There have been a number of updates from the Fair Work Commission (Commission).
Income and wages
The high income threshold for non-award/enterprise agreement covered employees in unfair dismissal cases was increased to $142,000 for dismissals occurring on or after 1 July 2017. The compensation limit for dismissals occurring on or after this date has increased to $71,000.
The Commission also issued its national wage case decision, increasing the national minimum wage by 3.3% to $694.90 from 1 July 2017. The increase flows through to all minimum award rates of pay.
The Commission ruled that a casual conversion clause should be inserted into 85 modern awards which do not already have a clause allowing eligible causals to elect to convert to full-time or part-time employment.
In changes which were expected to come into effect in late August 2017, casual employees will be able to elect to convert to a permanent position if they have been employed for 12 calendar months, and they have worked a pattern of hours on an ongoing basis which, without significant adjustment, could continue to be performed in accordance with the full-time or part-time provisions of the relevant award. Employers will be able to refuse a request for casual conversion if:
• to accommodate them in full-time or part-time employment, it would require a significant adjustment to the employee’s hours of work;
• it is known or reasonably foreseeable that the employee’s position will cease to exist;
• the employee’s hours of work will significantly change or be reduced within the next 12 months; or
• there are other reasonable grounds to do so based on facts which are known or reasonably foreseeable.
The Better Off Overall Test
Recent data shows that the Commission’s “triage” process for assessing whether enterprise agreements pass the Better Off Overall Test (BOOT) is resulting in closer scrutiny of enterprise agreements, leading to a significant increase in employers being required to give undertakings to the Commission in order to get their agreement approved. The triage process, which commenced as a pilot in October 2014, was expanded to all agreement applications late last year after the Full Bench decision to terminate the Coles Supermarkets agreement because it failed the BOOT.
Prior to the triage pilot, the Commission approved 74% of single enterprise agreements without undertakings, compared to 39% in the first six months of 2017. The tribunal approved 20% of approval applications ahead of the pilot with one or more undertakings, compared to 43% in 2017. The data is consistent with our anecdotal observations of employers being required to provide increasingly detailed explanations of the operation of their proposed agreement with respect to the BOOT, with the Commission adopting a “line by line” approach in comparing proposed agreements to the relevant modern award.
Three bills proposing amendments to the Fair Work Act 2009 (Cth) (FW Act) have been introduced into Parliament:
• The Fair Work Amendment (Corrupting Benefits) Bill 2017, which has passed both houses, will require bargaining representatives for a proposed enterprise agreement to disclose details of expected financial benefits. This will extend to employers, employer organisations, and unions. It also prohibits the payment of illegitimate and “corrupting benefits” being exchanged between businesses, employees, unions, or union officials, with exposure to significant criminal penalties. The prohibition does not apply to benefits with a nominal value of less than $420. The Bill received Royal Assent on 16 August and will take effect within six months.
• The Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Bill 2017, which is currently before the senate, is intended to stop automatic reviews of modern awards every four years, a change which is supported by employers and unions.
• The Fair Work Amendment (Protecting Vulnerable Workers) Bill 2017 was passed by the Senate on 4 September 2017. The Bill amends the FW Act by boosting the evidencegathering powers of the Fair Work Ombudsman (and grants powers similar to those available to corporate regulators such as ASIC or the ACCC), and increases the maximum fines for underpayments to $126,000 for individuals and $630,000 for bodies corporate. The Bill would also make franchisors and holding companies responsible for underpayments by franchisees or subsidiaries where the responsible franchisor entity had a significant degree of influence or control over the franchisee’s affairs, knew or ought to have reasonably known of the contraventions, and failed to take reasonable steps to prevent them. The Bill will become law following Royal Assent, with the new responsibilities for franchisers and holding companies starting six weeks later.
Penalty rates continues to remain a hot topic following the Commission’s ruling in late February this year in favour of reducing Sunday and public holiday penalty rates in the retail sector.
The Commission decided to phase in the cuts to Sunday penalty rates (from 200% to 150% for full-time and part-time employees; and from 200% to 175% for casual employees) over a period of four years. They were subject to an initial decrease of 5% from 1 July 2017, which will be followed by 15% and 10% decreases each year from 1 July 2018 for permanent and casual employees respectively.
While the transition is slower than anticipated, it is intended to mitigate hardship for employees reliant on the minimum wage under the General Retail Industry Award 2010 by ensuring the gradual reduction in Sunday penalty rates is offset by the annual increases in the minimum wage. However, the 3.3% increase in minimum award rates of pay nearly completely offsets the initial 5% reduction in Sunday penalty rates, meaning that retailers will need to wait until 1 July 2018 before seeing any real benefit from the penalty rates decision.
United Voice and the SDA have applied for judicial review of the penalty rates decision, arguing that it should be set aside on the basis that it failed to give appropriate weight to the relative living standards and needs of the low paid.
Building Code Update
The Federal Labor party’s last-ditch effort to stave off the impact of the Code for Tendering and Performance of Building Work 2016 was defeated on 9 August 2017, with the Senate refusing to disallow the code. Employers need to consider all available options to achieve code compliance before 1 September 2017, to ensure that they are able to tender for Commonwealth Government funded contracts.
New Work Health & Safety Bill announced for WA
After almost five years, national harmonisation of workplace health and safety laws is one step closer with the Western Australian Government recently approving the development of a Work Health & Safety Bill. The Bill would see Western Australia’s occupational health and safety legislation brought into line with the rest of Australia’s State and Territories, except for Victoria. The Bill will be based on the national Work Health & Safety Act, and supported by industry specific regulations to accommodate for Western Australia’s unique conditions. The Bill will be the subject of an extensive consultation period with stakeholders, and is expected to be introduced to Parliament in approximately two years’ time.