the award, which makes the benefits for both parties in such arrangements much more secure than traditional “over-award” payments. This provision opens up the option of moving from time-based overtime systems to task -based salary arrangements which, when properly managed, can lead to significant and produc tive changes in work behaviour.

Similar flexibility clauses will be required in enterprise agreements and similar opportunities will arise to explore innovative arrangements in dividually or collectively.

Under the Fair work Act, negotiating a col lective agreement now carries with it the duty to bargain in good faith. Essentially, this in volves procedural requirements whereby the negotiating parties meet and confer at rea sonable times and minds open to persuasion with a view to reaching an agreement. Good faith bargaining (GFB) does not mean that ei ther party is required to make concessions or conclude an agreement.

It’s a good idea to sort out how and when negotiations will be conducted, how communi cations with employees will be handled and how any sensitive information will be managed well before getting into the substance of negoti ations. You are not required to provide confiden tial or commercially sensitive information – but you do have to disclose relevant information and consider and respond with reasons to pro posals made.

But GFB cuts both ways, it requires both parties to refrain from capricious or unfair con duct which would undermine freedom of asso ciation or collective bargaining.

Regardless of the employment arrange ments in place, employers will be under pres sure to adapt to the current economic down turn. Concessions relating to early leave, working time, deferred pay rises and the like are emerging across all classes of employment. The Workplace Research Centre is building a picture of these emerging trends through its research program and through a series of national seminars on the Fair Work Act in the context of the current economic crisis.

At each event, Clayton Utz will be explaining what the new laws mean for you in practise and union and employer leaders will be providing their thoughts and insights on how to respond to these “new uncertainties”.

By Geoff McGill, visiting industry scholar, Workplace Research Centre. For more information visit