Industrial Law
Law Extension Committee
Winter 2010
2. Workplace Relations
System
Conciliation and arbitration power
Section 51(xxxv):
“Conciliation and arbitration for the prevention
and settlement of industrial disputes extending
beyond the limits of any one state.”
Conciliation and arbitration power
Features:
 Cannot legislate directly for terms and
conditions of employment;
 Permits establishment of a process – conciliation
and arbitration;
 Only for the prevention or settlement of
industrial disputes;
 Only industrial disputes extending beyond the
limits of any one state.
New South Wales v
Commonwealth[2006] HCA 52:
Kirby J (at [434]):
“If s 51(xx) of the Constitution now provides a legitimate
source federal law with respect to industrial disputes, by
inference it always did. All those hard-fought decisions of
this Court and the earnest presentation of cases, the
advocacy and the judicial analysis and elaboration within
them concerning the ambit of s 51(xxxv) of the
Constitution were (virtually without exception) a complete
waste of the Court’s time and energies.”
Corporations power
Section 51(xx):
“Foreign corporations, and trading or financial
corporations formed within the limits of the
Commonwealth.”
Constitutional corporation
R v Federal Court; Ex parte WA Football League
(1979) 143 CLR 190:
“… for constitutional purposes a corporation will
satisfy the description ‘trading corporation’ if
trading is a substantial corporate activity. Once it
is found that trading is a substantial and not a
merely peripheral activity, the conclusion that the
corporation is a trading corporation is open.”
New South Wales v Commonwealth
(2006) 299 CLR 1:
A law will be valid under s 51(xx) so long as it
either (at [198]):
 The law singles out constitutional corporations
as the object of statutory command (eg. a
corporation shall or shall not … ); or
 The law is directed at protecting constitutional
corporations from conduct intended or likely to
cause loss or damage to the corporation.
Other heads of power
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Trade and commerce power (s 51(i));
Taxation power (s 51(ii));
Defence power (s 51(vi));
External affairs (s 51 (xxix));
Commonwealth employees power (s 52(i));
Territories power (s 122).
Who does the Federal
system apply to?
Section 13 defines an “national system employee”:
A national system employee is an individual so
far as he or she is employed, or usually employed,
as described in the definition of national system
employer in section 14, by a national system
employer, except on a vocational placement.
Who does the Federal
system apply to?
Section 14 defines an “national system employer”:
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a constitutional corporation;
the Commonwealth or a Commonwealth authority;
a person or entity who employs an individual as a flight crew
officer, a maritime employee or a waterside worker; or
a body corporate incorporated in a Territory;
a person or entity that carries on an activity in a Territory in
Australia, so far as the person or entity employs, or usually
employs, an individual in connection with the activity carried on
in the Territory.
Referral of powers
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The Industrial Relations (Commonwealth Powers) Act
2009 (NSW) referred to Commonwealth powers
with respect to terms and conditions of
employment or rights and responsibilities of
employers, employees or association (s 5).
Excludes state public sector employees, law
enforcement officers and local government
sector employees (s 6).
Referral of powers (cont)
Reference excludes:
 Superannuation, workers compensation and occupational
health and safety;
 Outworkers and child labour;
 Training arrangements;
 Long service leave, victims of crime leave, jury service;
 Essential services in an emergency;
 Employee and employer associations;
 Workplace surveillance and trading hours;
 Enforcement of contract of employment.
Federal/state balance
FWA, s26 Act excludes some State and Territory laws
(1) This Act is intended to apply to the exclusion of all State or Territory
industrial laws so far as they would otherwise apply in relation to a national
system employee or a national system employer.
A State or Territory industrial law includes:
 A general State industrial law, including the Industrial Relations Act
1996 (NSW);
 An Act of a State or Territory that applies to employment
generally or dealing with leave;
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Laws providing for equal remuneration, unfair employment
contracts or union right of entry;
 An instrument made under such a law.
Exceptions – s 27
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Discrimination laws;
Superannuation;
Workers compensation;
Occupational health and safety;
Outworkers and child labour;
Long service leave;
Leave of victims of crime and jury service;
Public holidays;
Provision of essential services in an emergency;
Regulation of industrial organisations;
Workplace surveillance;
Business trading hours;
Enforcement of employment contracts.
Federal institutions
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Fair Work Australia (FWA);
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Fair Work Ombudsman;
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Fair Work Inspectors;
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Fair Work Division of the Federal Court and
Federal Magistrate’s Court.
National Employment Standards
(NES)
Minimum standards for:
 Maximum weekly hours;
 Requests for flexible working arrangements;
 Parental leave, including maternity, paternity and
adoption leave;
 Annual leave;
 Personal/carer’s leave and compassionate leave;
NES (cont.)
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Community service leave;
Long service leave;
Public holidays;
Notice of termination and redundancy pay;
Fair Work Information Statement.
Maximum weekly hours (s 62)
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An employer must not request or require an
employee to work more than 38 hours per week
unless the additional hours are reasonable.
Whether hours are reasonable is assessed taking
into account any risk to health and safety, the
employee’s personal circumstances, the needs of
the enterprise, whether overtime is paid, notice
to the employee, usual pattern of work in the
industry and employee’s role.
Flexible working arrangements
(s 65)
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An employee who is a parent (or has
responsibility for the care of a child) may request
a change in working arrangements to assist in
caring for the child if the child is under school
age or under 18 and has a disability.
An employer may only refuse such a request on
reasonable business grounds and must provide a
written response.
Parental leave
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An employee is entitled to 12 months of unpaid
parental leave associated with the birth of a child
if the employee has or will have responsibility
for the care of the child (s 70).
An employee may request an extension of
unpaid parental leave up to 24 months but
employer can refuse on reasonable business
grounds (s 76).
Annual leave
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For each year of service, an employee is entitled
to 4 weeks paid annual leave (5 weeks for 7 day
shift workers) (s 87).
Annual leave may be taken for a period agreed
between the employer and employee but
employer must not unreasonably refuse to agree
(s 88).
Cashing out can only occur in accordance with
an award, enterprise agreement or Act (s 92-94).
Personal/carer’s leave
An employee is entitled to:
 10 days of paid personal/carer’s leave for each
year of service (s 96).
 2 days unpaid carer’s leave if member of
immediate family requires care (s 102).
 2 days of compassionate leave if member of
immediate family has illness or injury that poses
serious threat to life or dies (s 104).
Community service leave
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An employee is entitled to leave for jury service
or a volunteer emergency management activity (s
109).
Community service leave is unpaid except for
jury service.
An employee undertaking jury service is entitled
to paid leave for the first 10 days of absence (s
111).
Long service leave
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State long service leave legislation continues to
apply, including the Long Service Leave Act 1955
(NSW) (s 27(2)(g)).
An employee previously entitled to long service
leave under an award or agreement will continue
to be entitled to long service leave under those
provisions (s 113).
Public holidays
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An employee is entitled to be absent from his or
her employment on a public holiday (s 114(1)).
An employer may request an employee work on
a public holiday, but the employee may refuse if
the request is not reasonable or the refusal is
reasonable (s 114(2) and (3)).
Have regard to factors such as nature of work,
personal circumstances, reasonable expectation
of employee, payment and notice (s 114(4)).
Notice and redundancy
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An employer must not terminate an employee’s
employment unless a minimum period of
written notice is given of up to 4 weeks (or 5
weeks if over 45) depending upon length of
service (s 117).
Does not apply to employees for a specific task
or period, termination for serious misconduct,
casual employees, employees under a training
arrangement or daily hire employees (s 123).
Notice and redundancy (cont.)
An employee who is made redundant is entitled
to be paid redundancy pay depending upon
length of service (s 119).
 An employee is redundant if terminated:
(a) because the employer no longer requires the
job done by anyone (other than ordinary or
customary turnover of labour);
(b) because of insolvency or bankruptcy.
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Fair work information statement
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The Fair Work Information Statement must
contain information about the NES, modern
awards, agreement-making, freedom of
association, termination of employment, right of
entry, etc (s 124).
An employer must give every employee the Fair
Work Information Statement before, or as soon
as practicable after, the employee starts
employment (s 125).
Minimum wages
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FWA must conduct an annual wage review an
vary the national minimum wage order or
modern award wages (s 285).
FWA must determine a national minimum wage
order setting a national minimum wage and
special minimum wages for junior employees,
employees under training arrangements and
employees with a disability (s 294).
Modern awards
FWA is required to establish a system of “modern
awards” that:
 are simple and easy to apply;
 provide a fair minimum safety net;
 are economically sustainable;
 promote collective enterprise bargaining;
 constitute a certain, stable and sustainable
modern award system.
Terms of modern awards
Modern awards may deal with (s 139):
 minimum wages;
 type of employment (full-time, part-time, casual,
shift work and flexible work arrangements);
 hours of work, rostering, etc;
 overtime rates;
 penalty rates for unsociable hours, weekends or
public holidays or shift work;
Terms of modern awards (cont.)
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annualised wage and salary arrangements;
allowances for expenses, skill or disabilities
associated with particular work;
leave and leave loading;
superannuation;
consultation, representation and dispute settling
procedures;
terms that supplement the NES (s 55).
Terms of modern awards (cont.)
A modern award must not contain:
 an objectionable term;
 terms requiring unreasonable deductions from
wages;
 discriminatory terms;
 terms containing state-based differences;
 terms dealing with long service leave.
Application of modern awards
A modern award applies to an employer or
employee if the modern award (s 47):
 is expressed to cover the employer or employee;
 is in operation; and
 no other provision of the Act provides that the
modern award not apply;
 but does not apply to a “high income
employee”.
Enterprise agreements
Types of enterprise agreements (s 172):
 Single-enterprise agreement made by an
employer (or related employers);
 Multi-enterprise agreement made by a number
of employers;
 Greenfields agreement between employer(s) and
one or more employee organisation relating to a
business being established.
Bargaining and representation
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An employer must give notice to employees
who will be covered by the agreement of the
right to be represented (s 173).
An employer must ensure employees are given a
copy of or access to the proposed agreement 7
days before it is voted upon (s 180).
An employer may ask employees to approve the
agreement by voting for it (s 181).
Approval of agreements
FWA must approve an agreement if it was (s186):
 genuinely agreed to by the employees and
employer(s);
 do not contravene s 55;
 passes the better off overall test (“BOOT”);
 group of employees was fairly chosen;
 does not contain unlawful terms;
 not contrary to good faith bargaining.
Better off overall test (“BOOT”)
Section 193(1):
An enterprise agreement ... passes the better off overall
test ... if FWA is satisfied ... that award covered
employee, or prospective award covered employee, for the
agreement would be better off overall if the agreement
applied to the employee than if the relevant modern award
applied to the employee.
Good faith bargaining
Bargaining representative must comply with good
fair bargaining requirements including (s 228):
 attending meetings at reasonable times;
 disclosing information in a timely manner;
 responding to and giving genuine consideration
to proposals;
 refraining from capricious or unfair conduct;
 recognising other bargaining representatives.
Bargaining orders
To assist bargaining, FWA may make a :
 Bargaining order specifying actions to be taken
to comply with good faith bargaining
requirements (s 230-231);
 Serious breach declaration (s 234-235);
 Majority support determination (s 236-237);
 Scope order (s 238).
Workplace determinations
Upon application by a bargaining representative,
FWA may make the following determinations:
 Low-paid workplace determination (s 262-263);
 Industrial action related workplace
determination (s266-267);
 Bargaining related workplace determination (s
269-270).
NES, awards and agreements
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A modern award or enterprise agreement cannot
exclude the NES, but may supplement NES
standards or have ancillary provisions (s 55);
A modern award does not apply to an employee
when an enterprise agreement applies except
outworker terms (s 57);
Only one enterprise agreement can apply to an
employee at a particular time (s 58).
Transfer of business
Transfer of business occurs when (s 311):
 Employment with old employer is terminated;
 Commence with new employer within 3
months;
 Performing substantially the same work;
 Transfer of assets or outsourcing arrangement
between old and new employer or new employer
is associated entity.
New South Wales system
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Awards setting fair and reasonable conditions of
employment for employees: s 10.
Enterprise agreements (s 31):
(i) with industrial organisation;
(ii) with employees directly.
Conciliation and arbitration of industrial
disputes (s130).
Inconsistency of federal and state
laws
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Direct inconsistency;
Cover the field;
Commonwealth expressly excludes the
operation of certain State laws (s 26);
Modern awards or enterprise agreements prevail
over State laws to the extent of any
inconsistency (s 29).
Enforcement of awards and
enterprise agreements
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The Federal Court or Federal Magistrates Court may
make any order the court considers appropriate,
including injunction or compensation (s 545(1));
An eligible State or Territory court may order employer
to pay an amount payable under the Act or a fair work
instrument (s 545(3));
Court may impose penalty of up to $6,600 (or $33,000
for a corporation) in case of breach of the NES, a
modern award, enterprise agreement or workplace
determination (s 546);