Fairer or not: new changes to the Fair Work Act

iHR Australia I Promotional Pricining on Outstanding Workplace Training I Offer ends 31 January 2014

Fairer or not: new changes to the Fair Work Act

Fairer or not? New changes to the Fair Work Act

January 2013

*This article was first published in January 2013. For the latest on Fair Work Commission changes for January 2014 click here.

The Fair Work Amendment Bill 2012 introduces some key amendments to the Fair Work Act 2009.  The Bill implements around a third of the 53 proposals made by the Fair Work Act Review Panel in its final report and introduces other changes arising from the government’s consultations with relevant stakeholders.

Most of the changes will take effect on 1 January 2013, with other changes to be implemented on 1 January 2014.  They are largely procedural changes that do not markedly change the form and substance of the Act.

The Bill renames the Tribunal function of Fair Work Australia, which will become the Fair Work Commission (FWC) as of 1 January 2013.  The rationale for this is that there has been some confusion about the similarity in names between Fair Work Australia (FWA), the existing national workplace relations Tribunal, and the Fair Work Ombudsman (FWO), the independent statutory office empowered to investigate workplace complaints and to ensure compliance with the Fair Work Act and no name to specifically refer to the Tribunal function of Fair Work Australia.  There will also be a number of changes to the structure and processes of the FWC, which include the creation of two new statutory Vice President positions. The powers of the President and the two new Vice President positions have also been increased.

iHR Australia I Promotional Pricining on Outstanding Workplace Training I Offer ends 31 January 2014

Of concern to business is that there has been little change of substance in the area of unfair dismissals and general protections (adverse actions). Commencing 1 January 2013, the time limit for making General Protections claims to the FWC involving dismissal will be reduced from 60 days to 21 days. The intent of the amended time limit is to align the time frame for lodging general protections claims involving dismissal to the (new) 21-day time limit for lodging unfair dismissal claims, up from 14 days.  This change would be welcomed by employers, as employees will now need to decide whether to lodge an unfair dismissal or a general protections claim (rather than one, followed by the other; or the pursuit of a general protections claim that should properly have been brought as an unfair dismissal claim). 

Upon application by the employer, the FWC will also be empowered to dismiss unfair dismissal applications if satisfied that the employee: unreasonably failed to attend a conference conducted by, or a hearing held by the FWC; failed to comply with an order or direction of the FWC; or failed to discontinue his/her application after a settlement agreement was concluded.

Further, upon application by either party, the FWC will be able to award costs against a party (including their representative) if that party caused costs to be incurred by the other party because of an unreasonable act or omission.   The intent of this provision is not to deter a party from “robustly pursuing or defending an unfair dismissal claim”, but is instead directed at the small minority of litigants who unreasonably pursue or defend unfair dismissal claims.

Currently, most modern awards nominate specified default superannuation fund(s) into which employers must make compulsory superannuation contributions. The FWC will conduct a review of the default superannuation fund terms contained in modern awards every four years, at the same time as the four yearly review of modern awards occurs. The first such review will occur as soon as practicable after 1 January 2014.

The new Act, from 1 January 2013, underpins the argument that an enterprise agreement must be collective in nature given the abolition of statutory individual agreements, and that an agreement with only one employee undermines the statutory purpose of promoting collective bargaining – that is, there must be at least two employees to make an agreement.  Further, the new Act prohibits the inclusion of “opt-out” clauses in enterprise agreements, through which some employers have sought to reach agreement with individual employees despite there being an otherwise applicable agreement.

There have also been amendments regarding bargaining representatives, which will also become law on 1 January 2013. The Bill provides that an employee organisation (union) or its officials cannot be a bargaining representative unless the organisation is entitled to represent the industrial interests of the employee concerned. This is intended to address attempts by officials of some unions to obtain representation rights over employees whose work falls within the coverage rights of a rival union, by arguing that the official is acting in an “individual” or “private” capacity.

As well as provisions enabling electronic voting and clarifying voting eligibility, a new requirement has also been inserted to require the FWC to specify a date in the protected action ballot order that will ensure that protected action ballots are conducted as expeditiously as possible.

The Fair Work Amendment Bill 2012 was described in the Explanatory Memorandum as a “first tranche response” to the Fair Work Act Review Report.

Further information can be found at the FWC website.