Introduction of the Fair Work Bill – Key Changes – November 2008

On 25 November 2008, Workplace Relations Minister, Julia Gillard, introduced into Parliament the awaited Fair Work Bill 2008. Earlier this year, transitional legislation was introduced, removing AWAs, introducing a "no disadvantage test" for agreements and beginning the award modernisation process.

The new Fair Work Bill seeks to implement the remaining changes save for a further transitional and consequential changes bill which is to be introduced next year that will "explain how existing employers and employees move to the new Forward with Fairness arrangements".

Individual Flexibility Clauses
The Bill mandates that an "individual flexibility arrangement" clause – modeled on the flexibility clause to be incorporated into modern awards – be included in all collective agreements. The clauses under proposed section 205 of the legislation will be required to specify the particular terms of the collective agreement that can be varied by the individual flexibility arrangement. Agreements failing to include such a clause will have a model flexibility clause, to be prescribed in regulations, included as a term. The individual flexibility arrangements must meet requirements set out in proposed section 203, which requires that it be genuinely agreed and pass a no disadvantage test. Arrangements made with employees under 18 will require parental consent. Individual flexibility arrangements will be treated as a term of the agreement, making them enforceable. The Bill also requires agreements to contain a clause obliging employers to consult employees about major workplace change, and allow them to be represented during consultation. Any agreement failing to include such a clause will have a model consultation clause inserted.


Single Employer and Multi-Employer Agreements
The Bill removes the distinction between union and non-union collective agreements providing instead for single and multiple-enterprise agreements.
More than one employer can bargain for a single-enterprise agreement if they are part of a joint venture, are related corporate bodies, or they obtain a single interest employer authorisation under proposed s248. This is to apply to franchisees of the same franchisor (or similar arrangements).

Unlawful and permitted content
The Bill returns the requirement that "substantive terms" be included in agreements pertaining to the employment relationship. "Permitted matters" must pertain to the relationship between the employee and employer (under proposed section 172(1)(a)) and employers and unions (s172(1)(b)), and can include matters banned under Work Choices, such as union consultation clauses and trade union training leave. The explanatory memorandum says specific terms that would be taken to be permitted matters under s172(1)(a) would include those specifying staffing levels (particularly if directed at ensuring OHS), relating to terms and conditions for engaging casual, labour hire or contract workers (but only it relates closely enough to employees’ job security), converting casual employees to permanent and preventing employers from seeking a contribution from employees for losses due to personal injuries. However "general prohibitions" on engaging labour hire workers, contractors or casuals would be outlawed, as would provisions requiring an employee or employer covered by an agreement to donate to a political party or charity, or clauses requiring employers to engage or not engage clients, customers or clients who agreed to commit to certain employment, ethical or environmental standards (unless the provision directly related to employees’ job security). Deductions from employees’ pay, such as for union fees, superannuation and salary sacrifice, will be lawful under the Fair Work Bill.

Fair Work Australia will refuse to approve agreements containing "unlawful content" such as union bargaining fees, provisions "contracting out" of unfair dismissal provisions and clauses allowing industrial action during the life of an agreement. Agreements will have a maximum nominal term of 4 years. They will apply 7 days after approval and will be allowed to have retrospective terms, such as backdated pay rises. Fair Work Australia will check the following before approving a collective agreement:

1. there is genuine agreement;
2. the group of employees to be covered has been fairly chosen;
3. it passes the Better Off Overall Test;
4. it has a nominal expiry date and dispute settlement clause;
5. It doesn’t contain terms contravening the NES; and
6. it doesn’t contain unlawful content.

"Adverse action" against employees
The new s351 will prohibit employers from taking "adverse action" against employees or prospective employees on a range of specified discriminatory grounds. Under the provisions, employees can take action in the federal, federal magistrates or state supreme courts over an employer’s refusal to employ, discrimination in the terms of employment offered or imposing other detriments, although some exceptions apply.

The new provision is significant as it opens up new discriminatory grounds for employees. In NSW, for example, employees will for the first time, if the legislation passes, be able to claim for discrimination on the basis of religion, political opinion, national extraction and social origin. A copy of the Bill can be downloaded via the following link: Fair Work Bill 2008 (613 pages).

To obtain further information or discuss how the new proposed legislation might impact on your business, please contact Andrew Bland at [email protected].

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