Five new Fair Work traps

After hearing it said more than a little since the election of the Rudd Government, WorkChoices is now, officially, dead.   

With Parliament now having passed the Fair Work Bill, employers need to turn their attention to planning for the staged introduction of the legislation. 

Broadly speaking, the unfair dismissal changes and new enterprise bargaining regime will come into effect from 1 July 2009.  New minimum employment conditions, represented by legislated national employment standards and modern awards, which are currently being considered by the Australian Industrial Relations Commission, will start-up on 1 January 2010. 

There are many challenges for employers, but here are just five new things that employers might experience under the legislation that they either haven’t seen before, or they might just be a bit rusty on,

Unfair dismissals – more than a slight return

There’s been a lot of coverage and media time spent on this in the last two weeks. The central issue of debate in the Parliament has been whether employers with between 15 and 20 employees would have either six months or 12 months to terminate employment without being subject to an unfair dismissal claim – seriously.  

You wouldn’t know it, but there are changes that effect a far bigger range of employers that you need to be on top of. 

If you employ less than 100 employees, blow the dust off your old disciplinary procedures booklet and make sure your managers understand what’s in it.  You are now open to unfair dismissal claims.

The Government says that claim handling procedures will lead to much more efficient and effective disposition of claims without merit.

Good faith bargaining

Aside from the powers the AIRC has exercised in the past to require parties to meet to discuss enterprise bargaining issues or disputes, Fair Work Australia (FWA) will have the power to require employers to disclose information to unions in the bargaining process.

Employers will also be required to provide reasons for adopting the position they have in respect of particular proposals, and “refraining from capricious or unfair conduct that undermines freedom of association or collective bargaining” – unless by freedom of association you mean that the employers or employees do not want to deal with a union. 

Unions have automatic rights to negotiate an agreement if they have one member in the workplace, and automatic rights to become bound by an agreement reached between an employer and its employees.

FWA will, in limited circumstances, be able to arbitrate about matters that the employer and the union could not reach agreement about.

Demarcation disputes

“Demarcation dispute” seems such a quaint, old-fashioned notion.  For those who came in late, it means two or more unions having a punch up over which has the right to represent employees within a particular employer’s enterprise. 

This situation arises from the rule (see above) that a union with one member has a right to negotiate an agreement with an employer.  Claims on employers from competing unions at bargaining time will dazzle employers with their creativeness and vigour. 

The Government has tried to address this issue in its transitional legislation.  At least one prominently militant union has signalled its intention to muscle in on other unions’ turf.

Workplace flexibilities

Employees will have the right to ask an employer to allow flexible working arrangements, such as part-time work or variable start and finish times, to allow an employee to care for a child up to school age, or a disabled child up to 18 years of age.

An employer may refuse such a request only on “reasonable business grounds”, which must be provided in writing to the employee. 

Employers will need to be prepared to go further than they might until now have felt comfortable with to accommodate employees seeking these arrangements.  The provision of written reasons in case of a refusal is also going to need careful attention, if employers do not inadvertently create the basis of an “adverse action” claim (see below).

Adverse actions – a new anti-discrimination jurisdiction

Most employers are reasonably aware of their obligations in relation to various pieces of state and federal anti-discrimination legislation.  The Fair Work Bill adds a whole new twist.

The bill contains provisions which prohibit, in very general terms, discrimination by employers against employees for reasons such as race, religion, sex, marital status and a range of other reasons that are now a familiar part of the employment landscape. 

If the employee is unable to meet the inherent requirements of the position, then a claim may not succeed. 

So what is the point of adding another layer of legislation in this field?  There is a big difference between current anti-discrimination legislation and the Fair Work Bill.  Under the new legislation, if a claim is made by an employee or a group of employees, the onus will be on the employer to show the court it did not discriminate against the employee. Furthermore, an employer found to be in breach may be subject to civil penalties.

The lesson for employers:

The Fair Work legislation is about much, much more than reintroducing unfair dismissal rights.  The legislation is far reaching, and creates a number of potential pitfalls for employers. 

While this article deals with only a few of those issues, in some respects, the legislation winds back the law 20 years or more.

Employers need to understand how this legislation will impact their businesses, or they will find themselves breaching laws they never knew existed.

Peter Vitale is the principal of CCI Victoria Legal

What is your view of the new legislation? Share your thoughts in the Comments field below.