WR 2009/2: Transition to the Fair Work Act 2009
This advice is to inform Agencies and Authorities of transitional arrangements in the lead up to the commencement of the Fair Work Act 2009 (FW Act) on 1 July 2009.
2. Existing industrial agreements will continue to operate following the commencement of the FW Act, and will become ‘transitional instruments’.
3. These transitional instruments will cease to operate when terminated or replaced by a new enterprise agreement made under the FW Act.
4. Parties to agreements that were certified by the Australian Industrial Relations Commission prior to 27 March 2006 have until 31 December 2009 to apply to Fair Work Australia to have those agreements extended and/or varied. After this date, extension and variation of certified agreements will no longer be possible.
Agreements currently under negotiation
5. Agencies and Authorities that are close to completing negotiations for a new employee collective or union collective agreement should take into account the transitional arrangements in place for agreements made on or before 30 June 2009.
6. Where a new employee collective agreement has been made and approved on or before 30 June 2009, it must be lodged with the Workplace Authority within 14 days of approval in order for it to undergo the approval processes of the current Workplace Relations Act 1996 (WR Act).
7. An agreement is approved when:
- the employees who will be subject to the agreement are given a reasonable opportunity to decide whether they want to approve the agreement; and
- a majority of employees who vote decide to approve the agreement, via a vote or another method.
8. Regulation 4.01 of the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009 may have an impact on the transition of union collective agreements made under the Workplace Relations Act 1996 (WR Act). This may impact on agencies currently negotiating.
9. The Regulation will allow union collective agreements that have been made on or before 30 June 2009 in accordance with the WR Act but which have not been approved by the relevant employees on or before 30 June 2009 to be approved and lodged with the Workplace Authority between 1 July 2009 and 30 September 2009.
10. To be covered by the provisions of this regulation, the union collective agreement must also be signed and dated by the parties who made the agreement (i.e. the employer and the union(s)) on or before 30 June 2009. Under the Australian Government Employment Bargaining Framework (AGEBF) this may only occur following approval of the proposed agreement by the Agency Minister.
11. The effect of the AGEBF is such that any proposed union agreement would need to have been assessed by DEEWR and approved by the responsible Minister by 30 June 2009 in order to meet the requirement that an agreement on the terms of the agreement has been made between the relevant union and the employer and before the Agency Head can sign the agreement as the employer.
12. Where a proposed new agreement is not made or approved as outlined above on or before 30 June 2009, bargaining will need to recommence under the FW Act.
Bargaining under the Fair Work Act
13. Under the FW Act, employers and employees are able to make enterprise agreements. Enterprise agreements are collective agreements that will cover a group of employees of an employer.
14. The FW Act specifies new requirements which must be met at the commencement of bargaining for an enterprise agreement, including:
- employers are required to take all reasonable steps to provide employees with a notice of employee representational rights (s.173 of the FW Act); and
- all bargaining representatives are required to meet the good faith bargaining requirements.
15. The notice of employee representational rights describes the right of employees to appoint a person of their choice as their bargaining representatives to negotiate a new enterprise agreement on their behalf (s.176). The notice must also explain that if the employee is a member of an employee organisation and has not appointed another person as their bargaining representative then the organisation is automatically the bargaining representative for the employee.
16. A template for the notice of employee representational rights, as is prescribed by the Fair Work Regulations 2009 (FW Regulations), is at Attachment A.
17. The notice must be provided to employees as soon as practicable, and not later than 14 days, after the notification time for the agreement (which, in the context of Australian Government employment, will generally be the time when the employer agrees to bargain or initiates bargaining for the agreement). An employer is not required to give another notice of employee representational rights if the employer has already given the employee such a notice within a reasonable period before the notification time for the agreement.
18. Regulation 2.04 of the FW Regulations prescribes how the notice may be given. In summary, the notice may be given to an employee personally, sent via post, emailed, placed on the employer’s intranet with an accompanying email notifying employees, faxed, displayed in a conspicuous location in the workplace that is known and readily accessible to the employee, or provided to the employee via another suitable method.
19. A ballot for approval of a new enterprise agreement cannot commence until at least 21 days after the last notice of employee representational rights in relation to the agreement is given.
20. Agencies and Authorities will need to ensure that proposed enterprise agreements to be lodged under the FW Act meet the new content requirements, including containing:
- only terms that are about permitted matters,
- a flexibility term,
- a consultation term,
- a term for dealing with disputes, and
- a nominal expiry date.
21. The FW Regulations contain model clauses for flexibility and consultation terms which may assist agencies in negotiating agreements. These model clauses are at Attachments B and C respectively.
22. In the period between 1 July 2009 and 31 December 2009, enterprise agreements will continue to be assessed against the current No-Disadvantage Test. From 1 January 2010, enterprise agreements will instead be assessed against the new Better Off Overall Test. Further details on the Better Off Overall Test will be provided in a separate WR Advice.
23. Attachment D provides some illustrative examples of the effect of the transitional arrangements.
The National Employment Standards
24. Agencies and Authorities should be aware that the National Employment Standards (NES) apply from 1 January 2010. Importantly, the NES will apply to existing agreements on a no detriment basis, as well as agreements made on or after that date.
25. This means that the NES will prevail over an existing agreement to the extent that the agreement is detrimental, in any respect, when compared to an entitlement in the NES.
26. Agencies and Authorities negotiating new agreements should ensure those agreements will be compliant with the NES ahead of its implementation. DEEWR will endeavour to identify, where possible, clauses which may not be consistent with the NES when assessing proposed agreements against the AGEBF. To this end, Agencies and Authorities are encouraged to seek a preliminary assessment of a proposed agreement by DEEWR before finalising its terms. Further details on the NES will be provided in a separate WR Advice.
27. As part of the NES, from 1 January 2010 employers must provide new employees with a copy of the Fair Work Information Statement before, or as soon as practicable after, the employee starts employment. The Fair Work Ombudsman will prepare and publish the Fair Work Information Statement.
The Australian Government Employment Bargaining Framework
28. A revised Australian Government Employment Bargaining Framework will be released in the near future.
Further information and advice
29. Should you require any further information or assistance on this matter, please contact your APSC Client Contact directly or email email@example.com. Additional information is also available from www.fairwork.gov.au or by contacting the Fair Work Infoline on 13 13 94.
Public Sector Branch
 The Workplace Authority will operate until 31 January 2010 to finalise outstanding actions under the Workplace Relations Act 1996.
Attachment A - Notice of employee representational rights
Fair Work Act 2009, subsection 174 (6)
[Name of employer] gives notice that it is bargaining in relation to an enterprise agreement ([name of the proposed enterprise agreement]) which is proposed to cover employees that [proposed coverage].
What is an enterprise agreement?
An enterprise agreement is an agreement between an employer and its employees that will be covered by the agreement that sets the wages and conditions of those employees for a period of up to 4 years. To come into operation, the agreement must be supported by a majority of the employees who cast a vote to approve the agreement and it must be approved by an independent authority, Fair Work Australia.
If you are an employee who would be covered by the proposed agreement:
You have the right to appoint a bargaining representative to represent you in bargaining for the agreement or in a matter before Fair Work Australia about bargaining for the agreement.
You can do this by notifying the person in writing that you appoint that person as your bargaining representative. You can also appoint yourself as a bargaining representative. In either case you must give a copy of the appointment to your employer.
[If the agreement is not an agreement for which a low-paid authorisation applies — include:]
If you are a member of a union that is entitled to represent your industrial interests in relation to the work to be performed under the agreement, your union will be your bargaining representative for the agreement unless you appoint another person as your representative or you revoke the union’s status as your representative.
[If a low-paid authorisation applies to the agreement — include:]
Fair Work Australia has granted a low-paid bargaining authorisation in relation to this agreement. This means the union that applied for the authorisation will be your bargaining representative for the agreement unless you appoint another person as your representative, or you revoke the union’s status as your representative, or you are a member of another union that also applied for the authorisation.
[if the employee is covered by an individual agreement-based transitional instrument — include:]
If you are an employee covered by an individual agreement:
If you are currently covered by an Australian Workplace Agreement (AWA), individual transitional employment agreement (ITEA) or a preserved individual State agreement, you may appoint a bargaining representative for the enterprise agreement if:
- the nominal expiry date of your existing agreement has passed; or
- a conditional termination of your existing agreement has been made (this is an agreement made between you and your employer providing that if the enterprise agreement is approved, it will apply to you and your individual agreement will terminate).
If you have any questions about this notice or about enterprise bargaining, please speak to either your employer, bargaining representative, go to www.fairwork.gov.au, or contact the Fair Work Australia Infoline on 1300 799 675
Attachment B - Model flexibility term
(Regulation 2.08, Schedule 2.2)
Model flexibility term
- An employer and employee covered by this enterprise agreement may agree to make an individual flexibility arrangement to vary the effect of terms of the agreement if:
- the agreement deals with 1 or more of the following matters:
- arrangements about when work is performed;
- overtime rates;
- penalty rates;
- leave loading; and
- the arrangement meets the genuine needs of the employer and employee in relation to 1 or more of the matters mentioned in paragraph (a); and
- the arrangement is genuinely agreed to by the employer and employee.
- the agreement deals with 1 or more of the following matters:
- The employer must ensure that the terms of the individual flexibility arrangement:
- are about permitted matters under section 172 of the Fair Work Act 2009; and
- are not unlawful terms under section 194 of the Fair Work Act 2009; and
- result in the employee being better off overall than the employee would be if no arrangement was made.
- The employer must ensure that the individual flexibility arrangement:
- is in writing; and
- includes the name of the employer and employee; and
- is signed by the employer and employee and if the employee is under 18 years of age, signed by a parent or guardian of the employee; and
- includes details of:
- the terms of the enterprise agreement that will be varied by the arrangement; and
- how the arrangement will vary the effect of the terms; and
- how the employee will be better off overall in relation to the terms and conditions of his or her employment as a result of the arrangement; and
- states the day on which the arrangement commences.
- The employer must give the employee a copy of the individual flexibility arrangement within 14 days after it is agreed to.
- The employer or employee may terminate the individual flexibility arrangement:
- by giving no more than 28 days written notice to the other party to the arrangement; or
- if the employer and employee agree in writing — at any time.
Attachment C - Model consultation term
(Regulation 2.09, Schedule 2.3)
Model consultation term
- This term applies if:
- the employer has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its enterprise; and
- the change is likely to have a significant effect on employees of the enterprise.
- The employer must notify the relevant employees of the decision to introduce the major change.
- The relevant employees may appoint a representative for the purposes of the procedures in this term.
- a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
- the employee or employees advise the employer of the identity of the representative;
the employer must recognise the representative.
- As soon as practicable after making its decision, the employer must:
- discuss with the relevant employees:
- the introduction of the change; and
- the effect the change is likely to have on the employees; and
- measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and
- for the purposes of the discussion — provide, in writing, to the relevant employees:
- all relevant information about the change including the nature of the change proposed; and
- information about the expected effects of the change on the employees; and
- any other matters likely to affect the employees.
- discuss with the relevant employees:
- However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.
- The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.
- If a term in the enterprise agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in subclauses (2), (3) and (5) are taken not to apply.
- In this term, a major change is likely to have a significant effect on employees if it results in:
- the termination of the employment of employees; or
- major change to the composition, operation or size of the employer’s workforce or to the skills required of employees; or
- the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
- the alteration of hours of work; or
- the need to retrain employees; or
- the need to relocate employees to another workplace; or
- the restructuring of jobs.
- In this term, relevant employees means the employees who may be affected by the major change
Attachment D - Illustrative examples - transitional arrangements
Example 1 – Agreement made and approved on or before 30 June 2009
Agency One has negotiated a new union collective agreement with employees and unions, which has been assessed by DEEWR as being consistent with the AGEBF and approved by its Minister. The proposed new agreement was approved by Agency One’s employees in a ballot which ended on 26 June 2009.
In this scenario, as the agreement was made and approved before 30 June 2009, the agreement must be lodged with the Workplace Authority within 14 days after the approval. Assuming the agreement is lodged with the Workplace Authority within 14 days of 26 June 2009 and approved by the Workplace Authority, it will commence operation seven days after the Workplace Authority issues a notice that the agreement has passed the no disadvantage test.
Example 2 – Agreement made on or before 30 June 2009 but not yet approved
Agency Two reached agreement with unions for a new union collective agreement on 20 June 2009. The proposed agreement was then provided to DEEWR for assessment and subsequently approved by Agency Two’s Minister, as outlined at paragraph 11.
Following these processes, the agreement was signed and dated by the employer and the unions in accordance with the requirements set out in the Fair Work (Transitional Provisions and Consequential Amendments) Regulations 2009..
Agency Two can now put the agreement to employees for their approval. Agency Two will have until 30 September 2009 to get the approval of the relevant employees and to lodge the agreement with the Workplace Authority.
- Under the WR Act employees must have, or have ready access to, the agreement in writing for a period beginning seven days before the agreement is approved (unless all of the eligible employees agree to waive this period). An agreement is approved when the relevant employees have been given a reasonable opportunity to decide whether they want to approve the agreement and a majority of the employees who vote decide to approve the agreement.
Example 3 – Agreement not finalised on or before 30 June 2009
Agency Three has a current union collective agreement which reaches its nominal expiry date on 30 September 2009. Agency Three started negotiating with the union for a new agreement before 30 June 2009, but these negotiations are only at a relatively early stage.
Agency Three will need to recommence bargaining under the FW Act. From 1 July 2009 Agency Three must now provide its employees with a notice of employee representational rights consistent with the FW Act, and Agency Three’s employees may now appoint bargaining representatives. If at least one employee of Agency Three is a member of a union which is entitled to represent Agency Three employees, that union is automatically a bargaining representative.