By Adrienne Unkovich, MD, Workforce Guardian – Australia’s number one online employment relations service

The long-awaited Fair Work Bill 2008 has been introduced into Federal Parliament and it’s essential for employers to understand how it will affect them. Certain elements are expected to take effect from 1 July 2009. Please note that there may be more change as it progresses through the Senate in the next few months but it’s important to start reviewing what the new laws will mean for your business.

So you don’t have to wade through many pages of legal jargon, we have provided a summary below of the important elements relevant for SMBs.

What are the changes to Employee entitlements?

National Employment Standards - From 1 January 2010, 10 minimum employee entitlements will apply to most Australian workplaces. These will replace the existing Australian Fair Pay and Conditions Standard.

Modern Awards - The Bill provides that Modern Awards will be reviewed every four years and outside of this, awards will be able to be varied in limited circumstances. Modern Awards will not cover employees earning over $100,000 per annum.

Minimum rates of pay - These will be included in Modern Awards. However, Fair Work Australia (FWA), the Government's new agency for industrial matters, will also annually review minimum wages. Updated rates of pay will take effect on or before 1 July each year.

How will the Unfair Dismissal Laws affect my business?

Unfair dismissal – Some of the most significant changes for small businesses are the changes to unfair dismissal laws that will come into effect on 1 July 2009.

The new Bill removes the exemption of employers with less than 100 employees. It also adjusts the length of service required of employees before they are able to access unfair dismissal protection to:

• 6 months for businesses that employ 15 or more employees; and

• 12 months for smaller businesses.

• Each full time, part time and long term casual employee will count as one employee. A casual employee who has been employed on a regular basis for at least 12 months will be considered a long term casual employee.

Employees will generally have only 7 days to make an unfair dismissal claim. Claims will be determined by a conference that FWA conducts between the parties or by a hearing. Fair Work Australia will be able to make initial inquiries and discuss issues directly with the Employer and the Employee and will not allow legal or fee paid agent representation unless in exceptional circumstances. The Bill also provides for the "Fair Dismissal Code", which sets out a checklist procedure that, if followed, will exempt small businesses from unfair dismissal claims.

Collective bargaining - what does it mean?

Good faith bargaining - FWA will have the power to compel parties to bargain for industrial agreements in good faith. FWA will also be able to impose fines for breaches of good faith bargaining.

Special provisions for low paid workers - FWA will be able to assist low paid workers with minimal bargaining power to make agreements. Where bargaining agents are genuinely unable to reach agreement, FWA will also have the power to order arbitration to resolve the dispute.

Industrial action - Most of the provisions introduced by the previous government have been retained, including the requirement that employees must, in secret ballots, approve taking industrial action before such industrial action can commence.

What is Fair Work Australia and its authority?

Fair Work Australia's Alternative Dispute Resolution Powers - FWA will be the "one-stop shop" for industrial relations. It will have an array of powers to resolve disputes including conciliation, mediation, compulsory conferences and make recommendations. It will also be able to make binding decisions in respect of unfair dismissal. The new Bill provides that one party alone may request FWA's involvement.

New Fair Work Divisions of the Federal Court and the Federal Magistrates Court – FWA will have divisions in the Federal Court and Federal Magistrates Court. These divisions will exercise judicial power including in a new informal small claims jurisdiction for claims up to $20,000. It will also adjudicate cases involving failures to comply with an award or NES obligation. These divisions will have the power to make "any order they consider appropriate" to remedy a breach and to issue injunctions to prevent breaches.

Things to do Now

Regardless of the size of your business, it’s important that you start preparing now for the upcoming changes.

• Make sure that you have employment contracts in place for all employees that comply with current Australian employment legislation.

• Check how your current employment contracts will be affected by the new award modernisation process.

• Be aware of upcoming employee termination and restructuring processes if you are considering change now.

• Put workplace rules and policies in place describing the behaviour that is expected of your employees and the circumstances that may result in summary dismissal.

• Ensure disciplinary procedures exist; managers are trained in the processes and clearly communicate these to all your employees.

• Confirm whether award or low income employees have large annual leave entitlements accrued and reduce before the system changes, if applicable.

We recommend that you look to the Workforce Guardian website for more information. A whitepaper on these changes will be available shortly.

Disclaimer

This article is intended to provide commentary and general information. It should not be relied upon as legal advice. Formal legal advice may be necessary in particular transactions or on matters of interest arising from this article. Workforce Guardian Pty Ltd is not responsible for the results of any actions taken on the basis of information in this article, nor for any error or omission in this article