Timeline

The following timeline outlines key dates leading up to the introduction of Australia's new IR legislation and also some of the main changes that have been introduced.

  • March 2006: Howard Government introduces WorkChoices reforms. The changes include introduction of Australian Fair Pay and Conditions Standard enshrining key minimum employment entitlements, significant restrictions on unfair dismissal claims and curtailment of the jurisdiction of the Australian Industrial Relations Commission.
  • April 2007: ALP releases 'Forward with Fairness' IR policy which commits the ALP in government to establishing 'a new industrial relations system for Australia that is fairer, simpler and more productive'.
  • November 2007: ALP wins federal election following campaign which directs public attention to impact of WorkChoices with vocal backing from union movement.
  • March 2008: Workplace Relations Amendment (Transition to Forward with Fairness) Act 2008 commences. Key aspects include prohibition on new AWAs, introduction of interim individual statutory contracts known as ITEAs and reinvigoration of award modernisation process.
  • November 2008: Fair Work Bill 2008, which proposes a complete re-write of Australia's federal IR legislation, introduced into federal parliament.
  • March 2009: Fair Work Act 2009 passes parliament in amended form following eleventh hour deal brokered between ALP and cross bench senators. Key elements include:
  • Establishment of Fair Work Australia (to replace AIRC, Workplace Authority and Workplace Ombudsman).
  • Introduction of National Employment Standards or NES. The NES broadly reflect the minimum entitlements of employees under the current Australian Fair Pay and Conditions Standard (maximum working hours, annual leave, personal leave, parental leave, etc) but also include a new right for parents and carers to request flexible working arrangements plus new legislated rights to community service leave and redundancy pay.
  • The NES will be supplemented by new modern awards which will set the minimum terms and conditions for employees in particular industries or occupations. Modern awards will commence from 1 January 2010.
  • Unfair dismissal claims will again become an issue for SMEs. Employees of small businesses (less than 15 employees) who have worked for 12 months will be able to make a claim. Employees of other businesses will only need to have worked for six months to be able to make a claim. Employers will also need to become familiar with the new Small Business Fair Dismissal Code and the concept of 'genuine redundancy' (which replaces the current genuine operational reasons exemption).
  • Introduction of a new system of enterprise agreement making including new requirement for parties to bargain with one another in good faith and for agreements to pass the 'better off overall test' or BOOT (not the current no-disadvantage test).
  • New rules which expand the situations where the industrial instruments that cover one employer will transfer to a new employer in a transfer of business (including asset sales, transfer between associated entities, outsourcing and insourcing). Different provision is also made for the treatment of entitlements of transferring employees.
  • Expansion of union rights of entry.

In the same month, the Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009 is introduced into parliament to deal with the technical detail of how parties operating under the current IR system will transition into the new regime from 1 July 2009. The legislation is quite long and complex. Key elements include:  

  • Existing industrial instruments (to be known as 'transitional instruments') will continue to operate past their nominal expiry date until terminated or replaced by a new agreement.
  • There will be a six month bridging period during which new enterprise agreements will continue to be assessed against the current no-disadvantage test, not the 'better off overall test', which will apply from 1 January 2010.
  • The new transfer of business rules will operate in relation to transactions and restructures that complete on or after 1 July 2009.
  • From 1 January 2010, the NES will apply to all employees in the federal system including those working under transitional instruments.
    • June 2009: Transitional legislation and further legislation to deal with referral of state industrial relations powers and consequential amendments to other federal laws passes parliament. Government also introduces draft legislation to deal with compulsory paid maternity leave for eligible employees from 2011.
    • 1 July 2009: Majority of Fair Work Act 2009 provisions (apart from National Employment Standards and modern awards) commence operation.
    • 1 January 2010: New National Employment Standards and modern awards to commence.

Conclusion

Particularly in relation to collective agreement-making and unfair dismissal, the recent legislative changes in this area mark a significant departure from the way in which things have worked under WorkChoices.

SMEs are likely to be especially impacted by the renewal of the unfair dismissal jurisdiction which, for employers with less than 100 employees, has not been on the radar since 2006.

Beyond that, in many ways, the new legislation requires businesses and employees alike to rethink and change the way in which things have been done in the workplace. Those who are most familiar with the new system will be best placed to respond to the challenges it presents.