The federal government has introduced the Fair Work Amendment Bill 2014 (Cth) (Bill) into Parliament to start implementing the limited changes to the Fair Work Act 2009 (Cth)(Act) foreshadowed during the recent election campaign.  In this article, we provide an overview of the changes that have been proposed in the Bill.

Unpaid parental leave

Under the Act, an employee can request to extend their period of parental leave so that the total duration of the parental leave is up to a maximum of 24 months.  While an employer can already refuse a request on reasonable business grounds, the Bill proposes to further limit an employer’s ability to do so unless the employer has given the employee a reasonable opportunity to discuss the request.

Payment in lieu of annual leave on termination

If an employee’s employment ends, the Act currently provides that they are entitled to be paid for their accrued but untaken annual leave at a rate which includes any annual leave loading payable under an applicable modern award or enterprise agreement, regardless of how that instrument deals with the payment of annual leave loading when providing an employee with a payment in lieu of annual leave on termination.  The Bill proposes to clarify the Act so that if the modern award or enterprise agreement provides that an employee is not entitled to annual leave loading on a payment in lieu of annual leave on termination, that the annual leave loading will not be payable.

Accrual of leave when absent from work receiving workers’ compensation benefits

The Bill clarifies that if an employee will be absent from work for a period while receiving workers’ compensation benefits, that the employee will not be able to take or accrue annual leave, personal/carer’s leave or community service leave for that period.

Individual flexibility arrangements

Currently, the Act requires that all modern awards and enterprise agreements include a flexibility term which allows an employer and an employee to vary the effect of certain terms of an applicable modern award or enterprise agreement.

The Bill proposes a number of changes to individual flexibility arrangements, including:

  • extending the notice period to terminate an individual flexibility arrangement to 13 weeks;
  • require a flexibility term in an enterprise agreement to allow the employer and employee to vary, at a minimum, terms of the enterprise agreement dealing with: arrangements about when work is performed, overtime rates; penalty rates; allowances; and leave loading; and
  • requiring an individual flexibility arrangement to include a statement by the employee setting out why the employee believes that the individual flexibility arrangement meets the genuine needs of the employee and results in the employee being better off overall.

Enterprise agreements

The Bill proposes to change the manner in which protracted negotiations for a greenfields agreement are resolved by allowing an employer to submit a greenfields agreement to the Fair Work Commission for approval if the terms have not been finalised with the relevant union(s) within three months of the negotiations starting.  In approving such an agreement, the Fair Work Commission will need to be satisfied that the proposed enterprise agreement, considered overall, provides for pay and conditions which are consistent with the prevailing pay and conditions within the relevant industry for the performance of equivalent work.

Protected industrial action

The Bill proposes that the Fair Work Commission will not be able to authorise the taking of industrial action by employees until an employer has either agreed to start bargaining for an enterprise agreement, or an employer has been compelled to start bargaining for an enterprise agreement as a result of a majority support determination or a low paid authorisation.

Transfer of business

Currently under the Act, if an employee takes up employment with an associated entity of their employer to perform work which is the same, or substantially the same, as the work they performed for their old employer, and the employee starts work for the new employer within three months of their employment with the old employer ending, there will have been a transfer of business.  The Bill clarifies that if the employee sought to take up employment with the new employer of their own initiative, that a transfer of business will not have occurred.

Right of entry

The Bill proposes to make a number of changes to the right of a permit official to enter an employer’s premises, principally undoing the changes that were made to the Act last year.  In particular, the Bill proposes that:

  • an employer will not have to provide transport and accommodation to a permit holder who is exercising their right of entry at a remote location
  • a union official will only be able to enter a workplace where the union is covered by an applicable enterprise agreement, unless employees request otherwise
  • an employer will be able to require a union official to hold discussions in a particular room, provided that requirement is reasonable
  • the Fair Work Commission will be able to deal with disputes about the frequency of a union visiting an employer’s premises.

Other amendments

The Bill also proposes a number of additional amendments that were recommended as a result of the review of the Act in 2012 and which had not previously been introduced.

What now?

The Bill will still need to be passed by both houses of Parliament before the changes to the Act take effect, and it is likely that at least some of the changes will be resisted in the Senate where the federal government does not hold the balance of power.

Gadens will be closely monitoring the progress of the Bill, and will provide further updates on changes to the Bill as it progresses through Parliament.