The Fair Work Amendment Bill 2014 (the Bill) is currently before the Senate. The Bill proposes a number of changes to the Fair Work Act 2009 (Cth) (FW Act) and if passed, will represent the first significant amendments made by the Government since the election in September 2013.

We briefly discuss a few of these proposed changes.

Changes to the making of greenfields agreements

Good faith bargaining requirements under the FW Act do not currently apply to the making of a greenfields agreement. This has caused difficulty for employers in the past as unions often do not agree to reasonable terms.

The proposed changes will see good faith bargaining rules enacted to apply to the negotiation of greenfields agreements. The changes will also allow for a three month negotiation period between the employer and a union. If the employer and the union cannot reach an agreement in that time, the employer can apply to the Fair Work Commission (FWC) for the agreement to be approved even when no agreement has been reached.

Repeal of right of entry provisions introduced in the Fair Work Amendment Act 2013

In 2013, the right of entry provisions under the FW Act were expanded to allow a union official to enter a workplace to hold discussions with employees if it was entitled to represent the industrial interests of relevant employees at the workplace.

If passed, the Bill proposes to repeal the expanded right of entry provisions and only allow right of entry where the union is bound by an award or enterprise agreement that covers a workplace where they have members, or employees eligible to be their members.

Clarification on the payment of annual leave loading upon termination of employment

There has been confusion as to whether annual leave loading is payable on accrued annual leave paid out on termination of employment. Some modern awards specifically deal with this issue and some do not.

It is proposed in the Bill that annual leave loading only be paid out on termination in circumstances where it is explicitly required under the modern award, industrial instrument (such as an enterprise agreement), or it has been specified in the employee’s contract of employment.

Changes to the transfer of business provisions

Currently under the FW Act, the default position is that where a transfer of business has been triggered,  the enterprise agreement (or other ‘transferable instrument’) of the old employer becomes binding on the new employer. Employers are required to seek an order from the FWC to alter that position.

The Bill proposes to change the current default position in circumstances where employees, at their own initiative, seek employment with an associated entity of their employer. In these circumstances, the employee will be subject to the terms and conditions of employment provided by the new employer, not the old employer.

Other changes

Some other changes proposed by the Bill are:

  • greater powers for the FWC to dismiss an unfair dismissal application in certain circumstances;
  • wider minimum requirements for flexibility terms in enterprise agreements;
  • providing that employers must not refuse a request for extended unpaid parental leave unless the employee has been given a reasonable opportunity to discuss the request; and
  • clarification as to the requirements of meeting the ‘better off overall test’ when entering into individual flexibility agreements and expanded notice of termination of those agreements.