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The Fair Work Act 2009 commenced on 1 July 2009, ushering in many changes to industrial legislation, including Fair Work Australia (assuming the functions of the Australian Industrial Relations Commission); changes to Unfair Dismissal Laws and Good Faith Bargaining, leading to a ‘One Stop Shop’ of Government Industrial Relations Agencies by early 2010.

 

The implementation of the Fair Work Act 2009 from 1 July was made possible by the passage of the important "Transitional Provisions and Consequential Amendments Bill 2009” which, in effect, transitions the previous industrial system (i.e. WorkChoices) to the new system under the Fair Work Act 2009.

 

The changes to unfair dismissal legislation will potentially have the biggest initial impact on employers subject to the Federal system. Employers should be aware that the ‘less than 100’ threshold which applied under WorkChoices has been overridden as of 1 July 2009 and more stringent guidelines for termination/dismissal have once again become enforceable. From 1 July 2009 many more employees will be able to pursue unfair dismissal if they feel they have been treated harshly in being terminated by their employer. Most employers will find from 1 July 2009 that, except in limited circumstances, they are required to observe a process (i.e. performance management process) before deciding to terminate an employee – the minimum requirements of the performance management process that an employer will need to observe will differ depending on the size of the organisation and the determinant will be whether the employer employs 15 or more employees or less than 15 employees (counted on a full-time equivalent basis).

 

In addition to the initial changes from 1 July 2009, the Modern Award System and the National Employment Standards (NES) are due to commence from 1 January 2010. For more information on the new Federal IR System (including dismissal legislation) please refer to the recent editions of our "Relations” Newsletter, in particular, the March and June 2009 issues.

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If your business was drawn into the Federal System of Industrial Relations when WorkChoices commenced on 27 March 2006 please ensure that you have increased the personal leave entitlement of full-time employees to 10 days per year (part-time employees calculated pro rata) as from 27 March 2006. Subject to the Minimum Standards of WorkChoices (which continue to apply under Fair Work Australia until superseded by the National Employment Standards from 1 January 2010) personal leave is to be credited at least monthly.

 

Prior to 27 March 2006, some awards previously provided for 10 days sick leave per year but many State-system awards only provided for 8 days per year. 10 days sick leave per year is a minimum standard of Federal legislation and if your business is subject to the Federal system you must allow for a minimum entitlement of 10 days sick leave per year for full-time employees (pro rata for part-timers).

 

Employers operating under the Federal system should not be confused by NAPSA Awards or Pre-reform Awards that may still reference a personal leave entitlement of less than 10 days per year in the body of the award. Although the content of clauses addressing personal leave in NAPSA and Pre-reform Awards cannot be updated under the current legislation (because no Body has the authority to amend these awards) employers in the Federal system should have no doubt that they must provide for a personal leave entitlement of 10 days per year as a minimum. Any confusion currently surrounding personal leave accrual in the Federal system should be eliminated by the introduction of the Modern Awards and National Employment Standards from 1 January 2010.

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WorkChoices was the Federal System of industrial relations which was introduced on 27 March 2006. Businesses classed as 'Trading/Constitutional Corporations' were automatically propelled into the Federal System of WorkChoices.

 

The sole determinant of the application of the Federal system of industrial relations (i.e. WorkChoices – now Fair Work Australia) to a business is the trading status of the organization so it is imperative that a determinant be made as to whether a business is regarded to be a trading/constitutional corporation or not. Advice about the trading status of your business can be provided by an accountant or solicitor.

Our "Relations" Newsletters contain a series of briefings on numerous aspects of the Federal WorkChoices Legislation (which has been replaced by the Fair Work Act 2009 as from 1 July 2009 – refer article above) and these are available to our Clients via our ‘Newsletters’ page.