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Obligations to consult employees on major change

Since 1 January 2010 the majority of employees are covered by a Modern Award unless they are otherwise covered by a workplace agreement such as an Enterprise Agreement.

Most Modern Awards have a model “Consultation regarding major workplace change” clause. It is common for workplace agreements to contain similar clauses. The Fair Work Act 2009 does not however define “Major Change”.

The Federal Court (1) recently fined Queensland Rail the maximum penalty of $660,000 for failing to consult with unions regarding major workplace change in relation to the proposed privatisation of QR. While QR has indicated it will appeal this decision, it sends a warning to employers who do not comply with such award or agreement clauses.

The National Employment Standards (NES) also oblige employers to consult with employees who are on paternity leave about change (item 28 refers).

Further employers who do not consult about major change and retrench employees without consultation may leave themselves open to unfair dismissal claims and/or have their reorganisation programs delayed while going through costly dispute settling procedures and/or court action.

It is imperative that employers have well developed strategies for implementing workplace change and that these comply with any award and/or agreement obligations.

(1) Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing And Allied Services Union Of Australia & Ors v QR Limited & Ors, QUD33/2010

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