Fair Work Bills Development – March 2009

Updates on the Changes Agreed Between the Government and the Senate Over the Past Seven Days.

On the last sitting day for Parliament until May, the Fair Work Bill has passed through the Senate, after the Government reached a much debated agreement with Family First Senator Steve Fielding, on phasing-in its definition of small business for unfair dismissal purposes.


This means that legislation which introduces changes to unfair dismissal laws, a single workplace regulator and increases legal support for unions and collective bargaining remains on track to come into effect on 1 July this year while the modern awards system and the NES will take effect from 1 January next year.

Transitional definition for small businesses

The agreement reached with the Family First Senator means “small businesses” will be defined as having fewer than 15 employees on a full-time equivalent basis from 1 July 2009, with the Government’s original definition of fewer than 15 on a headcount basis taking effect 18 months later, on 1 January 2011.This amendment is to be introduced through transitional legislation.

From 1 July 2009, the number of full-time equivalent workers will be calculated by averaging the ordinary hours worked by all employees in the business over the four weeks prior to the employee being sacked, and dividing that by 38 (ordinary weekly hours).

The Government has also agreed that the objects of the Fair Work Bill will acknowledge the special circumstance of small and medium size enterprises – an amendment that will also be progressed through the transitional and consequential bill when it is debated in Parliament.

Unfair dismissal assistance

A specialist information and assistance unit for small and medium size enterprises will be established within the Office of the Fair Work Ombudsman.

The Government has also agreed to increase the period during which a sacked employee may lodge a claim for unfair dismissal from 7 to 14 days.

A review by Fair Work Australia is scheduled for 2012 of the experiences of employers and employees with the new unfair dismissal system.

Right of Entry

Unions will continue to have the right to enter premises with the Government committed to no change in this area however, the circumstances in which right of entry is permitted will be significantly broader.

For example, unions will a right of entry for discussion purposes where work is carried out on premises in relation to which the union is entitled to represent employees, and the employees wish to participate in discussions with the union. Unions will therefore gain the right to enter premises which are currently award-free. The Government has however agreed to support an amendment to the Bill that gives unions the right to inspect non-member records only if those non-members give their written consent or permission is given by FWA.

Terms dealing with right of entry will be permitted in enterprise agreements, but only to the extent they relate to purposes not dealt with in the Bill (for example, to assist with dispute resolution).

FWA will retain its power to deal with disputes about right of entry, such as whether a particular room is reasonable.

Transfer of Business

The Bill makes significant changes to the current circumstances in which a transmission of business (now called a transfer of business) occurs.

The Bill returns to the pre-Work Choices position that an instrument that transfers continues to apply to the new employer until it is terminated or replaced (under Work Choices they applied for up to 12 months).

Instruments only transfer where the new employer takes on employees, and there is no obligation to do so. Where the new employer does take on employees, the application of the transferred instruments is generally confined to those employees, plus any new employees the employer takes on in the business where the workplace is instrument-free. Further amendments to the Bill agreed last week, will enhance the capacity of FWA to modify the transferring instruments or order that the instrument not transfer at all so that it is appropriate and fits the operation of the new enterprise.

For a complete overview of the legislation please see our previous articles on our website or, for a detailed analysis please contact us for a White Paper. To obtain further information or discuss the Fair Work Bill and its impact on your business, please contact Andrew Bland at [email protected]

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