It took more than two years but the first amendments to the Fair Work Act 2009 under this Government, which passed both Houses of Parliament on 11 November 2015, came into effect on Friday 27 November 2015, coinciding with the Thanksgiving holiday in the U.S.

What started off in February 2014 as a significant package of reforms is now a shadow of its former self, with comprehensive compromises being made to secure the support of the independents in the Senate.

The changes are so limited in nature the field is still wide open for more meaningful reform to come.

What are the Changes?

Perhaps the most important change is the ability to break deadlocks in the negotiation of Greenfields Agreements. However, there are also changes restricting protected action ballot orders and extending unpaid parental leave.

Greenfields Agreements

Under the new regime, if parties are unable to finalise a Greenfields Agreement within six months of a 'notified negotiation period' officially commencing, the employer may apply to the Fair Work Commission to approve the agreement. This is a compromise on the original three month period sought by the Government.

The regime provides, however, that the Fair Work Commission may only approve a Greenfields Agreement in circumstances where the pay and conditions under the agreement meets prevailing standards. The amendment intends to address the prevailing situation where there is no mechanism to break deadlocks when negotiations reach an impasse.

While the intention is worthy and a much sought after right by the construction and resources sector, the requirement for any agreement to meet 'prevailing industry standards' will mean that major projects will still be measured against often unreasonably high wages and conditions in place in these sectors. It does not present the opportunity for companies to obtain a Greenfields Agreement in circumstances where the deal on offer is designed to undercut what may be paid to workers on similar types of projects and therefore will not prompt significant reform in this sector.

Protected Action Ballot Orders

The Fair Work Amendment Act 2015 restricts the availability of unions to initiate protected industrial actions in circumstances where the employer has refused to bargain.

The amendment essentially overrules previous decisions which have held that a protected action ballot order may be granted even if the has refused to bargain.

This will only be available in limited circumstances. These circumstances include

  • when bargaining has already commenced
  • when the union has obtained a Majority Support Determination in favour of bargaining.

The practical effect of this amendment is that it creates an extra hurdle for unions which want to take protected action when bargaining has not started as a result of the employer refusing to bargain.

The amendment places employers who refuse to bargain in a better position with respect to protected action although this is likely simply to delay, rather than abolish the risk of protected action. In reality, if support amongst the workforce exists for bargaining, the union will readily be able to obtain a Majority Support Determination and then make an application for a protected action ballot.

Extending Unpaid Parental Leave

This is a somewhat simple amendment which is likely to reflect usual practice for most employers. The amendment provides that an employer must not refuse a request for an extension of the period of unpaid parental leave unless the employer has given the employee a reasonable opportunity to discuss the request.

The rationale for imposing this requirement is, on the one hand, to help employees balance their work and family commitments and, on the other hand, to help employers maintain skilled workers who have caring responsibilities.

Next Steps

Now that this is finally operational, the issue for 2016 is whether the Government will develop an ambitious Industrial Relations (IR) reform package to take to the 2016 election, or whether it will approach IR reform in a piecemeal way by careful dealing, as with the 2015 legislation, with crossbench Senators

Many of the important elements of this Bill were dropped and never made it finish line. It remains to be seen whether these proposals will be revived and have a better chance of success with a different Prime Minister and Minister at the helm of negotiations.