1. Which workers are covered by the Bill

Like WorkChoices, The Fair Work Bill covers national system employers, including:

  • constitutional corporations
  • the Commonwealth as employer
  • specified employers engaged in interstate trade and commerce (employing flight crew, maritime employees or waterside workers)
    employers in the Territories

The Bill will also cover some or all employees in the state systems if and when the states refer their industrial relations powers to the Commonwealth. This includes state public sector employees and employees of non-trading corporations, partnerships and trusts.

Some parts of the bill cover all employees. These include:

  • Notice of termination
  • Unlawful termination
  • The National Employment Standard for Parental Leave

State IR Laws are overridden

The Bill “covers the field” and excludes the operation of general State or Territory industrial laws. General laws that those apply to all employers or employees in a State or Territory.

This means the federal laws will exclude the operation, in respect to national system employers, of State laws relating to the establishment or enforcement of terms and conditions of employment, laws providing remedies for termination of employment, and State laws relating to leave (other than long service leave) or to unfair contracts.

What state laws continue to operate?

State laws are preserved include laws on non-discrimination, supperannuation, workers’ compensation, OH&S, outworkers, child labour, training arrangements (except where these laws contain matters that are covered by the NES or modern awards), workplace surveillance and business trading hours.

2. Fair Work Institutions

New institutions will replace the Australian Industrial Relations Commission and Registry, the Australian Fair Pay Commission, the Workplace Authority, the Workplace Ombudsman and eventually the Australian Building and Construction Commission. The Courts will have a greater role in disputes.

Fair Work Australia (FWA) will be independent of government with its President, Deputy Presidents and members appointed until age 65. Specialist members of the Minimum Wage Panel will be appointed for 5 years. FWA will:

  • Set and adjust award wages and make minimum wage orders
  • Regularly review and vary awards
  • make bargaining orders (scope orders, majority support orders and good faith bargaining orders) and, in limited circumstances, make workplace determinations settling bargaining disputes
  • supervise the taking of industrial action
  • approve agreements
  • conciliate and (in limited cases) arbitrate disputes
  • deal with disputes about right of entry
  • determine whether an instrument applies in a transfer of business
  • determine unfair dismissal claims

FWA will be able to inform itslef informally, and will have powers to convene compulsory conferences aimed at settling disputes.

The non-tribunal functions will be performed by the general manager and staff of FWA, who will take on some of the functions of the Australian Industrial Registry and the Workplace Authority.

The Office of the Fair Work Ombudsman will take over the work of the Workplace Ombudsman and, from 1 February 2010, the ABCC. The Office will be responsible for providing information and education and for enforcing the new laws. Fair Work Inspectors will be able to inspect documents and premises and prosecute breaches of the law, including breaches of common law contracts where the breach relates to a matter covered by an award of NES matter. In addition, Fair Work Inspectors will be able to issue compliance notices.

Fair Work Divisions of the Federal Court and the Federal Magistrates Court will determine claims relating to breaches of the NES, awards, agreements and workplace rights. The small claims procedures, where the rules of evidence do not apply and lawyers can only appear with permission of the Court, will be available for claims of up to $20,000 (up from $10,000 under the current law). The Courts will be able to make any orders considered appropriate to remedy a contravention, including injunctions and penalties. The Courts will also be able to enfoce entitlements under a common law contract of employment that relate to the NES or modern awards.

3. The Safety Net; an overview

The new safety net will consist of ten legislated National Employment Standards (NES) and modern awards. This safety net comes into effect on 1 January 2010.

The National Employment Standards apply to all national system employees

  • A standard 38 hour working week for full time employees and the right to refuse unreasonable overtime
  • Up to 24 months unpaid parental leave
  • A right for parents to request flexible working arrangements
  • 4 weeks paid annual leave each year, plus an additional week for shift workers
  • 10 days paid personal/carer’s leave each year, 2 days paid compassionate leave and 2 days unpaid emergency leave
  • Unpaid community service leave
  • All national and state public holidays
  • Long service leave
  • Notice of termination and, if employed in a business with 15 or more employees, redundancy pay.A requirement that all employees provide new employees with information about their rights (A Fair Work Information Statement).
  • Modern awards set industry and occupational standards

The second part of the safety net is modern industry or occupational awards. These are currently being developed by the AIRC, and will contain wages rates, types of employment, hours of work, overtime and penalty rates, annualised wages, allowances, leave, superannuation and procedures for consultation, representation and dispute resolution. In making the modern awards the AIRC has been directed to ensurre they do not extend to emplpoyees that, due to their senority, have not traditionally been covered by an award.

Minimum wage orders will provide a wages and casual loading safety net for award free employees.

Application of the safety net

The NES applies to all employees in the federal system. Rights to unpaid parental leave and notice of termination applies to all employees in Australia. Awards apply according to their terms, but will not apply where an employee has accepted a guarantee of high income.

What is the relationship between the NES, awards and agreements?

Awards and enterprise agreements cannot contain terms that go below the NES. They can go above them: eg an agreement can provide for paid parental leave or for other types of community service leave. Awards and agreements may also define terms that are used in the NES: eg an award can define a shift worker for the purpose of dertermining who gets 5 weeks paid annual leave or provide detail on the kind of evidence that employees are required to provide to obtain personal leave.

As soon as an enterprise agreement covers an employee, the award ceases to apply to that employee.

Regardless of the terms of an enterprise agreement, an employee covered by the agreement will remain entitled to the NES and to a wage no lower than the minimum award wage or minimum wage order.

How does safety net get varied and updated?

The NES are legislated minimum standards that can only be varied by Parliament. However, awards can build upon the NES, so awards can be varied to improve upon matters that are also covered by the NES.

Minimum wages are reviewed each year and awards are reveiwed at least once every four years.