UNDERSTANDING THE FAIR WORK ACT In Recruitment, On-hire & Contracting IT Industry PRESENTED BY Charles Cameron
PRESENTATION OVERVIEW RCSA has been funded by the Australian Government to educate employers on the Fair Work Act 2009 ( Fair Work ) This presentation focuses on the recruitment, on-hire/labour hire and contracting sectors The Fair Work Act commenced in part on 1 July, 2009 The second part of the Fair Work Act will commence on 1 January 2010 The Australian Government has prepared guides to the Fair Work Act and they are available for download on the RCSA website at www.rcsa.com.au/content/about-fair-workreferences-and-resources
PRESENTATION OVERVIEW In this presentation we will cover: Who the Fair Work Act covers When the Fair Work Act commences How the Fair Work Act interacts with State and Territory laws Fair Work Australia Unfair dismissal General employment protections Right of entry Agreement making Transfer of business The National Employment Standard (NES) Modern awards
WHO IS COVERED Since 1 July 2009 most of the Australian workforce has been covered by Fair Work It applies in Australia to national system employers and their employees National system employers include employers who are: - A constitutional corporation - The Commonwealth - A Commonwealth authority - A person who employs a flight crew officer, maritime employee or waterside worker in connection with interstate or overseas trade or commerce - A body corporate incorporated in a Territory - A person who employs an employee in connection with a commercial, governmental or other activity undertaken by that person in a territory
WHO IS COVERED The Fair Work Act applies to all Victorian private sector employers and Victorian public sector employees, subject to certain exemptions The Fair Work Act applies to trusts where their employer is a corporate trustee The Fair Work Act does not cover sole-traders and partnerships, other than in Victoria, the ACT and the Northern Territory (as previously outlined) The law enables States to refer power to the Commonwealth to create a single national workplace relations system
COMMENCEMENT Stage One of Fair Work Commenced on 1 July Fair Work Australia (FWA) opened its doors New unfair dismissal eligibility and process introduced New transfer of business laws commenced Introduction of new and streamlining of existing general protections for employees and independent contractors New system of workplace agreement making New agreement bargaining & industrial action laws Amended right of entry laws
COMMENCEMENT Stage Two of Fair Work Commences on 1 January 2010 The Safety Net Provisions Modern Awards will replace all current awards and NAPSA s National Employment Standard will replace the Australian Fair Pay and Conditions Standard (AFPCS) National Minimum Wage Orders through FWA
STATE AND TERRITORY LAW The Fair Work Act excludes State and Territory industrial laws that would otherwise apply to national system employers and employees This includes the industrial relations Acts of the States, as well as other State and Territory laws that apply to employment generally and regulate key aspects of the employment relationship OHS laws, workers compensation laws and discrimination laws are preserved and continue to apply at a State and Territory level State and Territory laws dealing with flexible working arrangements and community service leave (e.g. jury duty make-up) are also preserved if they provide a more beneficial entitlement
THE BRIDGING PERIOD During the bridging period from 1 July to 31 December 2009: Pay scales and other minimum conditions such as public holidays, continue to apply, pending commencement of the National Employment Standards and Modern Awards During this period federal awards, NAPSA s, workplace agreements, AWA s and pre-reform certified agreements & AWA s continue as saved provisions The Australian Fair Pay and Conditions Standard continues Institutions are able to complete certain matters which commenced prior to 1 July, 2009
FAIR WORK AUSTRALIA Fair Work Australia will manage the new system of workplace relations and replaces: The Workplace Authority (Agreement Making and Advice) The Workplace Ombudsman (Enforcement) Australian Industrial Relations Commission (Dispute Resolution and Facilitation of Bargaining) Australian Fair Pay Commission (Minimum Wage Increases)
FAIR WORK AUSTRALIA Fair Work Australia will: Review and vary Modern Awards Approve enterprise agreements Issue good faith bargaining orders Process unfair dismissal claims Issue industrial action orders Resolve disputes and hear complaints Set minimum wages Issue right of entry permits
FAIR WORK OMBUDSMAN The Fair Work Ombudsman is part of Fair Work Australia and replaces: The Workplace Ombudsman (1 July) The Australian Building & Construction Commission (1 February 2010) The Fair Work Ombudsman powers: Enforce National Employment Standards (NES) Enforce Modern Awards and enterprise agreements Bring court proceedings to enforce rights & obligations under common law contracts relating to the NES and Awards The Fair Work Ombudsman will deliver the Fair Work Infoline Service Ring 13 13 94
SMALL CLAIMS There will be an increased capacity for employees to pursue claims of less than $20,000 quickly and inexpensively The Fair Work Division of the Federal Magistrates Court will be able to act: in an informal manner, without lawyers without formal rules of evidence, and may act without regard to legal form and technicality
UNFAIR DISMISSAL The unfair dismissal test remains whether the termination of employment by an employer is harsh, unjust or unreasonable Unfair dismissal claims need to be made within 14 days of termination of employment Terminations must be in writing and specify the effective date of termination (no retrospective dates) Unfair dismissal claims will be initially handled by Fair Work Australia in conference There are limited rights of legal and paid agent representation The Fair Work Australia Officer will make a determination following the conference Appeals only available if in public interest or error of fact
UNFAIR DISMISSAL CONSIDERATIONS The following factors will be considered by Fair Work Australia when assessing a claim: 1.Whether there was a valid reason for the dismissal related to the person s capacity or conduct 2.Whether the person was notified of that reason 3.Whether the person was given any opportunity to respond to that reason 4.Any unreasonable refusal by the employer to allow the person to have a support person present to assist 5.Whether the person had been warned about unsatisfactory performance before the dismissal
UNFAIR DISMISSAL CONSIDERATIONS Factors considered by Fair Work Australia Continued 6. Whether the size of the employer s enterprise would be likely to impact on the procedures followed in process of the dismissal; 7. Whether a lack of dedicated human resource management specialists or expertise in the employer s enterprise would be likely to impact on the procedures followed in the dismissal 8. Any other matters that Fair Work Australia considers relevant
EXEMPTIONS The 100 employee exemption has been removed Employees of employers with 15 employees or more (full time equivalent) are exempt from making claims for first 6 months of employment Employees of employers with less than 15 employees (FTE) are exempt from making claims for first 12 months of employment The Casual employee 12 month employment exemption has been removed and they are now classified in the same way as permanent employees (subject to criteria on next slide)
EXEMPTIONS Casual employees must: a) Be employed on a regular and systematic basis; and b) Have a reasonable expectation of ongoing employment on a regular and systematic basis Genuine redundancies are exempt but must consider redeployment High Income Employees are exempt (earning more than $108,300 not including statutory superannuation) Terminations at the end of a fixed term, fixed task or end of a training period are exempt
FAIR DISMISSAL CODE A Fair Dismissal Code has been created If a small business employer (less than 15 employees) complies with this code the dismissal will be deemed to be fair It is a minimum requirement for all employers, not just small business employers Use the code as the minimum obligation and rely upon current case law for further guidance until further information is made available Apply procedural and substantive fairness in all circumstances
FAIR DISMISSAL CODE The Code requires at least: 1. A clear written or verbal warning that the employee was not doing his or her job properly 2. Notice that the employee would have to improve his or her conduct or performance, or otherwise be dismissed 3. A reasonable amount of time to improve his or her conduct following the warning 4. Some assistance to improve performance e.g. training 5. Ongoing poor performance or conduct 6. An opportunity to respond prior to dismissal
UNLAWFUL TERMINATION There are prohibitions against dismissing someone on discriminatory grounds or for other reasons such as engaging in industrial activity or being temporarily absent from work because of illness or injury. This is not the same as unfair dismissal and is dealt with under the General Protections part of the Fair Work Act There are no exemptions from such unlawful termination claims
TIPS Ensure contracts are drafted for the position at hand and for the form of engagement Ensure employees are clearly advised of the form of employment e.g. casual Clearly define performance and conduct expectations for all employees Keep written records to assist conciliation conference Issue warnings within the 6 month exemption period as these may need to be relied upon thereafter
GENERAL PROTECTIONS A range of general employment protections exist to protect employees from adverse actions Whilst the previous law provided for some of these protections they have been consolidated and streamlined under the Fair Work Act Many of the protections have also been expanded under this process Many of these general protections also apply to independent contractors
GENERAL PROTECTIONS An employer cannot take adverse action against an employee, prospective employee or independent contractor because they have a workplace right, do or do not exercise, or propose to exercise, that right. Workplace rights include: Benefits and rights under workplace law Rights to be involved in or initiate proceedings Abilities to make complaints or inquiries (including complaints or inquiries to unions)
GENERAL PROTECTIONS Adverse Action includes (by example) actual or threatened: Dismissal or termination of contract Discrimination Refusal to employ or engage a person Injuring an employee or independent contractors in their employment or contract Prejudicially altering the position of an employee or independent contractor More..
GENERAL PROTECTIONS The General Protection provisions of Fair Work are extensive and provide rights to employees and independent contractors well beyond current levels The onus of proof is upon the employer or principal to prove they have not acted in an adverse manner Where it does not involve dismissal an application can be made to FWA to have the dispute heard (voluntary) If the claim involves dismissal the conference is compulsory If FWA does not resolve the matter the employee or independent contractor can go to the courts
GENERAL PROTECTIONS Where Adverse Action is proven by a court it may make the following orders An injunction to stop or remedy the effects of the breach An award of compensation for loss suffered (uncapped) A fine of up to $6,600 per offence for individuals and $33,000 per offence for corporations Reinstatement of entitlements, employment, position or benefits
SHAM CONTRACTING PROVISIONS Sham contracting is where an employer tries to disguise an employment relationship as an independent contracting relationship. This is illegal. Under the Fair Work Act 2009 an employer cannot: - disguise an employment relationship or proposed employment relationship as an independent contracting arrangement - dismiss or threaten to dismiss an employee to re-engage them as an independent contractor - knowingly make a false statement to persuade or influence an employee to become an independent contractor.
SHAM CONTRACTING - PENALTIES Fair Work Inspectors may take an employer to court if they find the employer is involved in sham contracting (penalty of up to $33,000 per contravention). If the employer dismisses or threatens to dismiss an employee to re-engage them as an independent contractor, the Fair Work Inspector can apply to the courts to: - stop the dismissal from happening - order the employer to give the employee their job back - have the employer compensate the employee - make another appropriate order.
TIPS Understand that claims will be brought for action other than termination of employment Be careful not to reduce hours or change conditions of employment or contracts for reasons that are protected Need to establish and prove real grounds for changing employment conditions so records become paramount Manage expectations from the beginning of employment and contracting relationships and use contracts to clarify conditions
RIGHT OF ENTRY Under the Fair Work Act, unions may enter premises for two specified purposes where they have eligible members 1.To investigate a suspected breach of the Fair Work Act or a term of a fair work instrument (award or agreement) 2.To hold discussions with employees
RIGHT OF ENTRY Conditions of Entry: They must hold a valid right of entry permit (issued by Fair Work Australia) Permit holder must provide 24 hours notice of intention to enter Entry only during working hours Discussions with employees during non-working hours (e.g. meal breaks) Permit holder must set out basis for entry rights (e.g. the part of union rules which enable union to represent employees) Permit holder must comply with reasonable employer requests
RIGHT OF ENTRY Alleged breach right of entry must relate to an alleged breach of: The Fair Work Act An award that applies to employer An approved agreement that applies to employer Unions can look at and copy employment records of employees where records are relevant to the alleged breach being investigated Records for (union) non-members only to be inspected or copied by permit holder if The non-member gives written consent or If Fair Work Australia authorises Employer not required to provide documents if that would breach federal or state law
AGREEMENT MAKING Collective bargaining is a term which describes the process where employers, employees and bargaining representatives bargain for an enterprise agreement Under Fair Work, other than ITEA s which cannot be made beyond 31 December, only collective agreements can be made Existing certified or collective agreements, AWAs and ITEAs continue to operate but NES displaces any inferior agreement provision from 1 January 2010 Single employer enterprise agreements, multi-employer enterprise agreements and greenfields agreements Common law contracts can still be made but cannot override law
AGREEMENT MAKING If majority of employees want Collective Agreement and a Majority Support Determination is obtained from Fair Work Australia, an employer must bargain in good faith An employer must also bargain in good faith where it initiates or agrees to negotiate an enterprise agreement Fair Work Australia can assist & make determinations Union deemed to be bargaining representative for members covered by agreement unless the employee elects otherwise Union able to get representation orders without there being dispute/demarcation Collective bargaining with multiple employers in low-paid industries introduced
GOOD FAITH BARGAINING Good faith bargaining involves all the parties: Attending and participating in meetings at reasonable times Disclosing relevant information (other than confidential or commercially sensitive information) in a timely manner Responding to proposals made by other bargaining representatives in a timely manner Giving genuine consideration to the proposals of other bargaining representatives and reasons for any responses Refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining
CONTENT OF AGREEMENTS Enterprise agreements must be about permitted matters. Permitted matters are: Matters pertaining to the relationship between an employer or employers and employees Matters pertaining to the relationship between an employer or employers and an employee organisation or organisations Deductions from wages authorised by an employee How the agreement will operate
TRANSFER OF BUSINESS Transfer of Business is the name given to circumstances where certain industrial instruments will follow employees when they move to a new employer This is now more likely to occur given that it isn t limited to the acquisition of a new business
TRANSFER OF BUSINESS The following instruments transfer with the employee: 1. A Named Employer Modern Award 2. An Enterprise Agreement approved by Fair Work Australia (includes current awards, workplace agreements, NAPSA, AWA s, ITEA s and pre-reform collective agreements) 3. A Workplace Determination
TRANSFER OF BUSINESS A transfer of business will occur where: 1. An employee is terminated from old employer 2. Within 3 months that employee is employed by a new employer 3. Work performed for the new employer is substantially the same 4. There is a connection between the old and new employer
TRANSFER OF BUSINESS There is a connection when one of the following arrangements are in place between the old and new employer 1. Transfer of assets from old employer to new employer 2. Old employer outsources work to new employer 3. New employer ceases to outsource work to old employer 4. New employer is associated entity of old employer *New employer includes associated entity
TRANSFER OF ASSETS Transfer of assets from old employer to new employer - Assets may be either tangible or intangible - Employees are not assets - Working in the same workplace and using the clients work equipment and systems does not necessarily result in a transfer - The passing of PPE and/or leases may result in a transfer of assets - Need to get advice during transitions and acquisitions of new businesses
OUTSOURCE Old employer outsources work to new employer - Outsourcing is where a company contracts work outside the company rather than employ more in-house workers - May be a small number of employees or a whole division within a business - An example may be a client engaging an on-hire firm to supply additional workers or a whole division workforce - Does not apply to transitions because employees no longer working for your firm
INSOURCE New employer ceases to outsource work to old employer -Where a company has previously outsourced work to a company and then decides to cease the outsource arrangement there will be a transfer -This could apply to temp to perm arrangements or where a client -Recommended that advice is sought -Applications for exemption can be sought from Fair Work Australia
ASSOCIATED ENTITY New employer is associated entity of old employer - This may occur where an employee moves between entities within the same group or where one company controls another
TRANSFER OF BUSINESS Transferring instruments apply to the new employer until terminated or replaced (no longer limited to 12 months) Instruments only apply to transferring employees except for the following qualification Transferring instruments will also extend to new employees of the new employer following the transfer of the specific instrument in circumstances where there is no other workplace instrument applying to the new (nontransferring) employees such as an enterprise agreement or modern award
NATIONAL EMPLOYMENT STANDARDS From 1 January 2010 1. Maximum weekly hours 2. Requests for flexible working arrangements 3. Parental leave and related entitlements 4. Annual leave 5. Personal/carer s leave and compassionate leave 6. Community service leave 7. Long service leave 8. Public holidays 9. Notice of termination and redundancy 10. Fair Work Information Statement
FLEXIBLE WORK REQUEST The National Employment Standards give employees the right to request a change to working arrangements if they have 12 months continuous service and are parents of, or have responsibility for the care of, a child under school age, or a disabled child under 18 The request must be in writing and detail the change sought and reasons for the change. A written response must be received from the employer within 21 days and state whether the employer grants or refuses the request A request may only be refused on reasonable business grounds. Fair Work Australia will be able to provide information on what constitutes reasonable business grounds
COMMUNITY SERVICE LEAVE The National Employment Standards provides a paid entitlement for employees required to attend jury service and unpaid leave for those who engage in a voluntary emergency management activity An employee is entitled to be paid by their employer for a period of up to 10 days while they are absent from work during a period of jury service. An employer may require the employee to obtain payments to which they are eligible from the applicable State/Territory or Commonwealth body; these payments will reduce the amount payable to the employee
LONG SERVICE LEAVE The Government will work with the States and Territories to develop a uniform minimum long service leave standard. The National Employment Standards provide transitional arrangements while the new national standard is being developed.
REDUNDANCY PAY An employee whose position is made redundant (as defined in the National Employment Standards) is entitled to a payment based on years of continuous service with an employer Businesses with less than 15 employees are exempt from this National Employment Standard An employee employed for a specified period of time, for a specified task, or for the duration of a specified season is exempt (also some training arrangements)
REDUNDANCY PAY An employee whose employment is terminated because of serious misconduct is exempt Casual employees are exempt Period of calculation commences 1 January 2010 unless earlier entitlement to redundancy pay under contract or instrument
MODERN AWARDS Modern awards to be created along industry and occupation lines plus a general application award Industry awards take precedence over occupational awards The Commission will/is creating modern awards to cover all employees who perform work that has historically been regulated by awards. Modern awards to replace current federal awards and NAPSA from 1 January 2010 Modern awards will apply nationally Safety net general application award for those not covered by modern award but historically covered
MODERN AWARDS High Income Employees exempt from awards ($108,300) but must be guaranteed and in writing The Commission will include a flexibility clause in each modern award allowing employers and employees to negotiate arrangements to meet their individual needs Ability to agree with individual employee after commencement of work to vary entitlements such as leave loading, ordinary hours, overtime penalties Protections will make sure that an employee is better off overall under the flexibility arrangement 25% casual loading in most awards Possible Labour Hire Services Award
MODERN AWARDS - IT Industry The exposure draft the the IT Modern Award is now available Professional Employees Award 2010 Exposure Draft only Contains an IT Stream (also engineering stream and scientists stream)
MORE INFORMATION Australian Government guides which complement this presentation available at: www.rcsa.com.au/content/about-fair-work-referencesand-resources www.fairwork.gov.au Ring 13 13 94 for Fair Work Infoline Email bsc@rcsa.com.au if you are an RCSA Corporate Member