The Fair Work (Transitional Provisions and Consequential Amendments) Bill 2009 was given Royal Assent on 25 June 2009. However, a number of amendments were made by both Houses of Parliament late in the parliamentary process. This article summarises the amendments that were made to the Bill.

The Transitional Act, which comes into effect on 1 July 2009, amongst other things:

  • repeals the Workplace Relations Act (other than Schedules relating to registered organisations and transitionally registered associations) and renames it as the Fair Work (Registered Organisations) Act 2009 (Cth)
  • provides for the application of the National Employment Standards and minimum wages to all national system employees from 1 January 2010
  • establishes rules in relation to the treatment of existing instruments
  • introduces transitional bargaining and agreement-making rules
  • provides for the limited, continued operation of the Australian Fair Pay Commission, Workplace Ombudsman and the Australian Industrial Relations Commission (AIRC)
  • establishes rules to enable state-registered organisations to participate in the new federal workplace relations system, and
  • creates Fair Work Divisions within the Federal Court and Federal Magistrates’ Court.

For a full analysis of the implications of the Transitional Act on your business, see our previous Employee Relations Express.5

Clean break model diluted

Initially, the Bill adopted a ‘clean break’ model for parties who are bargaining as at 30 June

2009. If the parties have not made a workplace agreement by 30 June 2009, they will need to start bargaining again in the new Fair Work system. This meant that a union or employees wishing to take protected industrial action needed to go through a new secret ballot process authorising the action again.

Late amendments to the Bill made by the Senate allow a union or employees to apply to Fair Work Australia for an order that their existing protected action ballot conducted under the Workplace Relations Act authorises industrial action taken after 1 July 2009. Such applications can only be made until 28 July 2009 – after this date, industrial action must be authorised by Fair Work Australia after a secret ballot is conducted in accordance with the Fair Work Act.

Fair Work Australia has the power to make an order that recognises a previous authorisation if it is ‘reasonable in all the circumstances’ and it is satisfied that the parties are genuinely trying to reach agreement in relation to the proposed enterprise agreement. It is unclear what involvement (if any) an employer will have in such applications.

Enterprise award modernisation

The Transitional Act provides a process for enterprise awards to be modernised. Any person covered by an enterprise award can apply to Fair Work Australia to have it modernised or terminated. Making an application does not require the consent of all parties to the award (so an employer or a union could apply). Such applications can now be made from 1 July 2009 until 31 December 2013 (previously under the bill, applications to modernise modern awards could only be made from 1 January 2010). As before, there is no obligation to modernise but if an enterprise award is not modernised by 31 December 2013 it ceases to apply. Employees would fall back to the relevant industry modern award.

Another amendment moved by Independent Senator Nick Xenophon requires the Australian Industrial Relations Commission, when modernising awards, to have regard to the likely effects on the relevant industry or industry sector of any modern award, including on productivity, labour costs and the regulatory burden on businesses. The Commission is also required to consider the state of the national economy, and the likely effects of making the award on the national economy (including employment levels and inflation).

Disputes about interaction between transitional instruments and the National Employment Standards

The National Employment Standards apply to all federal-system employees from 1 January 2010, including those on existing arrangements such as a Work Choices enterprise agreement or a pre-Work Choices certified agreement (‘transitional instrument’). The Transitional Act allows a person covered by a transitional instrument to apply to Fair Work Australia for a determination varying the transitional instrument to:

  • resolve an uncertainty or difficulty relating to the interaction between the instrument and the National Employment standards, and
  • to make the instrument operate effectively with the National Employment Standards.

Recent amendments to these provisions allow Fair Work Australia to compare the entitlements in dispute on a ‘line-by-line’ basis comparing individual terms, or on a global basis comparing entitlements according to particular subject areas.