November 2015
Practice Group(s):
Labour, Employment
and Workplace Safety
A Thanksgiving Turkey or Should Employers be
Grateful for Limited Reform?
By Alice DeBoos
It took more than two years but the first amendments to the Fair Work Act 2009 under
this Government, which passed both Houses of Parliament on 11 November 2015, came
into effect on Friday 27 November 2015, coinciding with the Thanksgiving holiday in the
U.S.
What started off in February 2014 as a significant package of reforms is now a shadow of
its former self, with comprehensive compromises being made to secure the support of
the independents in the Senate.
The changes are so limited in nature the field is still wide open for more meaningful
reform to come.
What are the Changes?
Perhaps the most important change is the ability to break deadlocks in the negotiation of
Greenfields Agreements. However, there are also changes restricting protected action
ballot orders and extending unpaid parental leave.
Greenfields Agreements
Under the new regime, if parties are unable to finalise a Greenfields Agreement within six
months of a 'notified negotiation period' officially commencing, the employer may apply to
the Fair Work Commission to approve the agreement. This is a compromise on the
original three month period sought by the Government.
The regime provides, however, that the Fair Work Commission may only approve a
Greenfields Agreement in circumstances where the pay and conditions under the
agreement meets prevailing standards. The amendment intends to address the prevailing
situation where there is no mechanism to break deadlocks when negotiations reach an
impasse.
While the intention is worthy and a much sought after right by the construction and
resources sector, the requirement for any agreement to meet 'prevailing industry
standards' will mean that major projects will still be measured against often unreasonably
high wages and conditions in place in these sectors. It does not present the opportunity
for companies to obtain a Greenfields Agreement in circumstances where the deal on
offer is designed to undercut what may be paid to workers on similar types of projects
and therefore will not prompt significant reform in this sector.
Protected Action Ballot Orders
The Fair Work Amendment Act 2015 restricts the availability of unions to initiate
protected industrial actions in circumstances where the employer has refused to bargain.
The amendment essentially overrules previous decisions which have held that a
protected action ballot order may be granted even if the has refused to bargain.
A Thanksgiving Turkey or Should Employers be Grateful for Limited
Reform?
This will only be available in limited circumstances. These circumstances include:
•
when bargaining has already commenced
•
when the union has obtained a Majority Support Determination in favour of
bargaining.
The practical effect of this amendment is that it creates an extra hurdle for unions which
want to take protected action when bargaining has not started as a result of the employer
refusing to bargain.
The amendment places employers who refuse to bargain in a better position with respect
to protected action although this is likely simply to delay, rather than abolish the risk of
protected action. In reality, if support amongst the workforce exists for bargaining, the
union will readily be able to obtain a Majority Support Determination and then make an
application for a protected action ballot.
Extending Unpaid Parental Leave
This is a somewhat simple amendment which is likely to reflect usual practice for most
employers. The amendment provides that an employer must not refuse a request for an
extension of the period of unpaid parental leave unless the employer has given the
employee a reasonable opportunity to discuss the request.
The rationale for imposing this requirement is, on the one hand, to help employees
balance their work and family commitments and, on the other hand, to help employers
maintain skilled workers who have caring responsibilities.
Next Steps
Now that this is finally operational, the issue for 2016 is whether the Government will
develop an ambitious Industrial Relations (IR) reform package to take to the 2016
election, or whether it will approach IR reform in a piecemeal way by careful dealing, as
with the 2015 legislation, with crossbench Senators.
Many of the important elements of this Bill were dropped and never made it finish line. It
remains to be seen whether these proposals will be revived and have a better chance of
success with a different Prime Minister and Minister at the helm of negotiations.
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A Thanksgiving Turkey or Should Employers be Grateful for Limited
Reform?
Authors:
Alice DeBoos
alice.deboos@klgates.com
+61.2.9513.2464
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