Fair Work Act 2009

Last updated

Coat of Arms of Australia.svg
Parliament of Australia
  • An Act relating to workplace relations, and for related purposes
Citation No. 28, 2009 or No. 28, 2009 as amended
Territorial extent States and territories of Australia
Enacted by House of Representatives
Royal assent 7 April 2009
Commenced1 July 2009
Legislative history
Introduced by Rudd government
First reading 25 November 2008
Second reading 1 December 2008
First reading5 December 2008
Second reading11 March 2009
Related legislation
Industrial Relations Act 1988
Workplace Relations Amendment Act 2005
Status: In force

The Fair Work Act 2009(Cth) is an Act of the Parliament of Australia, passed by the Rudd government to reform the industrial relations system of Australia. [1] [2] It replaced the Howard government's WorkChoices legislation, it established Fair Work Australia, later renamed the Fair Work Commission. [3]

Contents

As the core piece of Australian labour law legislation, it provides for terms and conditions of employment, and also sets out the rights and responsibilities of parties to that employment.

The Act established a safety net consisting of a national set of employment standards, national minimum wage orders, and a compliance and enforcement regime. [4] It also establishes an institutional framework for the administration of the system comprising the Fair Work Commission and the Fair Work Ombudsman, The Fair Work Divisions of the Federal Court and Federal Magistrates Court and, in some cases, state and territory courts, perform the judicial functions under the Act. [5]

The Act is the foundation of Australia's industrial relations legal framework, thought to be one of the most complex in the world. [6] [7] [8]

Background

John Howard Howard John BANNER.jpg
John Howard

The Howard government introduced WorkChoices in November 2005, these changes later credited a significant contributor to the defeat of the Coalition and installation of a Labor government committed to repealing the reforms. [9] Joe Hockey, some days after his government lost power, described WorkChoices as "dead". [10]

Introduced in 2008, the Act was explained as creating 'a national workplace relations system that is fair to working people, flexible for business and promotes productivity and economic growth'. [11]

The then Minister for Employment and Workplace Relations, Julia Gillard was responsible for the Act's eventual implementation. Prior to taking office in 2007, Gillard had been responsible as party spokeswoman on industrial relations for negotiating with unions in drafting the Australian Labor Party's policy on industrial relations. [9] This policy was formalised in April 2007 through Forward with Fairness, detailing 'Labor's plan for fairer and more productive Australian workplaces. [12]

Julia Gillard Gillard.jpg
Julia Gillard

Gillard stated in a speech to the Australian Labor Law Association her ambition was to 'establish long-term stability in [the Australian industrial] relations system'. [13] [14] [15] Beginning with the Industrial Relations Act 1988, the preceding two decades had been a prolonged period of repeated and substantial change to the Australian industrial landscape. [14] [16] The system following the passing of the Act was the first Australian labour law regime to last a full ten years in operation since the conciliation and arbitration model which characterised Australian industrial relations for much of the previous century. [14]

A senior member of the Fair Work Commission acknowledged in 2014 that Australia's workplace laws are complex, often requiring specialist legal advice. [17] Gillard has stated a fairer system meant 'in most cases lawyers [would not] be necessary', however under the reform, employers and employees are seeing an increasing risk of litigation and complexity, leading to increased involvement of lawyers. [18]

The Act

Collective bargaining

Collective bargaining is a mechanism which allows employees, employers and representational parties to express their objectives with respect to work. [19] Such bargaining was at the centre of the Australian Labor Party's industrial relations policy. As noted by Woodward, modern awards would provide the 'floor' of entitlements, the base from which further conditions could be bargained. [9] The Act enables bargains to be formalised into an enterprise agreement, which as noted by Naughton and Pittard, is the "principal focus" of the Act. [20]

Part 2-4: Enterprise Agreements

On 1 July 2010, the new bargaining arrangements under the Act became operational. [21] Contrary to the individual arrangements dominant under WorkChoices, the Act emphasises enterprise based bargaining, removing individual Australian Workplace Agreements. [21] The Act continues to outlaw pattern bargaining and removed the distinction between union and non-union agreements. [21]

Under the Act there are three types of enterprise agreement. [22] First, a single-enterprise agreement made between an employer and the employees whom the agreement will cover. [23] Second, a multi-enterprise agreement made between two or more employers, covering the employees of those employers. [24] Third is a 'greeenfields' agreement between an employer and trade union, made in relation to a new business which has not commenced operations. [25]

Better Off Overall Test

The most common type of enterprise agreement is the single-enterprise, and the principal requirement for such an agreement to be approved by the Fair Work Commission is that it passes what is known as the "Better Off Overall Test" (BOOT). [26] The BOOT involves the Fair Work Commission assessing a proposed agreement and ensuring it provides conditions more favourable than current legal minimum entitlements.

Christian Porter Christian Porter Portrait 2015.jpg
Christian Porter

The BOOT is different to its predecessor, the 'no disadvantage test' which allowed passing of a collective agreement provided it would not result in conditions less favourable to those otherwise applicable. Naughton and Pittard note the different language and requirements of the BOOT, suggesting it 'can be interpreted quite differently from the [no disadvantage test]' raising the bar higher to ensure workers are actually better off, rather than simply not disadvantaged. [27]

There has been mostly partisan debate about aspects of the BOOT in its current form. The Industrial Relations Minister Christian Porter in 2020 introduced legislation designed to weaken the BOOT, but withdrew it in March 2021 in the face of opposition from independent crossbenchers. [28] The legislation would have allowed the Fair Work Commission significant discretion to approve an agreement that places workers on conditions less favourable than they otherwise would be entitled. [29] Trade unions and the Australian Labor Party argued such changes would result in cuts to workers pay and opposed the changes. [30]

Good faith bargaining

A core objective of the Act is to enable the facilitation of good faith bargaining. [31] This involves each party making a sincere effort in negotiations, [32] including attending and participating in meetings at reasonable times, disclosing relevant information and considering proposals genuinely and in a timely manner. [33] Capricious or unfair conduct undermining collective bargaining is prohibited. Parties may seek bargaining orders from the Fair Work Commission if they believe the other party has failed to comply with these good-faith bargaining obligations. [32] Good-faith bargaining does not require a bargaining representative to make concessions during bargaining for the agreement, nor does it require a bargaining representative to reach agreement on the terms that are to be included in the agreement.

If one or more of the bargaining parties does not meet the good-faith requirements, the concerned party should first provide the party allegedly not bargaining in good faith with a written notice setting out those concerns to the relevant bargaining representatives, and a reasonable time within which to respond to those concerns. [34] However, Section 229 of the Act states it may not be necessary to comply with the notice requirements should the Fair Work Commission be 'satisfied that it is appropriate in all the circumstances to do so'. [34]

The Fair Work Commission at Melbourne Fair-Work-Commission.png
The Fair Work Commission at Melbourne

If the party does not respond appropriately to the written notice, the Fair Work Commission can make a bargaining order. [35] Should the relevant party continue to ignore the good-faith requirements following this order, the Fair Work Commission can issue a serious breach declaration. [36] If the bargaining representatives have not settled the issue of non-compliance by the end of the post-declaration negotiating period (generally 21 days), the Fair Work Commission can issue a bargaining related workplace determination. [37]

Bargaining agents

The Act stipulates that employers must take all reasonable steps to notify employees of their right to a bargaining agent not later than 14 days after the notification time of the agreement. The notification time is the time when the employer agrees to bargain or initiates bargaining when the FWC determines that there is majority support among employees for collective bargaining, or when a scope order (an FWC-issued order to resolve questions about the employees covered by an agreement) comes into operation. The notice must specify that the employee may appoint a bargaining representative to represent the employee in bargaining for the agreement and a matter before FWC that relates to bargaining for the agreement. An employee organisation cannot be a bargaining representative of an employee unless the organisation is entitled to represent the industrial interests of the employee. A person may revoke their bargaining agent in writing. Bargaining agents are described in Division 3 of the Fair Work Act 2009, and can be the employer, a person the employer appoints in writing, the employee, or a person an employee appoints in writing. [38]

If the employee is a member of an employee organisation that is entitled to represent the industrial interests of the employee and the employee does not appoint another person as their bargaining representative, the organisation will be the bargaining representative of the employee. Instruments for appointing a bargaining representative are also set out in Division 3. An appointment of a bargaining representative comes into force on the day specified in the instrument of appointment. The employer must be given the instrument of appointment of the bargaining agent. For an appointment made by an employer, a copy of the bargaining instrument must be given, on request, to a bargaining representative of an employee who will be covered by the agreement.

Mandatory terms

Mandatory terms in an enterprise agreement are set out in Division 5 of the Act. Agreements must include a flexibility term, that is, a mechanism for allowing variations in the agreement to meet needs of individual employees while still preserving basic entitlements and protections. They must include the obligation for the employer to consult with covered employees about major workplace changes that are likely to have a significant effect on the employees and allow for the representation of those employees for that consultation. The agreed-on base rate of pay cannot be below that set by the relevant modern award.

Key provisions

Part 2-2: National Employment Standards

There are eleven minimum conditions covered under the National Employment Standards:

  • A limit on maximum weekly hours, ensuring employers can not request or require an employee to work more than 38 hours for full-time employees or the ordinary hours of work for a part-time employee. [39]
  • The ability to request flexible working arrangements, allowing for employees to request a change to their working arrangements where such change relates to any of the circumstances listed in the Act, which includes caring for children or family, disability, age, or family violence. [40] [41] Such a request may only be refused on 'reasonable business grounds'. [42]
  • Unpaid parental leave, so parents who complete 12 months service with an employer become entitled to take a period of 12 months of unpaid parental leave without pay from their employer.
  • Annual leave of 20 paid annual leave days per year. [43]
  • 10 days of personal leave per year is provided, with this for use when an employee is unfit for work due to illness or family emergency.
  • Unpaid community service leave for activities such as voluntary emergency management activities or jury duty. [44]
  • Long service leave after a long period of working for the same employer, and this entitlement varies from state to state. [45]
  • An entitlement to be absent from work on a day that is a public holiday in their base state of work. [46]
  • A set period of termination notice, and redundancy pay depending on years of service.
  • Standardised documents on the rights of employees which must be given to any new employee on commencement.

Part 2-3: Modern awards

The Act created modern awards, which are industrial instruments setting out the minimum terms and conditions of employment in addition to the National Employment Standards. A modern award cannot exclude any provision of the National Employment Standards, but can provide additional detail in relation to the operation of a related entitlement. [47] Modern awards came into effect on 1 January 2010, and apply to all employers covered by the Act. [48]

Part 3-1 General protections

The Act specifically prohibits employers from taking what is known as 'adverse action' against an employee because of a protected reason.

Adverse action

Adverse actions can include: [49]

  • Dismissal of an employee
  • Not giving an employee their legal entitlements
  • Changing an employee's job to their disadvantage
  • Differential treatment of an employee
  • Refusing to hire an employee
  • Offering an employee different and unfair working conditions, compared to other employees
Protected reasons

Employers must not take adverse action against an employee because of:

  • Engagement in industrial activity (Such as strike action, or campaigning for better conditions)
  • Temporary absence from work due to illness or accident
  • Discriminatory reasons (Including age, disability, race, or sex) [50]
  • Exercising a workplace right (Such as asking for an unpaid entitlement) [51]

Under the provisions provided in the general protection provisions, a claim of adverse action based on a protected reason must show a direct and substantial link. It is not sufficient merely to claim adverse action on the basis of possessing a protected characteristic and then facing adverse action, as demonstrated in Philip v State of NSW, where an individual applied for a position in the New South Wales police force, and during interviews had been recorded in file notes as having limited English skills, an accent, and was difficult to understand. [52] It was also noted this individual was agitated during the interviews. The individuals refusal of employment was found not to constitute a breach of the general protections provision as the decision was not exclusively based on a lack of English, but also an 'abrasive' attitude. [52]

Analysis

The Australian Constitution plays a fundamental role in the Australian industrial relations system, particularly the Act. As it is legislation of the federal parliament, application of the Act is limited by section 51 of the Australian Constitution, which sets out the division of powers between federal and state parliaments. Prior to 2006, the relevant power relied by governments to regulate Australia's industrial relations system was the conciliation and arbitration power under section 51(xxxv). [53] This led to both federal and state parliaments having the power to legislate with respect to industrial relations, leading to a 'dual system' that had 'unnecessary complexity and technicality'. [54] A federal industrial tribunal would conciliate and arbitrate disputes between trade unions and employers, generally on an industry basis ensuring consistency of conditions within that industry, and the tribunal would deliver its decisions via instruments known as awards. [55]

The Australian Constitution provides no direct power for the Commonwealth Parliament to make laws with respect to industrial relations. [56] Therefore, WorkChoices and the Act rely on the corporations, territory, and external affairs powers. [57] [5] Through a series of decisions, the High Court of Australia has found the parliament has jurisdiction to rely on these constitutional powers to enact industrial legislation, most recently in New South Wales v Commonwealth, also known as WorkChoices decision. [58] However, state parliaments retain the exclusive power for laws with respect to industrial relations not within the scope of these powers, which is any employer not considered a 'constitutional corporation', an employer not incorporated under the Corporations Act, an Commonwealth legislation enacted under the corporations power. [56]

Related Research Articles

Labour laws, labour code or employment laws are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, employer, and union.

Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong. A collective agreement reached by these negotiations functions as a labour contract between an employer and one or more unions, and typically establishes terms regarding wage scales, working hours, training, health and safety, overtime, grievance mechanisms, and rights to participate in workplace or company affairs. Such agreements can also include 'productivity bargaining' in which workers agree to changes to working practices in return for higher pay or greater job security.

The Australian Industrial Relations Commission (AIRC), known from 1956 to 1973 as the Commonwealth Conciliation and Arbitration Commission and from 1973 to 1988 as the Australian Conciliation and Arbitration Commission, was a tribunal with powers under the Workplace Relations Act 1996 that existed from 1956 until 2010. It was the central institution of Australian labour law. The AIRC replaced a previous system of industrial courts, which broadly speaking, was engaged in the same functions, but with superior independence and powers.

<span class="mw-page-title-main">Australian labour law</span> Rights and duties of workers, unions and employers in Australia

Australian labour law sets the rights of working people, the role of trade unions, and democracy at work, and the duties of employers, across the Commonwealth and in states. Under the Fair Work Act 2009, the Fair Work Commission creates a national minimum wage and oversees National Employment Standards for fair hours, holidays, parental leave and job security. The FWC also creates modern awards that apply to most sectors of work, numbering 150 in 2024, with minimum pay scales, and better rights for overtime, holidays, paid leave, and superannuation for a pension in retirement. Beyond this floor of rights, trade unions and employers often create enterprise bargaining agreements for better wages and conditions in their workplaces. In 2024, collective agreements covered 15% of employees, while 22% of employees were classified as "casual", meaning that they lose many protections other workers have. Australia's laws on the right to take collective action are among the most restrictive in the developed world, and Australia does not have a general law protecting workers' rights to vote and elect worker directors on corporation boards as do most other wealthy OECD countries.

Enterprise bargaining is an Australian term for a form of collective bargaining, in which wages and working conditions are negotiated at the level of the individual organisations, as distinct from sectoral collective bargaining across whole industries. Once established, they are legally binding on employers and employees that are covered by the Enterprise bargaining agreement. An Enterprise Agreement (EA) consists of a collective industrial agreement between either an employer and a trade union acting on behalf of employees or an employer and employees acting for themselves.

A modern award is a ruling in Australian labour law of the national Fair Work Commission or by a state industrial relations commission which grants all wage earners in one industry or occupation the same minimum pay rates and conditions of employment such as leave entitlements, overtime and shift work, as well as other workplace-related conditions. The national awards, with the National Employment Standards, provide a minimum safety net of terms and conditions of employment for all national system employees. The pay rates are often called award wages or award rates. Awards in Australia are part of the system of compulsory arbitration in industrial relations.

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<span class="mw-page-title-main">WorkChoices</span> Australian industrial relations law

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<i>Workplace Relations Act 1996</i> Act of the Parliament of Australia, no longer in force

The Workplace Relations Act 1996 was an Australian law regarding workplace conditions and rights passed by the Howard government after it came into power in 1996. It replaced the previous Labor Government's Industrial Relations Act 1988 and Industrial Relations Reform Act 1993, and commenced operation on 1 January 1997. In 2005, the Howard government passed the Workplace Relations Amendment Act 2005 which came into effect on 27 March 2006 and substantially amended the original Act, bringing in the WorkChoices changes to Australian labour law. The Act was repealed on 1 July 2009 by the Fair Work Act 2009 passed by the Rudd Labor Government, and superseded by the Fair Work Act 2009.

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<span class="mw-page-title-main">Commonwealth Conciliation and Arbitration Act 1904</span> Act of the Parliament of Australia, no longer in force, registered as C1904A00013

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Unfair dismissal in Australia is the right to not be unfairly dismissed from work in the Fair Work Act 2009. This is a core part of Australian labour law, and refers to an unlawful act of employment termination due to it being an unfair action on the employee by the employer.

References

  1. ↑ Taylor, Jeremy (1 July 2009). "Unions welcome new Fair Work Act". The 7:30 Report.
  2. ↑ "Fair Work timeline". Sir Richard Kirby Archives. 20 March 2017. Archived from the original on 11 September 2020.
  3. ↑ Kuruppu, Indra; O'Neill, Steve (6 December 2007). "Workplace Relations Reforms". Parliament of Australia.
  4. ↑ Fair Work Act 2009 (Cth) Part 4–1.
  5. 1 2 "Overview of the Fair Work Act 2009 (Cth)". Australian Law Reform Commission. 18 August 2011.
  6. ↑ Hannan, Ewin (14 April 2015). "Australia Leads World in Complex Workplace Laws, Hays Recruitment". Financial Review.
  7. ↑ Gonski, Mike (1 December 2020). "Deciphering the Complex World of Underpayment of Wages: Compliance and Enforcement". Herbert Smith Freehills.
  8. ↑ "What is Industrial Law?". Cairns Employment & Workplace Lawyers. 9 October 2018.
  9. 1 2 3 Woodward, Dennis, 'WorkChoices and Howard's Defeat' (2010) 69(3) Australian Journal of Public Administration.
  10. ↑ "WorkChoices 'went too deep': Hockey". ABC News. 28 November 2007. Retrieved 18 May 2022.
  11. ↑ "Fair Work Bill 2008 (Cth) Explanatory Memorandum". AustLii.
  12. ↑ "ParlInfo - Forward With Fairness: Labor's plan for fairer and more productive Australian workplaces". parlinfo.aph.gov.au. 2007.
  13. ↑ "Australian Labour Law Association 4th Biennial Conference 2008". University of Melbourne.
  14. 1 2 3 Walpole, Kurt; Kimberley, Nic; McCrystal, Shae (2020). "The Fair Work Act in 2020 Hindsight: The Current Multifaceted Crisis and Prospects for the Future". Australian Journal of Labour Law. 33 (1) – via LexisAdvance Research.
  15. ↑ Gillard, Julia (14 November 2008). "Address to the Australian Labour Law Association". Ministers' Media Centre, Department of Education, Skills and Employment. Retrieved 13 December 2021.
  16. ↑ Bray, M; Stewart, A. "What Is Distinctive about the Fair Work Regime?". Australian Journal of Labour Law. 26: 20 – via LexisAdvance Research.
  17. ↑ Applicant v Respondent [2014] FWC 2860.
  18. ↑ "Fair Work Commission Acknowledges Workplace Laws Too Complex". Australian Resources & Energy Group. 7 May 2014. Retrieved 15 December 2014.
  19. ↑ Sheldon, P. (2008). What collective bargaining future for Australia? Lessons from international experience. In J. Riley and P. Sheldon (eds), Remaking Australian Industrial Relations (pp. 235–48).
  20. ↑ Naughton, Richard; Pittard, Marilyn (2015). Australian Labour and Employment Law. LexisNexis. pp 596.
  21. 1 2 3 Cooper, R. (2009). The 'New' Industrial Relations and International Economic Crisis: Australia in 2009. Journal of Industrial Relations. Vol. 52, No. 3. pp. 261–74.
  22. ↑ Fair Work Act 2009 (Cth) s 172.
  23. ↑ Fair Work Act 2009 (Cth) s 172(2).
  24. ↑ Fair Work Act 2009 (Cth) s 172(3).
  25. ↑ Fair Work Act 2009 (Cth) s 172(4).
  26. ↑ "Better off overall test (BOOT) - Fair Work Ombudsman". www.fairwork.gov.au. Retrieved 26 May 2022.
  27. ↑ Naughton, Richard; Pittard, Marilyn (2015). Australian Labour and Employment Law. LexisNexis. p. 587.
  28. ↑ Hannan, Ewin (11 February 2021). "Christian Porter set to give IR changes the boot". The Australian.
  29. ↑ "Employees could be forced to work under worse conditions under new laws". ABC News. 8 December 2020. Retrieved 26 December 2021.
  30. ↑ "How Australia's industrial relations bill will affect you and your workplace". the Guardian. 9 December 2020. Retrieved 26 December 2021.
  31. ↑ Fair Work Act 2009 (Cth) s 171(b).
  32. 1 2 Cooper, R. & Ellem, B. (2009) 'Fair Work and the Re-regulation of Collective Bargaining', Australian Journal of Labour Law, vol. 22, No. 3, pp. 284–305.
  33. ↑ Fair Work Act 2009 (Cth) s 228.
  34. 1 2 Fair Work Act 2009 (Cth) s 229.
  35. ↑ Fair Work Act 2009 (Cth) s 230.
  36. ↑ Fair Work Act 2009 (Cth) s 235.
  37. ↑ Fair Work Act 2009 s 29.
  38. ↑ Fair Work Act 2009, Division 3: Bargaining and Representation During Bargaining.
  39. ↑ Fair Work Act 2009 (Cth) s 62
  40. ↑ Fair Work Act 2009 (Cth) s 65(1A).
  41. ↑ Fair Work Act 2009 (Cth) s 65.
  42. ↑ Fair Work Act 2009 (Cth) s 65(5).
  43. ↑ Martin, Nicole (11 July 2019). "Australia: A New Age of Leave Entitlements". Society for Human Resource Management. Retrieved 14 December 2019.
  44. ↑ "Community Service Leave". Fair Work Commission. Retrieved 14 December 2021.
  45. ↑ Fair Work Act 2009 (Cth) s 113.
  46. ↑ Fair Work Act 2009 (Cth) s 114.
  47. ↑ "The Fair Work Act 2009 (Cth)". ALRC. Retrieved 18 May 2022.
  48. ↑ "Modern Awards". Fair Work Ombudsman. Retrieved 14 December 2021.
  49. ↑ Fair Work Act 2009 (Cth) s 342.
  50. ↑ Fair Work Act 2009 (Cth) s 351(1). Other characteristics which are considered discriminatory for the purpose of adverse action are colour, sexual preference, marital status, family or carer's responsibilities, pregnancy, religion, political opinion, national extraction, or social origin.
  51. ↑ Fair Work Act 2009 (Cth) s 341.
  52. 1 2 Phillip v State of New South Wales [2011] FMCA 308.
  53. ↑ "Overview of the Fair Work Act 2009 (Cth)". ALRC. Retrieved 25 May 2022.
  54. ↑ Anthony Mason, The Australian Constitution 1901-1988 (1998) 62 Australian Law Journal 752.
  55. ↑ Office of the Commissioner for Public Employment (2012) Overview of the National Industrial Relations System.
  56. 1 2 "Victoria extends its Fair Work referral for public sector employees - Knowledge - Clayton Utz". www.claytonutz.com. Retrieved 26 May 2022.
  57. ↑ Australian Constitution ss 51(xx), 122, 51(xxix).
  58. ↑ New South Wales v Commonwealth (1990) 169 CLR 482.
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