Fair Work Act 2009 What does it mean for not-for-profit organisations?
Summary of key changes One stop shop called Fair Work Australia National Employment Standards - safety net of 10 guaranteed employment conditions Current federal awards (including SACS and CASH) will cease to exist ‘Modern awards’ will be created, including up to 10 additional conditions on top of NES End of AWAs New bargaining arrangements New unfair dismissal rules Expanded right of entry entitlement
Key dates 1 July 2009: Fair Work Australia New unfair dismissal rules ‘General protections’ Expanded right of entry for unions New bargaining provisions Transfer of business changes 4 December 2009: Post-SACS modern award finalised 1 January 2010: National Employment Standards Modern Awards
Jurisdiction Are you covered by the Fair Work Act? What is a ‘constitutional corporation’? Can non-constitutional corporations be covered?
Constitutional Corporations s51xx of the Australian Constitution: “The Parliament shall… have power to make laws... with respect to… foreign corporations and trading and financial corporations formed within the limits of the Commonwealth”. So: -Are you a corporation? -Are you a trading, foreign or financial corporation?
Corporations A ‘corporation’ can be: A proprietary limited (Pty Ltd) company An incorporated association A statutory authority incorporated under legislation A public company limited by guarantee A corporation is not: A partnership or sole trader An unincorporated association A State Government department
Trading Corporations Trading activities must be ‘substantial’ ‘Substantial’ is a matter of degree, there is no fixed threshold Profit is irrelevant Organisation’s purpose is irrelevant
Jurisdiction So, if you’re: Incorporated; and You have ‘significant’ or ‘substantial’ trading activities then you’re covered by the Fair Work Act. If you don’t satisfy both those conditions then you’re not covered, and you’re in the WA State IR system. (Temporary exception for some businesses currently on SACS or another federal award)
Fair Work Australia Fair Work Australia replaces: Australian Industrial Relations Commission Australian Fair Pay Commission The Workplace Authority The Workplace Ombudsman The Australian Building and Construction Commission
Unfair Dismissal Removal of the ‘100 employee’ exemption Qualifying period is now 12 months for small businesses, 6 months for others Employees not covered by award or agreement who earn >$100k base are excluded Changes to redundancy Streamlined processes New ‘fair dismissal code’ for small businesses
What is an ‘unfair dismissal’? An employee can only make an unfair dismissal claim in the following circumstances: He or she was dismissed, did not resign; The dismissal was harsh, unjust or unreasonable The dismissal was not consistent with the Small Business Fair Dismissal Code (where applicable) The dismissal was not a genuine redundancy
Genuine Redundancy Only occurs when the employee could not have been redeployed within the business. Need to meet the consultative process spelled out in award/agreement.
SBFD Code A small business only has to comply with the fair dismissal code The code requires that the employer provides 1 verbal or written warning and provides the employees with a reasonable opportunity to improve (basic ‘procedural fairness’). Can also summarily dismiss where the employer reasonably believes that the employee’s misconduct is sufficiently serious Summary dismissal will be lawful in cases of theft, fraud, violence and serious OHS breach
Unfair Dismissal - Penalties Reinstatement is the primary remedy FWA can order compensation up to 6 months pay or $50000 Process is streamlined
Dismissal – What do you do? Only dismiss people for valid reasons (summary dismissal, fair dismissal, or genuine redundancy) Comply with consultative process Comply with the SBFD code Train managers Assess policies Be aware of the changes
National Employment Standards 10 minimum conditions for all employees Replaces the Australian Fair Pay and Conditions Standard The NES is the bedrock ‘safety net’, you can’t go below it
National Employment Standards Hours of work Parental leave Flexible work for parents Annual leave Personal leave and Compassionate leave Community service leave (including jury service) Public holidays Information in the workplace Notice of termination and redundancy Long Service Leave
Modern Awards SACS, CASH and other federal Awards are being replaced with ‘modern awards’ Modern awards take effect from 1 January 2010 Do not cover ‘high income’ employees (>$100k base) Do not cover employees on an enterprise agreement
What happens to SACS? AIRC will deliberate on SACS replacement later this year. Deliberations will be finalised on 4 December SACS will cease to apply from 1 January, new modern award will take effect The modern award will be ‘national’, but can have 5 years of State differences Allowances, penalties, hours arrangements, etc will all change
Wages in Modern Awards The SACS pay scale (& other award scales) will cease to apply Modern awards will contain minimum wages and classification rates
Individual Flexibility Can’t make AWAs Can ‘contract out’ of awards in a limited way, must be better-off overall Wages can’t dip below the award
Collective Bargaining Central feature of the new system Union is default bargaining representative ‘Good-faith’ bargaining introduced Requirement to bargain where there’s majority support “Better Off Overall Test” introduced, applies from 1 July
Good Faith Bargaining Obliged to: Attend and participate in meetings Disclose relevant information Respond to proposals Give genuine consideration to proposals Not obliged to make concessions, reach agreement, etc.
Low Paid Bargaining Stream Can’t generally have ‘pattern’ bargains Exception for specific low paid industries/occupations Union can apply to have a low-paid industry declaration from FWA This can then allow multi-employer bargains Is likely to happen to some degree in the NFP sector
Union Right of Entry New right of entry regulations allow greater union access to employees and records Unions can enter where they suspect a breach, or to talk with employees Need not be union members, merely ‘covered’ Can enter award/agreement-free workplaces
Union Right of Entry Make sure your records are in order Make sure you’re complying with the award/agreement, NES, OHS regulations and other requirements Keep records in a ‘compliant manner’
Other changes ‘General protections’ Transfer of business changes Statutory redundancy pay minima