What you should know about the new Fair Work Act
Earlier this year (7 April 2009), Australia’s much anticipated employment legislation The Fair Work Act 2009 passed through federal parliament. The introduction of the Act, which became effective as of 1 July 2009, spells the end of the controversial Workplace Relations Act 1996 that was implemented by the Howard Government during its time in power.
There are a lot of changes taking place that both employers and employees should be aware of. In short, some of the core objectives of the new Fair Work Act include creating a new instrument called the Individual Transitional Employment Agreement (ITEA’s), setting minimum conditions for all National Employment Standard (NES) and award modernisation, a radical overhaul of the current Unfair Dismissal laws, ensuring that only workplace agreements, agreement variations and terminations that meet fundamental requirements (such as employee approval) would come into operation and abolishing the Australian Industrial Relations Commission and the Workplace Ombudsman and replacing it with Fair Work Australia.
It is important to understand that some of the changes have taken effect as at 1 July 2009 and others will not be in operation until a later date. For example, The National Employment Standards and award modernisation commence on 1 July 2010.
Introduction of Fair Work Australia
In line with the new legislation the Federal Government has also introduced new governing organisations to oversee and regulate employment conditions in Australia. The Australian Industrial Relations Commission and the Workplace Ombudsman will cease to operate and will instead be replaced with Fair Work Australia and Fair Work Ombudsman. Fair Work Australia is the national workplace relations tribunal. It is an independent body that is responsible for a range of functions including minimum wages and employment conditions, enterprise bargaining, industrial action, dispute resolution, termination of employment and other workplace matters. The Fair Work Ombudsman is a service available to all Australians and offers advice to assist with understanding employer’s and employee’s rights and responsibilities in the workplace. It is important to know that the Ombudsman does not deal with Unfair Dismissal matters.
New Unfair Dismissal Laws
Under the Fair Work Act 2009, a person is considered to have been unfairly dismissed if:
(a) The person has been dismissed; and
(b) The dismissal was harsh, unjust or unreasonable; and
(c) The dismissal was not consistent with the Small Business Fair Dismissal Code.
The Small Business Fair Dismissal Code is available to employers of fewer than 15 employees. Part of the new code contains a checklist that an employer can choose to complete at the time of a dismissal and should be retained in the event of any future unfair dismissal claims. Whilst it is not a requirement for employers to complete the checklist it could prove to be useful down the track.
Some key changes to unfair dismissal that should be noted include:
• Small business employees can only claim unfair dismissal after they have served a qualifying period of 12 months. However, for larger business the qualifying period is reduced to six months. For qualifying purposes, a small business is defined as a business which employs less than 15 employees at the relevant time.
• There no longer exists a ban on employees bringing unfair dismissal proceedings against their employer because of number of employees their employer engages. Generally, those who engage as little as 2 or as many as 200 employees can be subject to an unfair dismissal claim.
• The Small Business Fair Dismissal Code – compliance with the code will generally be considered an acceptable defence to an unfair dismissal claim. However, it should be noted that the Code largely mirrors the previous practice of the Industrial Relations Commission in determining unfair dismissals and it is not likely that it will provide any substantial protection for small businesses.
• “Operational reasons” are no longer a defence to a claim of unfair dismissal. However, a dismissal is not considered unfair if it was done through a genuine redundancy.
• Applications for a remedy for unfair dismissal are to be made to the new agency Fair Work Australia, the application must be made within 14 days after the dismissal took effect.
It is simply impossible to discuss all of the significant changes in one brief article so we have outlined two of the most notable aspects here on this occasion.
The introduction of the Fair Work Act will see dramatic changes in workplaces across the country. Whether you are an employer or an employee if you have any questions or would like more information on how the new laws will affect you please contact us on 1300 QUINNS or click here to submit an online enquiry.