From 1 January 2014, employers will need to ‘genuinely consult’ with employees about changes to their regular roster or ordinary hours of work.
The new obligation is a result of amendments to the Fair Work Act 2009 (Cth) (Act) (amendments) which provide that all modern awards and enterprise agreements made and approved on or after 1 January 2014 must include a term requiring the consultation.
The new provisions form part of the ‘Family Friendly Measures’ in the Act and are intended to encourage discussion between employers and employees. Genuine consultation will require employers to consider the impact of proposed changes on employees, including their family and caring responsibilities.
Obligation to consult
Under the amendments, the new consultation terms must require an employer who proposes a change to an employee’s regular roster or ordinary hours of work to:
- provide information to the employee about the proposed change;
- invite the employee to provide their views about how the changes will affect them (including in relation to family and carer responsibilities); and
- consider any views about the impact of the changes given by the employee.
The term must also allow employees to be represented in consultation, for example by an elected employee or representative from an employee organisation.
Importantly, the amendments do not require the employer to reach any agreement with an employee provided they engage in genuine consultation and properly consider the employee’s position.
‘Regular roster’ is not defined in the Act, however the explanatory memorandum to the amendments provides that there will be no obligation to consult with an employee who has irregular, sporadic or unpredictable hours. The obligation will, however, apply in circumstances where an employee has an understanding or reliance on systematic or regular hours, irrespective of whether or not the employee is a casual employee.
If an employer fails to comply with a consultation term, it will be in breach of the relevant modern award or enterprise agreement. Breaches may be enforced by application to an eligible State or Territory Court and attract civil penalties of $51,000 for a body corporate.
What will the consultation terms look like?
Modern award term
On 7 November 2013 the Fair Work Commission (FWC) proposed that the standard consultation term currently in modern awards (applying to consultation over major workplace change), be varied to reflect the new legislative requirement. The draft term proposed by the FWC can be accessed here.
The FWC invited submissions on the draft term to be made by 6 December 2013. To date no submissions have been published, and it is likely that the draft term will not change. The FWC must make a final determination on the term by 31 December 2013.
Model term for enterprise agreements
While enterprise agreements must include a consultation term that complies with the amendments, employers and employees may negotiate the wording of the term if they do not wish to adopt the model consultation term prescribed by the Fair Work Regulations 2007 (Cth) (model consultation term). Enterprise agreements that do not contain a consultation term will be taken to include the model consultation term.
What should employers do?
To prepare for the upcoming changes, employers should:
identify any employees who are covered by a modern award or enterprise agreement and will be protected under the new consultation terms;
ensure they are familiar with the new consultation terms in any relevant modern awards and the model term prescribed by the regulations;
consider the new consultation requirements when bargaining for a new enterprise agreement, understanding that if a consultation term is not agreed, the model consultation term will apply;
ensure internal policies and procedures are consistent with the new consultation requirements; and
document consultation meetings as proof of compliance with the new obligations to combat any potential claims of breach of a modern award or enterprise agreement.